U.S. Department of Labor

FY 2007 Performance and Accountability Report 3 

Table of Contents 

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

Management’s Discussion and Analysis................................................................................................... 9

Introduction ............................................................................................................................................................ 10

Program Performance Overview......................................................................................................................... 14

Financial Performance Overview ........................................................................................................................ 29

Major Management Challenges .......................................................................................................................... 37

DOL Top Management Challenges Identified by the OIG ......................................................................... 46

The President’s Management Agenda............................................................................................................... 54

Performance Section .................................................................................................................................59

Strategic Goal 1: A Prepared Workforce .......................................................................................................... 65

Strategic Goal 2: A Competitive Workforce...................................................................................................... 85

Strategic Goal 3: Safe and Secure Workplaces.............................................................................................119

Strategic Goal 4: Strengthened Economic Protections ................................................................................141

Financial Section..................................................................................................................................... 169

Message from the Chief Financial Officer .......................................................................................................170

Independent Auditors’ Report ...........................................................................................................................172

Annual Financial Statements ............................................................................................................................185

Principal Financial Statements and Notes ...............................................................................................187

Required Supplementary Stewardship Information ...............................................................................248

Required Supplementary Information.......................................................................................................255

Appendices............................................................................................................................................... 281

1. Improper Payments Information Act Reporting Details ...........................................................................282

2. Acronyms..........................................................................................................................................................294

3. Internet Links...................................................................................................................................................295

This report can be found on the Internet at http://www.dol.gov/%5Fsec/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 

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 nongovernmental organizations’ Web sites mentioned in this report, or their views or contents; nor does it vouch 

for the accuracy of the information contained on other organizations’ Web sites. 

The following companies were contracted to assist preparation of the FY 2007 DOL Performance and 

Accountability Report: 

Accounting services − Martin and Yarbrough, Joint Venture 

Graphic design – Jill Tanenbaum Graphic Design & Advertising Inc. and GraphicVisions Associates 

5 United States Department of Labor 

Secretary’s Message 

November 15, 2007 

I am pleased to submit the ninth annual Department of Labor Performance 

and Accountability Report to Congress and the American people. This is the 

first opportunity to report progress under our FY 2006-2011 Strategic Plan, 

which articulates the Department’s program performance priorities, 

strategies, and targets for the years ahead and identifies four strategic goals 

that serve as the basis of this annual report: 

• A Prepared Workforce — to provide training and services to new and 

incumbent workers and supply quality information on the economy 

and labor market. 

• A Competitive Workforce — to enhance the effectiveness and 

efficiency of the workforce development and regulatory systems that 

assist workers and employers in meeting the challenges of worldwide 

competition. 

• Safe and Secure Workplaces — to ensure that workplaces are safe, 

healthful, and fair; protect workers’ rights to wages due them; protect 

workers’ equal opportunity rights; and protect veterans’ employment 

and re-employment rights. 

• Strengthened Economic Protections — to protect and strengthen economic security; ensure union 

transparency; and secure pension and health benefits. 

President’s Management Agenda

Building upon these four goals, the President’s Management Agenda (PMA) continues to be the central 

strategy for the Department’s efforts in management improvement. The Department continues to 

demonstrate progress in each of the five government-wide PMA initiatives: Strategic Management of Human 

Capital, Competitive Sourcing, Improved Financial Performance, Expanded Electronic Government, and the 

Performance Improvement Initiative (formerly Budget and Performance Integration). A major achievement 

linked to PMA implementation is the good-government results that have been implemented on behalf of our 

stakeholders – including America’s taxpayers. These results are exemplified by DOL's winning four 

President's Quality Awards for management excellence since 2004, including the award for Expanded 

Electronic Government we received last November. 

Preparing Workers for New Opportunities 

To better accomplish the Department's mission, DOL has worked to overhaul the nation's duplicative, 

compartmentalized, and bureaucracy-ridden workforce training programs. This Administration has proposed 

innovative strategies to spur regional workforce development, give workers personalized Career Advancement 

Accounts to reach their own career goals, and create a workforce investment system that puts workers first. 

The Department of Labor continues to build on the President's results-oriented vision -- and strives to 

maximize the use of all Federal workforce investment funds for the direct provision of training and other 

value-added services to workers. 

The workforce investment system is expanding its work with employers in high-growth, high-demand 

industries, including collaborations with large multi-State employers. These partnerships help to identify the 

workforce needs of high-growth industries and provide a forum for improved communication between industry 

and the workforce investment system. To further address the need for in-demand skills, the Department 

eliminated a backlog of approximately 363,000 applications in the permanent foreign worker certification 

program over the last three years. 

 
Secretary’s Message 

6 United States Department of Labor 

Protecting Workers’ Safety and Health, Pay, Benefits, and Union Dues 

The Department's agencies that protect workers' health, safety, benefits, pay, and union member rights 

continue to achieve results for American workers and their families, all within restrained budget growth. In 

addition to enforcement, DOL is deploying outreach and compliance assistance to prevent violations and 

identify high-risk industries. The Occupational Safety and Health Administration's National Emphasis Program 

(NEP) is one example of how the Department is combining aggressive, targeted strategies to reduce or 

eliminate hazards from workplaces with high injury and illness rates. In 2007, DOL established NEP's for 

petroleum refineries and microwave popcorn manufacturing facilities. 

The passage of the Mine Improvement and New Emergency Response (MINER) Act of 2006 -- the most 

significant mine safety legislation in nearly 30 years -- provides the Department new tools to better ensure 

miner safety. The Mine Safety and Health Administration has vigorously implemented this legislation to 

better protect miners. 

In protecting the economic security of workers, the Department reached its compliance and discrimination 

rate targets for audited Federal contractors while union criminal investigations leading to prosecutions 

resulted in more than $30 million in court-ordered restitution. The Department released the first-ever 

regulations implementing, clarifying, and streamlining the Uniformed Services Employment and 

Reemployment Rights Act, or USERRA. These regulations and other Departmental efforts, which help protect 

the jobs and benefits of citizen-soldiers while on active duty, led to a decrease in claims of prohibited 

personnel practices by four percent from the previous year, based on preliminary reports. 

Workers' compensation claims were processed with greater efficiency without sacrificing the quality of 

decisions. The Department successfully eliminated 100 percent of the backlog of Energy Employee 

Occupational Illness cases inherited from the Department of Energy. In addition, the rate of change in 

medical costs for injured Federal workers remained below the national average for the fifth consecutive year. 

The Pension Benefit Guaranty Corporation (PBGC) is now trustee of some 3,800 terminated plans, managing 

an asset portfolio in excess of $55 billion. Effective management of this diverse portfolio is critical; 650,000 

retirees and beneficiaries with trusteed plans were receiving benefits and 525,000 other participants had 

earned benefits. The Department is working with PBGC to develop strategies and measures focused on their 

long-term financial challenge to support the Administration's commitment to safeguarding the pension 

insurance program. 

Program Data and Financial Systems

Department of Labor managers routinely use the performance and financial information summarized in this 

report to improve the quality and cost-effectiveness of the services they provide to the public. For 

management and accountability purposes, it is crucial to have confidence in the quality of this information. 

Program performance data presented in this report are complete and reliable, with no material inadequacies 

as defined in OMB Circular A-11 – with one exception. Performance Goal 06-2D (Community-Based Job 

Training Grants) data are considered inadequate for the purpose of determining goal achievement. 

Accordingly, it has been omitted from this report. DOL continues to develop a reporting system that will 

provide Federal job training program common measures outcome data for this program. 

Last year, DOL implemented data quality assessments to continue efforts in effective performance 

management and transparent reporting. These assessments promote continuous improvement in 

performance goal data by applying additional criteria beyond adequacy, such as data accuracy, validity, and 

timeliness. Based on such criteria, the Department's data quality is rated Very Good or Excellent on a five 

point scale for more than half of the data presented in this report. Program performance data quality, 

assessment of internal controls pursuant to the Federal Managers' Financial Integrity Act (FMFIA) and 

compliance of financial management systems with the Federal Financial Management Improvement Act of 

1996 (FFMIA) are discussed in greater detail in the Management's Discussion and Analysis section of this 

report. 
Secretary’s Message 

FY 2007 Performance and Accountability Report 7 

Conclusion

This 2007 Performance and Accountability Report is a comprehensive assessment of achievements with 

respect to ambitious and challenging goals and targets. The positive results this year have been possible 

because of Department wide teamwork to prepare America’s workers for a competitive global market; to 

provide for safe and healthy work environments; and to vigorously protect retirement security and ensure fair 

compensation. 

Elaine L. Chao 

Secretary of Labor 

Secretary’s Message 

FY 2007 Performance and Accountability Report 9 

Management’s Discussion and Analysis 
Management’s Discussion and Analysis 

10 United States Department of Labor 

Introduction 

Mission 

 

The Department of Labor (DOL or the Department) fosters and 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 and 

retain workers, strengthening free collective bargaining, and tracking changes in employment, prices, and 

other national economic measurements. 

President William Howard 

Taft signed the bill 

establishing the 

Department of Labor on 

March 4, 1913, just hours 

before leaving office. In 

the words of the act 

establishing the 

Department of Labor, its 

main purpose is "to 

foster, promote and 

develop the welfare of 

working people, to 

improve their working 

conditions, and to 

advance their 

opportunities for 

profitable employment."

While socio-economic 

conditions have changed 

greatly since 1913 and 

new statutory 

responsibilities have 

expanded its scope, the 

Department’s mission 

remains unchanged. 

 

 

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. 

The seal of the Department of Labor was approved by President Woodrow Wilson on 

June 21, 1913. The seal is a gold shield divided horizontally by a red band. The gold 

color denotes integrity; the red color is for courage and endurance. 

 

On the gold shield above the red band is an anvil and below the band is a plough, 

both in their natural colors. These represent industry. On the red band are a pulley, a 

lever, and an inclined plane. They are in silver and represent the three fundamental 

principles of mechanics and represent humanity’s efforts to understand and harness 

the forces of nature for productive ends. 

 

The crest is an eagle with outspread wings. 
Introduction 

FY 2007 Performance and Accountability Report 11 

Organization and Program Activities 

 

DOL accomplishes its mission through component agencies and offices that administer the various statutes 

and programs on behalf of the Department. 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, Commissioner, or Director, are the Employment 

and Training Administration (ETA), Employment Standards Administration (ESA), Occupational Safety and 

Health Administration (OSHA), Mine Safety and Health Administration (MSHA), Veterans’ Employment and 

Training Service (VETS), Employee Benefits Security Administration (EBSA), Pension Benefit Guaranty 

Corporation (PBGC)1, and Bureau of Labor Statistics (BLS). The organization chart and the major activity 

description that follows include the most significant offices of the Department. 

Employment and Training 

ETA provides high quality job training and education, employment, labor market information, and income 

maintenance services primarily through State and local workforce investment systems. For example, the 

Trade Adjustment Assistance Program provides re-employment services such as occupational training, job 

search and relocation assistance, and income support to workers who have lost their jobs due to increased 

imports or shifts of production to foreign countries. 

 

1 PBGC – a Federal corporation created by the Employee Retirement Income Security Act of 1974 – is not included in the 

DOL organization chart. However, in accordance with the requirements of the Government Performance and Results 

Act (GPRA), PBGC’s performance reporting is included in this report because PBGC’s performance goals are included in 

the Department’s performance budget. 

Office of 

Public 

Affairs 

Office of

Congressional and 

Intergovernmental 

Affairs

Office of the 

Assistant Secretary 

for Administration 

and Management 

Mine Safety

and 

Health 

Administration 

Office of 

Inspector 

General 

Office of the 

Secretary 

of Labor 

Office of the 

Deputy Secretary

of Labor 

Executive Secretariat 

Employment 

and Training 

Administration 

Employment 

Standards 

Administration

Veterans’ 

Employment 

and Training 

Service 

Employee 

Benefits Security 

Administration 

Bureau of 

International 

Labor Affairs 

Office of Small

Business Programs 

Women's

Bureau 

Office of the 

Assistant 

Secretary for 

Policy 

Bureau of 

Labor 

Statistics 

U.S. Department of Labor

Office of the 21st

Century Workforce 

Center for Faith Based 

and Community 

Initiatives

Office of the 

Ombudsman for the 

Energy Employees 

Occupational Illness 

Compensation 

Program

Office of 

Administrative Law 

Judges 

Benefits Review 

Board 

Employees’ 

Compensation 

Appeals Board

Administrative 

Review Board

Occupational 

Safety and 

Health 

Administration

Office of Job Corps 

Office of the 

Chief Financial 

Officer 

Office of 

Disability 

Employment 

Policy 

Office of the 

Solicitor 
Management’s Discussion and Analysis 

12 United States Department of Labor 

VETS helps veterans, reservists, and National Guard members in securing and maintaining employment and 

the rights and benefits associated with employment. 

The Women’s Bureau (WB) promotes profitable employment opportunities for women, empowering them by 

enhancing their skills and improving their working conditions, and providing employers with more alternatives 

to meet their labor needs. 

The Office of Disability Employment Policy (ODEP) seeks to increase employment opportunities for people 

with disabilities by expanding access to training, education, employment supports, assistive technology, 

integrated employment, entrepreneurial development, and small-business opportunities. 

 

Unemployment Insurance 

ETA’s Unemployment Insurance (UI) programs provide unemployment benefits to workers who are 

unemployed because of a lack of suitable work and meet other eligibility requirements that are established 

mostly by the States. 

 

Workers’ Compensation 

ESA’s Office of Workers’ Compensation Programs (OWCP) provides wage replacement benefits, medical 

treatment, vocational rehabilitation, and other benefits to Federal and certain other workers who are injured 

at work or acquire an occupational disease, and/or to other members of their families. 

 

Workplace Safety and Health 

OSHA seeks to assure for every working man and woman in the Nation safe and healthful working conditions. 

OSHA enforces compliance with the regulations and safety and health standards contained in the 

Occupational Safety and Health Act. Employers subject to the Act have a general duty to provide work and a 

workplace free from recognized, serious hazards. 

MSHA protects the safety and health of miners by assuring compliance with Federal safety and health 

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

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

ESA protects the welfare and rights of, and generates equal employment opportunity for, American workers by 

promoting compliance with laws such as the Fair Labor Standards Act, which contains rules concerning the 

safe employment of young workers. 

 

Health Plan and Retirement Benefit Protections 

The Department is responsible for administering and enforcing provisions of the Employee Retirement Income 

Security Act (ERISA). EBSA enforces ERISA through civil and criminal actions, provides consumer information 

on benefit plans and compliance assistance to employers and plan service providers and develops regulations 

encouraging the growth of employment-based benefits. 

PBGC, for which the Secretary serves as Chair of the Board of Directors, insures retirement-plan participants’ 

pension benefits and supports 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. 

 

Labor Statistics 

BLS provides key economic statistics to the public, Congress, Federal agencies, State and local governments, 

businesses, and others, including data on employment, wages, inflation, productivity, and many other topics. 

 

International Policy 

The Bureau of International Labor Affairs (ILAB) develops and implements Departmental policy, oversees 

programs relating to international labor activities, and coordinates Departmental international activities 

involving other U.S. Government agencies, intergovernmental and non-governmental organizations. 
Introduction 

FY 2007 Performance and Accountability Report 13 

Report Outline 

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

Department’s program and financial performance for FY 2007. It is divided into four sections: 

• The Secretary’s Message is a letter from the chief executive that highlights the Department’s 

achievements for the year and communicates direction and priorities. 

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

organization, and activities; summarizes program and financial performance, including Program 

Assessment Rating Tool reviews and compliance with relevant financial management legislation; 

addresses major management challenges such as those identified annually by the Office of Inspector 

General (OIG); and reports on DOL’s implementation of the President’s Management Agenda. 

• The Performance Section presents program results and costs, and includes assessments of progress 

in achieving the Department’s performance 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. It includes a letter from the Chief Financial 

Officer, the Independent Auditors’ Report (an independent opinion on the Consolidated Financial 

Statements) and the Annual Financial Statements.

Three Appendices supplement the performance and financial sections by providing additional information on 

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

Labor Day History 

Labor Day, celebrated on the first Monday in 

September, is a yearly national tribute to the 

contributions workers have made to the strength, 

prosperity, and well-being of America. The Central 

Labor Union of New York City first proposed to 

celebrate Labor Day “as a general holiday for the 

laboring classes.” They appointed a committee that 

planned a street parade to demonstrate the esprit de 

corps of the trade unions and a festival for workers 

and their families, and held the first celebration on 

Tuesday, September 5, 1882, in New York City. 

Members took unpaid leave and invited other unions 

to join them in the march. At first, only a handful of 

marchers assembled and onlookers jeered. Then, 

shortly before the march started, 200 men and a 

band from the Jewelers’ Union arrived. As the parade 

inched forward, more and more groups joined in. By the time they reached the reviewing stands in Union Square, there 

were around 10,000 marchers. Afterwards, the marchers and their families went to Wendel’s Elm Park for a picnic, 

speeches, dancing and fireworks. 

In 1884, the Central Labor Union went back to their original idea of celebrating Labor Day on the first Monday of 

September. They urged similar organizations in other cities to follow suit, and by 1885, Labor Day was celebrated in 

many industrial centers across the country. The first governmental recognition of the holiday came through city 

ordinances passed in 1885 and 1886. Legislation was first introduced in New York, but first passed in Oregon on 

February 21, 1887. The same year, four more states – Colorado, Massachusetts, New Jersey, and New York – passed 

Labor Day legislation. Connecticut, Nebraska, and Pennsylvania did so by the end of the decade. Over the next seven 

years, 23 other states joined. Finally, a bill making it a national holiday was passed unanimously by both houses of 

Congress and signed by President Grover Cleveland on June 28, 1894. 
Management’s Discussion and Analysis 

14 United States Department of Labor 

Program Performance Overview 

Fiscal Year (FY) 2007 marks the ninth 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 

DOL strategic goals2 were selected for inclusion in the FY 2008 Performance Budget Overview.3 These 

performance goals and their indicators provide the basis for assessments of DOL’s effectiveness. The 

Department’s goal structure has three levels that are described below. The table that follows indicates FY 

2007 program performance goal achievement by strategic goal. 

Strategic Goals

DOL has four goals that express outcomes associated with the Department’s mission and serve to 

focus Departmental efforts on links between activities and higher purposes: A Prepared Workforce, A 

Competitive Workforce, Safe and Secure Workplaces, and Strengthened Economic Protections. 

Performance Goals

Each of DOL’s strategic goals is supported by several program-level goals that provide clarity of 

purpose. This report includes 25 performance goals.4

Performance Indicators

Quantitative measures determine achievement of performance goals. For this 

reporting period, 87 indicators serve this purpose. DOL requires that all indicator 

targets are reached to qualify as Achieved. Substantially Achieved, which recognizes 

results that were very close to the goal, requires that for 80 percent of indicators, 

targets are reached or results improved over the prior year. 

Performance Goals 

Strategic Goal Goals 

Achieved

Substantially

Achieved

Not 

Achieved Total 

Percent 

Achieved or 

Substantially 

Achieved 

Goal 1 – A Prepared Workforce: Develop a prepared 

workforce by providing effective training and support services 

to new and incumbent workers and supplying high quality 

information on the economy and labor market.

2 1 2 5 60% 

Goal 2 – A Competitive Workforce: Meet the competitive 

labor demands of the worldwide economy by enhancing the 

effectiveness and efficiency of the workforce development 

and regulatory systems that assist workers and employers in 

meeting the challenges of global competition.

5 0 5 10 50% 

Goal 3 – Safe and Secure Workplaces: Promote 

workplaces that are safe, healthful and fair; guarantee 

workers receive the wages due them; foster equal opportunity 

in employment; and protect veterans’ employment and reemployment rights. 

3 1 1 5 80% 

Goal 4 – Strengthened Economic Protections: Protect 

and strengthen worker economic security through effective 

and efficient provision of unemployment insurance and 

workers’ compensation; ensuring union transparency; and 

securing pension and health benefits. 

1 3 1 5 80% 

Total 11 5 9 25 64% 

 

2 See the DOL FY 2006-2011 Strategic Plan at http://www.dol.gov/_sec/stratplan/main.htm 3 http://www.dol.gov/_sec/Budget2007/overview-pb.htm#app1

4 This report includes performance goals from two different reporting periods. 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 by nine months. This period is referred to as a Program Year (PY); such goals being reported on in this 

document cover July 1, 2006 to June 30, 2007 (PY 2006). PY 2007 goals will appear in the FY 2008 report.
Program Performance Overview 

FY 2007 Performance and Accountability Report 15 

The total of 64 percent achieved or substantially achieved compares with 50 percent last year and 60 percent 

in FY 2005. Starting in FY 2007, DOL simplified its performance reporting by replacing the indicator result 

category “substantially reached” with “improved.” Of the five substantially achieved goals, just two would 

have qualified under the old rule, and the overall percent achieved and substantially achieved would have 

been 52 percent. In other words, two percentage points of the improvement are due to performance and the 

other twelve points are accounted for by methodology. 

Charts below present, by strategic goal, FY 2007 achievement as measured by performance indicators and 

performance goals. The performance goal number,5 goal statement, and responsible agency appear on the 

left axis, the total percentage of indicator targets reached or improved is indicated in the horizontal bars, and 

the goal result is on the right axis. Corresponding strategic goal and DOL-wide averages for indicators and 

performance goals (percentage of goals achieved or substantially achieved) are presented at the bottom of 

each chart in the bars and on the right axis, respectively, to facilitate comparisons. If the goal is achieved, the 

bar will run all the way across because by definition, 100 percent of indicator targets were reached. If the 

goal is substantially achieved, the indicator total can range from 80 percent to 100 percent as determined by 

the category definition (see “Performance Indicators” description on the preceding page). 

Strategic Goal 1 - A Prepared Workforce

Performance Goal achievement (on right axis) and percent of indicators improved or 

targets reached (inside box)

100%

33%

100%

100%

50%

74%

79%

0% 20% 40% 60% 80% 100%

07-1A Improve information available to decision-makers on

labor market conditions, and price and productivity changes. 

(BLS)

06-1B Improve educational achievements of Job Corps

students, and increase participation of Job Corps graduates

in employment and education. (OJC)

06-1C Increase placements and educational attainments of

youth served through the WIA youth program. (ETA)

07-1D Strengthen the registered apprenticeship system to

meet the training needs of business and workers in the 21st

Century. (ETA)

06-1E Improve the employment outcomes for veterans who

receive One Stop Career Center services and Homeless

Veterans’ Reintegration Program services. (VETS)

Goal 1 Average

DOL Average

Achieved

Not Achieved

Substantially

Achieved

Achieved

Not Achieved

60%

64%

As indicated in the chart above, DOL had five performance goals under Strategic Goal 1 in FY 2007, of which 

three were achieved or substantially achieved (60 percent) – below the Department wide average of 64 

percent. BLS achieved its goal, reaching all six targets. Job Corps reached its literacy/numeracy target but 

not its targets for placement in employment or education and attainment of a degree, General Educational 

Development (GED) credential or certificate. The WIA Youth program, which uses the same measures, 

substantially achieved its goal; student academic attainment reached the target, while placement improved 

 

5 The first two digits of each goal number indicate the funding year. In this report, all “06” goals are reporting on the 

Program Year period defined above. 
Management’s Discussion and Analysis 

16 United States Department of Labor 

over PY 2005 results but fell slightly below the target. The Office of Apprenticeship achieved its goal by 

reaching its employment retention and average hourly wage gains targets. VETS’ goal was not achieved; three 

of six targets were reached. 

Strategic Goal 2 - A Competitive Workforce

Performance Goal achievement (on right axis) and percent of indicators improved or 

targets reached (inside box)

67%

33%

33%

100%

50%

100%

25%

100%

100%

100%

68%

79%

0% 20% 40% 60% 80% 100%

06-2A Increase the employment, retention, and earnings of

individuals registered under the Workforce Investment Act

Adult program. (ETA)

06-2B Increase the employment, retention, and earnings of

individuals registered under the Workforce Investment Act

Dislocated Worker Program. (ETA)

06-2C Improve the outcomes for job seekers and

employers who receive One-Stop employment and

workforce information services. (ETA)

06-2E Increase accessibility of workforce information

through the National Electronic Tools. (ETA)

06-2F Assist older workers to participate in a demanddriven economy through the Senior Community Service

Employment Program. (ETA)

07-2G Assist workers impacted by international trade to

better compete in the global economy through the Trade

Adjustment Assistance Program. (ETA) 

07-2H Address worker shortages through Foreign Labor

Certification Programs. (ETA)

07-2I Build knowledge and advance disability employment

policy that affects and promotes systems change. (ODEP)

07-2J Maximize regulatory flexibility and benefits and

promote flexible workplace programs. (OASP)

07-2K Contribute to the elimination of the worst forms of

child labor internationally. (ILAB)

Goal 2 Average

DOL Average

Not Achieved

Not Achieved

Not Achieved

Achieved

Not Achieved

Achieved

Not Achieved

Achieved

Achieved

Achieved

50%

64%

DOL achieved or substantially achieved five of ten performance goals (50 percent) in Strategic Goal 2, which 

is below the Department’s average of 64 percent. The WIA Adult program goal was not achieved, but two of 

the three Federal job training program common measure6 targets were reached. The WIA Dislocated Worker 

 

6 Several Federal agencies, including the Departments of Labor, Education, Health and Human Services, Interior and 

Veterans Affairs, administer programs that share the goal of helping people find jobs. To inform comparative 

evaluations of effectiveness, the Administration worked with these agencies to develop outcome measures that apply 

to their diverse methods and target populations. While these measures have evolved over the last several years, they 

have consistently focused on participants’ entered employment and employment retention rates, and earnings. 
Program Performance Overview 

FY 2007 Performance and Accountability Report 17 

goal was not achieved, either, missing the entered employment and retention targets but reaching the 

average earnings target. The performance goal for One-Stop employment and workforce information services 

was not achieved; in this case, the average earnings target was reached but targets for entered employment 

and employment retention were not. Results for Performance Goal 06-2D (Community Based Job Training 

Grants) are not reported because data are considered inadequate for the purpose of determining goal 

achievement. The performance goal for increasing accessibility of workforce information through National 

Electronic Tools was achieved, reaching all three targets. The Senior Community Service Employment 

Program did not achieve its goal, reaching just one of two targets. The Trade Adjustment Assistance program 

reached all three of its targets, achieving the goal. 

The Foreign Labor Certification program goal was not achieved; one of four targets was reached. ODEP 

achieved its goal, reaching all three targets. The Office of the Assistant Secretary for Policy achieved its goal 

by reaching all three of its targets. ILAB’s goal to reduce exploitive child labor worldwide was achieved by 

reaching both targets. 

Strategic Goal 3 - Safe and Secure Workplaces

Performance Goal achievement (on right axis) and percent of indicators improved or 

targets reached (inside box)

100%

83%

50%

100%

100%

80%

79%

0% 20% 40% 60% 80% 100%

07-3A Improve workplace safety and health through

compliance assistance and enforcement of occupational

safety and health regulations and standards. (OSHA)

07-3B Reduce work-related fatalities, injuries, and illnesses

in mines. (MSHA)

07-3C Ensure workers receive the wages due them. (ESA)

07-3D Federal contractors achieve equal opportunity

workplaces. (ESA)

07-3E Reduce employer-employee employment issues

originating from service members’ military obligations

conflicting with their civilian employment. (VETS)

Goal 3 Average

DOL Average

Achieved

Substantially Achieved

Not Achieved

Achieved

Achieved

80%

64%

 

For Strategic Goal 3, DOL achieved or substantially achieved four of five performance goals (80 percent), 

exceeding the FY 2007 average of 64 percent. OSHA achieved its goal by reaching targets for reducing the 

workplace injury and illness rate and the fatality rate. MSHA substantially achieved its goal to improve mine 

safety and health by reaching targets for four performance indicators and improving results for another (of six 

total). ESA’s Wage and Hour Division did not achieve its goal because it reached just one of four targets – for 

improving efficiency of the wage determination process. ESA’s Office of Federal Contractor Compliance 

Programs achieved its goal, reaching its targets for reducing discrimination and increasing compliance among 

Federal contractors. VETS’ goal for protecting employment and reemployment rights of service members was 

achieved via improvement in the program’s comprehensive Progress Index. 
Management’s Discussion and Analysis 

18 United States Department of Labor 

Strategic Goal 4 - Strengthened Economic Protections

Performance Goal achievement (on right axis) and percent of indicators improved or 

targets reached (inside box)

75%

100%

100%

100%

100%

96%

79%

0% 20% 40% 60% 80% 100%

07-4A Make timely and accurate benefit payments to

unemployed workers, facilitate the reemployment of

Unemployment Insurance (UI) claimants, and set up tax

accounts promptly for new employers. (ETA)

07-4B Reduce the consequences of work-related injuries. 

(ESA)

07-4C Ensure union financial integrity, democracy and

transparency. (ESA)

07-4D Enhance pension and health benefit security. 

(EBSA)

07-4E Improve the pension insurance program. (PBGC)

Goal 4 Average

DOL Average

Not Achieved

Substantially

Achieved

Substantially

Achieved

Achieved

Substantially

Achieved

80%

64%

DOL achieved or substantially achieved four of the five performance goals in Strategic Goal 4 (80 percent) – 

above the 64 percent Department wide average. The Unemployment Insurance program did not achieve its 

goal; however, it reached two of its four indicator targets and improved results for a third. ESA’s OWCP 

substantially achieved its goal by reaching eight of nine targets for Federal Employees' Compensation Act, 

Longshore and Harbor Workers' Compensation, Black Lung Benefits and Energy Employees Occupational 

Illness Compensation programs. ESA’s OLMS substantially achieved its performance goal by reaching one 

target and improving results for the other two indicators. EBSA achieved its goal, reaching all three targets. 

PBGC substantially achieved its goal by reaching five of six targets and improving results for the sixth 

indicator. 

A tally of goals achieved and targets reached, 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 at whether observed results indicate positive program 

impacts. Separate performance goal narratives in the Performance Section discuss significant trends and 

their implications.
Program Performance Overview 

FY 2007 Performance and Accountability Report 19 

The next table lists Program Year 2007 goals (July 1, 2007 – June 30, 2008) for which results will be reported 

in the FY 2008 Performance and Accountability Report. All track spending and performance on a cycle that 

lags the Federal fiscal year by nine months due to WIA forward-funding provisions. 

07-1B (OJC) Improve educational achievements of Job Corps students, and increase participation of Job Corps 

graduates in employment and education. 

07-1C (ETA) Increase placements and educational attainments of youth served through the WIA youth program.

07-1E (VETS) Increase the employment outcomes for veterans who receive One Stop Career Center services 

and Homeless Veterans’ Reintegration Program services. 

07-2A (ETA) Increase the employment, retention, and earnings of individuals registered under the Workforce 

Investment Act Adult program. 

07-2B (ETA) Increase the employment, retention, and earnings replacement of individuals registered under the 

Workforce Investment Act Dislocated Worker program. 

07-2C (ETA) Improve the outcomes for job seekers and employers who receive One Stop employment and 

workforce information services. 

07-2D (ETA) Increase accessibility of workforce information through the National Electronic Tools. 

07-2E (ETA) Assist older workers to participate in a demand-driven economy through the Senior Community 

Service Employment Program. 

Program Assessment Rating Tool (PART) Reviews 

 

The Program Assessment Rating Tool (PART) was developed to assess and improve programs’ positive impact 

on outcomes that matter to the public. A review using the PART helps identify a program’s strengths and 

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

Federal programs are scored on their purpose and design, strategic and performance planning, management, 

and results and accountability. Total scores determine ratings: Effective, Moderately Effective, Adequate, 

Ineffective, or Results Not Demonstrated. The final category can apply to a program with any score if 

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

have adequate data. Summaries of each program’s assessment and improvement plan are published on 

ExpectMore.gov, a site dedicated to making meaningful information about Federal program performance 

more accessible to the public. 

To date, 35 DOL programs have been assessed using 

the PART. One is rated Effective, ten Moderately 

Effective, fifteen Adequate, four Ineffective, and five 

Results Not Demonstrated. The table below lists the 

programs as they are identified in ExpectMore.gov. 

For cross-referencing with the performance section of 

this report, where Departmental performance goals 

apply, goal numbers are provided. The list is sorted 

first by the calendar year in which the review was 

conducted, then by total score. 

PART assessments are useful because they lead to 

improvement plans intended to enhance 

accountability and performance. Improvements DOL 

has recently implemented include development of 

new outcome-oriented performance measures for two DOL programs currently rated Results Not 

Demonstrated (Job Training Apprenticeship and the Women’s Bureau) and development and implementation 

of efficiency measures for each of the DOL programs assessed through the PART. 

DOL PART Ratings

Rating, # programs and percent of total (35)

Adequate

15

(43%)

Ineffective

4

(11%)

Moderately 

Effective

10

(29%)

Results Not 

Demonstrated

5

(14%)

Effective

1

(3%)
Management’s Discussion and Analysis 

20 United States Department of Labor 

PART Scores and Ratings 

Program/Goal Year Score Rating 

Pension Benefit Guaranty Corporation/07-4E 2007 70 Moderately Effective 

Energy Employees Occupational Injury Compensation Program/07-4B 2007 61 Adequate 

Dislocated Worker National Emergency Grants/07-2B 2007 56 Adequate 

Occupational Safety and Health Administration/07-3A 2007 56 Adequate 

Job Corps/06-1B 2007 55 Adequate 

Trade Adjustment Assistance/07-2G 2007 49 Ineffective 

Homeless Veterans’ Reintegration Program/06-1E 2006 82 Moderately Effective 

Wage and Hour Enforcement and Compliance Program/07-3C 2006 73 Moderately Effective 

Office of the Solicitor 2006 71 Moderately Effective 

Office of Disability Employment Policy/07-2I 2006 41 Results Not Demonstrated

Youthbuild 2006 37 Results Not Demonstrated

Veterans' Employment and Training State Grants/06-1E 2005 76 Moderately Effective 

Work Incentive Grants 2005 57 Adequate 

Office of Labor Management Standards/07-4C 2005 55 Adequate 

Longshore and Harbor's Workers Compensation Program/07-4B 2005 54 Adequate 

Workforce Investment Act - Adult Employment and Training/06-2A 2005 53 Adequate 

Job Training Apprenticeship/07-1D 2005 45 Results Not Demonstrated

Women’s Bureau 2005 41 Results Not Demonstrated

H-1B Work Visa for Specialty Occupations – Labor Condition 

Application/07-2H 2004 78 Moderately Effective 

Employee Benefits Security Administration/07-4D 2004 71 Moderately Effective 

Office of Federal Contract Compliance Programs/07-3D 2004 65 Adequate 

Permanent Labor Certification/07-2H 2004 64 Adequate 

Employment Service/06-2C 2004 56 Adequate 

International Child Labor and Office of Foreign Relations 2004 51 Adequate 

Workforce Investment Act – Native American Programs 2004 51 Adequate 

Bureau of Labor Statistics/07-1A 2003 88 Effective 

Unemployment Insurance Administration State Grants/07-4A 2003 74 Moderately Effective 

Black Lung Benefits Program/07-4B 2003 71 Moderately Effective 
Program Performance Overview 

FY 2007 Performance and Accountability Report 21 

PART Scores and Ratings 

Program/Goal Year Score Rating 

Mine Safety and Health Administration/07-3B 2003 55 Adequate 

Workforce Investment Act – Dislocated Worker Assistance/06-2B 2003 50 Adequate 

Workforce Investment Act – Youth Activities/06-1C 2003 45 Ineffective 

Workforce Investment Act – Migrant and Seasonal Farmworkers 2003 38 Ineffective 

Prevailing Wage Determination Program/07-3C 2003 29 Results Not Demonstrated

Community Service Employment for Older Americans/06-2F 2003 28 Ineffective 

Federal Employees’ Compensation Act/07-4B 2002 75 Moderately Effective 

Cost of Results 

Total Net Cost7 of DOL activities for FY 2007 was $47.872 billion. An allocation based on the Department’s 

goal structure indicates that the fourth strategic goal, Strengthened Economic Protections, is dominant – 

accounting for $38.495 billion, or 80 percent of the total. This figure consists in large part ($35.101 billion, or 

91 percent) of mandatory benefit payments to unemployed workers or workers disabled as a result of workrelated injuries or illnesses. The first goal, A Prepared Workforce, required $3.103 billion (6 percent) for 

employment-related services. The second goal, A Competitive Workforce, accounted for $5.027 billion, 11 

percent of the total, which went toward job training programs and other services focused on maintaining 

America’s position in a global market for labor. Approximately $1.237 billion (3 percent) went toward the 

third goal, Safe and Secure Workplaces, to fund direct services (such as salaries of Federal employees) aimed 

at improving safety and health in the workplace. 

The table that spans the next several pages, DOL Program Net Costs, provides a comprehensive view of the 

cost information presented in the Performance Section, including footnotes that explain terms and 

methodology. It is important to note that while all net cost information in this report is derived from the same 

financial accounting system, DOLAR$, there are significant differences between statements in the 

Performance Section and in the Financial Section due to the Department’s numerous forward-funded 

programs (those operating on a Program Year). 

Where applicable, the program net cost statement includes a row labeled “Dollars not associated with 

indicators” to indicate costs that cannot be associated with the current set of performance indicators. 

Remaining difficulties may be resolved over time and lead to more complete allocations in future statements. 

However, it could also require a change in performance indicators that reduces the overall value of 

performance information. Frequently, costs for several indicators are intentionally combined by merging cells 

because program activities are not separable into categories associated with one or another of them (e.g., job 

training program common measures – entered employment, employment retention and average earnings). 

As indicated in the preceding paragraph, several programs make mandatory benefit payments that account 

for the majority of their costs. Because performance indicators and the Department’s managerial cost 

accounting system that generates this information are designed to inform analysis and decision-making 

related to discretionary budgets and program management, such payments are shown separately and not 

included in allocation cost models. 

 

7 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. 
Management’s Discussion and Analysis 

22 United States Department of Labor 

DOL’s FY 2005 Performance and Accountability Report was the first to feature a statement of full costs at the 

performance goal level. Last year, allocation of costs reached the performance indicator level for some goals. 

This year, most DOL programs were able to associate costs with their performance indicators. This 

information is provided along with results in the tables at the beginning of each performance goal narrative in 

the Performance Section. Many of these narrative sections also include charts that display three years of net 

cost data at the performance goal level. 

DOL Program Net Costs (Millions of Dollars) 

Goal FY 2005 

PY 2004 

FY 2006

PY 2005

FY 2007

PY 2006

Strategic Goal 1: A Prepared Workforce8 $3,211 $3,360 $3,103

Performance Goal 07-1A (BLS) 536 573 574

Percent of output, timeliness, accuracy, and long-term improvement targets 

achieved for labor force statistics − − 268

Percent of output, timeliness, accuracy, and long-term improvement targets 

achieved for prices and living conditions − − 198

Percent of output, timeliness, accuracy, and long-term improvement targets 

achieved for compensation and working conditions − − 95

Percent of output, timeliness, accuracy, and long-term improvement targets 

achieved for productivity and technology − − 12

Customer satisfaction with BLS products and services (e.g., the American 

Customer Satisfaction Index) − − 0

Cost per transaction of the Internet Data Collection Facility − − 1

Dollars not associated with indicators − 573 0

Performance Goal 06-1B (Job Corps) 1,309 1,402 1,238

Percent of participants entering employment or enrolling in post-secondary 

education or advanced training/occupational skills training in the first 

quarter after exit 

−

Percent of students who attain a GED, high school diploma or certificate by 

the end of the third quarter after exit −

Percent of students who achieve literacy or numeracy gains of one Adult 

Basic Education (ABE) level −

1,402 1,238

Performance Goal 06-1C (WIA Youth) 947 1,017 908

Percent of youth who enter employment or the military or enroll in post 

secondary education and/or advanced training/occupational skills training 

in the first quarter after exit 

−

Percent of students who attain a GED, high school diploma, or certificate by 

the end of the third quarter after exit −

1,017

Percent of students who achieve literacy or numeracy gains of one Adult 

Basic Education (ABE) level − −

908

 

8 Strategic goal subtotals reported in DOL’s FY 2006 Performance and Accountability Report are not valid for comparison 

to FY 2007 due to restructuring pursuant to the FY 2006-2011 Strategic Plan. Most performance goals moved, and 

costs for FY 2005 and FY 2006 have been restated to facilitate comparison. In addition, VETS’ costs for FY 2005 and 

FY 2006 were restated to reflect a more accurate allocation; totals for Strategic Goals 1, 2, and 3 were affected. 
Program Performance Overview 

FY 2007 Performance and Accountability Report 23 

DOL Program Net Costs (Millions of Dollars) 

Goal FY 2005 

PY 2004 

FY 2006

PY 2005

FY 2007

PY 2006

Performance Goal 07-1D (Apprenticeship) 23 25 24

Percent of those employed nine months after registration as an apprentice −

Average hourly wage gain for tracked entrants employed in the first quarter 

after registration and still employed nine months later −

25 24

Performance Goal 06-1E (VETS Employment Services) 209 212 211

Percent of Veteran participants employed in the first quarter after exit −

Percent of Veteran participants employed in the first quarter after program exit 

still employed in the second and third quarters after exit −

89 90

Percent of Disabled Veteran participants employed in the first quarter after 

exit −

Percent of Disabled Veteran participants employed in the first quarter after 

exit still employed in the second and third quarters after exit −

89 90

Entered employment rate for homeless veterans participating in the HVRP −

Employment retention rate after 6 months for homeless veteran HVRP 

participants −

30 29

Dollars not associated with indicators − 4 2

Other (Youth Offender Reintegration, Indian and Native American Youth 

Programs, etc.) 187 131 147

Strategic Goal 2: A Competitive WorkforceT

9 $5,110 $5,064 $5,027

Performance Goal 06-2A (WIA Adult) 906 912 864

Percent of participants employed in the first quarter after exit −

Percent of those employed in the first quarter after exit still employed in the 

second and third quarters after exit −

Average earnings in the second and third quarters after exit −

912 864

Performance Goal 06-2B (WIA Dislocated Worker) 1,472 1,543 1,443

Percent of participants employed in the first quarter after exit −

Percent of those employed in the first quarter after program exit still employed 

in the second and third quarters after exit −

Average earnings in the second and third quarters after exit −

1,543 1,443

Performance Goal 06-2C (One-Stop Employment and Workforce Information 

Services) 831 884 815

Percent of participants employed in the first quarter after exit −

Percent of those employed in the first quarter after exit still employed in the 

second and third quarters after exit −

Average earnings in the second and third quarters after exit −

884 815

 

9 Costs associated with Performance Goal 06-2D (Community Based Job Training Grants) are not listed separately 

because the goal was omitted from this report due to inadequate performance data; they are included in Goal 2 Other. 

Costs associated with Performance Goal 07-2J (OASP) are included in costs allocated to other performance goals. 
Management’s Discussion and Analysis 

24 United States Department of Labor 

DOL Program Net Costs (Millions of Dollars) 

Goal FY 2005 

PY 2004 

FY 2006

PY 2005

FY 2007

PY 2006

Performance Goal 06-2E (National Electronic Tools) 26 27 25

Number of page views on America’s Career InfoNet −

Number of O*NET site visits −

Number of page views on Career Voyages −

27 25

Performance Goal 06-2F (Senior Community Service Employment Program)T

10 426 432 443

Percent of participants employed in the first quarter after exit −

Percent of participants employed in the first quarter after exit still employed in 

the second and third quarters after exit −

Average earnings in the second and third quarters after exit −

432 443

Performance Goal 07-2G (Trade Adjustment Assistance) 846 700 816

Percent of participants employed in the first quarter after exit −

Percent of participants employed in first quarter after exit still employed in the 

second and third quarters after exit −

Average earnings in the second and third quarters after exit −

700 816

Performance Goal 07-2H (Foreign Labor Certification) 60 46 63

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 permanent labor certification under the 

streamlined system that are resolved within six months of filing − − −

Percent of accepted H-2A applications with no pending State actions 

processed within 15 days of receipt and 30 days from the date of need − − −

Percent of H-2B applications processed within 60 days of receipt − − −

Dollars not associated with indicators − 46 63

Performance Goal 07-2I (ODEP) 52 50 34

Number of policy related documents −

Number of formal agreements −

Number of effective practices −

50 34

Performance Goal 07-2K (ILAB) 74 95 101

Number of children prevented or withdrawn from child labor and provided 

education and/or training opportunities as a result of DOL-funded child 

labor elimination projects 

−

Number of countries with increased capacities to address child labor as a 

result of DOL-funded child labor elimination projects −

95 101

Other (Indian and Native American Adult Programs, National Farmworker Jobs 

Program, Work Incentive Grants, Transition Assistance Program, Pilots, 

Demonstrations, Research & Evaluations, Community Based Job Training 

Grants, H-1B Technical Skills Training, and other ILAB programs) 

417 375 424

 

10 This is a new goal that was listed with Other in the FY 2005 table. 
Program Performance Overview 

FY 2007 Performance and Accountability Report 25 

DOL Program Net Costs (Millions of Dollars) 

Goal FY 2005 

PY 2004 

FY 2006

PY 2005

FY 2007

PY 2006

Strategic Goal 3: Safe and Secure Workplaces11 $1,147 $1,189 $1,237

Performance Goals 07-3A (OSHA) 515 519 547

Days away, restricted and transferred (DART) per 100 workers −

Workplace fatalities per 100,000 workers for sectors covered by the OSH act −

519 547

Performance Goal 07-3B (MSHA) 307 348 356

Mine industry fatalities per 200,000 hours worked − − 121

Mine industry injuries per 200,000 hours worked − − 107

Percent of respirable coal dust samples exceeding the applicable standards 

for designated occupations − − 50

Percent of silica dust samples taken with a result that is less than half of the 

exposure limit in metal and nonmetal mines − − 35

Percent of noise samples taken with a result that is less than half of the 

exposure limit in metal and nonmetal mines − − 18

Percent of noise exposures above the citation level in coal mines − − 25

Dollars not associated with indicators − 348 −

Performance Goal 07-3C (Wage and Hour) 214 214 221

Number of workers for whom there is an agreement to pay or an agreement to 

remedy per 1,000 enforcement hours in complaint cases − 112 123

Percent of prior violators who achieved and maintained FLSA compliance 

following a full FLSA investigation − 27 30

Low wage workers assisted per 1,000 case hours − 39 45

Number of wage determination data submission forms processed per 1000 

hours − 23 23

Dollars not associated with indicators − 12 −

Performance Goal 07-3D (Federal Contractor Compliance) 99 97 103

Discrimination rate for audited Federal contractors − 68 72

Compliance rate for all other EEO requirements − 29 31

Performance Goal 07-3E (USERRA) 12 11 10

USERRA Progress Index (measures compliance and assistance 

performance) − 11 10

 

11 In FY 2005, OSHA and MSHA shared performance goals. Amounts shown for Performance Goals 07-3A and 07-3B for 

that year represent agencies’ shares of the total costs. 
Management’s Discussion and Analysis 

26 United States Department of Labor 

DOL Program Net Costs (Millions of Dollars) 

Goal FY 2005 

PY 2004 

FY 2006

PY 2005

FY 2007

PY 2006

Strategic Goal 4: Strengthened Economic Protections12 $40,597 $35,705 $38,495

Performance Goal 07-4A (Unemployment Insurance) 34,243 33,340 34,697

Mandated benefit payments − 30,506 32,051

Percent of intrastate first payments made within 21 days − − −

Percent of the amount of estimated detectable/recoverable overpayments that 

the States can establish for recovery − − −

Percent of UI claimants who were reemployed by the end of the first quarter 

after the quarter in which they received their first payment − − −

Percent of new employer liability determinations made within 90 days of the 

end of the first quarter in which liability occurred − − −

Dollars not associated with indicators − 2,834 2,645

Performance Goal 07-4B (Workers’ compensation) 6,131 2,130 3,554

Mandated benefit payments − 1,708 3,050

Lost production days rate (LPD per 100 employees) for FECA cases of the 

United States Postal Service − 7 7

Lost production days rate (LPD per 100 employees) for FECA cases of All 

Other Government Agencies − 7 7

Savings resulting from Periodic Roll Management case evaluations − 20 34

The rate of change in the indexed cost per case of FECA cases receiving 

medical treatment remains below the nationwide health care cost trend − 22 40

Targets for six communications performance areas − 7 12

Average days required to resolve disputed issues in Longshore and Harbor 

Worker’s Compensation Program contested cases − 6 6

Average number of days to render a decision on a claim for Black Lung 

benefits − 24 26

Average number of days to process initial claims for Energy Employees 

Occupational Illness benefits − 155 185

Percent of Final Decisions in the Energy Program processed within 180 days 

(hearing cases) or 75 days (all other cases) − 16 18

Percent of Part E claims backlog receiving initial decisions − − −

Dollars not associated with indicators − 159 172

Performance Goal 07-4C (Labor-Management Standards) 63 56 68

Percent of unions with fraud − 18 35

Percent of unions in compliance with LMRDA standards for democratic union 

officer elections − 11 13

Percent of union reports meeting standards of acceptability − 8 16

Dollars not associated with indicators − 20 4

 

12 Costs for Performance Goal 07-4E (PBGC) are not referenced because the Corporation’s financial statements are not 

part of the Department’s consolidated statements. PBGC’s financial statements can be found in their Annual 

Management Report at http://www.pbgc.gov/docs/PBGCAMR.pdf.
Program Performance Overview 

FY 2007 Performance and Accountability Report 27 

DOL Program Net Costs (Millions of Dollars) 

Goal FY 2005 

PY 2004 

FY 2006

PY 2005

FY 2007

PY 2006

Performance Goal 07-4D (EBSA) 160 179 176

Ratio of closed civil cases with corrected fiduciary violations to civil closed 

cases − −

Ratio of criminal cases accepted for prosecution to cases referred − −

103

Customer Satisfaction Index for employers, plan sponsors, employee 

representatives, trustees of multiemployer plans, and other plan 

professionals who have contacted EBSA for assistance 

− − 29

Applications to Voluntary Compliance programs − − −

Dollars not associated with indicators − 179 44

Costs Not Assigned to Goals $11 $10 $10

Total13 $50,076 $45,328 $47,872

Reconciliation to the Consolidated Statements of Net Costs:

Costs for programs included above on a program year basis (July 1 to June 30) $6,268 $6,659 $6,224

Costs for these same programs on a fiscal year basis (October 1 to September 30) $6,556 $6,205 $6,643

Net Cost of Operations per Consolidated Statements of Net Costs $50,364 $44,874 $48,291

Cost of Regulations Enforced by DOL 

The Department enforces a broad range of regulations that provide for Safe and Secure Workplaces and for 

Strengthened Economic Protections.

14 However, the cost data reported in the preceding table -- and in the 

Financial Section of this report -- do not include the costs (and benefits) to non-DOL entities of compliance 

with these regulations. To further improve transparency and accountability of our PAR, we are introducing 

data on the cost of our regulations this year, and plan to make additional information available in subsequent 

reports. Reporting costs at the performance indicator level took several years, and we expect this ambitious 

effort to take some time, as well. 

In the Performance Section of the PAR, we quantify our results (or benefits) via outcome or output indicators 

that are seldom monetized, or valued in dollars. However, the DOL regulatory agencies do provide reports to 

OMB’s Office of Information and Regulatory Affairs (OIRA), which produces the annual Report to Congress on 

the Costs and Benefits of Federal Regulations. Accounting in these reports relies on rigorous, defensible 

estimates of the monetary value of both the cost and benefit sides of the ledger. OIRA’s report to Congress 

covers reviews of major final rules concluded in the preceding fiscal year.15 OSHA’s final rule – issued in 

 

13 This total does not match total net costs in the Consolidated Statements of Net Cost as certain costs in this table are 

presented on a program year basis. All costs in the Consolidated Statements of Net Cost are on a fiscal year basis. 14 Occupational Safety and Health Administration (OSHA), Mine Safety and Health Administration (MSHA), Employment 

Standards Administration (ESA), Employment Training Administration (ETA), and Employee Benefits Security 

Administration (EBSA).

15 Major rules include those likely to result in (A) an annual effect on the economy of $100 million or more; (B) a major 

increase in costs or prices for consumers, individual industries, Federal, State, or local government agencies, or 

geographic regions; or (C) significant adverse effects on competition, employment, investment, productivity, innovation, 

or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export 

markets – per the Small Business Regulatory Enforcement Fairness Act of 1996 – or that may result in the expenditure 

by State, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more (adjusted 

annually for inflation) in any one year – under the Unfunded Mandates Reform Act of 1995 – or that may have an 

annual effect on the economy of $100 million or more or adversely affect in a material way the economy, a sector of 

the economy, productivity, competition, jobs, the environment, public health or safety, or State, local, or tribal 

governments or communities – per Executive Order 12866. 
Management’s Discussion and Analysis 

28 United States Department of Labor 

February 2006 – on Occupational Exposure to Hexavalent Chromium was the only DOL rule among the seven 

added to OIRA’s 2007 Report to Congress. 

Hexavalent chromium compounds include chromate pigments found in some dyes, paints, inks, and plastics, 

and can also be used in the production of stainless steel and as anticorrosive agents in paint, primers, and 

other surface coatings. Workers who breathe hexavalent chromium compounds at their jobs for many years 

may be at increased risk of developing lung cancer – and breathing high levels of hexavalent chromium can 

irritate or damage the nose, throat, and lungs. Annual costs of this regulation were estimated to range from 

$244 million to $253 million, and annual benefits were estimated at $36 million to $896 million (both cost 

and benefit data are expressed in 2001 dollars). OSHA’s estimated compliance costs are based on the need 

to install engineering controls and to purchase and use supplemental respirators. Benefits are based on 

OSHA’s estimate that the rule would prevent 40-145 fatal cancers annually and 5-20 non-fatal lung cancers 

per year. OSHA also quantified, but did not monetize, an estimated benefit of avoiding from 332-1,140 nasal 

perforations per year. 

The only major final rule issued by a DOL agency in FY 2007 is MSHA’s Mine Evacuation Rule. A summary of 

the costs and benefits of this rule appears in the narrative for Performance Goal 07-3B. 
FY 2007 Performance and Accountability Report 29 

Financial Performance Overview 

Improving financial management continues to be high priority at DOL and an essential element of 

demonstrating accountability and enhancing services provided to the public. With the added impetus of 

tightening budgetary resources, improvements initiated under the President’s Management Agenda continue 

to mature from externally driven “initiatives” to internally embraced “ways of doing our business better.” 

Pivotal to driving better performance results through enhanced financial management practices has been 

DOL’s ongoing efforts to better inform day-to-day decision making with reliable cost information. 

In a July 2007 study of managerial cost accounting (MCA) practices in ten agencies, GAO found that only three 

agencies, including DOL, had implemented an MCA system entity-wide (GAO-07-679). The GAO Report 

commended DOL and the other agencies for having a strong leadership that supports MCA implementation. 

DOL’s ongoing efforts to improve its MCA tool, Cost Analysis Manager (CAM), are creating an instrument of 

change that managers increasingly value and use in their decision making. 

CAM allows agencies to identify, accumulate, and assign costs to outputs and bring relevant cost information 

to the desktops of managers throughout the department. An indispensable tool for improving program 

performance, CAM improves accountability and transparency for how well tax dollars are spent. One of DOL’s 

remaining challenges is the validation of labor distribution and performance data, where labor cost is often 

the most predominant factor when determining the cost of an activity. 

In FY 2007, DOL used CAM for costing quarterly performance indicator results using continual refinements for 

more accurate reporting. Throughout the year, DOL expanded the use of CAM by developing cost models for 

several programs, including one model that calculates the marginal rate of return on investment. Broader use 

of CAM is also being seen in the support of other budget activities. In DOL’s FY 2007 PAR, CAM provides net 

costs for 89 percent of the performance indicators. 

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 applies crossservices to 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. As of the end of 3rd quarter FY 2007, 

DOL referred $65.2 million, which represents 57 percent of all delinquent debt required to be referred to 

Treasury for collection. The Department continues to monitor and aggressively pursue its debt greater than 

180 days old. 

The Department continues to make improvements in its efforts to meet guidance and regulations outlined in 

the Prompt Payment Act (PPA). The PPA requires Executive agencies to pay commercial obligations within 

discrete time periods and to pay interest penalties when those time constraints are not met. During FY 2007, 

approximately $1.2 billion in gross payments were made. Included in this amount was just over $355,000 in 

interest penalty fees. Also during FY 2007, there were over 111,000 payments made to vendors and 

travelers. Of this amount, 3,352 invoices were paid late resulting in only 3 percent of the total payments 

incurring interest penalties. This is the same percentage rate that was reported by the Department for FY 

2006. 

The Department continues to work aggressively with its agencies to increase the number of vendors receiving 

payments through electronic fund transfer (EFT). The total number of vendors receiving EFT payments in FY 

2007 increased by 4 percent to 99 percent as the fiscal year ends. Although our Employment Standards 

Administration is continuing to promote EFT payments for their benefit and medical programs, their 

percentage rates continues to remain below Treasury’s goal of 98 percent. 

 
Management’s Discussion and Analysis 

30 United States Department of Labor 

Analysis of Financial Statements 

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 2007 and FY 2006. Highlights of the financial information 

presented in the principal financial statements are shown below. 

 

Assets 

(in thousands)

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

Funds with

Treasury

Investments Interest

Receivable

Accounts

Receivable

Advances Property,

Plant and

Equipment

FY2007 FY2006

 

Financial Position 

The Department's Balance Sheet presents its financial position through the identification of agency assets, 

liabilities, and net position. The Department's total assets increased from $83.6 billion in FY 2006 to $92.8 

billion in FY 2007. The increase in total assets primarily was accounted for in the Department's investments. 

The Department invests in non-marketable, special issue Treasury securities balances held in the 

Unemployment Trust Fund. The Department did not experience major changes in liabilities during FY 2007. 

Liabilities totaled $19.8 billion at the end of FY 2006 and $21.3 billion in FY 2007. Beginning in FY 2006, 

agencies were required to report earmarked non-exchange revenue and other financing sources, including 

appropriations. The Department was also required to report the portions of cumulative results of operations 

and unexpended appropriations on the face of the Balance Sheet. 
Financial Performance Overview 

FY 2007 Performance and Accountability Report 31 

Net Cost of Operations 

The Department's total net cost of operations in FY 2007 was $48.3 billion, an increase of $3.4 billion from 

the prior year. This increase was attributable to the following crosscutting programs: 

 

Crosscutting Programs

(in millions)

0

10,000

20,000

30,000

40,000

50,000

Income

Maintenance

Employment and

Training

Standards Safety and

Health

Statistics

FY 2007 FY 2006

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. 

Income maintenance increased by $3 billion from FY 2006 to FY 2007. There are two reasons for the 

increase. The Unemployment Trust Fund weekly reimbursement rate increased by 4.5% and the Energy 

Benefit Program actuarial liability increased by $1 billion. 

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. 

Statement of Budgetary Resources. This statement reports the budgetary resources available to DOL during 

FY 2007 and FY 2006 to effectively carry out the activities of the Department as well as the status of these 

resources at the end of each fiscal year. The Department had direct obligations of $52 billion in FY 2007, an 

increase of $1.7 billion from FY 2006. 

Limitations on the Principal Financial Statements. As required by the Government Management Reform Act 

of 1994 (31 USC 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. 

 
Management’s Discussion and Analysis 

32 United States Department of Labor 

Management Assurances 

The Department successfully implemented the internal control requirements outlined in the revised OMB 

Circular A-123, Management's Responsibility for Internal Controls, Appendix A. The Department's A–123 

compliance builds upon existing successes in financial management, including the Quarterly Financial 

Management Certification program, which requires managers at all levels to attest to the adequacy of 

effective management controls over program resources, financial systems, and financial reporting. The 

Department's approach to the A-123 requirement is compliance at managed cost, sustainability by reducing 

compliance mindset and reliance on outside parties to discover errors and problems, and improvement in 

effectiveness and efficiency of agency programs. 

 
Financial Performance Overview 

FY 2007 Performance and Accountability Report 33 

Disclosure of Federal Information Security Management Act (FISMA) Significant Deficiencies 

 

FISMA requires the Office of Inspector General (OIG) to perform annual independent evaluations of the DOL 

information security program and practices based upon audits of a subset of DOL’s identified major 

information systems. The objective of the audits is to determine if security controls over the systems are in 

compliance with FISMA requirements. 

Based on the audits performed during FY 2007, the OIG identified two significant deficiencies. One significant 

deficiency relates to access control weaknesses covering eight financial and non-financial information 

systems. None of the systems had an individual significant deficiency; however, when taken together the OIG 

stated that an access control significant deficiency exists at the Department level. Management has 

determined that the deficiencies relating to financial systems did not rise to the level of a significant 

deficiency. The other significant deficiency relates to a lack of an effective information security program in 

one other non-financial system. The OIG recommended that DOL: (1) implement an enhanced Department 

wide monitoring program to address the first deficiency, and (2) establish an information security program to 

address the second deficiency, with both programs designed to afford management reasonable assurance of 

compliance with DOL security controls, policies and procedures. In its response to the audit report, DOL 

stated that it has already taken certain corrective actions and is in the process of taking additional corrective 

actions to address the recommendations. 

 

Financial Management Systems and Strategy 

 

During FY 2007, DOL continued to pursue its financial management systems strategy to improve reporting, 

accountability, and decision-making, while furthering implementation of key provisions of the President’s 

Management Agenda, e-Gov requirements, and other regulatory mandates. The Department seeks to 

maintain financial management systems, processes, and controls that ensure financial accountability, provide 

useful information to management, and satisfy Federal laws, regulations, and guidance. 

DOL’s existing enterprise architecture for financial management consists of a central, mainframe-based core 

accounting system, DOLAR$. DOLAR$ receives and transmits financial data through both manual and 

automated processes from numerous feeder systems. These feeder systems include PeoplePower, CAM, 

eProcurement, systems maintained by program agencies to oversee the Department’s benefits programs, and 

others. 

DOLAR$ has been in use for over 18 years and was implemented prior to the passage of numerous significant 

laws affecting Federal financial management, including the Chief Financial Officers Act of 1990, the 

Government Performance and Results Act of 1993 (GPRA), the Government Management Reform Act of 

1994 (GMRA), the Clinger-Cohen Act of 1996, the Reports Consolidation Act of 2000, and the Federal 

Information Security Management Act of 2002 (FISMA). It is no longer cost-effective to upgrade DOLAR$, 

which is a mainframe, COBOL-based system, to continue to meet the new requirements intended to enhance 

accountability and results through improved financial management that have been and will continue to be 

promulgated by Congress, OMB, the Department of the Treasury, and the Federal Accounting Standards 

Advisory Board. 

In 2004, the Department began an effort to supersede DOLAR$ with a commercial off-the shelf (COTS) 

financial management system that would ensure sufficient flexibility to comply with new requirements and 

meet the Department’s future needs. In FY 2007, an assessment of this effort, which included a 

comprehensive cost-benefit analysis (CBA). indicated that migration to a shared service provider (SSP) would 

better meet the Department’s needs. In FY 2008, DOL will issue a solicitation to both public and private 

providers whose services comport with the requirements of the FMLoB for serving as an SSP. The timely 

replacement of DOLAR$ is critical to continuing to meet DOL’s financial management needs and support the 

Secretary’s 21st century and competitive workforce priorities. The completion of this initiative will provide 

managers with the financial information and metrics they need to manage their programs efficiently and 

effectively. 
Management’s Discussion and Analysis 

34 United States Department of Labor 

IPIA Compliance

Improved financial performance through the reduction of improper payments continues to be a key financial 

management focus of the Federal government. At DOL, developing strategies and the means to reduce 

improper payments is a matter of good stewardship. Accurate payments lower program costs. This is 

particularly important as budgets have become increasingly tight. 

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

management focus of the Federal government. A key PMA 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.16 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. In August 2006, OMB 

issued Circular A-123, Appendix C - Requirements for Effective Measurement and Remediation of Improper 

Payments. 

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 high risk for improper payments. It also requires the agency to implement a corrective action plan 

that includes improper payment reduction and recovery targets and to report annually on the extent of its 

improper payments for high risk programs and the actions taken to increase the accuracy of payments. 

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

Erroneous Payment Reduction Coordinator for the Department. The OCFO works with program offices to 

develop a coordinated strategy to perform annual reviews for all programs and activities susceptible to 

improper payments. This cooperative effort includes 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 the benefit, grant and other 

programs, the Department conducted its FY 2007 risk assessment using different methodologies to assess 

their improper payment risk. Per OMB guidance, two benefit programs -- Unemployment Insurance (UI) and 

Federal Employees' Compensation Act (FECA), and one grant program -- Workforce Investment Act (WIA), are 

deemed to be high risk irrespective of the determined improper payment error rate. This determination is 

based on the fact that the annual outlays for each of these programs exceed $2 billion. 

In FY 2007 and consistent with prior years, programs with FY 2006 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 programs were not statistically sampled. For benefit programs with 

outlays greater than $200 million, the Department conducted sampling to determine the 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 high risk17 as a result of 

this approach. However, the Department is also reporting on FECA's improper payment rate, since it is 

required per OMB guidance. 

 

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

Investment Act (WIA) as programs required to report annual erroneous payments. 17 MB Implementation Guidance, M-03-13, further defined programs to be susceptible to risk if the improper payment 

rate exceeded 2.5 percent and the amount of overpayment exceeded $10 million. This guidance is now superseded by 

Appendix C of Circular A-123, which continues to define susceptibility to risk in the same manner. 
Financial Performance Overview 

FY 2007 Performance and Accountability Report 35 

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

in grant programs. The Department analyzed all FY 2005 Single Audit Act Reports18 to identify questioned 

costs, which were used as a proxy for improper payments, and to estimate an approximate risk for 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.19 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 required per OMB guidance, 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 

or natural disasters, 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

The Department met its reduction and recovery targets for improper payments. The estimated improper 

payment error rates were 9.71 percent for UI, 0.1 percent for FECA and 0.08 percent for WIA for FY 2007. 

The Department's analytical studies indicate that earlier detection of recoverable overpayments, especially 

those where claimants have returned to work but continued to claim benefits, is the most cost-effective way 

to address improper payments. Early detection allows agencies to stop benefit payments for a claimant who 

has returned to work and to recover these overpayments more readily. The Department estimates that the 

forty-five states that crossmatch UI beneficiaries with the State Directory of New Hires (SDNH) or the National 

Directory of New Hires (NDNH) instead of UI wage records prevented approximately $75 million of 

overpayments in each of the past two fiscal years. A pilot study showed that a cross-match using the NDNH is 

more effective than the SDNH in identifying individuals no longer eligible to receive UI benefits, by including 

benefit year earnings for out-of-State employers, Federal agencies, and multi-State employers that report all 

of their new hires to a single state. The Department provided states with funds to implement these NDNH 

cross-matches; as of September 30, 2007, thirty-five states have implemented the NDNH crossmatch, and 

seven others have signed the computer-matching agreement with the Department of Health and Human 

Services that is the prelude to connecting with the NDNH. The remaining states are in the planning process. 

All States are required to use NDNH crossmatches as part of their Benefit Accuracy Measurement programs 

by January 1, 2008. 

In FY 2005, the Department began providing States funds to conduct Reemployment and Eligibility 

Assessment (REAs) with UI beneficiaries, to reduce improper payments both by speeding claimants' return to 

work and by detecting and preventing eligibility violations. Twenty states received funds to continue REAs 

during FY 2006, and the Department has sought $40 million to expand the number to about forty in FY 2008. 

A solicitation of grant applications has been sent to all States. The REAs in the twenty states are estimated to 

return about $66 million to the UI trust fund. An impact evaluation of nine states' REA programs will be 

published in fall 2007. 

 

18 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 

2005. 

19 The grant programs assessed were the WIA program, the State Unemployment Insurance and Employment Service 

Operations (SUIESO) program, and DOL’s other grants as a group. To estimate the rate of improper payments for WIA, 

SUIESO and the other grants as a group, the Department divided the amount of questioned costs from the FY 2005 

single audit reports by the amount of the applicable direct outlays. The FY2007 improper payment rate was assumed 

to be similar to the FY2005 rate and was applied to the program outlays for FY 2007 to determine the amount of 

estimated improper payments for FY 2007. 
Management’s Discussion and Analysis 

36 United States Department of Labor 

To address the second largest cause of overpayments -- errors in handling separation issues -- the Department 

has two efforts underway. First, funding has been provided to states to support the training of approximately 

400 adjudicators to address improper payments that result from nonmonetary determination errors. 

Secondly, the Department is facilitating the design and implementation of an automated system - 

Unemployment Insurance Separation Information Data Exchange System (UI SIDES). UI SIDES is expected to 

provide more timely and complete separation information from large multi-State employers or Third Party 

Agencies (TPAs) to make more accurate benefit eligibility decisions. 
Major Management Challenges 

FY 2007 Performance and Accountability Report 37 

Major Management Challenges 

The table below lists the major challenges the Department is addressing by identifying specific actions to be 

taken and measuring its progress in accomplishing these actions. For the purposes of transparency we use 

the same titles used in the OIG’s following discussion of Top Management Challenges. However, the table 

below includes related matters appearing in numerous GAO audits, such as the audits covering mine safety 

and health and DOL responses to disasters such as Hurricane Katrina that also had action items identified 

from the FY 2006 PAR. The following list of ten items listed in “2007 Top Management Challenges Facing the 

Department of Labor” covers both the OIG challenges and includes the action items remaining from previous 

PARs and other audit reports. This is the first year the OIG has identified Preserving Departmental Records as 

a challenge. Although the management of performance and financial data was not identified as a standalone challenge this year, DOL is tracking completion of remaining actions. These are included as follow-up 

actions under challenges I and IX. The complete list of challenges for FY 2007 is shown below. 

I. Protecting the Safety and Health of Workers 

II. Ensuring the Effectiveness of the Job Corps Program 

III. Ensuring the Security of Employee Benefit Plan Assets 

IV. Safeguarding Unemployment Insurance 

V. Improving the Federal Employees’ Compensation Act (FECA) Program 

VI. Improving Procurement Integrity 

VII. Securing Information Technology Systems and Protecting Related Information Assets 

VIII. Maintaining the Integrity of the Foreign Labor Certification Program 

IX. Improving Performance Accountability of Grants 

X. Preserving Departmental Records 

The narrative in the heading of each challenge indicates the significance of the challenge, when the challenge 

was first identified, and a progress assessment for FY 2007 using a stoplight system: ●Green – Actively 

Implementing All Remedial Actions; ● Yellow – Actively Implementing Most Remedial Actions; and, ● Red – 

Not Implementing Most Remedial Actions. Actions completed in FY 2007 are also briefly noted in the 

heading. The heading also shows the strategic and performance goals affected by the challenge. 

The table below breaks down each challenge into the specific issues that need to be addressed, as identified 

in previous PAR findings and FY 2007 GAO and OIG audits. The source of each specific issue is noted in the 

cells of the left column. The table’s three columns break out the Management Challenges into specific issues 

(left column), actions taken in FY 2007 (center column), and actions remaining/expected completion date 

(right column). Additional information on many of these management challenges and their specific issues is 

in the performance goal narratives. 

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

OIG, GAO, OCFO or other sources within the Department. 

Management Challenge/ 

Significant Issue Actions Taken in FY 2007 Actions Remaining and Expected Completion Date 

I. Protecting the Safety and Health of Workers Challenge first identified in FY 2005. Areas of concern 

include the effectiveness of recent efforts to protect the safety and health of mine workers, particularly those 

who work in underground coal mines, the effectiveness of OSHA’s compliance assistance efforts and its ability 

to respond in disasters. Affects Strategic Goal 3 – Safe and Secure Workplaces, Performance Goal 3AImprove workplace safety and health through compliance assistance and enforcement of occupational safety 

and health regulations and standards and Performance Goal 3B- Reduce work-related fatalities, injuries and 

illnesses in mines. Progress Assessment: ●Yellow 

Strengthen MSHA accountability 

program. (OIG 2007, OIG 05-07-002-

06-001)

http://www.oig.dol.gov/public/reports/oa/2007/05-

Announced plans to create an Office 

of Accountability to ensure that 

management controls are in place 

and fully implemented. 

Revise current MSHA Accountability 

Program and Accountability 

Program Handbook – January 2008.
Management’s Discussion and Analysis 

38 United States Department of Labor 

Management Challenge/ 

Significant Issue Actions Taken in FY 2007 Actions Remaining and Expected Completion Date 

07-002-06-001.pdf

Implement the Mine Improvement 

and New Emergency Response 

(MINER) Act of 2006. (2006 PAR) 

Implemented most of the provisions of 

the MINER Act. 

Complete implementation of the 

MINER Act – December 2007. 

Improve MSHA management data. 

(OIG 22-07-008-06-001) 

http://www.oig.dol.gov/public/reports/oa/2007/22-

07-008-06-001.pdf

Updated coal noise sampling 

procedures and drafted revision to 

Metal and Nonmetal Handbook to 

require inspectors to verify that their 

noise sampling results are entered 

accurately. 

Respond to recommendations to 

develop the capability to compute 

fatality and injury incidence rates 

that include non-exempt contractor 

work hours at the mine site level – 

FY 2008. 

Replace retiring mine inspectors. 

Implement localized and targeted 

recruiting to increase the applicant 

pool (2006 PAR). In FY 2007, GAO 

issued a second report on hiring mine 

inspectors. (GAO-07-704R) 

Hired all 170 coal mine enforcement 

personnel funded by emergency 

supplemental appropriation. 

Developed a Human Resources 

Strategic Plan FY 2006-2011; a 

strategy roadmap and means to 

measure performance for staffing. 

Implement Human Resources 

Strategic Plan FY 2006 -2011 for 

hiring new mine inspectors – 

FY 2008. 

Ensure that interim protection is in 

place before OSHA funded 

consultation projects grant 

extensions to correction due dates 

for serious hazards and refer 

uncorrected serious hazards to OSHA 

enforcement. (OIG 2007) 

Reminded consultation officials about 

requirements to ensure that serious 

hazards are corrected at the 

Consultation Project Manager’s 

meeting. 

 

Regions to monitor consultation 

programs‘ adherence to 

requirements for ensuring that 

serious hazards are corrected – FY 

2008. 

Identify cost effective methods of 

collecting complete and comparable 

data on OSHA program outcomes.

(2006 PAR) 

Improved the data management 

system for the Voluntary Protection 

Programs and implemented an 

automated data management system 

for the Strategic Partnership Program.

Complete system to improve data 

collection for voluntary programs – 

September 2009. 

Improve planning for OSHA efforts 

to protect workers in disasters. 

(GAO-07-193) 

Signed a Standard Operating 

Procedures (SOP) document 

addressing roles and responsibilities 

of FEMA and OSHA and forwarded to 

FEMA for signature. 

FEMA to approve SOP– FY 2008. 

II. Ensuring the Effectiveness of the Job Corps Program Challenge first identified in FY 2006. 

Contractors operate 98 Job Corps Centers nationwide; the Departments of the Interior and Agriculture operate 

another 28 centers via interagency agreements with DOL. These centers provide services to about 60,000 

students annually. DOL Regional Offices monitor contractors to ensure DOL policies are implemented. DOL is 

challenged to ensure that regional monitoring is effective. Affects Strategic Goal 1 – A Prepared Workforce, 

Performance Goal 1B, Improve educational achievements of Job Corps students and increase participation of 

Job Corps graduates in employment and education. Progress Assessment: ● Yellow 

Promote effective regional 

monitoring. (OIG 2007, 2006 PAR) 

Required Regional Offices to perform 

rigorous data quality/data integrity 

reviews in addition to comprehensive 

onsite policy compliance monitoring 

reviews at least once every 24 

months. Assessed $315,739 in 

liquidated damages for recovery. 

Continue to conduct rigorous data 

integrity audits concurrently with 

onsite compliance/quality 

assessments – FY 2008. 
Major Management Challenges 

FY 2007 Performance and Accountability Report 39 

Management Challenge/ 

Significant Issue Actions Taken in FY 2007 Actions Remaining and Expected Completion Date 

A new process that included both a 

fiscal and performance review 

became operational in July. Trained 

three (of six) regional offices on 

monitoring contractor performance of 

financial management and cost 

reporting, data integrity, and asset 

management. 

Conduct training for the three 

remaining regional offices on 

monitoring contractor performance 

of financial management and cost 

reporting, data integrity, and asset 

management – October 2007. 

Improve contracts management. 

Job Corps runs contractor-operated 

centers through performance-based 

contracts, which tie incentive fees and 

bonuses directly to contractor 

performance. There is a risk that 

contractors will inflate their 

performance reports. Recent audits 

determined that specific centers 

manipulated performance data and 

others had inadequate financial 

management systems and 

weaknesses in the management of 

personal property. (OIG 2007) 

Drafted revised Interagency 

Agreement (IA) with Interior and 

Agriculture to provide for more 

accountability on financial and 

property management by the 

agencies and greater oversight by Job 

Corps. 

The agencies will continue to work 

collaboratively to revise the drafted 

IA and expect a final IA to become 

effective in FY 2008. 

Ensure student safety and health. 

(OIG 2007) 

Addressed the safety and health 

issues identified by OIG by closing the 

Oconaluftee Center effective March 

22. A Notice to Proceed has been 

issued to repair failing infrastructure 

and when work is completed, the 

Oconaluftee Center will once again 

commence operations. 

Implement occupational safety and 

health standards; develop and 

disseminate programs promoting 

occupational safety and health; 

ensure timely and accurate injury 

reporting; provide technical 

assistance, conduct annual safety 

and health reviews; monitor 

quarterly facility inspection reports; 

and, assist regions in approving 

center abatement plans – FY 2008. 

Assess incoming students for 

cognitive disabilities. Federal law 

requires assessment for cognitive 

disabilities under specific 

circumstances. (OIG 2007) 

Revised screening admissions 

process to ensure that criteria are 

objective and comply with 

nondiscrimination laws. Hired parttime Regional Disability Coordinators 

and revised the Health Questionnaire 

to aid in minimizing or removing 

barriers to success. Began 

developing training packages and 

information booklets for center staff 

on topics related to cognitive 

disabilities. 

Offer staff training opportunities on 

instructional strategies for 

cognitively disabled and low 

achieving students. Strengthen sitelevel training, technical guidance 

and monitoring to ensure that 

students with cognitive disabilities 

are identified and properly 

assessed. Convert part-time 

Regional Disability Coordinators to 

full time – FY 2008. 

III. Ensuring the Security of Employee Benefit Plan Assets Challenge first identified in FY 2000. Safeguarding the retirement assets of American workers, retirees, and their families is a daunting challenge that 

affects the quality of life for millions. EBSA strengthened its enforcement program and leveraged its resources. 

Affects Strategic Goal 4, Strengthened Economic Protections and Performance Goal 4D- Enhance pension and 

health benefit security. Progress Assessment: ● Green 

Implement the Pension Protection 

Act of 2006. (2006 PAR) 

Issued regulations implementing the 

Pension Protection Act of 2006. 

Continue to implement regulations – 

FY 2008. 

Establish written procedures for the 

PBGC Board’s monitoring of 

operations. (GAO-07-22) 

Enhanced PBGC’s governance 

processes. 

Review and revise PBGC’s bylaws 

to delineate authorities – FY 2008. 

Increase efforts toward legislative 

change to strengthen EBSA 

oversight authority over plan 

auditors and the scope of plan 

audits to increase plan protections 

for American workers. (OIG 2007) 

Continued CPA firm inspection 

program, focusing on firms that 

conduct at least 200 audits annually. 

Performed augmented reviews of 450 

sets of work papers from CPA firms 

and referred 24 to the American 

Continue to focus on CPA firms that 

perform a significant amount of plan 

audit work and to selectively target 

those that have smaller audit 

practices for ongoing enforcement – 

FY 2008. 
Management’s Discussion and Analysis 

40 United States Department of Labor 

Management Challenge/ 

Significant Issue Actions Taken in FY 2007 Actions Remaining and Expected Completion Date 

Plan audits provide a first-line defense 

for plan participants against financial 

loss. DOL’s authority to require 

corrective action is currently limited. 

Institution of Certified Public 

Accountants Professional Ethics 

Division or a State board of public 

accountancy. 

Continue EBSA efforts to decrease 

the number of fraudulent Multiple 

Employer Welfare Arrangements 

(MEWAs). Continue to work closely 

with State insurance commissioners 

and the Department of Justice to 

identify and prosecute fraudulent 

MEWAs. (OIG 2007, 2006 PAR) 

Worked with the Department of Justice

to prosecute these complex whitecollar crimes. Closed 36 civil and 

criminal MEWA cases that restored, 

protected, corrected or recovered in 

excess of $5.1 million. Met with 

National Association of Insurance 

Commissioners (NAIC) quarterly to 

coordinate actions against fraudulent 

MEWA operators. 

Health Fraud/MEWAs is an EBSA 

national enforcement project with a 

focus on health fraud recidivists. 

EBSA will continue to coordinate 

closely with NAIC and DOJ officials 

– FY 2008. 

IV. Safeguarding Unemployment Insurance Challenge first identified in FY 2000. Preventing overpayments 

and reducing fraud against these programs remains a major challenge. The Department, other Federal 

agencies, and the states are further challenged in having the necessary systems and controls in place to quickly 

respond and yet prevent improper payments during national emergencies or disasters. Affects Strategic Goal 4 

– Strengthened Economic Protections, and Performance Goal 4A- Make timely and accurate benefit payments 

to unemployed workers, facilitate the reemployment of unemployment insurance beneficiaries and set up 

unemployment tax accounts promptly for new employers. Progress Assessment: ● Green 

Prevent overpayments. Continue to 

disseminate information about best 

practices and promote the use of 

mechanisms, to identify ineligible 

claimants more timely. Require states 

to cross-match UI payments selected 

for Benefit Accuracy Measurement 

audits with the National Directory of 

New Hires (NDNH) to improve 

detection of erroneous payments. 

(OIG 2007, 2006 PAR) 

Issued a Directive requiring all states 

to incorporate the NDNH cross match 

into their Benefit Accuracy 

Measurement audits. All states are 

expected to comply by the January 

2008 deadline. 

All states incorporate the NDNH 

cross match into their Benefit 

Accuracy Measurement audits – 

January 2008. 

Monitor the initiation of crossmatching activities. If a State fails to 

implement cross-matching, it will be 

required to address remedies in its 

annual State Quality Service Plan 

for the next fiscal year – FY 2008. 

Collect results of Reemployment 

and Eligibility Assessment (REA) 

Grants. (2006 PAR) 

Analysis of REA report revealed that 

in some states, REAs enhanced rapid 

reemployment of unemployed and 

reduced overpayments while other 

states found no significant impact. 

Even though results were uneven, 

REA grants are likely effective and 

ETA solicited all states for REA grant 

applications. 

Requested $40 million in the FY 

2008 President’s Budget to expand 

the number of states receiving REA 

grants to about forty. 

Reduce fraud. 

Contingent upon the appropriation of 

funds and passage of the Integrity Act, 

State UI agencies will increase efforts 

to prevent fraudulent employment 

benefit claims. (OIG 2007, 2006 PAR) 

The Integrity Act included in the 

President’s FY 2007 Budget did not 

receive Congressional action, but has 

been included again in the President’s 

FY 2008 Budget request. 

Continue to promote enactment of 

the 2008 Integrity Act – FY 2008. 

Conduct an Integrity Conference for 

State UI agencies – FY 2008. 

V. Improving the Federal Employees’ Compensation Act (FECA) Program Challenge first identified in 

FY 2005. FECA is one of three DOL programs classified as high risk for improper payments due to the amount 

of benefits paid. (The other two are UI and WIA.) Affects Strategic Goal 4, Strengthened Economic Protections 

and Performance Goal 4B-Reduce the consequences of work-related injuries. Progress Assessment: ● Green 

Reduce improper payments. OWCP 

had not consistently obtained and 

reviewed medical evidence when 

Conducted testing of iFECS system 

controls to ensure that current 

medical evidence is on file during 

Monitor and adjust iFECS as 

necessary – FY 2008. 
Major Management Challenges 

FY 2007 Performance and Accountability Report 41 

Management Challenge/ 

Significant Issue Actions Taken in FY 2007 Actions Remaining and Expected Completion Date 

determining claimants’ continued 

eligibility for FECA compensation 

payments. (OIG 2007) Ensure that 

current medical information for 

claimants is on file, so that payments 

are not made to those who are no 

longer disabled. (2006 PAR)

FECA program district office 

accountability reviews. 

Reduce fraud. OWCP does not have 

legal authority to match FECA 

compensation recipients against their 

social security wage records to identify 

those who are collecting FECA 

benefits while working. (OIG 2007) 

Seek legislative reforms to enhance 

incentives for injured employees to 

return to work; address benefit equity 

issues; discourage unsubstantiated 

claims; and make other improvements. 

(2006 PAR) 

Redrafted legislative proposal to 

include a provision to enable data 

record matching of FECA payment 

records with SSA records to identify 

concurrent receipt of FERS retirement 

benefits and receipt of employment 

earnings. Estimated savings of the 

entire legislative proposal over ten 

years is $608 million. 

Transmit draft bill to Congress – 

FY 2008. 

VI. Improving Procurement Integrity Challenge first identified in FY 2005. DOL resolved all prior 

procurement recommendations except one. The OIG believes the Department should move quickly to fill the 

CAO position and place the Department’s acquisition workforce under the supervision of the CAO. Affects all 

DOL strategic goals. Progress Assessment: ●Yellow 

Improve procurement integrity. 

Resolve the “unresolved and open” 

OIG procurement recommendations. 

(OIG 2007, 2006 PAR) 

Issued Secretary’s Order 2-2007 

establishing the Chief Acquisition 

Officer (CAO) position and requiring 

acquisition management to be the 

CAO’s primary duty. The CAO will 

report to the Secretary with day-today guidance from the Deputy 

Secretary and will have responsibility 

for overseeing Department acquisition 

activities. 

Issue decision on recommendation 

that Departmental procurement 

responsibilities be removed from the 

Office of the Assistant Secretary for 

Administration and Management 

and that a Senior Procurement 

Executive position reporting to the 

Deputy Secretary be established – 

FY 2008. 

 

VII. Securing Information Technology Systems and Protecting Related Information Assets 

Challenge first identified in FY 2002. Developing and maintaining efficient, effective and secure systems is an 

ongoing challenge. DOL successfully completed its challenges in the FY 2006 PAR to enhance incident 

response capability and maintain information technology security. In addition, DOL was the first agency to 

successfully implement Smart Card requirements in Homeland Security Presidential Directive 12. Affects all 

DOL strategic goals. Progress Assessment: ● Green 

Secure Personally Identifiable 

Information (PII). Implement security 

controls for protection of remote 

information provided in OMB’s 

Memorandum “Protection of Sensitive 

Agency Information”. (OIG 2007) 

Developed and began implementing a 

plan to protect personally identifiable 

information (PII) in compliance with 

OMB requirements. 

Drafted DOL Directive on for PII, 

revised the Computer Security 

Handbook (CSH), and implemented 

an annual process requiring agencies 

to review their PII and sensitive data. 

DOL-wide implementation of OMB 

requirements – Ongoing. 

Complete DOL Clearance process 

for DLMS 9-1200 – December 2007.

Revised incident handling procedures 

to include new requirements for 

reporting incidents involving PII and 

developed a breach notification policy.

Develop policy and procedures for 

logging computers’ readable extract 

– June 2008. 
Management’s Discussion and Analysis 

42 United States Department of Labor 

Management Challenge/ 

Significant Issue Actions Taken in FY 2007 Actions Remaining and Expected Completion Date 

Began deploying encryption of mobile 

devices and computers and selected 

a solution for 2-factor authentication. 

Implement 2-factor authentication 

solution for remote access 

capabilities – June 2008. 

Drafted policy regarding user 

responsibility to safeguard PII. 

Finalize and issue the PII Rules and 

Consequences Policy – FY 2008. 

Established a Task Force of 

representatives from each DOL 

agency to eliminate unnecessary use 

of SSN and reduce holdings of PII. 

Implement SSN Reduction 

Implementation plan milestones – 

FY 2008-FY 2009. 

Prevent unauthorized access to 

systems. (OIG 2007) Be proactive in 

identifying and mitigating IT security 

weaknesses. (2006 PAR) 

Revised the Computer Security 

Handbook (CSH) to incorporate 

National Institute of Standards and 

Technology (NIST) Security Controls 

for Federal Information Systems 

requirements for all minimum controls. 

Performed Access Controls security 

controls testing and evaluation for all 

DOL Major Information Systems. 

Implemented agency specific 

continuous monitoring requirements. 

Complete revision to the CSH to 

incorporate additional requirements 

for access controls – June 2008. 

Implement enhanced security 

controls testing and evaluation 

process – FY 2008. 

Transition VETS' major information 

systems to DOL's ECN /DCN and 

properly apportion security 

responsibilities between the OASAM 

and VETS Security teams – March 

2008. 

Ensure certification and 

accreditation of systems. (OIG 

2007) 

 

Completed a comprehensive review 

of DOL’s security certification and 

accreditation document repository to 

ensure the documentation was 

complete and current for all systems. 

Revise DOL’s CSH to incorporate 

additional NIST Recommended 

Security Controls for certification 

and accreditation – June 2008. 

Continue to review certification and 

accreditation documentation to 

ensure adequacy as they are 

revised and updated – Ongoing. 

Create an independent Chief 

Information Officer (CIO). Consider 

having agency security officers report 

to the Chief Information Security 

Officer (CISO) in addition to reporting 

to their agency heads. Consider 

having the CISO report to the 

Secretary’s Office as well as to the 

CIO. (OIG 2007) 

Considered the creation of a new CIO 

position. 

Issue a decision regarding the 

creation of a new CIO position and 

consider having agency security 

officers report to the CISO in 

addition to their agency heads and 

having the CISO report to the 

Secretary’s office in addition to the 

CIO – FY 2008. 

VIII. Maintaining the Integrity of the Foreign Labor Certification Program Challenge first identified in FY 

2001. Problems with the 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. DOL published the PERM fraud regulation reducing the incentives 

and opportunities for fraud and abuse. Affects Strategic Goal 2 – A Competitive Workforce, Performance Goal 

2H-Address worker shortages through the Foreign Labor Certification. Progress Assessment: ●Green 

Reduce high incidence of fraud. 

Increase the detection of fraudulent 

labor applications during the 

certification process. (OIG 2007) 

Reduce the incidence of applications 

certified with wage rates on the 

application that are lower than the 

Programmed the H-1B Application 

System to verify that the wage rate 

listed on the employer’s application is 

at least the prevailing wage for the 

occupation and enhanced the system 

to check for inaccuracies in the 

Employer Identification Numbers, 

Monitor the impact of the actions 

taken in FY 2007 and make 

adjustments as necessary to 

enhance detection of fraud – FY 

2008. 
Major Management Challenges 

FY 2007 Performance and Accountability Report 43 

Management Challenge/ 

Significant Issue Actions Taken in FY 2007 Actions Remaining and Expected Completion Date 

prevailing wage and erroneous 

employer identification numbers. 

(2006 PAR) 

based on data checks currently in 

place for employers filing W-2 Wage 

Reports. 

Permanent Certification Program

Eliminated backlog. To address 

limited resources, DOL proposed a 

fee on employers for the processing 

of Permanent Labor Certifications. 

Reduce certification backlogs. It 

remains a challenge to avoid backlogs 

while maintaining the integrity of the 

FLC process. (OIG 2007) In 2006, 

DOL received 125,000 applications at 

the National Processing Centers in 

Atlanta and Chicago. In addition to 

reducing backlog, DOL is challenged 

to prevent new backlogs. (2006 PAR) 

Temporary, agricultural worker (H-2A 

visas) In response to a 19 percent 

increase in demand and processing 

delays at the States, trained State 

Workforce Agencies in requirements 

for the H-2A program. Requested 

retaining the H-2A processing fee 

revenue to offset the costs. 

Review regulations implementing 

the H-2A program and institute 

changes providing farmers with an 

orderly and timely flow of foreign 

legal workers, while protecting the 

rights of American laborers – FY 

2008. 

Temporary, non-agricultural workers 

(H-2B visas) Responding to a more 

than 20 percent increase in demand, 

some PERM resources were 

temporarily reallocated to eliminate an 

applications backlog in the H-2B 

Program. Requested authority to 

establish a fee structure to cover the 

Department’s direct costs of 

administering the H-2B program. 

Monitor H-2B application caseloads 

and act to address backlogs as they 

arise – FY 2008. 

Issue regulations streamlining the 

process by moving from a 

government-certified system to an 

employer-attestation system akin to 

the PERM system that has reduced 

backlogs – FY 2008. 

IX. Improving Performance Accountability of Grants Challenge first identified in FY 2007. The 

competitiveness of the American workforce is a top priority. The OIG found high error rates in the performance 

data reported by DOL direct grantees that raised concerns about the usefulness of that data for decision 

making. ETA made progress in improving performance data by making data validation by the states a criterion 

for incentive awards. (This information was taken into account when preparing the relevant ETA Performance 

Data Quality Assessments. For information about the DOL Performance Data Quality Assessments, please see 

the Performance Section Introduction.) Due to funding constraints, ETA did not modify data validation software 

to allow Federal staff to sample records at the State level, and instead Regional staff will continue to request 

manual samples for review. In addition, ETA did not meet milestones for developing a monitoring guide for the 

trade program as an addendum to the ETA Core Monitoring Guide and continues to use the draft issued in FY 

2005 as a tool. ETA’s Workforce Investment Streamlined Performance System, scheduled for implementation 

in FY 2008, will integrate and expand program reporting. Affects Strategic Goal 1: A Prepared Workforce, 

Performance Goals 1C-1D, and Goal 2: A Competitive Workforce, Performance Goals 2A-G. Progress 

Assessment: ●Yellow

Improve monitoring of direct grants. 

Audits of three direct or non-formula 

grantees showed underperformance, 

services to participants whose 

eligibility was not established, 

unsupported or unallowable costs, and 

inadequate financial and performance 

reporting systems. (OIG 2007) 

Held new grantee training, including 

sessions on allowable costs and 

eligibility requirements. Federal grant 

managers conducted desk reviews of 

grantee financial and performance 

quarterly reports as well as on-site 

reviews. Grant project officers 

provided ongoing assistance 

throughout the life of the grant. 

Emphasize financial and 

performance requirements at new 

grantee training sessions – FY 2008.

Train grant project officers – FY 

2008. 

In the Solicitation for Grant 

Applications (the vehicle used by 

ETA to award non-formula grants), 

continue to comply with applicable 

Federal laws, regulations, and OMB 

circulars. Selected grantees must 

conduct or will be subject to 
Management’s Discussion and Analysis 

44 United States Department of Labor 

Management Challenge/ 

Significant Issue Actions Taken in FY 2007 Actions Remaining and Expected Completion Date 

independent evaluations to 

determine the outcomes and 

benefits of the projects – FY 2008. 

Audit ETA data validation. DOL 

lacks monitoring procedures to ensure 

that single audits of its grantees are 

completed and that reports are 

received in a timely manner for those 

grantees that meet the single audit 

threshold. (OIG 2007) DOL uses 

audits conducted by independent 

accountants or State auditors under 

the Single Audit Act (SAA) to provide 

oversight of more than 90 percent of 

DOL expenditures by State and local 

governments and non-DOL 

organizations. (2006 PAR) 

Monitored grantees’ performance on 

submitting their audit reports required 

under the single audit act to the 

Federal government. Additionally, 

ETA modified its standard grant 

agreement to emphasize adherence 

to the single audit submission 

requirements. 

Develop and test the monitoring 

procedures for the single audit 

report submission – FY 2008. 

Codify procedures into the 

appropriate offices’ Procedures 

Manuals – FY 2008. 

Improve performance measurement 

for Youthbuild grants, transferred 

from HUD to DOL in 2007. (GAO-07-

82) 

Built a Web-based MIS/Case 

Management System for YouthBuild. 

Produce quarterly performance 

reports that include three common 

performance measures (placement 

in employment/education, 

attainment of a degree/certificate, 

and literacy/numeracy gains) as well 

as a six month retention rate, a 

recidivism rate, and additional data –

FY 2008. 

Work with States to improve data 

quality. Implement reporting format 

(Workforce Investment Streamlined 

Performance System – WISPR) to 

enable DOL to analyze performance 

across programs. (2006 PAR) 

WISPR implementation delayed. Implement WISPR, which will 

expand data collection and reporting 

– FY 2008. 

Collect employer services 

information to help gauge employer 

involvement in the One-Stop 

system. (GAO-07-167) 

The WISPR System will capture 

employer services data based on 

customized geographic areas down to 

the One-Stop Career Center level. 

Improve Apprenticeship data 

quality. Develop a cost-effective 

strategy for collecting data from 

council-monitoring states. Continue to 

negotiate with states to participate in 

the Registered Apprenticeship 

Information System (RAIS). (2006 

PAR) 

Retention and wage data from Phase 

I of the performance reporting system 

for Apprenticeship became available. 

California and New Hampshire agreed 

to participate in the RAIS, bringing the 

total of participating states to 32. 

Nearly 70% of the Federally managed 

registered apprentices are registered 

in RAIS. 

Phase II RAIS Quarterly 

performance data available – FY 

2009. 

X. Preserving Departmental Records Challenge first identified in FY 2007. Current DOL policy requires 

employees to treat e-mail like any paper record. Recently, the OIG reported that employees may not be aware 

of their responsibilities to preserve Federal records and recommended that DOL require records management 

training for employees. Affects all DOL strategic goals. Progress Assessment: ●Green 

Require records management 

training for managers and 

employees. (OIG 2007) Employees 

may not be aware of their 

responsibilities to preserve Federal 

Conducted numerous records 

management training sessions 

throughout the year. 

Published and disseminated the DOL 

Install a URL link to NARA’s 

“Records Management for 

Everyone” training course on 

LaborNet for all DOL employees to 

receive the training – November 
Major Management Challenges 

FY 2007 Performance and Accountability Report 45 

Management Challenge/ 

Significant Issue Actions Taken in FY 2007 Actions Remaining and Expected Completion Date 

records. Records Management Staff 

Development Training Plan to DOL 

Records Officers and Records 

Management Contacts. 

Announced and disseminated NARA’s 

Basic Electronic Records 

Management Training course to DOL 

Records Managers, Administrative 

Officers, Employees, and Agency 

Heads. 

2007. 
Management’s Discussion and Analysis 

46 United States Department of Labor 

DOL Top Management Challenges Identified by the OIG 

For 2007, the Office of Inspector General (OIG) considers the following areas to be the most serious 

management and performance challenges facing the Department of Labor. They involve workplace 

protections, compliance, accountability, and delivery of services and benefits. The OIG has assessed the 

Department’s progress in these areas and will continue to review and monitor the Department’s effort to 

address these complex challenges. 

• Protecting the Safety and Health of Workers 

• Ensuring the Effectiveness of the Job Corps Program 

• Ensuring the Security of Employee Benefit Plan Assets 

• Safeguarding Unemployment Insurance 

• Improving the Federal Employees’ Compensation Act Program 

• Improving Procurement Integrity 

• Securing Information Technology Systems and Protecting Related Information Assets 

• Maintaining the Integrity of Foreign Labor Certification Programs 

• Improving Performance Accountability of Grants 

• Preserving Departmental Records 

CHALLENGE: Protecting the Safety and Health of Workers

Overview: The Federal Mine Safety and Health Act of 1977, as amended by the Mine Improvement and New 

Emergency Response Act of 2006 (MINER Act), charges the Mine Safety and Health Administration (MSHA) 

with protecting the safety and health of over 300,000 men and women who work in our nation's mines. 

The Occupational Safety and Health Administration (OSHA), authorized by the Occupational Safety and Health 

Act of 1970, promulgates and enforces occupational safety and health standards and provides compliance 

assistance to employers and employees. State OSHA Programs provide comparable protections and services 

to over 7.7 million state and local government employees. Recent OIG audits have identified opportunities for 

strengthening MSHA and OSHA’s enforcement and assistance activities. 

Challenge for the Department: The magnitude of the Department’s mission to protect the health and safety 

of workers and the finite resources available presents a significant challenge requiring an appropriate balance 

between enforcement and compliance assistance and vigilance in ensuring that such programs are effectively 

administered. MSHA created an Accountability Program to ensure that its health and safety enforcement 

program is working effectively. This Accountability Program is MSHA’s internal peer review process that is 

supposed to ensure that mine safety inspectors are doing their jobs effectively. However, a recent OIG audit 

found that this program is not well-designed and should be strengthened, because some peer reviews only 

looked at paper records of mine inspections and peer review teams did not always visit the mines to review 

what inspectors had examined. Recent tragic events involving several mines underscore the importance of 

thorough mine safety inspections and of having an effective peer review process to provide assurance that 

mine inspections are properly conducted. 

OSHA’s Consultation Program was designed to encourage employers to volunteer for an inspection and then 

resolve work place safety and health issues without the use of enforcement fines and penalties. However, a 

recent OIG audit found that consultation program officials seldom ensured that interim protection was in 

place before granting employers’ requests for extensions to correct serious hazards, and employers who did 

not complete corrective actions in a timely fashion were seldom referred for enforcement actions. We have 

recommended that OSHA establish a performance measure that benchmarks and reports the percentage of 

serious hazards corrected by the initial correction due date. 

Department’s Progress: MSHA has proposed several steps to address shortcomings in its Accountability 

Program. Most significantly, MSHA has announced plans to create a new Office of Accountability within the 
Major Management Challenges 

FY 2007 Performance and Accountability Report 47 

Office of the Assistant Secretary to ensure that management controls are in place and fully implemented to 

prevent potential lapses in enforcement policies and procedures. 

In response to problems in its Consultation Program identified by our audit, OSHA will ensure that its new 

OSHA Information System will not allow consultants to grant extensions without the assurance that proper 

interim protections are in place. In addition, OSHA has taken some actions and will implement additional 

measures to ensure that consultation program officials refer employers for enforcement action. These 

measures include clarifying existing requirements, training for both Federal and state consultation staff, and 

increased monitoring by Regional Offices. While OSHA disagreed with our recommendation on performance 

measures, the OSHA Information System is being designed to allow OSHA to create specific benchmarks for 

states that may have problems monitoring the correction of serious hazards. 

 

CHALLENGE: Ensuring the Effectiveness of the Job Corps Program

Overview: Job Corps operates 126 centers throughout the United States and Puerto Rico to provide 

occupational skills, academic training, job placement services, and other support services, such as housing 

and transportation, to approximately 60,000 students each year. Its purpose is to assist eligible at-risk youth 

who need intensive education and training services. The program was appropriated nearly $1.5 billion in FY 

2007. It utilized contracts with private companies to operate 98 centers and interagency agreements with 

the Departments of Interior and Agriculture to operate 28 centers. 

Challenge for the Department: The challenges facing the Department regarding its Job Corps program 

include: 1) management of its centers; 2) performance monitoring and verification; 3) student safety and 

health; and 4) assessment of incoming students for cognitive disabilities. For example, a recent OIG report 

found numerous health and safety problems, such as inoperable fire alarms, and an unhealthful food 

handling area at the Oconaluftee Job Corps Center, which is operated by another Federal agency. Job Corps 

needs to utilize the results of facilities surveys conducted by its contractor to make sure necessary repairs are 

funded and completed as scheduled. In addition, we have found that the Department needs to hold regional 

offices accountable for utilizing effective monitoring techniques in their oversight of services provided by Job 

Corps contractors and government operators. Further, an OIG audit of Job Corps’ processes for assessing 

students for cognitive disabilities found that Federal law requires assessment for cognitive disabilities under 

specific circumstances, but that Job Corps had not done so. Job Corps must identify and address cognitive 

disabilities of current and future students in order to improve their outcomes and long-term success. 

Another concern relates to the fact that Job Corps runs contractor-operated centers through performancebased contracts, which tie incentive fees and bonuses directly to contractor performance. Under such 

contracts, there is a risk that contractors will inflate their performance reports so they can continue to operate 

centers. Recent audits determined that specific centers have manipulated their reported performance data. 

Our audits have disclosed other challenges as well, including inadequate financial management systems, 

unauthorized costs charged to center budgets, and deficiencies in the management of personal property. 

Department’s Progress: Job Corps has addressed some student safety and health issues raised by the OIG by 

temporarily closing the Oconaluftee Center. In addition, Job Corps has indicated that it will provide more 

rigorous monitoring of all centers. Job Corps has also taken action to improve performance data reliability at 

all centers, including requiring each regional office to conduct mandatory audits of student records concurrent 

with annual center quality assessments. Further Job Corps has developed additional criteria and a dedicated 

website for identifying and addressing students with cognitive disabilities. Much remains to be done to 

address the many challenges faced by this program to provide safe, quality, and long-impact services to 

disadvantaged youth. 

 
Management’s Discussion and Analysis 

48 United States Department of Labor 

CHALLENGE: Ensuring Security of Employee Benefit Plan Assets 

 

Overview: Pension, health, and welfare benefit plans consist of over $5.6 trillion in assets covering more than 

150 million workers and retirees. These plans and their service providers continue to be a strong audit and 

investigative focus of both the OIG and the Employee Benefits Security Administration (EBSA). EBSA is 

charged with overseeing the administration and enforcement of the fiduciary, reporting, and disclosure 

provisions of Title I of the Employee Retirement Income Security Act (ERISA). 

Challenge for the Department: Protecting pensions and health benefit plan assets against fraud is a 

challenge for the Department. OIG labor racketeering investigations and the increased criminal enforcement 

by EBSA continue to find that plan assets are vulnerable to criminal activity. 

Plan audits by independent public accountants provide a first-line defense for plan participants against 

financial loss. Ensuring that audits by independent public accountants meet quality standards adds to the 

Department’s challenges in providing adequate oversight. However, the Department’s authority to require 

corrective action is currently limited. The Department should increase its efforts toward legislative change to 

strengthen its oversight authority over plan auditors and the scope of plan audits to increase plan protections 

for American workers. 

Another challenge is the Department’s increased responsibility for regulatory oversight of ERISA health care 

provisions. In the health care arena, the Department needs to continue its efforts to decrease the number of 

fraudulent Multiple Employer Welfare Arrangements, which are typically marketed to small businesses as a 

way to obtain inexpensive health coverage for their employees. In this regard, the Department should 

continue, through its national enforcement projects, to work closely with State insurance commissioners and 

the Department of Justice to identify and prosecute fraudulent MEWAs. 

Department’s Progress: The Department has made several improvements to its processes for identifying and 

correcting deficient employee benefit plan audits. Also, the Department has sought legislative changes to 

obtain more authority over plan auditors and the scope of plan audits. 

The Department continues to utilize a multi-pronged strategy to help ensure compliance with ERISA Title I. 

This includes imposing criminal penalties to correct violations of the law, ensuring the security of employee 

benefit plan assets, and regulatory oversight of health care laws. 

 

CHALLENGE: Safeguarding Unemployment Insurance 

Overview: The Department partners with the states in administering unemployment benefit programs. State 

Unemployment Insurance (UI) provides benefits to workers who are unemployed because of a lack of suitable 

work and meet other eligibility requirements established by their respective states. UI benefits are financed 

through employer taxes imposed by the states and collected by the Internal Revenue Service, which holds 

them in the Unemployment Trust Fund (UTF) until needed to pay benefits. 

The second program, Disaster Unemployment Assistance (DUA), is a Federally funded program that provides 

financial assistance to individuals who lose their jobs as a direct result of a major disaster and are ineligible 

for other UI. The 2005 hurricanes demonstrated the importance of effective controls to ensure that 

unemployment benefits reached only eligible persons. 

Through the Benefits Accuracy Measurement (BAM) program, the Department has identified duplicative 

payments to individuals who are working while concurrently claiming UI benefits as the single largest cause of 

overpayment errors. Also, audit work initiated following Hurricanes Katrina and Rita identified potential 

benefit overpayments as a result of claimants concurrently filing under the UI and DUA programs, states not 

timely verifying eligibility for DUA, and other reasons. For example, we found that Louisiana paid claimants 

when the National Directory of New Hires (NDNH) database reported those individuals as having obtained jobs 
Major Management Challenges 

FY 2007 Performance and Accountability Report 49 

requiring further follow-up by the state. This one example represented potential overpayments of $51 million. 

In addition, following the 2005 hurricanes, the OIG opened over 300 cases of potential UI and DUA fraud 

resulting in 77 indictments and 43 convictions. As of August 10, 2007, 189 of these cases have been closed. 

 

Challenge for the Department: Preventing UI and DUA overpayments and reducing fraud against these 

programs remains a major challenge for the Department and states. The Department, other Federal 

agencies, and the states are further challenged in having the necessary systems and controls in place to 

quickly respond and yet prevent improper payments during national emergencies or disasters. Ongoing audit 

and investigative work indicate that improper payments related to past disasters may be extensive. The 

prevention and early detection of overpayments is critical because the follow-up required to verify and collect 

an overpayment once it has been made is significant. Therefore, the Department needs to continue its efforts 

to disseminate information to the states about best practices and promote the use of mechanisms, such as 

the NDNH, to help states identify ineligible claimants more timely. 

Department’s Progress: The Department has taken some measures to eliminate UI and DUA overpayments. 

For example, in coordination with other Federal partners and the National Association of State Workforce 

Agencies, the Department developed action plans using lessons learned from recent disasters. The 

Department has also brought together Federal partners to develop a resource guide to facilitate coordination 

and streamline the delivery of services in the event of a major disaster. 

In addition, the Department stated in its FY 2006 Performance and Accountability Report that it has 

developed a new core performance measure on overpayment detection and has begun to improve states’ 

ability to identify individuals who are working while also claiming UI benefits. Further, the Department is 

working with state agencies to encourage the use of the NDNH database, which will improve the states’ 

efforts to detect overpayments early. The Department and its state partners need to continue to incorporate 

the results of BAM and the NDNH to better prevent and detect overpayments. The OIG will continue to 

monitor the Department’s use of this new performance measure to detect UI overpayments. 

 

CHALLENGE: Improving the Federal Employees’ Compensation Act Program 

Overview: The Federal Employees’ Compensation Act (FECA) Program provides income and pays medical 

expenses for covered Federal civilian employees injured on the job or who have work-related occupational 

diseases, and dependents of employees whose deaths resulted from job-related injuries or occupational 

diseases. This program is administered by the Department and impacts employees and budgets of all Federal 

agencies. FECA benefit expenditures totaled $2.5 billion in 2006. These costs were charged back to 

individual agencies for reimbursement to the Department’s Office of Workers’ Compensation Programs 

(OWCP). 

Challenge for the Department: The structure and operation of the FECA program is both a Departmental and 

government-wide challenge. All Federal agencies rely upon OWCP to adjudicate the eligibility of claims, to 

manage the medical treatment of those claims, and to make compensation payments and pay medical 

expenses. Beginning in FY 2003, we reported that OWCP had not consistently obtained and reviewed medical 

evidence when determining claimants’ continued eligibility for FECA compensation payments. Further, 

beginning in FY 2000, we reported that OWCP did not have the legal authority to match FECA compensation 

recipients against social security wage records. This is still the case. This match would help enable OWCP to 

identify individuals who are collecting FECA benefits while working and collecting wages. It is a challenge for 

the Department to ensure that only eligible recipients are receiving FECA benefits. 

Department’s Progress: The Department has taken several steps to improve the administration of FECA and 

is seeking legislative reforms to the FECA program. These legislative changes would: enhance incentives for 

employees to return to work; discourage unsubstantiated claims; and make other benefit and administrative 

improvements. If these proposals are enacted, the Department estimates that the government will save 

$608 million over 10 years. 
Management’s Discussion and Analysis 

50 United States Department of Labor 

Last year, the Department completed the roll-out of its new FECA benefit payment system, Integrated Federal 

Employees’ Compensation System, which tracks due dates of medical evaluations; revalidates eligibility for 

continued benefits; contains increased internal mechanisms to prevent improper payments; boosts efficiency; 

and promises improved customer satisfaction. 

 

CHALLENGE: Improving Procurement Integrity 

 

Overview: The Department contracts for many goods and services to assist in carrying out its mission. In FY 

2006, the Department’s acquisition authority exceeded $1.7 billion and included over 8,800 acquisition 

actions. The OIG continues to be concerned about the Department’s procurement activities. Specifically, for 

several years, we have recommended that the Department separate program and procurement 

responsibilities to ensure procurement integrity. Several OIG audits have reported that failure to adequately 

segregate program and procurement duties places procurement actions at risk due to conflict of interest or 

preferential treatment, among other things. 

In addition, the Services Acquisition Reform Act (SARA) of 2003 requires that executive agencies appoint a 

Chief Acquisition Officer (CAO) whose primary duty is acquisition management. However, the Department’s 

current organization is not in compliance with this requirement, as the Assistant Secretary for Administration 

and Management is serving as the CAO while retaining other significant non-acquisition responsibilities. 

Challenge for the Department: Until procurement and programmatic responsibilities are properly separated 

and effective controls are put in place, the Department will be at risk for wasteful and abusive procurement 

practices. The Department must improve its procurement and contract management processes to ensure 

that it is receiving quality services at fair prices in compliance with contract terms. An important first step to 

improving procurement integrity is the appointment of a CAO, whose primary duty is acquisition management, 

as required by SARA. 

Department’s Progress: The OIG has classified six of the eight recommendations from Audit Report Number 

05-05-005-07-720 (March 31, 2005) as “resolved and closed,” due to improved Departmental procurement 

processes and operating procedures. The Department has taken preliminary steps to implement SARA. In 

January 2007, the Secretary issued Order 2-2007, which formally established the position of CAO within DOL. 

This Order specifically stated that the CAO will have acquisition management as his or her primary duty. 

Further, the Order emphasized that the CAO will report to the Secretary with day-to-day guidance from the 

Deputy Secretary and that the CAO will have responsibility for overseeing other Department acquisition 

activities. The OIG encourages the Department to move expeditiously to implement the Secretary’s Order, 

comply with SARA requirements, and separate the procurement and program functions as the OIG has 

recommended. 

CHALLENGE: Securing Information Technology Systems and Protecting Related Information Assets 

 

Overview: The security of the Department’s information technology (IT) systems and data is vital. Those 

systems produce key economic indicators and pay billions of dollars in benefits and services. In FY 2007, the 

OIG identified a significant deficiency related to access controls across DOL financial and non-financial 

information systems. As of March 2007, the OIG found that the Department had not fully implemented 

OMB’s government-wide requirements to protect personally identifiable information (PII). The term 

“personally identifiable information” refers to information that can be used to distinguish or trace an 

individual's identity, such as name and social security number. 

Challenge for the Department: Our audits have identified a number of IT challenges for the Department, 

including preventing unauthorized access to systems, certification and accreditation of systems, and incident 

response capability. It is also a challenge for the Department to fully implement OMB’s requirements for 

protecting PII and close outstanding security issues within management’s planned actions and target dates. 
Major Management Challenges 

FY 2007 Performance and Accountability Report 51 

Keeping up with new threats and IT developments, providing assurances that IT systems will function reliably, 

and safeguarding information assets will continue to challenge the Department and require a sustained effort. 

As the need to raise the level of accountability for IT security in government continues, it is important for 

agencies to have the proper structure in place to achieve accountability, effectiveness, compliance with 

security controls, and remediation of vulnerabilities to prevent security breaches. To this end, as in last year’s 

Top Management Challenges, the OIG recommends the creation of an independent Chief Information Officer 

(CIO) to provide oversight of IT issues. In addition, we also believe that the Department should now consider 

having agency-level security officers report to the Department’s Chief Information Security Officer (CISO), in 

addition to reporting to their respective agency heads as they do now. Similarly, the CISO could report to the 

Secretary’s Office as well as to the CIO. The OIG believes such steps would enhance effectiveness within the 

Department-wide information security program. 

Department’s Progress: To meet the challenges associated with securing IT systems from harm, the 

Department is continuing to identify, assess, and remediate IT security vulnerabilities and is providing IT 

security training to program agency ISOs. In addition, the Department has indicated its plans to fully 

implement OMB’s PII recommendations by the first quarter of 2009. The Department has also required all 

employees to complete Computer Security Awareness Training. 

 

 

CHALLENGE: Maintaining the Integrity of Foreign Labor Certification Programs 

 

Overview: The Department’s Foreign Labor Certification (FLC) programs provide U.S. employers access to 

foreign labor to meet worker shortages under terms and conditions that do not adversely affect US workers. 

The Permanent Foreign Labor Certification Program allows an employer to hire a foreign worker to work 

permanently in the United States, if a qualified US worker is unavailable. The H-1B program allows the 

Department to certify employers’ applications to hire temporary foreign workers in specialty occupations. 

OIG audits have identified vulnerabilities in FLC programs, and our investigations, some of which have been 

initiated based on referrals from DOL’s Employment and Training Administration (ETA), have identified fraud 

against these programs. The foreign labor certification process continues to be compromised by dishonest 

attorneys, labor brokers, and employers. For instance, a recent OIG case led to the conviction of a former 

owner of an information technology company. He was convicted for his role in fraudulently assisting hundreds 

of immigrant aliens to live and work illegally in the United States. This former business owner was sentenced 

to prison and ordered to forfeit $5.7 million. 

Challenge for the Department: The Department is challenged in maintaining the integrity of the FLC 

programs, while effectively reviewing employer requests for foreign workers. For instance, the 

Department must increase its detection of fraudulent labor applications during the certification process. FLC 

programs are one of the few legal avenues available for foreign workers who want to enter the U.S. on a 

temporary or permanent basis. This fact, combined with the large amounts of money that can be made by 

unscrupulous entities, continues to create strong incentives to commit fraud or abuse. 

Because the Department must certify that H-1B applications are accurate and complete within seven days, 

DOL has limited capacity to validate the information on the application, which presents a challenge to the 

program’s integrity. Considering the large number of both Permanent and H-1B applications, it remains a 

challenge for the Department to avoid backlogs while maintaining the integrity of the FLC process. 

Department’s Progress: The Department has instituted measures to reduce fraud in its FLC programs. As a 

result of OIG investigations repeatedly demonstrating the need to eliminate the practice of substituting a new 

foreign worker for the one originally named on a permanent labor certification application, the Department 

enacted the Fraud Rule which prohibited the practice of substitution. The Fraud Rule became effective on July 

16, 2007. In addition, the OIG and ETA have been working collaboratively to identify and reduce fraud in the 

FLC process by immigration attorneys, employers, and others. Finally, the Department recently announced 

that it had eliminated the backlog of permanent program applications on-time. 
Management’s Discussion and Analysis 

52 United States Department of Labor 

CHALLENGE: Improving Performance Accountability of Grants 

 

Overview: The competitiveness of the American workforce is a top priority for the Department. To that end, 

the Department’s FY 2008 Budget proposed $3.4 billion to fund its training and employment grant programs. 

In addition, the Department proposed significant reforms to how the funding will be managed at the Statelevel. Grant funds are mainly provided as Federal awards to state and local government entities and to other 

non-profit organizations. 

To ensure that grant monies are being used for their intended purpose, in addition to ETA’s monitoring and 

oversight, the Single Audit Act (SAA) requires each recipient that expends $500,000 or more in Federal 

awards in a year to obtain an annual audit. The single audit covers both the reporting entity’s financial 

statements and Federal awards. As more than 90% of its expenditures are by state and local governments 

and other non-DOL organizations, the Department relies on audits conducted under the SAA to provide 

oversight of its grants. 

Challenge for the Department: Given the amount of money annually provided by the Department to grantees, 

it is critical that the Department has an effective means to ensure that funds were used as intended. 

OIG audit work disclosed high error rates in the performance data reported by Departmental grantees and 

raised concerns about the usefulness of that data for decision making. In addition, the OIG continues to be 

concerned about the adequacy of information that the Department receives from SAA audits, which are 

conducted by independent public accountants or state auditors. Our quality control reviews of single audits 

and a June 2007 report on the National Single Audit Sampling Project have revealed serious deficiencies. As a 

result, the Department is not receiving reliable information that it needs to make program and funding 

decisions. Further, a recent OIG audit disclosed that the Department lacks monitoring procedures to ensure 

that single audits of its grantees are completed and that reports are received in a timely manner for each 

grantee that meets the single audit threshold. 

Department’s Progress: The Department is completing its second full year of operating its new data 

validation system which was designed to reduce errors in performance data reported by grantees. In support 

of the Department and other Federal entities that issue grants, the National Single Audit Sampling Project has 

made significant recommendations to OMB to improve the reliability of single audits. Also, the Department 

has agreed that single audit procedures should be strengthened and will coordinate with appropriate agencies 

to develop and implement changes as recommended. These efforts are important steps in the Department’s 

effort to improve performance accountability of grants. 

 

CHALLENGE: Preserving Department Records Management 

Overview: The Department and other Federal agencies must create and maintain Federal records to account 

for their official business. As part of this responsibility, the Department is required to ensure that its Federal 

records are preserved and retrievable to document its policies and activities, and comply with Freedom of 

Information Act requests, and other statutory and regulatory reasons. The Department implements its 

records management program through the policy and guidelines established in the DOL Manual Series and 

Records Management Handbook. 

 

Challenge for the Department: The burgeoning use of electronic media to administer its programs makes it 

essential for the Department to have systems and processes in place to manage records effectively. Like 

other Federal agencies, the Department faces a major challenge in determining what information constitutes 

records that must be preserved as well as efficiently determining how to store, back-up, or dispose of records 

and other information. 

For example, current Departmental policy requires employees to treat e-mail like any paper record. If an email is an official record, then employees are expected to print and file the email in a manual recordkeeping 
Major Management Challenges 

FY 2007 Performance and Accountability Report 53 

system. Recently, the OIG reported that department employees may not be aware of their responsibilities to 

preserve Federal records and recommended that the Department require records management training for 

managers and employees. To this end, the Department needs to keep their employees trained and apprised 

of records management responsibilities. 

Department’s Progress: Records management is an emerging challenge for the Department and agencies 

government-wide. The OIG is conducting an audit which will assess the Department’s progress in this area. 

 

Changes from Last Year

The OIG recognizes that matters meriting the continued attention of Departmental management may be 

omitted from the list of its top challenges. This year we removed the challenge of Preparing for Emergencies 

from the list, because of the Department’s progress in making employee safety and emergency preparedness 

a priority. The OIG will continue to monitor the Department’s actions in this area. 

This year, we added a new challenge, Preserving Department Records Management, because of the 

Department’s legal requirements to maintain and safeguard its records. 
FY 2007 Performance and Accountability Report 54 

The President’s Management Agenda 

In FY 2007, the Department continued its focus on implementing the President’s Management Agenda (PMA) 

– and securing the taxpayer benefits tied to PMA success. Announced in 2001, the PMA remains the key 

strategy for improving the management and performance of the Federal government. The objective is to 

ensure a Federal government that is citizen-centered, not bureaucracy-centered; results-oriented, not outputoriented; and market-based – actively promoting rather than stifling innovation through competition. 

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. On June 30, 2005, the U.S. Department of Labor became the first

Executive Branch department or agency to achieve green status scores on all five government-wide PMA 

initiatives. While not an end in itself, this achievement represents an ongoing commitment to good 

management to bring quality services to the American people. 

As noted on the table below, as of September 30, 2007 DOL is pleased to have again achieved all-green 

status scores on the five government-wide initiatives– as well as on two of the three PMA program initiatives 

managed by DOL. Government-wide PMA results can be found at www.results.gov. 

Department of Labor’s PMA Scorecard Status 

Executive Branch Management Scorecard September 2006 Status September 2007 Status 

Human Capital 

Green Green

Competitive Sourcing 

Green Green 

Financial Performance 

Green Green

E-Government 

Green Green 

Performance Improvement Initiative 

Green Green 

Eliminating Improper Payments 

Green Green 

Faith-Based and Community Initiative 

Green Green 

Federal Real Property Asset Management

Yellow Yellow

 

We are now into the OMB-led Proud to Be V campaign, which runs through June 30, 2008 – with other goals 

linked to June 30, 2009 – and DOL intends to maintain its dedication to improve its performance through 

PMA implementation. To ensure that the good-government principles are used in day-to-day management, 

the Department uses a similar scorecard on a semi-annual basis to measure DOL individual agency progress 

on the PMA. 

 

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. In 2007, to develop 

future leaders with the critical skills and experience needed to effectively manage DOL programs, the 
President’s Management Agenda 

FY 2007 Performance and Accountability Report 55 

Department continued its MBA Fellows, Senior Executive Service (SES) Candidacy, and Management 

Development programs. Each of these programs is structured to develop the core competencies required for 

successful performance in the SES and necessary to continue the Department’s mission. 

DOL’s successful MBA Fellows program welcomed its sixth class of 15 Fellows in the summer of 2007 – 

Increasing the total to 92 participants. Of the 49 Fellows who have completed the program, 48 have been 

placed in permanent positions within the Department. 

 

Competitive Sourcing 

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. The skills and competencies that are not required to be performed by government personnel can 

often be performed more effectively and efficiently when subject to the competition of the marketplace. 

The Department encourages the development of a government “most efficient organization” (MEO) to 

compete with bids which may be received from the private sector. The MEO is designed to find innovative 

solutions to existing work processes that can be made more efficient to improve the Department’s chances of 

retaining the work in-house when competing against private-sector firms. The competition process generally 

results in savings regardless of whether the performance decision is in favor of the government or the private 

sector. The following four recently-completed competitions involving 117 FTE will save the government 

approximately $5.4 million: 

• National Certification Program 

• Installation Services 

• Visual Services 

• Chemical Services 

All four competitions resulted in the work being retained in-house, which means that the work continues to be 

performed by DOL employees. 

Improved Financial Performance 

The availability of timely, accurate, and useful 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 Office of the Chief Financial Officer (OCFO) has 

devoted significant resources to secure the Department’s achievement of excellence in financial management 

in the Federal Government. DOL’s clean audit opinion for FY 2007 marks the 11th straight year for this 

achievement. 

DOL’s managerial cost accounting system, Cost Analysis Manager (CAM), provides program managers with 

costs of outputs and activities to better understand how those costs affect the operations of their programs. 

This tool collects and allocates costs to activities — and ties these costs to performance. In doing so, it 

improves accountability and transparency by showing the results for the tax dollars spent. CAM generated the 

goal costing information at the strategic and performance goal levels for this report and for the second year 

straight year CAM generated costing information at the performance indicator level. Last year, costs were 

allocated at the indicator for about half of DOL’s performance goals. This year, most DOL programs were able 

to associate costs with their performance indicators. 

 

Expanded Electronic Government (E-government) 

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

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

performance projections. The Department’s Unified DOL Technology Infrastructure (UDTI) initiative is 

consolidating 30 IT service components into a unified, efficient environment. Savings resulting from UDTI on 
Management’s Discussion and Analysis 

56 United States Department of Labor 

network maintenance costs alone are estimated at $3 million. In addition, E-Grants – a web-based grants 

management tool – is used by all DOL grant-making programs to award some $9 billion in grants each year. 

E-Grants lowers administrative costs, strengthens internal controls, improves efficiency and customer service. 

Estimated savings associated with E-grants is nearly $20 million over the system’s twelve-year life. 

DOL also continues to seek other creative strategies and efficiencies to better serve our stakeholders. In April 

2002, GovBenefits.gov was launched – with DOL serving as the managing partner. GovBenefits’ mission is to 

use the Internet to connect citizens to government benefit program eligibility information; increase access to 

information, particularly for people with disabilities; reduce the burden and difficulty of doing business with 

the government; and continue to add programs to become the single source for Federal, State, and local 

government benefit programs. In April 2005, DOL launched GovBenefits en Espanol – and in April 2007, 

GovBenefits.gov was named as one of the Top 50 most innovative government programs in the Innovations in 

American Government Award program of Harvard University’s John F. Kennedy School of Government. In fact, 

GovBenefits.gov was one of only six Federal programs so recognized. Since its 2002 launch, GovBenefits.gov 

has had over 25 million visits – and now includes over 1,000 programs, both Federal and State. 

 

Performance Improvement Initiative 

The Performance Improvement Initiative – which, as of July 1, 2007, replaced the Budget and Performance 

Integration initiative of the PMA -- seeks to ensure that performance is routinely considered in funding and 

management decisions and that agency programs achieve expected results while working toward continual 

improvement. At DOL, it has also resulted in a gradual cultural shift that fosters a closer dialogue among 

program, performance, budget, and finance staff. Three FY 2007 areas to highlight: 

 

DEPARTMENTAL e-BUDGETING SYSTEM (DEBS) 

A recent management efficiency was gained through how DOL’s FY 2009 budget submission was created: 

the Departmental E-Budget System (DEBS). DEBS is an innovative tool designed to automate the budget 

formulation process – and allow budget analysts the ability to easily and electronically merge budget data 

with justification narrative using a web browser. For our FY 2008 cycle, we successfully completed pilot 

tests of the new DEBS system – which involved five DOL agencies or offices with 50 volunteer users. The 

DEBS system was rolled out to all of DOL for this FY 2009 budget cycle – and we are proud of the 

efficiencies gained by and budget produced through this new system. 

PROGRAM ASSESSMENT RATING TOOL (PART) 

DOL recently concluded six assessments and reassessments through the 2007 PART process. These 

assessments included National Emergency Grants, the Energy Employees Occupational Injury 

Compensation Program, Job Corps, the Occupational Safety and Health Administration, the Pension 

Benefit Guaranty Corporation, and Trade Adjustment Assistance. All new PART assessments, scores, 

ratings, and Improvement Plans were published this summer on www.ExpectMore.gov. This was several 

months in advance of when they have been published in the past – and allowed PART findings to play a 

more central role in the formulation of the FY 2009 DOL Budget. 

RIGOROUS EVALUATION OF MAJOR JOB TRAINING PROGRAMS 

DOL is contracting an independent study of program effectiveness – using administrative data – to be 

completed in 2008. Also in 2008, a more rigorous, seven-year evaluation will begin to determine WIA 

services’ impact on employment and earnings outcomes for participants.

Strategic Planning and Program Performance 

This is the first report in which DOL will report on progress against the strategic goal structure launched last 

September 30 in DOL’s 2006–2011 Strategic Plan. The Government Performance and Results Act of 1993 

calls for six-year strategic plans that must be updated every three years. Last year’s strategic planning 

process offered an opportunity to re-examine goals, program strategies and targets, and to solicit feedback 

from Congressional leadership and the public. The updated plan demonstrates how the Department’s diverse 

agency missions and program objectives will contribute to achieving our four overarching strategic goals: A 

Prepared Workforce, A Competitive Workforce, Safe and Secure Workplaces, and Strengthened Economic 

Protections. 
President’s Management Agenda 

FY 2007 Performance and Accountability Report 57 

In addition, the Department’s commitment to the new Performance Improvement Initiative continues through 

the Program Assessment Rating Tool (PART) process and implementation of PART program improvement 

plans. To date, 35 DOL programs have been reviewed under the PART process. FY 2007 was the first year of 

in which previously reviewed programs were reassessed to determine the impact of program improvements 

identified in the first review. DOL has implemented nearly half of the non-legislative PART recommendations. 

Agency-specific PMA Program Initiatives 

 

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

Improper Payments, Faith-Based and Community Initiative, and TFederal Real Property Asset Management. 

 

Eliminating Improper Payments 

The Improper Payments Act of 2002 defines improper payments as payments made to the wrong recipient; in 

the wrong amount; or used in an improper manner by the recipient. Better detecting and preventing improper 

payments to ensure taxpayer dollars are wisely and efficiently spent is the goal of the Eliminating Improper 

Payments initiative. 

At DOL, developing strategies and the means to reduce improper payments is good stewardship – and good 

business. Accurate payments lower program costs, thereby improving efficiency. The Department has three 

programs classified as high-risk for improper payments. Two are benefit programs – Unemployment 

Insurance in ETA and the Federal Employees Compensation Act program in ESA – and the third is an ETA 

grant program administered under the Workforce Investment Act. 

While Eliminating Improper Payments is still a fairly new PMA initiative, DOL is making progress and 

achieving results. Through the efforts of the Department’s Office of the Chief Financial Officer and ETA, 35 

States now use a cross-match of National Directory of New Hires data with State UI claimant data to identify 

individuals no longer eligible to receive UI benefits. In 2008, all States will be required to do so. 

Faith-Based and Community Initiative 

Over the past six years, DOL has significantly expanded opportunities for partnerships with faith-based and 

community non-profit organizations (FBCOs) to better serve Americans in need. Critical to this effort is 

removal of any unnecessary barriers to the participation of small and faith-based and community 

organizations in DOL grants and programs, thus establishing a level playing field for all. As reported last year, 

the Department employs a wide range of grants, technical assistance and other tools to draw upon the unique 

strengths of FBCOs in efforts such as serving the unemployed and underemployed, aiding homeless and 

incarcerated veterans, helping ex-offenders transition from prison to work, and reducing exploitive child labor 

abroad. In FY 2007, DOL strengthened its partnerships between faith-based and community organizations 

and the workforce investment system at the state and local levels. 

In 2007, DOL’s Center for Faith-Based and Community Initiative worked with the Employment and Training 

Administration to fund a sixth year of Grassroots grants, which feature simplified application and reporting 

requirements. These modest $25,000 grants allow DOL to draw upon the unique assets FBCOs bring to the 

task of assisting individuals looking for training and employment. This is particularly true with hard-to-serve 

populations who often need long-term, in-depth assistance to find and retain jobs. In Program Year 2006, the 

grantees reported impressive results. Forty-three Grassroots grantees, in partnership with One-Stop Career 

Centers, provided an expansive range of services, including enabling 1,460 high-need individuals to enter 

employment. Significantly, 1,007 of these individuals – ranging from ex-offenders to homeless individuals to 

persons with disabilities – were helped to retain their jobs for at least six months. Part of the partnerships’ 

success came through the efforts of the grantees to leverage a remarkable 14,275 volunteer hours! In FY 

2008, we look forward to reporting greater achievements. 

Federal Real Property Asset Management 

Better managing the Department’s properties is at the core the Federal Real Property Asset Management 

effort. This PMA initiative is intended to eliminate surplus assets; better manage the cost of inventory, and 

improve the condition of critical assets. The Department’s ongoing efforts in real property management have 
Management’s Discussion and Analysis 

58 United States Department of Labor 

yielded important benefits including DOL’s new Space Management System. Our Space Management 

Initiative includes a new tracking system with data on space holdings, utilization rates, rent costs, and square 

footage. Using this data to identify potential consolidations, since 2001 the Department has closed just over 

100 offices and released over 100,000 square feet – which accounts for an approximate annual cost savings 

of $2.8 million.

As demonstrated above, the Department has continued to make solid progress in improving DOL’s 

effectiveness and accountability to the American public. This is reflected in the fact that, since 2004, DOL has 

been honored with four President’s Quality Awards for management excellence. More important than the 

awards are the results for the taxpayers highlighted in this report. We are dedicated to ensuring that our 

programs achieve the best possible results, are managed effectively, and provide high quality services. 
FY 2007 Performance and Accountability Report 59 

Performance Section 
Performance Section 

60 United States Department of Labor 

Reporting Performance Results 

The Performance Section of this report presents results at the Strategic Goal and Performance Goal levels. 

The four Strategic Goals established in our FY 2006-2011 Strategic Plan are general outcomes clearly linked 

to the Department’s mission. Performance goals articulate more specific objectives associated with one or 

more programs administered by a distinct DOL agency. Progress in achieving these goals is measured by one 

or more quantifiable performance indicators, for which targets are established in the annual Performance 

Budget. 

Each of the four strategic goal sections is introduced by an overview of results, net cost and future plans for its 

component performance goals. Results for each performance goal are presented in a brief section that 

includes the following: 

• Headlines describe the goal in very basic terms. 

• Goal numbers (e.g., 07-1A) start with a two-digit year corresponding to the funding (budget) period. 

The single digit following the hyphen identifies the strategic goal and the letter distinguishes the 

performance goal from others in the same group. The agency acronym (e.g., BLS) is in parentheses. 

Finally, we indicate whether the program is reporting on a fiscal year (FY) or program year (PY).20

• Goal statements appear in italics. 

• Indicators, Targets and Results tables list each indicator, its targets and results for the reporting 

period and previous years that have data for the same indicators. Indicators that were dropped prior 

to the current year are not shown; however, a note indicates where additional historical performance 

information (legacy data) can be obtained. Where all data for any year are shown, goal achievement 

is indicated. Where “baseline” appears in the target cell for new indicators, no data were available for 

establishing a numerical target, and these data do not count towards goal achievement. If results 

improve over the prior year but do not reach the target, “I” appears in the target cell. Net cost 

associated with the goal and indicators is also provided.21

• Program Perspectives and Logic narratives describe the purpose of the program, how its activities are 

designed and managed to have a positive impact on the goal, and how it measures success and 

external factors that influence performance. Photos and vignettes communicate examples of 

programs’ impact at the personal level. 

• Analysis and Future Plans narratives interpret results, assess progress, explain shortfalls and describe 

strategies for improvement. Performance data at the indicator level and net cost at the goal level are 

displayed in charts where sufficient data are available to illustrate trends. 

• PART, Program Evaluations and Audits narratives provide updated information on Program 

Assessment Rating Tool reviews and improvement plans. Relevant audits and evaluations completed 

during the fiscal year are summarized in tables that highlight study purpose, major findings, 

recommendations and follow-up actions. 

• Data Quality and Major Management Challenges narratives discuss DOL’s confidence in the 

performance information reported for the goal’s measures and address management challenges that 

may have significant implications for achievement of program performance goals.22 

Data Quality 

This report is published six weeks after the end of the fiscal year. Since the Department uses a wide variety of 

performance data submitted by diverse systems and governed by agreements with State agencies and grant 

recipients, it is not possible in all cases to report complete data for the reporting period. The Department 

requires each agency responsible for performance goals in this report to submit a Data Estimation Plan in 

February that identifies, for each indicator, whether complete data are expected by the deadline for clearance 

 

20 FY 2007 began October 1, 2006 and ended September 30, 2007. PY 2006 began July 1, 2006 and ended June 30, 

2007. 

21 See also DOL Program Net Costs table in Cost of Results section of the Program Performance Overview 

(Management’s Discussion and Analysis). 22 See Major Management Challenges table in Management’s Discussion and Analysis.
Introduction 

FY 2007 Performance and Accountability Report 61 

and final review of the report in early October. If the data will not be available by then, the agencies must 

submit an acceptable plan to estimate results for the remainder of the year. Methodologies developed by 

agencies’ program analysts are reviewed by the Department’s Center for Program Planning and Results and 

the Office of Inspector General (OIG). The most common methods are substitution or extrapolation of two or 

three quarters of data and -- for data with significant seasonal variation -- use of the missing period’s results 

from the previous year. Estimates are clearly identified wherever they are used in this report. With very few 

exceptions, final (actual) data are available by the end of the calendar year; these data will be reported in the 

FY 2008 Performance and Accountability Report. 

OIG 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 at the 

bottom of each performance goal history. Lack of findings does not imply that data are factual. 

Material inadequacies are disclosed in the Secretary’s Message, which includes a statement on the adequacy 

of program performance data that is supported by signed attestations from each agency head responsible for 

a performance goal in this report. OMB Circular A-11 defines “material inadequacy” as a condition that 

significantly impedes the use of program performance data by agency managers and government decision 

makers. For Departmental management, this threshold is established at the performance goal level as data 

that are insufficient to permit determination of goal achievement. This is an unlikely occurrence, as most DOL 

performance goals have sufficient indicators and historical data to allow reasonable estimation of results. 

Generally, if agency or program level managers do not trust their own data, the results are not reported, 

because the problems created by skewed targets and trends are much worse than a gap in the data. 

Because DOL aspires to maintain high standards and because performance information is being used more 

than ever for decision-making and accountability, DOL recently created a Data Quality Assessment process to 

improve the quality of performance information reported to the public. The Data Quality and Major 

Management Challenges section of each performance goal narrative includes an overall rating of data quality 

(Excellent, Very Good, Good, Fair, or Unsatisfactory). Discussions summarize the rationale for these ratings 

and, for all but those rated Excellent, improvement plans. 
Performance Section 

62 United States Department of Labor 

Data assessments are based on seven criteria, of which two – accuracy and relevance – are weighted twice as 

much as others in the rating system (see box below). If data do not satisfy the standards for both of these 

criteria, the rating is Data Quality Not Determined. This reflects the DOL policy that further assessments of 

quality are irrelevant if the information is not reasonably correct or worthwhile. 

Data Quality Rating System 

Both bulleted descriptions under a criterion must be satisfied to receive points. No partial credit is awarded. The 

rating scale reflects 20 points for Section One “threshold” criteria plus additional points earned in Section Two. 

Data that do not satisfy both criteria presented in Section One are given the rating Data Quality Not Determined – 

regardless of the points achieved in Section Two. This rating indicates the agency is unable to assess data quality 

because it does not meet a minimum threshold. 

Section One: 20 points

Accurate Data are correct. (10 points) 

• Deviations can be anticipated or explained. 

• Errors are within an acceptable margin. 

Relevant Data are worth collecting and reporting. (10 points) 

• Data can be linked to program purpose to an extent they are representative of overall 

performance. 

• The data represent a significant budget activity or policy objective. 

Section Two: 25 points

Complete Data should cover the performance period and all operating units or areas. (5 points) 

• If collection lags prevent reporting full-year data, a reasonably accurate estimation method is in 

place for planning and reporting purposes. 

• Data do not contain any significant gaps resulting from missing data. 

Reliable Data are dependable. (5 points) 

• Trends are meaningful; i.e., data are comparable from year-to-year. 

• Sources employ consistent methods of data collection and reporting and uniform definitions 

across reporting units and over time. 

Timely Data are available at regular intervals during the performance period. (5 points) 

• The expectation is that data are reported quarterly. 

• Data are current enough to be useful in decision-making and program management. 

Valid Data measure the program’s effectiveness. (5 points) 

• The data indicate whether the agency is producing the desired result. 

• The data allow the agency and the public to draw conclusions about program performance. 

Verifiable Data quality is routinely monitored. (5 points) 

• Quality controls are used to determine whether the data are measured and reported correctly. 

• Quality controls are integrated into data collection systems.

Rating Points

Excellent 45 

Very Good 40 

Good 30-35 

Fair 25 

Unsatisfactory 20 

Data Quality Not Determined Varied 
Introduction 

FY 2007 Performance and Accountability Report 63 

DOL piloted the Data Quality Assessment process in FY 2006. By doing so, DOL not only increased the 

transparency of data quality among performance goals, but also implemented a forward-looking method for 

systematically evaluating data systems using widely accepted criteria. In its pilot year, the assessments 

provided a valuable baseline by identifying weaknesses and establishing improvement plans. By increasing 

the visibility of data quality, DOL is using the assessment process as an important benchmark for monitoring 

progress and stimulating change. 

In this year’s report, data for four performance goals are rated Excellent, ten are Very Good, six are Good, two 

are Fair, and two are Data Quality Not Determined. No performance goals were rated Unsatisfactory. Ratings 

this year largely remained the same; exceptions are higher ratings for ESA’s Wage and Hour Division, Office of 

Federal Contractor Compliance Programs and Office of Workers’ Compensation Programs goals, and lower 

ratings for ETA’s Senior Community Service Employment Program and VETS’ Uniformed Services Employment 

and Reemployment Rights Act goals. For two other goals, FY 2006 and FY 2007 ratings were not directly 

comparable due to the restructuring of performance goals. The Community Based Job Training Grants 

program did not report results and therefore, was not included. Given the short duration between the FY 2006 

year-end pilot assessment and the FY 2007 mid-year assessment, this year’s reporting focused on 

improvement plans to address the criteria not met in the pilot year assessment and considered the impact of 

any pertinent reports or audits released in FY 2007. 

OIG continues to identify data quality issues among its Major Management Challenges. Central to this 

ongoing challenge is the Department’s limited ability to ensure the quality of data reported by States and 

other sources below the Federal level. The Employment and Training Administration (ETA) is the principal 

agency affected by these findings. While their data quality assessments consistently identify verifiability as a 

weakness, these findings strictly relate to data collection systems for their performance goals. The OIG 

findings, however, cover data quality for sources not related to the performance goals. Beyond ETA, 

measuring the societal impact of compliance assistance, enforcement, policy development, and outreach also 

poses measurement challenges. 

Individual agencies must find a balance between measuring activities linked to their performance goals and 

measuring the far-reaching benefits to their constituents. Multiple performance measures, often relying on 

various data collection systems, allow an agency to focus on key performance areas linked to specific 

strategies. It is important to recognize that the data quality rating system evaluates only those data collection 

systems which support performance indicators appearing in this report. Program evaluations and audit 

reports, such as those listed in the performance goal chapters, supplement the performance data and give 

agencies a more comprehensive view into the effectiveness of their programs and help identify areas for 

improvement. 

In FY 2008, the data quality assessment process will entail full re-assessments for all performance goals. 

This could result in upward or downward adjustments of ratings for some goals. As data quality standards are 

further institutionalized and awareness of data quality increases Department-wide, DOL expects improved 

quality and quantity of information. It may also result in minor changes to ratings. As a testament to the 

robustness of the assessments to date, subsequent pertinent reports and audits generally confirmed 

assessment findings. This year’s improvement plans focused on remedying deficiencies among data systems 

that are mostly rated between Good to Excellent. Nonetheless, the Department views these results as the 

beginning of a long-term strategy to raise the bar in data quality and performance reporting. 
Performance Section 

64 United States Department of Labor 

Planning and Evaluation at the Department of Labor 

The diagram below illustrates the theoretical foundation of performance planning and evaluation structures, 

processes and results covered in this section of the Performance and Accountability Report. The outer circle 

represents the scope of DOL’s resources and influence. At the core is our mission. Everything in between is in 

continuous motion, clockwise and counter-clockwise. Quadrants represent the planning elements that are 

tied to periodic budget documents. Spokes incorporate the actual processes that follow resource allocation 

decisions and translate theory into practice. These elements are managed on a real-time basis; emergent 

cost and results information ultimately closes the feedback loop via reporting documents and the next 

period’s budget. A more detailed description of planning and evaluation processes follows the diagram. 

Planning Cycle 

The planning cycle begins in the upper left quadrant and moves clockwise. While planning can occur 

throughout the year, budget formulation officially launches the cycle. At this stage, programs define and 

prioritize desired outcomes by translating mere notions into realistic program goals. With clearly articulated 

goals in place, programs then need a mechanism for measuring their progress against those goals. 

Performance indicators, which appear throughout this plan, attempt to capture the results of program 

activities. Programs collect and monitor the data for these indicators in order to gauge progress towards their 

performance goals. Managers may adjust program strategies based on these results. As the budget 

formulation cycle nears, decision-makers can use performance data to strategically allocate resources to the 

most effective program strategies. Decision-makers also consider cost and which strategies will yield the 

maximum benefit for the least cost to the public. 

Evaluation Cycle 

Starting with the same quadrant but this time moving counter-clockwise, the budget defines fiscal parameters 

for execution of strategies constrained by program authorization legislation. Strategies materialize as 

activities, the results of which are assessed using performance indicators. Data from the performance 

indicators demonstrate whether goals are achieved. Outcomes – in generic terms, demonstrated 

effectiveness at achieving goals – justify further budget requests. 
FY 2007 Performance and Accountability Report 65 

Strategic Goal 1: A Prepared Workforce Develop a prepared workforce by providing effective training and support services to new and 

incumbent workers and supplying high-quality information on the economy and labor market.

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 possess skills required by today's employers. 

The Department must ensure that every available labor pool is tapped, including job seekers with disabilities, 

veterans, and disadvantaged youth. DOL agencies and offices supporting this goal are: 

• Bureau of Labor Statistics (BLS), 

• Office of Job Corps (OJC), 

• Employment and Training Administration (ETA), 

• Veterans’ Employment and Training Service (VETS), 

• Women’s Bureau, and 

• Center for Faith-Based and Community Initiatives. 

The Working Women in Transition (WWIT) program is a multiregional Women’s Bureau demonstration project focusing on 

women who are making a significant transition in their work 

lives. Sites in ten states target incarcerated women, Hurricane 

Katrina survivors, women in rural areas, recipients of Temporary 

Assistance for Needy Families, women recovering from 

substance abuse, baby boomers changing careers, minority 

women desiring to start or grow their own businesses, and single 

mothers. WWIT equips women with the skills and confidence 

they need to pursue career goals. For example, WWIT works with 

Vermont Works for Women and the Southeast State Correctional 

Facility in Windsor, Vermont, to teach building trade skills to 

incarcerated women. In addition to the hands-on training, 

the WWIT program also provides tailored support systems that 

include online and face-to-face mentoring; extra skills training; 

and tracking mechanisms to ensure participant success. [Photo 

credit: Jon Olender] 

A prepared workforce has the skills and the education that 

employers demand. Education – from literacy to vocational training – plays a fundamental role in preparing 

workers for life-long employment. In addition, DOL focuses on helping those who face exceptional barriers to 

successful employment. These individuals, such as low-income youth and homeless veterans, benefit from 

specialized training tailored to their unique situations. DOL provides comprehensive training programs that 

focus on specific, occupational skills while taking into account the trainees’ special circumstances. In 

addition, DOL produces labor statistics that individuals and businesses can use to better understand the job 

market and the economy. Performance indicators for these programs measure the extent to which DOL has 

successfully placed these individuals in jobs. In FY 2007, DOL delivered timely and accurate labor statistics, 

improved literacy skills and increased educational attainment for youth, connected individuals with better jobs 

through Apprenticeship programs, and placed homeless veterans in jobs. 

For Youth 

• The Job Corps program improved basic reading and math skills for nearly 60 percent of its students. 

• The job prospects for many low-income youth increased. Nearly 60 percent of low-income students 

entered employment, post-secondary education, or occupational skills training after exiting DOL 

funded training programs. 

For Workers in the Trades 

• Over 80 percent of workers in apprenticeship programs remained employed for nine months after 

entry. For individuals learning a trade, job experience leads to increasing skills and wages. 

• Average hourly wages increased by $1.50. 
Performance Section 

66 United States Department of Labor 

For Veterans 

• More veterans with disabilities found and kept their jobs. 

• More homeless veterans found jobs. 

These national results are realized by bringing together the right mix of services, education, and information 

to help each person fulfill his or her career goals. The vignettes throughout this section illustrate some of the 

stories behind Strategic Goal One. For more specific information, see the Performance Goal narratives. 

The following table provides key information, goal statements, and achievement for DOL performance goals 

associated with this strategic goal. Those with labels that begin with “06” operate on a Program Year (PY) 

basis, and are reporting on the period from July 1, 2006 to June 30, 2007 due to the forward-funding 

authorized in the Workforce Investment Act of 1998 (WIA). 

 

Net Cost (millions)23

Goal (Agency) and Statement Performance Summary FY 2005 

PY 2004 

FY 2006 

PY 2005 

FY 2007 

PY 2006 

07-1A (BLS) Improve information available to 

decision-makers on labor market conditions, and 

price and productivity changes. 

Goal achieved. All six 

targets reached. $536 $573 $574

06-1B (OJC) Improve educational achievements 

of Job Corps students and increase participation 

of Job Corps graduates in employment and 

education. 

Goal not achieved. One 

target reached and two 

not reached. 

1,309 1,402 1,238

06-1C (ETA) Increase placements and 

educational attainments for youth served through 

the WIA youth program. 

Goal substantially 

achieved. One target 

reached and one 

improved. 

947 1,017 908

07-1D (ETA) Improve the registered 

apprenticeship system to meet the training needs 

of business and workers in the 21st Century. 

Goal achieved. Both 

targets reached. 23 25 24

06-1E (VETS) Improve the employment outcomes 

for veterans who receive One-Stop Career Center 

services and Homeless Veterans’ Reintegration 

Program services. 

Goal not achieved. Three 

targets reached and three 

not reached. 

209 212 211

Other (Youth Offender Reintegration, Indian and Native American Youth 

Programs, etc.) 187 131 147

Total for Strategic Goal 1 

Two goals achieved, one 

substantially achieved 

and two not achieved. 

$3,211 $3,360 $3,103

The net cost dedicated to Strategic Goal 1 in FY 2007 was $3.103 billion. The first chart below is based on 

total Departmental costs of $47.872 billion; the second is based on an adjusted net cost of $12.771 billion 

that excludes the major non-discretionary program costs associated with Strategic Goal 4.24 Net cost 

dedicated to Strategic Goal 1 in FY 2006 (restated to reflect current goal structure) was $3.360 billion. 

 

23 Net cost as defined in a footnote to the Cost of Results discussion in Management’s Discussion and Analysis. 24 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 ($32.051 billion) plus disability benefit payments to individuals who 

suffered injury or illness on the job ($3.050 billion). 
Strategic Goal 1 

FY 2007 Performance and Accountability Report 67 

Percent of Net Cost Excluding Income 

Maintenance

24%

40%

10%

26%

1 - Prepared

2 - Competitive

3 - Safe and Secure

4 - Economic

Protections

Strategic Goal 1 - Percent of Net Cost of 

DOL Budget

6% 11%

3%

80%

1 - Prepared

2 - Competitive

3 - Safe and Secure

4 - Economic

Protections
Performance Section 

68 United States Department of Labor 

Timely, Accurate, and Relevant Economic Information

 

Performance Goal 07-1A (BLS) – FY 2007 

 

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

changes. 

Indicators, Targets and Results

*Indicator target reached (Y), substantially reached (S), improved (I), or not 

reached (N) 

Some indicators not shown for FY 2005 – see Legacy Data note below 

FY 2005 

Goal 

Substantially 

Achieved 

FY 2006 

Goal Not 

Achieved

FY 2007

Goal 

Achieved

Target — 85% 80%

Result — 79% 92%

* — N Y

Percent of output, timeliness, accuracy, and long-term improvement 

targets achieved for labor force statistics 

Cost — — 268

Target — 85% 90%

Result — 94% 90%

* — Y Y

Percent of output, timeliness, accuracy, and long-term improvement 

targets achieved for prices and living conditions 

Cost — — 198

Target — 85% 86%

Result — 77% 96%

* — N Y

Percent of output, timeliness, accuracy, and long-term improvement 

targets achieved for compensation and working conditions 

Cost — — 95

Target — 85% 86%

Result — 100% 100%

* — Y Y

Percent of output, timeliness, accuracy, and long-term improvement 

targets achieved for productivity and technology 

Cost — — 12

Target 75% 75% 79%

Result 74% 79% 79%

* S Y Y

Customer satisfaction with BLS products and services per the American 

Customer Satisfaction Index 

Cost — — 0

Target $3.32 $2.58 $1.79

Result $2.44 $1.82 $1.12

* Y Y Y

Cost per transaction of the Internet Data Collection Facility 

Cost — — 1

Goal Net Cost (millions) $536 $573 $574 

Source(s): Office of Publications and Special Studies report of release dates against OMB release schedule for 

BLS Principal Federal Economic Indicators; News releases for each Principal Federal Economic Indicator; BLS 

budget submissions and Quarterly Review and Analysis System; ACSI Quarterly E-Government scores. 

Legacy Data: Complete indicators, targets and results for FY 2004-05 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goal 06-1.2A. 

Note: Costs for this goal are net costs as defined in a footnote to the Cost of Results discussion in Management’s 

Discussion and Analysis. 
Strategic Goal 1 

FY 2007 Performance and Accountability Report 69 

Program Perspective and Logic 

BLS is the principal fact-finding agency in the Federal government in the broad field of labor economics. As 

an independent national statistical agency within the Department of Labor, BLS collects, processes, analyzes, 

and disseminates essential statistical data to the American public, the U.S. Congress, other Federal agencies, 

State and local governments, business, and labor. BLS provides information that supports the formulation of 

economic and social policy, and decisions that affect virtually all Americans. 

BLS reports performance for this goal by producing timely and accurate data, as well as by improving its 

products and services. BLS evaluates new economic and statistical methodologies; technologies; and survey 

design, collection, and dissemination approaches. Keeping abreast of improvements and using them to 

deliver data in a more timely and useful manner, while still maintaining cost effectiveness, are essential 

ingredients to meeting DOL goals and providing the quality of service BLS customers expect. In 2007, BLS 

began publishing information on employee hours and earnings, which will enhance understanding of wage 

growth and provide improved input for other major economic indicators. BLS also developed new measures 

of labor productivity and unit labor costs for three additional service-producing industries. In addition, BLS 

added new Business Employment Dynamics data at the State level, which are particularly useful in 

highlighting the forces behind the net changes in employment. 

Analysis and Future Plans 

BLS reached the targets for all six of its indicators, achieving its goal. Performance indicators for this goal 

include quality indicators for four categories of statistical surveys, a customer satisfaction index, and an 

efficiency measure. Each of the four survey quality indicators – for prices and living condition surveys, 

productivity and technology surveys, labor force statistics, and compensation and working conditions surveys 

– consist of output, timeliness, accuracy, and long-term improvement targets. BLS measures its survey 

quality by percent of these targets achieved, and in FY 2007 results exceeded targeted levels for all four 

categories. Cost per transaction of the Internet Data Collection Facility, the agency’s efficiency measure 

improved to $1.12 and also reached its target. The Occupational Outlook Handbook (OOH) is the Bureau’s 

nationally recognized source of career information. Using the American Customer Satisfaction Index, the OOH 

Web site reached its target score of 79 percent. See the PART, Program Evaluations and Audits section on 

the next page for more information on the recommendations DOL will implement to improve customer 

satisfaction with the BLS Website. 

The Department of Energy’s Office of 

Science operates 10 national laboratories 

(including Argonne, Fermi, and Oak Ridge) 

employing about 25,000 people. Since 

2002, the Acting Director has set a priority 

on workplace safety. He stated, “To be 

world class in science, we must be best-inclass in our safety performance.” Using 

tabulations from the BLS Survey of 

Occupational Injuries and Illnesses, the 

office set ‘Best-in-Class’ safety goals for its 

laboratories. As a result, between 2002 

and 2006, the Office of Science reduced its 

annual injury and illness cases from 593 to 

283 – over 50 percent. During that same 

period, the days away from work, restricted 

activity, and transfer (DART) cases 

decreased 71 percent from 301 to 87. The 

Acting Director credits BLS data for “helping 

the Office of Science set safety goals and 

improve our laboratories.” 

Under the labor force statistics indicator, BLS will improve its products by increasing the number of 

establishments surveyed by the Quarterly Census of Employment and Wages program, which is used to help 

Photo Credit: Fermilab 

(home to the world's highest-energy particle accelerator) 
Performance Section 

70 United States Department of Labor 

guide the allocation of tens of billions of dollars in Federal assistance programs. As part of the prices and 

living conditions indicator, the Producer Prices and Price Indexes (PPI) program is continuing work to upgrade 

two of its systems. PPI releases the Finished Goods Price Index, one of the Nation’s most closely watched 

indicators of economic health. PPI data are also used by the Bureau of Economic Analysis to calculate the 

gross domestic product (GDP) deflator. Within the compensation and working conditions indicator, BLS will 

publish data from a redesigned, more efficient Survey of Occupational Injuries and Illnesses sample. Under 

the productivity and technology indicator, the International Comparisons program will be enhanced. 

International Comparisons data are used to evaluate the competitive position of the U.S. in global markets. 

 

In FY 2007, for the first time, BLS is reporting on its costs at the performance indicator level. BLS will report 

on cost trends in future performance reports. The cost increase for this performance goal between FY 2005 

and FY 2006 was primarily due to budgeted increases in personnel compensation and benefits and other 

services and small differences in the timing of certain expenditures. Costs were virtually unchanged from FY 

2006 to FY 2007. 

 

PART, Program Evaluations and Audits 

BLS programs and services underwent a Program Assessment Rating Tool (PART) review in 2003 and 

received a rating of Effective, the highest rating category. BLS completed the three original PART 

recommendations in 2005. In 2006, DOL started work on new recommendations that will ensure continuous 

improvement: BLS is conducting an independent evaluation of agency effectiveness, developing additional 

efficiency and cost-effectiveness measures, and establishing more ambitious targets. In addition, in 2007, 

BLS made upward revisions to its long-term performance indicator targets. BLS programs are evaluated both 

internally and externally to ensure that they provide taxpayer value. As required by OMB, the seven BLS 

statistical reports that are designated as Principal Federal Economic Indicators are evaluated on a three-year 

schedule. In FY 2007, BLS completed a performance evaluation for the Current Population Survey. 

“Customer Satisfaction with the BLS Occupational Outlook Handbook (OOH) Website,” September 2007 

(Federal Consulting Group)

Purpose: As BLS continues to provide more information to customers on its Web site, it is important to know how 

satisfied customers are with the delivery of BLS products and services. 

Major Findings: BLS received a customer satisfaction score of 79% for 2007. Better search, navigation, and site 

performance could improve overall customer satisfaction. An architectural scan of the OOH Web site found that 

the OOH site has excellent page accessibility, very few broken internal or external links, and no duplicate images 

or documents, but that some pages are too large and that improvements can be made in the area of metadata 

coverage. (Metadata are descriptive tags or keywords that search engines use to index pages.) 

Recommendations: Architectural scan results recommend that BLS improve its metadata coverage. 

Actions Taken and Remaining: BLS may establish an internal standard for meta keywords and descriptions. 

Additional Information: A copy of the quarterly news release can be found at http://www.foreseeresults.com/. 

Data Quality and Major Management Challenges 

BLS has instituted rigorous, systematic, and comprehensive controls to ensure that its data are of Excellent

quality. For example, the BLS executive team meets with program management on a quarterly basis to 

discuss progress toward meeting performance indicators. BLS also conducts its own program reviews and 

contracts for external reviews, as necessary. These assessments ensure that survey data are accurate, 

reliable, and released in a timely fashion; systems and procedures are documented adequately; program 

performance meets or exceeds standards; and pre-release data are kept confidential. 
Strategic Goal 1 

FY 2007 Performance and Accountability Report 71 

Increase Placements and Educational Attainments of Youth 

Performance Goal 06-1B (OJC) – PY 2006 

 

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

employment and education.

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not reached (N) 

Some indicators not shown for PY 2004 – see Legacy Data note below 

PY 2004 

Goal Not 

Achieved 

PY 2005 

Goal Not 

Achieved

PY 2006

Goal Not 

Achieved

Target 85% 85% 87% 

Result 84% 80% 74% 

Percent of participants entering employment or enrolling in postsecondary education or advanced training/occupational skills training in 

the first quarter after exit * N N N 

Target 64% 64% 65% 

Result 64% 60% 57% Percent of students who attain a GED, high school diploma or certificate 

by the end of the third quarter after exit 

* Y N N 

Target 45% 45% 58% 

Result 47% 58% 58%

Percent of students who will achieve literacy or numeracy gains of one 

Adult Basic Education (ABE) level (approximately equivalent to two grade 

levels) * Y Y Y

Goal Net Cost (millions) $1,309 $1,402 $1,238 

Source(s): Job Corps Management Information System 

Legacy Data: Complete indicators, targets and results for PY 2001-04 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goal 05-1.1B. 

Note: Costs for this goal are net costs as defined in a footnote to the Cost of Results discussion in Management’s 

Discussion and Analysis. Participants included in the calculation of the placement rate (first indicator) will 

continue to include graduates and former enrollees, not all students, until complete and reliable data are 

available. Costs are not allocated to the indicator level for placement, credential and literacy/numeracy 

measures because program activities are not separable into categories associated with one or another of them. 

Program Perspective and Logic 

Job Corps is an intensive educational 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 career counseling, technical skills and academic training, social education, and other 

support services, such as housing, transportation and family support resources to more than 60,000 

individuals at 126 centers – including four satellite centers – nationwide. Job Corps centers, ranging in size 

from 200 to 2000 students, are located in both urban and rural communities. Job Corps centers provide 

individually tailored services to help students achieve the skills and credentials required to be successful, 

productive citizens and to obtain work opportunities that lead to long-term employment. 

Job Corps’ performance can be influenced 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. 

Performance of the Job Corps program is assessed using the Federal job training program common measures 

for youth – placement in employment or education, attainment of a degree or certificate, and literacy or 

numeracy gains – as indicators of student achievement in improving their long-term employability. 
Performance Section 

72 United States Department of Labor 

Analysis and Future Plans 

The Job Corps program did not achieve its goal for PY 2006; only one of its three indicator targets was 

reached. In PY 2006, Job Corps met its target for learning gains; literacy or numeracy skills increased by one 

Adult Basic Education (ABE) level for 58 percent of all students who were deficient in basic skills when they 

entered the program. Certificate attainment – students achieving a high school diploma (HSD), General 

Equivalency Diploma (GED) or vocational certificate while enrolled in Job Corps – fell for the second year in a 

row. In fact, the PY 2006 result of 57 percent was lower than PY 2005’s result of 60 percent. After data 

integrity reviews revealed that in past years misreporting of certificate attainments may have occurred, DOL 

implemented more stringent documentation requirements. The Department believes the correction of data 

integrity deficiencies, rather than a decline in actual performance, contributed to the reported drop in HSD, 

GED and vocational certificate attainments. 

From January 15 through February 22, 2007, more 

than 500 Job Corps students from 26 centers 

traveled to Lafayette, Louisiana, to participate in 

the Blitz Build project and build 11 Habitat for 

Humanity homes for victims of the 2005 hurricanes 

that devastated the Gulf Coast region. The Blitz 

Build project, a partnership of Habitat for Humanity, 

Major League Baseball and the Dallas Region of 

Job Corps, gave students a chance to demonstrate 

leadership skills and use their career technical 

training in a real-world setting. Students from a 

variety of construction trades, including plumbing, 

electricity, and building maintenance received 

valuable hands-on experience while logging more 

than 20,000 hours of community service. This 

project and its positive impact on victims’ lives 

serve as testimony to the character of our students. 

[Photo Credit: Meghan Umphres] 

DOL also attributes the second consecutive decline in placement results to changes in data collection and 

reporting. The pool of students has grown over the past few years due to the addition of former enrollees 

(students who did not complete their programs but were enrolled in Job Corps for more than 60 days). PY 

2004 was the first year that former enrollees were included, producing a modest impact on the results; by PY 

2005, the full effect was apparent and the negative impact continued through PY 2006. 

To improve performance, DOL is implementing an ambitious New Vision, which will include: strengthening 

placement services and post-center support; shifting to a standards-based approach centering on industry and 

occupational clustering; utilizing applied academics in career technical areas supported by career success 

standards; establishing a comprehensive 

admissions process that prepares students for 

life and ensures students are ready and 

committed; and increasing and strengthening 

industry, education and workforce partnerships 

to enhance and expand delivery of student 

services. While these changes will not happen 

all at once or improve results overnight, the 

cumulative effect is expected to improve 

program performance. 

Costs associated with this performance goal 

have trended downward over the last two years 

because of changes in cost allocations to Job 

Corps.

 

Performance Goal 06-1B

Net Costs ($Millions)

1,309 1,402

1,238

0

500

1,000

1,500

2,000

2004 2005 2006

Program Year
Strategic Goal 1 

FY 2007 Performance and Accountability Report 73 

PART, Program Evaluations and Audits 

The Job Corps program underwent a PART review in 2007 and received a rating of Adequate. This is a decline 

from the Moderately Effective rating Job Corps received in a 2004 PART review. This decline is primarily 

attributable to a reduced score in the Results and Accountability section of the Job Corps PART. In response 

to findings that suggest changes to Job Corps’ financial management practices, DOL is adopting efficiency 

measures that are linked to performance outcomes, account for all costs, and facilitate comparisons across 

Department of Labor training and employment programs. DOL is also improving cost effectiveness by 

transitioning to a center career clustering approach, improving the tracking and reporting of real property, and 

using the real property data to make informed resource allocation decisions. 

“Oconaluftee Job Corps Center Performance Audit,” March 2007 (OIG)

Purpose: This audit was conducted to determine whether the National Park Service (NPS) properly recorded and 

reported student accomplishments and attendance and whether NPS followed applicable laws, regulations, 

policies, and requirements in reporting on the Oconaluftee Job Corps Center’s (the Center) financial activities. 

Major Findings: 

1) NPS did not properly record and report student attendance. 

2) NPS did not follow laws, regulations, policies and requirements in reporting the Center’s financial activities. 

3) NPS and Job Corps had not completed actions on the health and safety issues previously reported by the Office 

of Inspector General. 

Recommendations: 

1) Ensure training is provided on applicable Job Corps Policy and Requirements Handbook and NPS requirements 

for all personnel with responsibility for recording and reporting absences without leave (AWOL), separating 

students who exceed AWOL limitations, and documenting leave requests and approvals. 

2) Monitor to ensure that the NPS and the Center accurately record and report the students’ accomplishments and 

attendance, and the Center’s financial activity. 

3) Collect the cost underrun of $190,367 and obtain a refund of $124,608 from NPS for the EEO claim improperly 

charged as Center operating costs. 

4) Require an annual reconciliation of program year funds provided to and expenditures reported by federally 

operated centers. 

Actions Taken and Remaining: The Job Corps National Director temporarily closed the Oconaluftee Job Corps 

Center on March 22, 2007, citing as reasons conditions that threatened students’ health and safety. 

Additional Information: A copy of the complete report can be obtained at 

http://www.oig.dol.gov/public/reports/oa/2007/26-07-001-01-370.pdf. 

“Job Corps Director’s Authority as Contracting Officer Raises Concerns,” March 2007 (OIG)

Purpose: This audit responded to an anonymous hotline complaint alleging improper actions by the former 

Regional Director (RD) of the Atlanta Regional Office of Job Corps (AROJC). 

Major Findings: 

1) The former AROJC Regional Director abused his contracting authority by violating procurement regulations to 

acquire personal services. 

Recommendations: 

1) Assign Contracting Officer and Regional Director responsibilities to two individuals in each region, to strengthen 

controls and provide for greater independence in the selection and award of future Job Corps contracts. 

2) Update the Program Assessment Guide (official guidance) to incorporate the Regional Office Assessment Team 

pre-brief out meeting process. This process includes the discussion, concurrence, and documentation of quality 

assessment scores prior to the Team providing Job Corps contractors results of their performance evaluation. 

3) Ensure adherence to Federal Acquisition Regulation of personal service contracts and conflicts of interest. 

Actions Taken and Remaining: 

1) Job Corps has separated the duties of the Regional Director and the Contracting Officer by placing those 

functions in two different reporting structures, which ensures adherence to Federal Acquisition Regulations. 

2) The Program Assessment Guide is being updated to reflect these changes. 

Additional Information: A copy of the complete report can be obtained at 

http://www.oig.dol.gov/public/reports/oa/2007/04-07-002-01-370.pdf. 

 
Performance Section 

74 United States Department of Labor 

Data Quality and Major Management Challenges

Data quality for this performance goal was rated Very Good. The data are accurate, relevant, complete, 

reliable, timely, and valid. When the OIG cited insufficient management controls over performance data in 

2004, DOL designed and implemented new data integrity procedures. These procedures required regional 

offices to utilize targeted samples (that highlight the most likely cases where error or manipulation has 

occurred) for audit reviews to be conducted in conjunction with on-site assessments. Regional offices were 

also required to develop procedures for identification and collection of liquidated damages, as necessary. 

Since that time, regional offices have recovered $315,739 in liquidated damages. Trends in performance 

data show that these audits, and resulting penalties, have affected performance reporting and results; the 

Office of Job Corps is confident that the new data integrity strategy is producing more reliable student 

outcome data from Job Corps centers and career transition service providers.

Ensuring the Effectiveness of the Job Corps Program is listed as a Departmental Major Management 

Challenge (see item II in the challenges table located in Management’s Discussion and Analysis). To address 

this challenge, DOL is improving the way Regional Offices monitor the performance of contractors that 

operate 98 of its Job Corps centers. In FY 2007, a new process that included both a fiscal and a performance 

review was implemented. The Office of Job Corps conducted training for three of six Regional Offices on 

monitoring contractor performance of financial management and cost reporting, data integrity, and asset 

management. The staff at the three remaining Offices will be trained in October of 2007. The Departments 

of Interior and Agriculture operate 28 Job Corps centers via Interagency Agreements with DOL. DOL is 

negotiating revisions to the Interagency Agreements with these Departments to provide for more 

accountability on financial and property management by the agencies and greater oversight by the Office of 

Job Corps. Finalized agreements are expected to become effective in FY 2008.

Additionally, in FY 2008, the Office of Job Corps will be implementing rigorous safety and occupational health 

standards and requirements for all Job Corps centers, and will be completing training for Job Corps center 

staff to ensure that students with cognitive disabilities are identified and assessed. Also, Regional Disability 

Coordinators hired on a part-time basis in FY 2007 -- to aid in minimizing or removing barriers to success for 

students with cognitive disabilities -- will be converted to full-time staff in FY 2008. 
Strategic Goal 1 

FY 2007 Performance and Accountability Report 75 

Assist Youth in Making a Successful Transition to Work

Performance Goal 06-1C (ETA) – PY 2006 

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

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not reached (N) 

**Estimated 

PY 2005 

Goal 

Achieved

PY 2006 

Goal Substantially 

Achieved

Target baseline 60% 

Result 57.8% 58.2%** 

Percent of participants entering employment or enrolling in post-secondary 

education or advanced training/occupational skills training in the first quarter after 

exit * Y I 

Target baseline 40% 

Result 36% 43.4%** Percent of students who attain a GED, high school diploma or certificate by the end 

of the third quarter after exit 

* Y Y 

Percent of students who will achieve literacy or numeracy gains of one Adult Basic Target — baseline

Education (ABE) level (approximately equivalent to two grade levels) Result — — 

Goal Net Cost (millions) $1,017 $908 

Source(s): Annual State WIA performance reports (ETA-9091) 

Legacy Data: Complete indicators, targets and results for PY 2001-04 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goal 05-1.1A. 

Note: Net costs are defined in a footnote to the Cost of Results discussion in Management’s Discussion and 

Analysis. Costs are not allocated to the indicator level for placement, credential and literacy/numeracy measures 

because program activities are not separable into categories associated with one or another. 

Program Perspective and Logic 

The Workforce Investment Act (WIA) authorizes services to low-income youth (age 14-21) with barriers to 

employment. 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. Through this program, youth are prepared for employment and post-secondary education by 

stressing linkages between academic and occupational learning. Additional services available to youth 

include tutoring, alternative schools, summer employment, occupational training, work experience, supportive 

services, leadership development, mentoring, counseling, and follow-up services. 

DOL collects data for three performance indicators, all common measures for youth and lifelong learning 

aspects of Federal employment and training programs. The first, percent of youth entering employment, 

advanced training or education after leaving the program, indicates whether DOL is transitioning youth into 

the workforce or post-secondary education – a key to successful careers. The second, percent of participants 

earning educational credentials, is a proxy for the preparedness of participants to compete in the 21st century 

knowledge-based economy. The third indicator measures literacy/numeracy gains by basic skills deficient 

out-of-school participants in the WIA Youth Program. Data on literacy/numeracy gains were collected but are 

insufficient to report at this time; DOL will establish a baseline in PY 2007 and then targets for PY 2008.

Analysis and Future Plans 

The goal for the WIA youth program was substantially achieved. In PY 2006, the program reached its target 

for attainment of a degree or certificate. Results for placement in employment or education fell slightly below 

the target; however, the result is an improvement over the PY 2005 result. DOL is in the process of collecting 

data to establish a baseline for literacy/numeracy gains. Increased emphasis on serving out-of-school and the 
Performance Section 

76 United States Department of Labor 

neediest youth likely impacted the program’s ability to meet the target for the entered employment or 

education indicator. These populations are the most difficult to serve, and they historically have lower 

performance outcomes. Results should improve as WIA-funded youth programs become more effective in 

serving out-of-school youth and continue to increase coordination with other youth-serving agencies and 

systems such as juvenile justice and education. 

Suzzie is a teen parent attending the Carver-Scott Educational Cooperative (CSEC) in 

Shakopee, Minnesota. She took the Medical Careers class which allows students to explore 

the health field. Park Nicollet Clinic, CSEC and Scott County developed a 10-week work 

experience program with academic credits. Suzzie was one of three parenting/pregnant 

teens enrolled in job shadowing a variety of high growth medical occupations at the clinic. 

Suzzie felt that the WIA youth program helped her with teamwork, communication and 

mathematics. She enjoys math now and understands how important it is in a medical 

profession. With this inspiration, Suzzie achieved straight A’s and is now attending Crown 

College as a Post Secondary Education Option student, taking classes that are applicable for 

her enrollment next year in their two-year nursing program. Suzzie is the first in her family 

to go to college and she hopes to inspire others to follow. [Photo Credit: Kay Tracy] 

Collection of baseline data on literacy/numeracy gains will continue in PY 2007 to enable the program to set 

a valid target for PY 2008. The Department will continue strategies that recognize out-of-school and at-risk 

youth as an important part of the new workforce “supply pipeline” needed by businesses to fill job vacancies 

in the knowledge economy. WIA-funded youth programs connect these youth with quality secondary and postsecondary educational opportunities, and high-growth and other employment opportunities. To support these 

strategies, DOL formed a Shared Youth Vision (SYV) Federal partnership with the Departments of Health and 

Human Services, Education, Justice, Housing and Urban Development and Transportation, and the Social 

Security Administration and the Corporation for National and Community Service. The focus of the Federal 

partnership is to assist States in coordinating resources and program delivery strategies to achieve positive 

outcomes for the neediest youth. In conjunction with the SYV Federal partnership, DOL awarded grants to 16 

States for the development and implementation of pilot projects to provide integrated services to a specific 

population of the neediest youth. 

Costs associated with this performance goal rose by seven percent between PY 2004 and PY 2005 and then 

fell eleven percent between PY 2005 and PY 

2006, reflecting fluctuation in the timing of 

expenditures; States have three years to 

expend obligated funds. The decrease in costs 

for PY 2006 is also attributable to a twelve 

percent decline in the number of participants 

served. The number of participants served 

fluctuates from year to year. Costs are not 

allocated at the indicator level since funds 

provided to the States support all the 

measured outcomes – entering employment 

or education, attaining a degree or certificate, 

and demonstrating gains in literacy or 

numeracy – and many of the youth who exit 

the program experience all three. 

PART, Program Evaluations and Audits 

The program underwent a PART review in 2003 and received a rating of Ineffective. After the review, DOL 

implemented the improvement plan recommendations: In PY 2006, the Department began collecting data 

from WIA grantees on all three common performance measures for Federal job training programs. DOL is 

also contracting an independent study of program effectiveness – using administrative data – to be 

completed in 2008. Also in 2008, a more rigorous, seven-year evaluation will begin to determine WIA 

Performance Goal 06-1C

Net Costs ($Millions)

947 908 1,017

0

400

800

1,200

2004 2005 2006

Program Year
Strategic Goal 1 

FY 2007 Performance and Accountability Report 77 

services’ impact on employment and earnings outcomes for participants. The Government Accountability 

Office conducted an evaluation titled, “Workforce Investment Act: Additional Actions Would Further Improve 

the Workforce System.” To view a summary of the findings, recommendations, and a link to the study, please 

see Performance Goal 06-2A. 

Data Quality and Major Management Challenges 

Data quality for this performance goal was rated Very Good. Strengths of the data included its relevance, 

reliability, and routine verification. While verification remains an area for improvement, extensive effort has 

been directed toward improving data quality through the use of DOL’s data validation system and monitoring 

at both the national and regional levels (see item IX, Improving Performance Accountability of Grants in the 

Major Management Challenges section of Management’s Discussion and Analysis). In particular, ETA drafted 

a revised Monitoring Guide for data validation in PY 2006 and will implement a streamlined performance 

reporting system in 2008. To support the new reporting system, benchmarks for data validation results will 

be established once baseline studies are completed.
Performance Section 

78 United States Department of Labor 

Satisfy High-Growth Industry Labor Needs via Apprenticeships 

Performance Goal 07-1D (ETA) – FY 2007 

 

Improve the registered apprenticeship system to meet the training needs of business and workers in the 21st

Century. 

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not reached (N) 

**Estimated 

Some indicators not shown for FY 2005 – see Legacy Data note below 

FY 2005 

Goal 

Achieved 

FY 2006 

Goal 

Achieved

FY 2007

Goal 

Achieved

Target Baseline 78% 79% 

Percent of those employed nine months after registration as an apprentice Result 78% 82% 83%** 

* Y Y Y 

Target Baseline $1.26 $1.33 

Result $1.26 $1.32 $1.50** Average hourly wage gain for tracked entrants employed in the first 

quarter after registration and still employed nine months later 

* Y Y Y 

Goal Net Cost (millions) $23 $25 $24 

Sources: Registered Apprenticeship Information System (RAIS) and Apprenticeship Information Management 

System (AIMS) 

Legacy Data: Complete indicators, targets and results for FY 2002-05 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goal 06-1.1A. 

Note: Costs for this goal are net costs as defined in a footnote to the Cost of Results discussion in Management’s 

Discussion and Analysis. “Tracked entrants” is defined as the cohort of apprentices registered and entered into 

RAIS during a given reporting period. Twenty-five States have federally registered apprenticeship programs and 

enter data on individuals into the system. Costs are not allocated to the indicator level for retention and earnings 

measures because program activities are not separable into categories associated with one or the other. 

Program Perspective and Logic 

The National Registered Apprenticeship System is a partnership of the Department of Labor, State agencies, 

sponsors, industry leaders, employers, employer associations, labor and management organizations, and 

educational institutions. It was established in 1937 to provide opportunities for jobseekers to find jobs with 

career paths, earn competitive wages, and obtain nationally-recognized industry credentials. The system 

promotes and registers programs and apprentices, certifies standards, 

safeguards the welfare of the apprentices, and provides a nationally 

recognized system for skilled and technical occupational training 

programs throughout the U.S. 

The CVS Career Prescriptions for Success (CAPS) program addresses projected 

shortfalls of Pharmacy Technicians and Pharmacists through a multifaceted 

career path strategy, which includes building community interest in 

pharmaceutical jobs, targeting recruitment in high unemployment 

neighborhoods in Detroit, providing apprenticeships, and assisting current 

workers with career advancement through academic and training programs. As 

a result of this program, several successful apprentices have emerged, including 

Teresa. Teresa learned of the CVS CAPS program through Goodwill Industries, a 

faith-based and community partner. The mother of two young sons, Teresa was 

looking for a challenging job in a new field with advancement opportunities. She 

joined CVS in August 2006. Since then, she has excelled as a Pharmacy Service 

Associate and is now training to become an Assistant Manager. [Photo Credit: 

Darnell Jones] 
Strategic Goal 1 

FY 2007 Performance and Accountability Report 79 

The Department promotes the apprenticeship training system to potential sponsors and participants and 

registers and monitors these partners’ apprenticeship programs, in some cases via State Apprenticeship 

Council/Agencies (SAA). Registration and oversight officials certify that standards are met for quality, 

fairness, and opportunity, and that apprenticeship programs incorporate appropriately supervised on-the-job 

learning and occupation-related technical instruction. 

The apprenticeship model has demonstrated success in providing employers in numerous industries with 

resources to develop new occupations and train a skilled workforce to remain globally competitive. As a 

system based on voluntary industry participation, apprenticeship program performance is directly impacted by 

external factors such as wage rates determined by local apprenticeship sponsors and by the demand for 

skilled and technical labor in local markets. 

Analysis and Future Plans 

Apprenticeship continues to demonstrate positive results as it reached FY 2007 targets for both indicators; 

therefore, the Department achieved its performance goal. In fact, the target for the employment retention of 

registered apprentices was exceeded by four percentage points. Nationally, there was modest wage gain 

reported from all apprenticeship programs. However, due to an unusually high demand for skilled workers in 

southern Nevada, there was a substantial increase in wages in that area that affected the national average for 

the wage gain indicator. The average cost per registered apprentice was $74, or $23 less than the FY 2006 

result of $97, because the number of registered apprentices increased from 220,000 in FY 2006 to 304,500 

in FY 2007. This 38 percent increase was likely due to a large, one-time influx of registered apprentices from 

California into the Department’s Registered Apprenticeship database.25 In summary, the program’s continued 

positive results demonstrate that Apprenticeship is an efficient and effective approach to training America’s 

workers. 

The Office of Apprenticeship is working with 

YouthBuild programs at various sites in 

Massachusetts to link with construction trades 

apprenticeship programs throughout the 

Commonwealth. The academic and hands-on 

training in construction safety and building 

techniques that participants receive is a natural lead 

into apprenticeship for program graduates 

interested in pursuing construction careers. YWCA 

YouthBuild Springfield is noteworthy because it 

graduated one of the first two Youth Development 

Practitioner journey workers in Massachusetts. 

[Photo Credit: DOL/ETA] 

The Department continues to re-engineer its 

database for registered apprenticeship 

programs. The new system coming online in FY 

2008, to be renamed Registered 

Apprenticeship Partnership Information Data 

System (RAPIDS), will improve program quality 

and efficiency by using electronic processes to 

manage program data. The system’s new and enhanced reporting capabilities will also reduce staff time 

necessary to generate management reports, which will improve program efficiency. Additionally, a survey of 

employer sponsors conducted in the spring of 2007 portrays their views on apprenticeship and integration 

with the workforce investment system. Findings from the survey will be published in FY 2008 and will help 

shape future improvements to the National Apprenticeship System. 

 

25 SAA programs are not required to submit performance data. The Department’s assumption of registration duties in 

California in FY 2007 had a dramatic impact on the size of the national database. 

YWCA YouthBuild participant Mercedes adjusts her hard hat 

before beginning work on new housing.
Performance Section 

80 United States Department of Labor 

Costs associated with this performance goal remained fairly constant between FY 2005 and FY 2007. Costs 

are not allocated to the performance indicator level since funding supports both measured outcomes for 

apprentices served by the federally administered programs. 

PART, Program Evaluations and Audits 

The program underwent a PART review in 2005 and received a rating of Results Not Demonstrated – 

reflecting lack of data on the common measures at that time. The resulting improvements DOL implemented 

include adopting the common measures for retention and earnings, and redesigning the Registered 

Apprenticeship Information System (RAIS) to capture post-training outcomes. Additionally, the Department 

continued efforts to expand the numbers of women in apprenticeship by awarding three Women in 

Apprenticeship and Nontraditional Occupations (WANTO) grants to a consortium of apprenticeship sponsors, 

and community- and faith-based organizations to recruit, train, employ and retain women in apprenticeship 

and nontraditional occupations. 

Data Quality and Major Management Challenges 

Data quality for this performance indicator was rated Fair. Strengths of the data include its accuracy, but 

room for improvement remains in verifiability, completeness, timeliness, and validity. The primary data 

source is RAIS, an automated system that operates independently from State workforce information systems. 

For the 25 States in which SAAs register apprentices, participation in RAIS is voluntary; therefore, complete 

nationwide data are not available and the collection of retention and earnings data remains challenging. 

Recent implementation of the common measures will affect the ability to compare performance trends in the 

short term. As indicated in the footnote on the first page of this narrative, wage gain data are limited to 

Federal efforts. RAPIDS (which will replace RAIS) includes trend analysis capability and offers features to 

encourage SAAs to utilize this data collection system. The system also has greater quality controls to ensure 

the accuracy of data collected from the federally administered programs. Efforts continue to determine how 

Unemployment Insurance wage record information may be accessed to verify employment outcomes of 

registered apprentices. It is anticipated that RAPIDS will considerably reduce the estimated staff hours 

needed to report the earnings indicator. 

Implementation of RAPIDS will address a Major Management Challenge (MMC), Improve Apprenticeship Data 

Quality – included in item IX of the MMC table in Management’s Discussion and Analysis – by making better 

use of performance data for program oversight and developing a cost-effective strategy for collecting data 

from SAAs. Expansion of the Apprentice Electronic Registration (AER) project in RAIS reduces application 

processing time, improves data quality, increases cost-effectiveness, and improves the program’s ability to 

track data. AER’s utilization rate increased from nine percent of participating States in FY 2005 to 50 percent 

in FY 2007. 

The Department continues efforts that began in FY 2005 to review apprenticeship activities in SAA States. All 

25 SAA States are complying with the Department’s SAA review recommendations. DOL anticipates that the 

SAA States will continue to correct any deficiencies identified during the review process. 
Strategic Goal 1 

FY 2007 Performance and Accountability Report 81 

Help Veterans Get and Keep Jobs 

 

Performance Goal 06-1E (VETS) – PY 2006 

 

Improve employment outcomes for veterans who receive One-Stop Career Center services and Homeless 

Veterans’ Reintegration Program services. 

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not reached (N) 

**Estimated 

PY 2003

Goal 

Achieved

PY 2004 

Goal 

Achieved 

PY 2005

Goal 

Achieved

PY 2006

Goal Not 

Achieved

Target 58% 58% 59% 60% 

Result 58% 60% 62% 60% Percent of Veteran participants employed in the first quarter 

after exit 

* Y Y Y Y 

Target 72% 80% 81% 81% 

Result 79% 81% 81% 79% 

* Y Y Y N 

Percent of Veteran participants employed in the first quarter 

after exit still employed in the second and third quarters after exit

Cost — — $89 $91 

Target — 54% 55% 55% 

Result — 56% 57% 55% Percent of Disabled Veteran participants employed in the first 

quarter after exit 

* — Y Y Y 

Target — 78% 79% 79% 

Result — 79% 80% 78% 

* — Y Y N 

Percent of Disabled Veteran participants employed in the first 

quarter after exit still employed in the second and third quarters 

after exit 

Cost — — $89 $91 

Target 54.5% 60% 61% 68% 

Result 61% 65% 68% 66% Entered employment rate for homeless veterans participating in 

the HVRP 

* Y Y Y N 

Target — baseline 58 58.5% 

Result — 58% 67% 63%** 

* — Y Y Y 

Employment retention rate after 6 months for homeless veteran 

HVRP participants 

Cost — — $30 $30 

Goal Net Cost (millions) — $209 $212 $211 

Source(s): State Workforce Agency administrative reports, State UI wage records and homeless veteran grantee 

reports. 

Note: Costs for this goal are net costs as defined in a footnote to the Cost of Results discussion in Management’s 

Discussion and Analysis. Costs are not allocated to the indicator level for employment and retention measures 

because program activities are not separable into categories associated with one or another of them. However, 

this goal includes two programs with three distinct target populations. Costs for each group (all veterans, disabled 

and homeless veterans) are provided in the cost cell opposite the retention indicators, where available. 

Program Perspective and Logic 

Jobs for Veterans State grants support the delivery of employment services needed by veterans and 

transitioning service members to promote their success in the civilian workforce. These grants support over 

2,100 disabled veterans’ outreach specialists and local employment representatives stationed at the 
Performance Section 

82 United States Department of Labor 

nationwide network of over 3,100 comprehensive and affiliate One-Stop Career Centers. These staff serve as 

experts on workforce resources available for veterans. The local representatives emphasize the provision of 

services for recently separated veterans and handle outreach to employers, while the outreach specialists 

focus their efforts on intensive services for disabled veterans and other veterans with significant barriers to 

employment. The Homeless Veterans’ Reintegration Program (HVRP) is a competitive grant program 

emphasizing stable employment as the critical factor in mitigating homelessness among veterans. Program 

participants are served by community-based grantees that provide pre-employment services, establish 

linkages with service providers funded by other Federal agencies, and rely on the specialists to assist them in 

finding employment once they are job-ready. 

One-Stop Career Centers serve younger, recently separated veterans who have limited civilian work 

experience and older veterans with civilian experience who have become unemployed. HVRP grantees serve 

homeless veterans who have minimal attachment to the workforce. DOL applies the Federal job training 

common measure definitions of entry to employment and retention in employment as the critical indicators of 

successful outcomes for all veterans and all disabled veterans who receive One-Stop services. For HVRP, DOL 

has used similar indicators; common measure definitions will be fully implemented in PY 2007. In setting 

performance targets, VETS seeks to improve service to veterans at a rate that is ambitious yet attainable. 

 

Analysis and Future Plans 

The goal was not achieved; only three of the six targets were reached. For all veterans served by One-Stop 

Career Centers, entered employment and employment retention rates declined by two percentage points from 

PY 2005. The employment rate target was reached while the retention rate target was not reached. For 

disabled veterans, the employment and retention rates also declined by two percentage points from PY 2005; 

as for all veterans, the employment rate target was reached while the retention rate target was not reached. 

The employment rate target for HVRP participants was not reached, and an estimate of the final retention 

result indicates it will exceed the target. Results in the charts below are for the first two indicators, which 

include disabled veterans but not HVRP participants. 

During the past year, continued improvement in broad national economic indicators for unemployment, 

interest rates and productivity had a positive impact on VETS program performance. The decline between PY 

2005 and PY 2006 of two percentage points across the results of all four indicators for veterans served by 

One-Stop Career Centers is attributable, at least in part, to a temporary disruption in interstate sharing of data 

on employment outcomes. That situation is expected to improve during PY 2007. While the employment 

rate attained by HVRP for PY 2006 was the second highest in the program’s history, an increase in the 

proportion of new grantees may have contributed to the failure to reach the ambitious target. In response to 

these results, DOL intends to redouble its efforts to facilitate coordination among the VETS State offices, State 

Workforce Agencies and community based grantees, such as those responsible for implementing HVRP. 

To improve employment outcomes for veterans, DOL is developing and implementing State Workforce Agency 

performance standards. Within the HVRP, VETS is implementing common measure reporting procedures to 

facilitate comparison of results across agency programs. Additionally, VETS will place increasing emphasis on 

serving those homeless veterans with significant barriers to employment or chronically homeless veterans by 

Entered Employment - All Veterans

50%

55%

60%

65%

70%

2003 2004 2005 2006

Program Year

Result Target

Employment Retention - All Veterans

70%

75%

80%

85%

90%

2003 2004 2005 2006

Program Year

Result Target
Strategic Goal 1 

FY 2007 Performance and Accountability Report 83 

extending the period grantees actively support and monitor employment retention. VETS also is expanding 

the Recovery and Employment Assistance Lifelines program by assigning additional program outreach staff at 

the major medical installations throughout the country. This program, which is complemented by efforts of 

the Departments of Defense and Veterans Affairs, provides individualized job training, counseling and reemployment services to seriously injured or wounded veterans of Operation Iraqi Freedom, Operation 

Enduring Freedom and other recent conflicts. In addition, VETS plans to enhance states’ flexibility with the 

Jobs for Veterans Act of 2002 (JVA) Grant program by helping states to more effectively integrate DVOP 

specialists and LVER staff into the One-Stop Career Center System.

Net costs for this performance goal remained fairly constant between PY 2004 and PY 2006. 

PART, Program Evaluations and Audits 

The 2005 PART review of the Jobs for Veterans State Grants Program rated the program Moderately Effective

and noted that it serves a large number of veterans, while focusing on those veterans requiring more intensive 

services by leveraging other resources within the workforce investment system. The improvement plan 

included setting more ambitious performance targets and conducting an independent evaluation to assess 

the effects of recent program changes on employment outcomes. VETS established ambitious targets in the 

DOL FY 2006-2011 Strategic Plan and completed the first phase of a two-year evaluation (see summary of 

SRA International study in table below). 

HVRP was rated Moderately Effective in its 2006 PART review, which noted that it provides competitive grants 

to community-based organizations that coordinate the wide range of local services required to enable 

homeless veterans to achieve self-sufficiency. The improvement plan included conducting a rigorous 

evaluation, continuing to improve cost-effectiveness, and strengthening accountability. VETS has taken 

significant action on these items by conducting competitions for PY 2007 grants, fully implementing common 

measures for PY 2007, and launching an independent evaluation in September 2007. 

“Veterans’ Employment and Training Service: Labor Could Improve Information on Reemployment 

Services, Outcomes, and Program Impact (GAO-07-594),” May 2007 (GAO)

Purpose: To identify the extent to which the reported performance results reflect the outcomes achieved by 

veterans as a result of services provided by One-Stop Career Centers and veterans’ employment 

representatives, and to identify improvements to be made in the performance information reported. 

Major Findings: 

1) Performance measures for Jobs for Veterans State Grants (JVSG) generally reflect services and outcomes, but 

are weakened by several factors. 

2) Reported results do not fully capture veterans’ services and outcomes in One-Stop Career Centers. 

3) DOL has taken steps to improve the quality of performance data and to better understand veterans’ services and 

outcomes. 

Recommendations: 

1) Consolidate all performance measures for the DVOP and LVER programs, including those for disabled and 

recently separated veterans. 

2) Comply with the Jobs for Veterans Act’s (JVA) requirement to implement a weighted system for the DVOP and 

LVER performance measures that takes into account the difficulty of serving veterans with particular barriers to 

employment. 

3) Develop legislative proposals for appropriate changes to the definition of veterans across employment and 

training program to ensure consistency. 

Actions Taken and Remaining: 

1) Performance measures for PY 2008 will address GAO recommendations on consolidation and weighting (April 

2008). 

2) Initiated dialogue within DOL on implications of a potential legislative initiative to standardize veteran definitions. 

Additional Information: http://www.gao.gov/new.items/d07594.pdf
Performance Section 

84 United States Department of Labor 

“Disabled Veterans’ Employment: Additional Planning, Monitoring and Data Collection Efforts Would 

Improve Assistance,” September 2007 (GAO)

Purpose: To assess recent results with respect to: a) improved coordination between VA and DOL in serving 

disabled veterans; b) progress in implementing VA’s Five-Track program; and c) the effectiveness and efficiency 

of VA’s employment coordinators and job resource labs. 

Major Findings: 

1) The implementation of joint planning, guidance and monitoring by VA and DOL has been inadequate. 

2) Existing program resources may not be appropriate to the specific needs of veterans of current conflicts. 

3) VA employment coordinators and job resource labs serve few veterans and duplicate other existing services. 

Recommendations: 

1) Improve the planning, guidance and monitoring of program operations that VA and DOL jointly provide. 

2) Review the employment coordinator role and its relationship to other resources, and identify improvements. 

3) Review the usage of job resource labs and their relation to other resources to improve their usefulness. 

Actions Taken and Remaining: VA and DOL are jointly responsible for the first recommendation; VA is 

responsible for the second recommendation, in consultation with DOL; and VA is responsible for the third 

recommendation. 

Additional Information: http://www.gao.gov/new.items/d071020.pdf

“An Assessment of the Influence of the Jobs for Veterans Act and the Workforce Investment Act on the 

Employment Outcomes of Veterans,” August 2007 (SRA International)

Purpose: Address recommendation from 2005 PART review of Jobs for Veterans State Grants program. 

Major Findings: 

1) The Jobs for Veterans Act in general and its priority of service provision in particular have improved the 

responsiveness of the workforce system to veterans’ needs for employment and training services. 

2) The Workforce Investment Act’s emphasis on One-Stop Career Centers and the integration of services has 

improved the accessibility, breadth and coordination of employment and training services for veterans. 

Recommendations: 

1) Improve the guidance issued to the field on the provision and the monitoring of priority of service for veterans. 

2) Promote scheduling options for half-time LVER staff consistent with the requirement to spend 50 percent of their 

time on employer outreach; assignment to business services for the non-VETS portion of their time is one option.

3) Promote scheduling options for half-time DVOP staff consistent with the emphasis on their responsibility for 

delivery of intensive services; assignment to WIA units for the non-VETS portion of their time is one option. 

Actions Taken and Remaining: A follow-up study was awarded to analyze the factors associated with veteran 

participants who are reported to have not entered employment and the steps that could be taken to improve those 

reported outcomes. 

Additional Information: Contact Ruth Samardick at (202) 693-4700 or Samardick.Ruth@dol.gov. 

 

Data Quality and Major Management Challenges 

Data quality for this performance goal was rated Good. Strengths of the data include relevance, timeliness, 

and completeness. The four indicators addressing the outcomes of veterans and disabled veterans served by 

One-Stop Career Centers rely upon the reporting system for One-Stop Career Centers (Performance Goal 06-

2C). Therefore, in general, the data quality assessment for that goal also applies to these indicators. The two 

indicators addressing outcomes for homeless veterans served by HVRP rely upon the Veterans' Employment 

and Training Operations and Program Activity Report (VOPAR). VOPAR areas for improvement are reliability 

and verifiability. During 2007, DOL enhanced the system to accommodate common measures and added 

internal consistency checks. During 2008, DOL plans additional system upgrades and focused oversight of 

implementation and verification processes. Routine quality control measures include trouble-shooting by 

expert VETS field staff and workshops on reporting at the annual conference attended by all grantees’ 

representatives. VETS has no DOL major management challenges. 
FY 2007 Performance and Accountability Report 85 

Strategic Goal 2: A Competitive Workforce Meet the competitive labor demands of the worldwide economy by enhancing the effectiveness and 

efficiency of the workforce development and regulatory systems that assist workers and employers 

in meeting the challenges of global competition. 

The nation’s future economic success will largely depend on a workforce that meets employers’ needs for new 

and skilled workers. Through partnerships with State and local workforce agencies, business and industry, 

education and training providers, faith-based and community organizations, and economic development 

agencies, DOL makes strategic investments in job training and increase accessibility and quality of 

information that helps match workers with employers. The current competitive economic environment 

requires a regulatory structure in which benefits of regulations exceed their costs. DOL conducts reviews to 

determine if regulations have or will have a significant economic impact on a substantial number of small 

businesses. These reviews examine the regulations’ compliance costs and whether the regulatory burdens of 

all employers, both large and small, are reduced. In today’s global economy, the well-being of American 

workers is increasingly tied to international stability, which is in part a function of broad-based economic 

prosperity. DOL-supported international technical assistance programs focus on raising living standards 

through workplace-related interventions, supporting the expansion of free and fair trade, eliminating exploitive 

child labor, and promoting the basic rights of workers. DOL agencies and offices supporting this goal are: 

• Employment and Training Administration (ETA), 

• Office of Disability Employment Policy (ODEP), 

• Office of the Assistant Secretary for Policy (OASP), and 

• Bureau of International Labor Affairs (ILAB). 

To support expansion of Whirlpool manufacturing 

operations in Ohio, the Governor’s office 

committed $1.2 million in customized workforce 

services as part of an incentive package connected 

with the company’s acquisition of Maytag. As 

operator of the local One-Stop Career Center, 

Marion Connections was charged with securing a 

workforce to support Whirlpool’s implementation 

of a weekend production operation which would 

create 500 jobs within 90 days. This challenge 

involved recruiting, application screening, testing, 

interviewing and referring for hire. Results met 

project goals and greatly exceeded Whirlpool’s 

expectations. Due to the success of this initial 

partnership, Whirlpool (the county’s largest 

employer) has designated Marion Connections as 

its exclusive portal to employment. To date, over 

3,000 interviews have been conducted and over 

1,500 job seekers have been hired. [Photo credit: 

DOL/ETA] 

 

Fostering a competitive workforce means providing workers with training that meets the rapidly evolving 

workforce needs of employers. By connecting workers with those needs, DOL can more effectively place 

those workers in better paying, long-term jobs. DOL supports training efforts that tie directly into local 

economies – where jobs are located. To achieve this goal, DOL relies on a mix of programs that deliver 

training focused on the skills employers need to succeed. DOL tailors its programs to specific situations and 

workers whose skills are no longer in demand, individuals with disabilities, and veterans. DOL primarily 

measures its success by the numbers of individuals who find and remain in those jobs. In FY 2007, DOL 

helped more workers find jobs, improved foreign worker application processing for employers, and improved 

workers protections internationally. 
Performance Section 

86 United States Department of Labor 

For American Workers 

• Greater percentages of older workers were still employed several months after completing training 

programs. In addition to finding a job, staying employed is an important measure of success. 

• More policies and effective practices were developed to assist workers with disabilities. 

For Employers 

• Almost 100 percent of H-1B applications were processed within seven days of filing. Workers with H1B visas help fill critical skill gaps. 

• The timeliness of permanent labor certification applications increased. 

For the International Community 

• More children were removed or kept out of exploitive child labor worldwide. 

• The number of countries better prepared to address child labor increased. 

These national results are realized by meeting the needs of one worker and one employer at a time. Vignettes 

throughout this section provide stories about the individuals who benefit from programs in Strategic Goal Two. 

For more program-specific information, please see the Performance Goal narratives. 

The following table provides key information, goal statements, and achievement for DOL performance goals 

associated with this strategic goal. Those with labels that begin with “06” operate on a Program Year (PY) 

basis, and are reporting on the period from July 1, 2006 to June 30, 2007 due to the forward-funding 

authorized in the Workforce Investment Act of 1998 (WIA). Results for Performance Goal 06-2D (Community 

Based Job Training Grants) are not reported because data are considered inadequate for the purpose of 

determining goal achievement. 

 

Net Cost (millions)26

Goal (Agency) and Statement Performance Summary FY 2005 

PY 2004 

FY 2006

PY 2005

FY 2007

PY 2006

06-2A (ETA) Increase the employment, retention, 

and earnings of individuals registered under the 

Workforce Investment Act (WIA) Adult program. 

Goal not achieved. Two 

targets reached and one not 

reached. 

$906 $912 $864

06-2B (ETA) Increase the employment, retention, 

and earnings replacement of individuals registered 

under the WIA Dislocated Worker program. 

Goal not achieved. One target 

reached and two not reached. 1,472 1,543 1,443

06-2C (ETA) Improve outcomes for job seekers 

and employers who receive One-Stop employment 

and workforce information services. 

Goal not achieved. One target 

reached and two not reached. 831 884 815

06-2E (ETA) Increase accessibility of workforce 

information through the National Electronic Tools. 

Goal achieved. All three 

targets reached. 26 27 25

06-2F (ETA) Assist older workers to participate in a 

demand-driven economy through the Senior 

Community Service Employment Program. 

Goal not achieved. One target 

reached and one not reached. 426 432 443

07-2G (ETA) Assist workers impacted by 

international trade to better compete in the global 

economy through the Trade Adjustment Assistance 

Program. 

Goal achieved. Both targets 

reached. 846 700 816

 

26 Net cost as defined in a footnote to the Cost of Results discussion in Management’s Discussion and Analysis.
Strategic Goal 2 

FY 2007 Performance and Accountability Report 87

Net Cost (millions)26

Goal (Agency) and Statement Performance Summary FY 2005 

PY 2004 

FY 2006

PY 2005

FY 2007

PY 2006

07-2H (ETA) Address worker shortages through 

the Foreign Labor Certification Program. 

Goal not achieved. One target 

reached and three not 

reached. 

60 46 63

07-2I (ODEP) Build knowledge and advance 

disability employment policy that affects and 

promotes systems change. 

Goal achieved. All three 

targets reached. 52 50 34

07-2J (OASP)27 Maximize regulatory flexibility and 

benefits and promote flexible workplace programs. 

Goal achieved. All three 

targets reached. – – –

07-2K (ILAB) Contribute to the elimination of the 

worst forms of child labor internationally. 

Goal achieved. Both targets 

reached. 74 95 101

Other (Indian and Native American Adult, National Farmworker, and Work Incentive 

Grants programs, Transition Assistance Program, Pilots, Demonstrations, Research 

and Evaluation, H-1B Technical Skills Training, and other ILAB programs) 

417 375 424

Total for Strategic Goal 2 Five goals achieved and five 

not achieved. $5,110 $5,064 $5,027

Five of the ten performance goals in Strategic Goal 2 are for employment and training programs whose 

results are measured by entered employment rate (percent of participants who obtain jobs subsequent to 

receipt of services) and by employment retention rate (percent of those who obtained jobs who are still 

employed six months later). The charts below indicate these programs’ current and previous year results. 

Earnings results are not included because the programs that measure earnings used different indicators prior 

to this year. Average earnings will be reported in FY 2008, when we expect to have comparable data for these 

programs. Significant differences in results between programs are generally explained by differences in types 

of services offered and populations served. 

The net cost dedicated to Strategic Goal 2 in FY 2007 was $5.027 billion. The first pie chart below is based 

on total Departmental costs of $47.872 billion; the second is based on an adjusted net cost of $12.771 billion 

 

27 Costs associated with Performance Goal 07-2J (OASP) are included in costs allocated to other performance goals.

Retention in Employment

40%

50%

60%

70%

80%

90%

100%

Adults

Dislocated Workers

One-Stop services

Older Workers

Trade Adjustment

DOL Program

Prior Year Target Result

Entry to Employment

20%

30%

40%

50%

60%

70%

80%

90%

Adults

Dislocated Workers

One-Stop services

Older Workers

Trade Adjustment

DOL Program

Prior Year Target Result
Performance Section 

88 United States Department of Labor 

that excludes the major non-discretionary program costs associated with Strategic Goal 4.28 Net cost 

dedicated to Strategic Goal 2 in FY 2006 (restated to reflect current goal structure) was $5.064 billion. 

Samson thought he knew everything about cars 

since his father had opened an auto repair shop in 

his native Ethiopia. But when he entered the 

General Service Technician (GST) program at 

Shoreline Community College, Samson realized 

how challenging modern car repair had become. 

The program, funded through the President’s High 

Growth Job Training Initiative, provides industrycertified automotive technician training. In addition 

to learning about automotive repair, Samson also 

says he has become a better listener and 

communicator. He graduated from the program in 

2006 and is now working full-time. Samson 

aspires to become a National Institute for 

Automotive Service Excellence-certified repairman. 

Samson believes, “My goal of having my own repair 

shop is in sight. The sacrifice has been worth it. 

I’m on my way to achieving my dream.” [Photo 

credit: Mark Cutshall] 

 

 

28 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 ($32.051 billion) plus disability benefit payments to individuals who 

suffered injury or illness on the job ($3.050 billion). 

Percent of Net Cost Excluding Income 

Maintenance

24%

40%

10%

26%

1 - Prepared

2 - Competitive

3 - Safe and Secure

4 - Economic

Protections

Strategic Goal 2 - Percent of Net Cost

6% 11%

80%

3%

1 - Prepared

2 - Competitive

3 - Safe and Secure

4 - Economic

Protections
Strategic Goal 2 

FY 2007 Performance and Accountability Report 89

Increase Employment, Retention, and Earnings for Qualified Adults

 

Performance Goal 06-2A (ETA) – PY 2006 

 

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

Act Adult Program. 

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not 

reached (N) 

**Estimated 

Some indicators not shown for PY 2001-05 – see 

Legacy Data note below 

PY 2001

Goal 

Achieved

PY 2002

Goal Not 

Achieved

PY 2003 

Goal 

Achieved 

PY 2004 

Goal 

Achieved 

PY 2005

Goal 

Achieved

PY 2006

Goal Not 

Achieved

Target — 70% 71% 75% 76% 76% 

Result — 74% 74% 77% 77% 69.7%** Percent of participants employed in the first 

quarter after exit 

* — Y Y Y Y N 

Target 78% 80% 82% 85% 81% 82% 

Result 79% 84% 85% 86% 82.5% 82.2%**

Percent of participants employed in the first 

quarter after exit still employed in the second 

and third quarters after exit * Y Y Y Y Y Y 

Target — — — — — $11,000

Result — — — — — $11,850** Average earnings in the second and third 

quarters after exit 

* — — — — — Y 

Goal Net Cost (millions) — — — $906 $912 $864 

Source(s): Annual State WIA performance reports (ETA-9091) 

Legacy Data: Complete indicators, targets and results for PY 2001-05 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goal 05-4.1A. 

Note: Costs for this goal are net costs as defined in a footnote to the Cost of Results discussion in Management’s 

Discussion and Analysis. Costs are not allocated to the indicator level for employment, retention and earnings 

measures because program activities are not separable into categories associated with one or another. 

 

Program Perspective and Logic 

The Workforce Investment Act (WIA) Adult Program helps adult workers (unemployed and employed) acquire 

the skills they need to compete in a global economy. Funds are provided by formula to States, which operate 

statewide networks of One-Stop Career Centers to provide comprehensive services to workers and employers. 

Services include assessments of skills needs, individual career planning, occupational skills training, on-thejob training, skills upgrading, entrepreneurial training, and adult literacy activities. States also use the WIA 

Adult Program to leverage additional, non-Federal resources to increase the quality and variety of assistance. 

Through collaboration with program partners, the WIA Adult Program seeks to assist individuals in their career 

goals, reduce welfare dependency, and improve the quality, productivity and competitiveness of the nation’s 

workforce. 

The Department evaluates this program’s success using the Federal job training program common measures: 

entered employment and employment retention rates, and average earnings. A high entered employment 

rate indicates that participants have improved financial opportunity. A high retention rate indicates stability 

of participants’ new positions. Increased average earnings indicate that participants are getting better jobs. 

Future performance targets will reflect performance information and data analysis. 
Performance Section 

90 United States Department of Labor 

Jamie, a single mother of a 22-month old girl, entered the 

Starke County WorkOne Office in February seeking help to 

attain marketable skills. Within three weeks of her initial 

appointment at WorkOne, Jamie was enrolled in high-growth 

occupational training to become a Certified Nurses Aide (CNA), 

her first step toward self-sufficiency. Using Workforce 

Investment Act funds to pay for her tuition and supportive 

services, Jamie was able to complete her CNA training and 

certification in April. She began working the next day at 

Wintersong Village, a local nursing facility in Knox, Indiana. 

With the assistance of a local faith-based organization, Jamie 

acquired her own home. Jamie is continuing her education at 

IVY Tech. [Photo Credit: Dean Corey]

 

 

 

Analysis and Future Plans 

The performance goal for the WIA Adult Program was not achieved. However, DOL reached two of the 

program’s three performance indicator targets. The exception was the entered employment rate of 69.7 

percent, which fell six percentage points below the target. As the workforce investment system moves to an 

integrated service delivery model with broader reach through co-enrollment efforts involving those with lower 

statistical success such as traditional Wagner-Peyser Act employment services recipients, some drop-off in 

the entered employment rate was expected. Thus, program performance must be viewed in the context of 

strategic approaches such as program integration and co-enrollment. The employment retention rate of 82.2 

percent reached the target; this means people who find a job are staying employed. Six month average 

earnings of $11,850 also reached the target. Continued progress in this indicator will help show the 

workforce investment system’s effectiveness in preparing and placing workers in high growth, high wage 

industries. 

 

Key strategies to improve services to WIA participants include strengthening strategic partnerships (through 

strategic planning and grant application requirements) with business and industry, and the education 

community to develop workforce solutions in the context of State and regional economies. These 

partnerships promote the use of WIA resources to prepare workers for jobs with career pathways in high 

demand occupations and industries. Also, the Department expects its grantees to leverage a wide array of 

non-WIA resources to maximize the impact of WIA investments and prepare more workers with the skills they 

need to be successful in today’s global economy. For example, many States and regions are align WIA funds 

with other economic development, education, and foundation dollars to transform their regions’ talent 

development approach. The WIA Adult program plays a critical role in this process by preparing workers in 

new high-growth industries and occupations. Funds may also be dedicated to new talent development 

models. For example, many areas are placing additional emphasis on entrepreneurship training and lifelong 

learning. 

Employment Retention

70%

75%

80%

85%

90%

2000 2001 2002 2003 2004 2005 2006

Program Year

Result Target

Entered Employment

60%

65%

70%

75%

80%

85%

2000 2001 2002 2003 2004 2005 2006

Program Year

Result Target
Strategic Goal 2 

FY 2007 Performance and Accountability Report 91

In order to address employees’ need to work and upgrade skills simultaneously, DOL encourages States to 

implement educational strategies for adult learners that are flexible and offer multiple entry and exit points. 

As part of the State planning process for PY 2007, many States emphasized their efforts to transform WIA 

and Wagner-Peyser Act formula funds to provide increased support for postsecondary education and lifelong 

learning opportunities that are aligned with 

State and regional talent development 

strategies. 

 

Costs associated with this goal decreased five 

percent from PY 2005 to PY 2006. This partly 

reflects normal spending fluctuations since 

States have three years to expend obligated 

funds. Costs are allocated to the performance 

goal rather than at the indicator level, as 

funding supports all the outcomes for the Adult 

program. 

PART, Program Evaluations and Audits 

The WIA Adult program underwent a PART review in 2005 and received a rating of Adequate. As required in 

the PART improvement plan, DOL is working with Congress to reform the WIA and consolidate funding for 

related programs to reduce administrative overhead and increase States’ flexibility to tailor services. 

Common performance measures, allowing for comparison between various job training programs, have 

already been instituted. In addition, DOL is contracting an independent study of program effectiveness – 

using administrative data – to be completed in 2008. Also in 2008, a more rigorous, seven-year evaluation 

will begin to determine WIA services’ impact on employment and earnings outcomes for participants. In the 

FY 2008 Budget, the Department is proposing to implement Career Advancement Accounts (CAAs). These 

personal $3,000 accounts are designed to help workers more efficiently access education and training 

options, and successfully transition to the global market place. 

“Workforce Investment Act: Additional Actions Would Further Improve the Workforce System,” June 2007 

(GAO)

Purpose: This Congressional testimony summarizes earlier reports issued between 2000 and 2007 on WIA. 

Major Findings: GAO made several recommendations that do not require legislative action: 

1) To help reduce the incentive to serve only those who will help meet performance levels, DOL should 

systematically adjust expected performance levels to account for different populations and local economic 

conditions when negotiating performance. 

2) DOL issued guidance to standardize the reporting of obligations. However, DOL has not taken steps to more 

accurately estimate States’ available funding by considering obligations as well as expenditures. 

3) DOL needs to consider alternative approaches that involve ongoing consultation with key stakeholders as the 

agency seeks to implement new initiatives. Ongoing consultation and collaboration would ensure that, for 

example, States have the time and resources to implement a new reporting system. 

4) DOL has not improved policymakers’ understanding of what employment and training programs achieve by 

conducting important program evaluations, including an impact study on WIA, and releasing those findings in a 

timely manner. 

Recommendations: See above. 

Actions Taken and Remaining: Some of the issues raised by GAO are being addressed in policy and legislative 

proposals, such as WIA reauthorization. To address performance level adjustments, DOL has instructed States 

to provide data and other evidence to demonstrate how economic conditions and other variables are expected to 

impact outcomes during the performance level negotiation process. For example, DOL takes into account 

significant new efforts by States aimed at increasing access to services for special populations who may face 

barriers to employment. It will be necessary to document how outcomes are impacted by changes in the mix of 

participants served. DOL will review those States with targeted strategies to determine the extent to which 

outcomes were impacted by changes in the mix of participants served. 

Performance Goal 06-2A

Net Costs ($Millions)

906 912 864

0

400

800

1,200

2004 2005 2006

Program Year
Performance Section 

92 United States Department of Labor 

 In an effort to improve collaboration on new initiatives, DOL has held discussions with States and conducted a 

series of conferences in August-September 2007 to provide States with an update on the proposed WISPR 

reporting system and obtain their feedback. Also, beginning in PY 2007, DOL will be conducting a rigorous, fiveyear evaluation to determine WIA services’ impact on employment and earnings outcomes for participants. 

Additional Information: The complete Congressional testimony (GAO-07-1051T) is accessible at 

http://www.gao.gov/cgi-bin/getrpt?GAO-07-1051T. 

“Managing Customers’ Training Choices: Findings from the Individual Training Account Experiment (Final 

Report),” December 2006 (Mathematica Policy Research, Inc.)

Purpose: This final report provides policymakers with information on the effectiveness of, and trade-offs inherent 

in, three approaches to managing customer choice of training programs (structured customer choice, guided 

customer choice and maximum customer choice). 

Major Findings: 

1) More people can access training with Individual Training Accounts (ITAs) when given individual choice and 

flexibility. When counseling was voluntary and individual choice maximized, few requested counseling, but the 

take-up rate of ITAs was highest. Individual choice expedited the start of training and customers were more 

likely to attend training programs at community colleges. 

2) Staff counseling had little effect on customers’ employment-related outcomes or on customers’ occupational 

choices, but may broaden the training options considered by the customer. Individuals are capable, on their 

own, of choosing an appropriate training path that leads to sustainable employment. 

3) Available evidence does not indicate that one approach is preferable to others, but cost savings could be 

achieved through the elimination of bureaucratic inefficiencies and certain unnecessary eligibility screening 

activities. 

Recommendations: None 

Actions Taken and Remaining: Career Advancement Accounts (CAAs), which are similar to the maximum 

customer choice approach under the ITA experiment, are proposed in the FY 2008 President’s Budget. In 

addition, ETA is piloting the CAA model in eight States to further test the maximum customer choice approach 

and increase individuals’ access to postsecondary education and training. If the CAA budget proposal is 

approved, ETA will use the findings in this report, as well as lessons from the eight-State demonstration, to better 

structure the CAA program. 

Additional Information: A copy of the report is available at 

http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_resultDetails&pub_id=2331&mp=y. 

Data Quality and Major Management Challenges 

Data quality for this performance goal was rated Very Good. Strengths of the data include its validity, 

accuracy and completeness. While verification remains an area for improvement, extensive effort has been 

directed at improving data quality through the use of ETA’s data validation system and monitoring at both the 

national and regional levels (see item IX, Improving Performance Accountability of Grants in the Major 

Management Challenges section of Management’s Discussion and Analysis). ETA drafted a revised 

Monitoring Guide for data validation in PY 2006 and is working to implement a streamlined performance 

reporting system in 2008. 
Strategic Goal 2 

FY 2007 Performance and Accountability Report 93

Assist Dislocated Workers 

Performance Goal 06-2B (ETA) – PY 2006 

 

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

Act Dislocated Worker Program. 

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or 

not reached (N) 

**Estimated 

Some indicators not shown for PY 2001-05 – 

see Legacy Data note below 

PY 2001 

Goal 

Achieved

PY 2002 

Goal Not 

Achieved

PY 2003 

Goal Not 

Achieved

PY 2004 

Goal Not 

Achieved 

PY 2005 

Goal Not 

Achieved

PY 2006

Goal Not 

Achieved

Target 73% 78% 78% 82% 83% 84% 

Result 79% 82% 82% 84% 83% 77.3%** Percent of participants employed in the 

first quarter after exit 

* Y Y Y Y Y N 

Target 83% 88% 88% 91% 89% 90% 

Result 87% 90% 90% 91% 88% 87.5%** 

Percent of participants employed in the 

first quarter after exit still employed in 

the second and third quarters after exit * Y Y Y Y N N 

Target — — — — — $13,800 

Result — — — — — $14,212** Average earnings in the second and 

third quarters after exit 

* — — — — — Y 

Goal Net Cost (millions) — — — $1,472 $1,543 $1,443 

Source(s): Annual State WIA performance reports (ETA-9091) 

Legacy Data: Complete indicators, targets and results for PY 2001-05 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goal 05-4.1C. 

Note: Costs for this goal are net costs as defined in a footnote to the Cost of Results discussion in Management’s 

Discussion and Analysis. Costs are not allocated to the indicator level for employment, retention and earnings 

measures because program activities are not separable into categories associated with one or another. 

Program Perspective and Logic 

The Workforce Investment Act (WIA) Dislocated Worker Program aims to quickly reemploy laid-off workers 

and to enhance their employability and earnings by increasing occupational skills. The Department allocates 

80 percent of funds by formula to the States. The Secretary of Labor may use the remaining 20 percent for 

discretionary activities specified under WIA, including assistance to localities that suffer plant closings, mass 

layoffs or job losses due to natural disasters, and military base realignment and closures. The types of 

training services available to dislocated workers are occupational skills training, on-the-job training, skills 

upgrading, entrepreneurial training, job readiness training, adult literacy activities, and customized training for 

employers who commit to hiring. The Federal job training common measures assess this program’s success. 

The entered employment rate measures the success of participants returning to work. The retention rate 

demonstrates if a participant has employment stability. Average earnings is a measure of salary after 

program intervention. 

Analysis and Future Plans 

The performance goal for the WIA Dislocated Worker Program was not achieved. The entered employment 

rate indicator result of 77.3 percent missed the target by seven percentage points. The Department is 

investigating the impacts of co-enrollment strategies (simultaneous participation in multiple employment and 

training programs) on performance. Lower outcomes for entered employment is likely a consequence of the 

broader reach of the program through co-enrollment efforts that include new customers such as trade 

impacted workers, whose entered employment rates have historically been lower than other dislocated 
Performance Section 

94 United States Department of Labor 

workers. Thus, program performance must be viewed in the context of this strategic approach. The 

employment retention rate for dislocated workers nearly equaled last year’s result, but missed the target by 

two percentage points. This may be due to residual impacts of the coenrolled participant pool. In the first year of recording results for the 

average earnings measure, the program posted a result of $14,212, 

reaching the target. Continued experience with this indicator will help 

show the workforce investment system’s effectiveness in preparing and 

placing people in high growth, high wage industries. 

Many paper mills in Maine are closing due to foreign competition. Many of these 

displaced workers have specialized job skills that are not transferable to other 

industries. However, with the assistance of the WIA Dislocated Worker Program, 

Brian was able to receive the training to successfully compete in a changing 

economic environment. Brian was selected for the Radiological Technologist 

program, graduated with honors and was hired by the office where he completed 

his practicum. Today, Brian is a Certified Medical Assistant at the Family 

Medicine Institute. As a testament to his success, Brian states, “I love my job, 

and I work with great people.” Brian will attend Kennebec Valley Community 

College to complete that degree and his employer will pay for tuition. Great 

work Brian! [Photo Credit: Edward Upham] 

 

DOL encourages and supports States and local areas to eliminate duplicative systems, to develop integrated 

service delivery strategies for dislocated workers, and to focus education and training investments on skills 

and occupations in demand. The Department is also developing strategies for a regional approach to 

workforce and economic development, and education. In instances of worker dislocations in PY 2007, DOL 

expects States and regions to provide increased support for postsecondary education and lifelong learning 

opportunities, and place additional emphasis on connecting dislocated worker populations to high growth 

occupations consistent with the region’s talent development plans.

Costs associated with this goal dropped six 

percent from PY 2005 to PY 2006, likely due 

to normal spending fluctuations since States 

have three years to expend obligated funds. 

Costs are allocated to the performance goal 

rather than at the indicator level, as funding 

supports all the outcomes for dislocated 

workers. 

 

 

 

 

Entered Employment

65%

70%

75%

80%

85%

90%

2000 2001 2002 2003 2004 2005 2006

Program Year

Result Target

Employment Retention

75%

80%

85%

90%

95%

2000 2001 2002 2003 2004 2005 2006

Program Year

Result Target

Performance Goal 06-2B

Net Costs ($Millions)

1,472 1,543 1,443

0

400

800

1,200

1,600

2,000

2004 2005 2006

Program Year
Strategic Goal 2 

FY 2007 Performance and Accountability Report 95

PART, Program Evaluations and Audits 

The Dislocated Worker Program underwent a PART review in 2002 and received a rating of Adequate. The 

program has generally met its goals for increasing participants’ reemployment and earnings after getting a 

new job, and program accountability has improved with the adoption of the new common measures (a PART 

recommendation), allowing for comparisons between various job training programs. However, the review 

found that States and local communities have insufficient flexibility to help dislocated workers. DOL has been 

working with Congress to reform the Workforce Investment Act to further consolidate funding for related 

programs to reduce administrative overhead and increase States’ flexibility to tailor services. In addition, DOL 

is contracting an independent study of program effectiveness – using administrative data – to be completed 

in 2008. Also in 2008, DOL will sponsor a more rigorous, seven-year evaluation that will begin to determine 

WIA services’ impact on employment and earnings outcomes for participants. 

The Government Accountability Office conducted an evaluation titled, “Workforce Investment Act: Additional 

Actions Would Further Improve the Workforce System.” To view a summary of findings, recommendations, 

and a link to the study, please refer to Performance Goal 06-2A. 

Data Quality and Major Management Challenges 

Data quality for this performance goal was rated Very Good. Strengths of the data include its validity, 

accuracy and completeness. While verification remains an area for improvement, extensive effort has been 

directed toward improving data quality through the use of DOL’s data validation system and monitoring at 

both the national and regional levels (see item IX, Improving Performance Accountability of Grants in the 

Major Management Challenges section of Management’s Discussion and Analysis). DOL drafted a revised 

Monitoring Guide for data validation in PY 2006 and is working to implement a streamlined performance 

reporting system in 2008. 
Performance Section 

96 United States Department of Labor 

Improve Employment Outcomes for One-Stop System Users 

 

Performance Goal 06-2C (ETA) – PY 2006 

 

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

information services. 

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not reached 

(N) 

**Estimated 

Some indicators not shown for PY 2002-05 – see Legacy 

Data note below 

PY 2002 

Goal Not 

Achieved

PY 2003 

Goal 

Achieved

PY 2004 

Goal Not 

Achieved 

PY 2005 

Goal 

Achieved

PY 2006

Goal Not 

Achieved

Target 55% 58% 58% 61% 64% 

Result 63% 61% 64% 63% 61.0%** Percent of participants employed in the first quarter 

after exit 

* Y Y Y Y N 

Target — 72% 72% 78% 81% 

Result — 80% 81% 80% 78.0%** 

Percent of participants employed in the first quarter 

after exit still employed in the second and third 

quarters after exit * — Y Y Y N 

Target — — — — $10,500 

Result — — — — $11,576** Average earnings in the second and third quarters 

after exit 

* — — — — Y 

Goal Net Cost (millions) — — $831 $884 $815 

Source(s): Quarterly State WIA performance reports (ETA-9090) 

Legacy Data: Complete indicators, targets and results for PY 2002-05 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goal 05-4.1B. 

Note: Costs for this goal are net costs as defined in a footnote to the Cost of Results discussion in Management’s 

Discussion and Analysis. Costs are not allocated to the indicator level for employment, retention and earnings 

measures because program activities are not separable into categories associated with one or another. 

Program Perspective and Logic 

A fundamental underpinning of the nation’s One-Stop Career Centers is the delivery of core employment and 

workforce information services to both businesses and job seekers. Core services include job matching, 

referral, assessments, and a wide array of workforce and labor market information, career guidance products 

and tools. Funded principally through the Wagner-Peyser Act, as amended by the Workforce Investment Act 

(WIA) of 1998, these services are designed to help both employed and unemployed workers obtain jobs and 

give employers access to skilled workers who will help them compete in the global economy. In addition to 

core services, the One-Stop Career Centers provide customized services to clients with special needs such as 

Unemployment Insurance claimants, veterans, and migrant and seasonal farm workers. 

Providing employment and workforce information services that account for the uniqueness of local/regional 

labor market conditions and the needs of workers is the key to achieving successful outcomes for job seekers 

and employers. Services are provided in collaboration with a wide array of One-Stop partners and are 

coordinated with other services available through One-Stop Career Centers, such as training, child care, and 

transportation. 

The Department uses the common measures for Federal employment and job training programs to evaluate 

its core employment and workforce information services: the entered employment rate, the employment 

retention rate, and average earnings. A high entered employment rate indicates that participants have 
Strategic Goal 2 

FY 2007 Performance and Accountability Report 97

improved financial opportunity. A high retention rate indicates stability of participants’ new positions. 

Increased average earnings indicate that participants are getting better jobs. 

 

Analysis and Future Plans 

The performance goal for the Wagner-Peyser Act funded Employment Service system was not achieved. The 

entered employment rate of 61.0 percent and employment retention rate of 78.0 percent were both three 

percentage points below targets and two percentage points below PY 2005 performance. These measures 

gauge the workforce system’s ability to bring together individuals who are seeking employment and 

employers who are seeking workers. The Employment Service system registers roughly 13 million 

participants a year, far more than other employment and training programs. Therefore, the lower results are 

driven, in part, by the system’s universal approach for jobseekers and workers with a diverse range of skills 

and employment needs. 

 

This year marks the first time six months average earnings data was collected. The program posted a result 

of $11,576, which is lower than WIA Adult and Dislocated Worker Program results. Unlike the WIA programs, 

the Employment Service system does not provide training services and instead delivers core and intensive 

services to meet the needs of the customers. If additional services are required, these participants are 

referred to and co-enrolled in WIA programs. 

Nicole came to the MontgomeryWorks One-Stop 

Career Center looking for a job. She had a limited 

work history and low self-esteem; her goal was to 

be able to “look someone in the eye.” Nicole had 

four children under the age of 5 and was receiving 

food stamps/housing from a program for battered 

women. Her school Individual Education Plan 

diagnosed her with learning disabilities. With 

services coordinated by the Disability Program 

Navigator (DPN), Nicole enrolled in the WIA Adult 

program and received occupational training related 

to computers and customer service, both high 

growth industries. Upon completion, Nicole’s skills 

were a match for a recipe consultant. In less than 

a year, she was promoted to a management 

position. The One-Stop DPN helped Nicole receive 

assistance with child care, transportation, 

occupational skills training and employment. 

Today, in her new career, Nicole can confidently 

look people in the eye! [Photo credit: Maggie Leedy] 

 

To continually improve performance, DOL has aggressively expanded its work with employers in high growth, 

high demand industries through its Business Relations Group (BRG). In partnership with States, the BRG has 

Employment Retention

65%

70%

75%

80%

85%

2003 2004 2005 2006

Program Year

Result Target

Entered Employment

50%

55%

60%

65%

70%

2002 2003 2004 2005 2006

Program Year

Result Target
Performance Section 

98 United States Department of Labor 

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 identify the workforce needs of high growth 

industries and provides a forum for improved communication between industry and the workforce investment 

system. 

In addition to working toward integrating the Wagner-Peyser Act funded employment services and WIA 

services, DOL strengthened its focus on the role of workforce information in the design and delivery of core, 

intensive and training services in the One-Stop delivery system. The Department will continue to provide 

direction and technical assistance in order to achieve a fully integrated workforce investment system focused 

on building the critical talent pool required for the 21st Century. The Department continues to work with 

States, regions and local areas to eliminate duplication of services provided through the One-Stop delivery 

system, and to focus on training investments 

on skills in demand to facilitate access to 

successful career pathways to individuals 

utilizing the services. 

Costs associated with this goal decreased eight 

percent from PY 2005 to PY 2006. This 

reflects normal spending fluctuations since 

States have three years to expend obligated 

funds. Costs are allocated to the performance 

goal rather than at the indicator level, as 

funding supports all measured outcomes for 

participants. 

 

PART, Program Evaluations and Audits 

The Employment Service underwent a PART review in 2004 and received a rating of Adequate. The review 

found that grantees’ accountability for performance results was insufficient, and that the program duplicates 

some services offered by the WIA Adult and Dislocated Worker programs. To address the first finding, DOL 

accelerated implementation of the common measures for Federal job training and employment programs. As 

a step toward reducing unnecessary duplication of services, the Department will integrate reporting for the 

training programs and the provision of core services it oversees through the new Workforce Investment 

Streamlined Performance Reporting System (WISPR). Finally, DOL’s proposed legislation to reauthorize the 

WIA combines the Wagner-Peyser Act funding for core services with those of WIA Adult, Dislocated Worker 

and Youth programs to minimize duplication of services and administration costs. 

“Workforce Investment Act: Employers Found One-Stop Centers Useful in Hiring Low-Skilled Workers; 

Performance Information Could Help Gauge Employer Involvement,” December 2006 (GAO)

Purpose: In this report, GAO addressed the extent to which employers hire their employees through One-Stops 

and the extent to which these employers view one-stop services as useful, and the factors that may affect onestop service to employers. 

Major Findings: 

1) Regardless of business size, employers completing the GAO survey hired a small percentage of their employees 

through one-stops, and two-thirds of the employees were low-skilled. 

2) Employers primarily used only one of the seven services available through the one-stop, usually the job posting 

service, but also viewed other services as helpful. When a particular service was not used, employers indicated 

that they were not aware that the one-stop provided the service—they either obtained it elsewhere or carried it 

through on their own. 

3) At least three factors may affect one-stop services to employers: skills set of the labor pool, limited staff available 

to serve employers, and lack of data on employers’ use of the One-Stop system. 

Recommendations: DOL should collect information on employers’ use of one-stop services, and develop a way to 

measure employer engagement in the workforce investment system as part of the department’s performance 

reporting system. 

Actions Taken and Remaining: At the time the GAO study was published in December 2006, DOL planned to 

Performance Goal 07-2C

Net Costs ($Millions)

831 884 815

0

200

400

600

800

1,000

2005 2006 2007

Fiscal Year
Strategic Goal 2 

FY 2007 Performance and Accountability Report 99

implement a new data reporting system, WISPR, by July 2007 to collect data on how employers were using the 

system. However, due to external factors, implementation has been delayed until FY 2008. To better address 

the needs of employers for workers trained in high growth industries, Career Advancement Accounts were 

proposed in the FY 2008 President’s Budget, and the Administration continues to engage Congress on 

reauthorization of the Workforce Investment Act. 

Additional Information: A copy of the report can be accessed at http://www.gao.gov/cgi-bin/getrpt?GAO-07-167. 

Data Quality and Major Management Challenges 

Data quality for this performance goal was rated Very Good. Strengths of the data include completeness and 

validity. While verification remains an area for improvement, extensive effort has been directed towards 

improving data quality through the use of DOL’s data validation system and monitoring at both the national 

and regional levels (see item IX, Improving Performance Accountability of Grants in the Major Management 

Challenges section of Management’s Discussion and Analysis). ETA drafted a revised Monitoring Guide for 

data validation in PY 2006 and is working to implement a streamlined performance reporting system in 

2008.
Performance Section 

100 United States Department of Labor 

Better Decision-making through Workforce Information

Performance Goal 06-2E (ETA) – PY 2006 

Increase accessibility of workforce information through the National Electronic Tools. 

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not reached (N) 

Some indicators not shown for PY 2004 – see Legacy Data note below 

PY 2004 

Goal 

Substantially 

Achieved 

PY 2005

Goal 

Achieved

PY 2006

Goal 

Achieved

Target — baseline 62.0 

Number of page views on America’s Career InfoNet (millions) Result — 61.4 87.2 

* — Y Y 

Target 2.77 3.87 7.5 

Number of O*NET site visits (millions) Result 3.91 7.0 9.7 

* Y Y Y 

Target — baseline 8.5 

Number of page views on Career Voyages (millions) Result — 7.9 10.9 

* — Y Y 

Goal Net Cost (millions) $26 $27 $25 

Source(s): Web statistics provided by the State grantees for O*NET and CareerOneStop using AWStats and 

WebTrends software, respectively. 

Legacy Data: Complete indicators, targets and results for PY 2001-04 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goal 05-4.1E. 

Note: Net costs are defined in a footnote to the Cost of Results section of Management’s Discussion and Analysis. 

Program Perspective and Logic 

The State and national workforce information system supports the goal of increased accessibility of workforce 

information through the National Electronic Tools by integrating and broadly disseminating current, local 

information on high growth industries and occupations that is critical for planning and delivering demanddriven workforce services. Customers include employers, State and local partner organizations, and job 

seekers who find these information services useful for business and economic development, education, and 

individual career decision-making. The workforce information system consists of: 

• Occupational Information Network (O*NET) – a database of occupational competency requirements 

(tasks, knowledge, skills, abilities, work activities, and other characteristics); 

• Core products and services that describe State and local labor market dynamics, e.g., employment, 

wages, and skills in demand by industry and occupation; 

• CareerOneStop national electronic tools that allow universal access to workforce information, 

including data on wages, occupations in demand, skills held and needed, and growth industries; and 

• Workforce information services provided through the nationwide network of over 3100 comprehensive 

and affiliate One-Stop Career Centers. 

The CareerOneStop electronic tools, Career Voyages, and the O*NET OnLine Web sites are designed to 

improve self-service options for customers of the public workforce investment system. Resources supporting 

these systems are used for technical assistance and emerging occupation research, to operate the Web sites, 

and to keep the databases current. Performance indicators gauge usefulness of the occupational information 

to the wide-ranging user community – business, educators, students, parents, and job seekers. Goal 
Strategic Goal 2 

FY 2007 Performance and Accountability Report 101

attainment over the last two years indicates more customers are using the self-service options to assist them 

in finding employment. Performance targets are based on past results and other external factors, such as 

changes in public demand for workforce information or in public participation in the data collection efforts. 

The Key to Career Success campaign connects veterans 

and separating military service members to assistance 

and resources of One-Stop Career Centers nationwide. In 

November 2006, a Military Transition Portal was 

launched at www.careeronestop.org/militarytransition. 

The portal provides career information and links to 

services that help veterans and military service members 

successfully transition to civilian careers in high growth 

industries, including the wealth of resources available on 

CareerOneStop Web sites. [Photo Credit: DOL/ETA] 

Analysis and Future Plans 

The performance goal was achieved. Results for 

increased dissemination of O*NET data as 

measured by site visits reached the target, and 

future targets have been adjusted upward 

accordingly. Career Voyages and America’s Career 

InfoNet reached targets for number of page views, reflecting increased public use of workforce information 

through the National Electronic Tools. These results indicate that workforce system partners, employers, 

career counselors, and the public recognize the usefulness and accessibility of the national electronic tools. 

It has not yet been determined whether these are sufficient indicators to measure the performance of this 

activity in PY 2007 and beyond. Since the goal is to increase accessibility of workforce information, 

increasing usage of the information sites is one measure of performance indicating that there is demand for 

the data and information provided. To better gauge usability, the Career InfoNet Web site now includes a 

“Rate this Page” link in the header on all pages. This link provides users visiting the site an opportunity to give 

feedback on the usefulness of the information. 

A significant component of the National Electronic Tools, America’s Job Bank (AJB), was discontinued on June 

30, 2007 because it duplicated services provided by private sector firms. Due to the uncertainty inherent in 

attempting to predict the impact of this closure on usage, a baseline for the efficiency measure (cost per page 

view) and a new baseline for America’s Career InfoNet will be developed based on PY 2007 data. 

Costs are allocated to the overall performance goal rather than at the indicator level, as funding supports all 

the outcomes for usage of Career InfoNet, O*Net, and Career Voyages. Although performance is no longer 

reported for AJB, the site was in operation for the full program year. The decline in costs due to actual 

cessation of AJB activities should be reflected in PY 2007. 

PART, Program Evaluations and Audits 

The workforce information system was included in the 2004 PART review of the Wagner-Peyser Act funded 

Employment Service grants, which received a rating of Adequate. None of the PART findings and 

recommendations addressed electronic tools specifically. 

 

Data Quality and Major Management Challenges 

Data quality for this performance goal was rated Very Good. Strengths of the data include completeness, 

accuracy, and reliability. Data for the O*NET, Career InfoNet, and Career Voyages indicators are gathered and 

validated by internal management information systems, which comply with industry standards and norms. 

However, the validity of Web site hits as a measure of impact is limited. While the usability of the Web sites 

may be inferred from increasing use, the data do not sufficiently link the use of the tools to employment 

outcomes. As discussed before, the Career InfoNet Web site now includes a “Rate this Page” link on all pages 

to provide users visiting the site an opportunity to give feedback on the usefulness of the information.
Performance Section 

102 United States Department of Labor 

Provide Older Americans Service and Employment Opportunities

Performance Goal 06-2F (ETA) – PY 2006 

 

Assist older workers to participate in a demand-driven economy through the Senior Community Service 

Employment Program. 

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not reached (N) 

**Estimated 

PY 2005 

Goal Not 

Achieved

PY 2006 

Goal Not 

Achieved

Target 55% 38% 

Percent of participants employed in the first quarter after exit Result 44% 32%** 

* N N 

Target 65% 48% 

Result 57% 66%** Percent of participants employed in the first quarter after exit still employed in the 

second and third quarters after exit 

* N Y 

Target baseline baseline

Average earnings in the second and third quarters after exit Result — $6,704** 

* N — 

Goal Net Cost (millions) $432 $443 

Source(s): SCSEP Quarterly Reports from SPARQ data collection system 

Note: Costs for this goal are net costs as defined in a footnote to the Cost of Results discussion in Management’s 

Discussion and Analysis. Costs are not allocated to the indicator level for employment, retention and earnings 

measures because program activities are not separable into categories associated with one or another of them. 

Program Perspective and Logic 

The aging of the baby boomer generation presents both challenges and opportunities to the workplace. The 

Senior Community Service Employment Program (SCSEP) serves low income workers age 55 and older 

through formula grants to States and competitively awarded grants to public and private non-profit 

organizations. These funds provide part-time, minimum wage employment and job training services. The 

goal of the program is to promote self-sufficiency for older persons by placing them in unsubsidized 

employment. SCSEP grantees and their affiliates coordinate delivery of placement and training services 

through 3,100 comprehensive and affiliate One-Stop Career Centers nationwide. The program has served 

over 100,000 individuals each year for the last four years. 

DOL uses the Federal job training program common measures – entered employment rate, employment 

retention rate and average earnings – to evaluate the success of SCSEP. These indicators measure 

participants’ improved financial opportunity, stability of their new positions in unsubsidized employment, and 

effectiveness of training services, respectively. Targets for these measures are negotiated with each grantee 

based on past and projected outcomes, improvements in program design, and external economic factors. 

Analysis and Future Plans 

The performance goal for SCSEP was not achieved. The entered employment rate was six percentage points 

below the target and five percentage points below the PY2005 result. However, the employment retention 

rate was significantly higher than both the PY 2005 result and PY 2006 target. Targeting difficulties are 

largely due to incremental implementation of common measures among grantees. As indicated in more 

detailed discussion below, a new data collection and validation system is expected to resolve this issue. The 

new six month average earnings measure shows a result of $6,704. 
Strategic Goal 2 

FY 2007 Performance and Accountability Report 103

To continually improve performance, the SCSEP program, through its partnership with the One-Stop delivery 

system, continues to identify occupational skills that are most in demand and aggressively expand its 

linkages to high growth industries and employers, in order to place its participants in unsubsidized jobs. 

Connie was a SCSEP participant prior to being hired in March 

2007 by the Northwest Regional Workforce Investment Board 

(NRWIB) to be the Payroll Clerk for MaturityWorks. NRWIB is 

a partner of The WorkPlace Inc. in MaturityWorks’ western 

Connecticut SCSEP program. Connie is responsible for 

making sure participants’ timesheets are accurate and 

submitted timely. Connie also tracks program performance 

data. NRWIB management stated, “We were more than 

willing to hire Connie when she came to us after the transition. 

She is an excellent asset to the organization, early to work and 

late to leave. Every pay period her payroll is on the money.” 

Connie celebrated her 90th birthday on June 2. [Photo Credit: 

Janiese Void]

Beginning July 1, 2004, SCSEP implemented a uniform 

database reporting system using client-based individual 

electronic records. While this has created complex operational requirements, it has also allowed the program 

to make strides in reporting timely, accurate, and reliable data. As more outcome data are received through 

the new reporting system, DOL will continue analyzing available data to negotiate ambitious and achievable 

targets for this population pool with the State and national agencies administering the program. 

In addition to implementing the common measures for Federal employment and training programs, the 

SCSEP program has a set of statutorily defined indicators. These additional indicators measure the program’s 

service level and service to those most-in-need; and the customer satisfaction of participants, host agencies, 

and employers. SCSEP achieved an exceptional response rate and very high scores on the American 

Customer Satisfaction Index (ACSI) for its customer satisfaction indicator. 

Costs are allocated to the performance goal rather than at the indicator level, as funding supports all the 

measured outcomes for older workers. Costs associated with this goal rose primarily due to the transfer of 

$7.5 million of PY 2004 recaptured funds into PY 2006, to help grantees with transition expenses resulting 

from a new grant competition. 

PART, Program Evaluations and Audits 

The SCSEP underwent a PART review in 2005 and received a rating of Ineffective. In response to the PART, 

SCSEP launched the Performance and Results Quarterly (SPARQ) performance reporting system software in 

May 2006, which allows reporting of individual outcomes and integration of grantee reporting systems. The 

Department continues to work with Congress to update and strengthen the competitive grant process. For 

example, DOL increased the number of grantees and consolidated service delivery areas. DOL continues to 

implement the common measures for Federal employment and job training programs and adjust future 

performance targets to be ambitious but also more realistic. Common measures have replaced the former 

SCSEP placement and retention measures for PY 2007 and beyond. 

 

Data Quality and Major Management Challenges 

The data quality for this performance goal was rated Data Quality Not Determined, which represents a 

downgrade from the baseline rating of Good in FY 2006. Data are linked to program purpose and collected 

quarterly; however, they are not yet available from all grantees29 and there are unresolved issues with 

verification. In PY 2006, SCSEP implemented an Internet-based version of the SPARQ data collection system 

and in early PY 2007 the program began to implement a new data validation system. These efforts are 

expected to improve data reporting and overall quality. 

 

29 Results for PY 2006 reflect outcomes reported by State agency grantees, which account for 16.3 percent of total 

exiters from the program. 
Performance Section 

104 United States Department of Labor 

Help Trade-Affected Workers Find New Jobs 

 

Performance Goal 07-2G (ETA) – FY 2007 

 

Assist workers impacted by international trade to better compete in the global economy through the Trade 

Adjustment Assistance Program. 

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or 

not reached (N) 

**Estimated 

Some indicators not shown for FY 2002-06 – 

see Legacy Data note below 

FY 2002 

Goal Not 

Achieved

FY 2003 

Goal Not 

Achieved

FY 2004 

Goal Not 

Achieved

FY 2005 

Goal Not 

Achieved 

FY 2006 

Goal 

Achieved

FY 2007 

Goal 

Achieved

Target 78% 78% 70% 70% 70% 70% 

Result 66% 62% 63% 70% 72% 70%** Percent of participants employed in the 

first quarter after exit 

* N N N Y Y Y 

Target 88% 90% 88% 89% 85% 85% 

Result 89% 86% 89% 91% 90% 88%** 

Percent of participants employed in the 

first quarter after exit still employed in 

the second and third quarters after exit * Y N Y Y Y Y 

Average earnings in the second and Target — — — — — Baseline

third quarters after exit Result — — — — — $13,700**

Goal Net Cost (millions) — — — $846 $700 $816 

Source(s): Trade Act Participant Report (TAPR) included in the Enterprise Business Support System (EBSS) 

Legacy Data: Complete indicators, targets and results for FY 2002-06 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goal 06-4.1B. 

Note: Net costs, which are defined in a footnote to the Cost of Results discussion in Management’s Discussion and 

Analysis, are not allocated to the indicator level for employment, retention and earnings measures because 

program activities are not separable into categories associated with one or another. The goal was reported as 

not achieved in the FY 2006 report; corrections to data for two of the three indicators changed this result. 

Program Perspective and Logic 

DOL’s Trade Adjustment Assistance (TAA) Program provides training, income support, and related assistance 

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. The TAA Program is one component of integrated products and 

services available through the nationwide network of One-Stop Career Centers, including those funded under 

the WIA Adult and Dislocated Worker Programs and the Wagner-Peyser Act. The comprehensive 

readjustment services and benefits offered by the TAA Program include job search and relocation assistance; 

training that can include occupational, on-the-job and remedial training; income support, and access to Health 

Coverage Tax Credit benefits. The One-Stop system provides counseling, assessment, and placement services 

for TAA participants. 

The TAA Program’s success in an expanding, global economy is measured by the extent to which it helps 

individuals regain economic self-sufficiency by quickly securing and maintaining employment. Economic 

factors such as available labor and the ability to adapt that human capital to new uses appear to contribute 

importantly to reemployment; therefore, the TAA program is pursuing a regional workforce investment 

strategy designed to reach more workers and improve their access to training. Performance indicators are 

the Federal job training program common measures. The entered employment indicator tracks the program’s 

progress in quickly returning participants to employment. The retention rate indicates whether participants 

who quickly obtain jobs are able to sustain employment, and average earnings serves as a measure of job 

quality. 
Strategic Goal 2 

FY 2007 Performance and Accountability Report 105

Ryan and his fellow Alaskan fishermen suffered 

economic hardship when imported and farmed 

salmon began taking a heavy toll on the market. 

Because of the excellent partnerships available in 

Alaska, the training plan developed for Ryan was 

supported by multiple resources, including funds 

from the Trade Adjustment Assistance (TAA), 

National Emergency Grants for displaced salmon 

fishermen, and Dislocated Worker Program. TAA 

funded Ryan’s training at Kenai Peninsula College, 

where he earned his degree in Instrumentation and 

Process Technology. Today, Ryan is an Oilfield 

Operations Specialist; he has advanced quickly in 

his new career, increasing his income to about four 

times what he earned as a fisherman – more than 

$100,000 annually. Another successful story 

thanks to the Trade Act! [Photo Credit: Thomas 

Nelson, Alaska Department of Labor and Workforce 

Development] 

Analysis and Future Plans 

As indicated in the table and charts, the TAA Program reached targets for both of its indicators in FY 2007, 

achieving its goal. Results for the entered employment and the employment retention rates decreased 

following the 2001–2002 recession, then turned upward with the economic recovery. However, FY 2007 

results for both indicators were below FY 2006 results. For average earnings, a baseline was established. 

DOL has made great strides in improving 

administrative efficiency as measured by 

average days to process petitions for 

determination of eligibility for TAA benefits. 

Average processing time has been reduced 

from 96 days to 31 days between FY 2003-

2007. In FY 2003, the program completed 

just 60 percent of determinations within the 

40 day statutory limit; in FY 2006, the TAA 

program completed over 78 percent of 

determinations within the limit – a 30 percent 

increase in efficiency. 

 

Costs associated with this performance goal decreased by 19 percent between FY 2005-06 due primarily to a 

reduction in demand for Trade Readjustment Allowances (TRA) – which are the weekly cash benefits payable 

to allow trade-displaced workers to enroll in long-term TAA training. Participation, reflected by the number of 

individuals who received additional TRA benefits (which can be paid only when the individual is actually 

Employment Retention

75%

80%

85%

90%

95%

2001 2002 2003 2004 2005 2006 2007

Fiscal Year

Result Target

Entered Employment

50%

60%

70%

80%

90%

2001 2002 2003 2004 2005 2006 2007

Fiscal Year

Result Target

Performance Goal 07-2G

Net Costs ($Millions)

846

700

816

0

400

800

1,200

2005 2006 2007

Program Year
Performance Section 

106 United States Department of Labor 

receiving training), decreased by almost one-third in FY 2006. This change appears to be an anomaly, and 

access to income support for training has returned to previous levels for FY 2007. 

PART, Program Evaluations and Audits 

The TAA Program underwent a PART review in 2007 and received a rating of Ineffective. Areas in need of 

improvement include reemployment assistance and procedures to measure and improve efficiency. The TAA 

Program is expected to be reauthorized by Congress; any adjustments in administration of the program will 

reflect the requirements of the reauthorized statute. ETA is studying how best to implement an efficiency 

measure tied to performance outcomes for all ETA programs. 

 

In 2007, GAO completed studies on TAA funding allocation and eligibility requirements, industry wide 

certification, and program administration in preparation for Congressional hearings on reauthorization of the 

program, as described in the table below. As recommended, DOL is reviewing the training fund allocation 

methodology for opportunities to improve program effectiveness. 

“Trade Adjustment Assistance: Changes to Funding Allocation and Eligibility Requirements Could 

Enhance States’ Ability to Provide Benefits and Services,” May 2007 (GAO)

Purpose: Report issued in preparation for TAA reauthorization to Senate Finance Committee. 

Major Findings: 

1) Labor’s process for allocating training funds does not accurately reflect States’ prior year spending. 

2) Few TAA participants take advantage of the health coverage benefits due to high out-of-pocket costs. 

3) Few TAA participants take advantage of the Wage Insurance benefit due to the requirements that reemployment 

be obtained within 26 weeks and to choose either training or wage insurance. 

4) About 40 percent of the total denials of petitions were because workers were not involved in producing an article. 

Recommendations: 

1) Congress may wish to review and modify the Wage Insurance and Health Care Tax Credit programs to address 

disincentives. 

2) DOL should review the funding allocation formula, especially the 85% hold harmless provision which overallocates funds to States. 

Actions Taken and Remaining: In its FY 2008 allocation, the 85% hold harmless provision has been removed, 

and State funding will be based more on actual spending history. 

Additional Information: Access the report (GAO-07-701) at http://www.gao.gov/cgi-bin/getrpt?GAO-07-701. 

“Trade Adjustment Assistance: Industry Certification Would Likely Make More Workers Eligible, but 

Design and Implementation Challenges Exist,” June 2007 (GAO)

Purpose: Report issued in preparation for TAA reauthorization. 

Major Findings: 

1) During the past three years, DOL certified about two-thirds of the TAA petitions it investigated and generally 

processed petitions in a timely manner. DOL took on average 32 days to make a certification decision and 

processed 77% of petitions within the required 40-day time frame. 

2) An industry wide certification approach based on three petitions certified in 180 days could double the number of 

workers eligible for TAA but presents some design and implementation challenges. 

Recommendations: GAO made no recommendations at this time. 

Actions Taken and Remaining: None 

Additional Information: View the report (GAO-07-919) at http://www.gao.gov/cgi-bin/getrpt?GAO-07-919.

 

Data Quality and Major Management Challenges 

Data quality for this performance goal was rated Fair. Strengths of the data are its accuracy and relevance; 

however, TAA can further improve timeliness, completeness, validity, reliability, and verifiability. An 

improvement plan includes 1) updating guidance to regional office staff on monitoring TAA data collection, 

quality control and reporting methods, and 2) implementing the new Workforce Investment Streamlined 

Performance Reporting System (WISPR), providing standards for all ETA-administered training and 

employment service programs. 
Strategic Goal 2 

FY 2007 Performance and Accountability Report 107

Address Worker Shortages 

Performance Goal 07-2H (ETA) – FY 2007 

 

Address worker shortages through Foreign Labor Certification Programs. 

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not reached (N) 

**Estimated 

Some indicators not shown for FY 2005 – see Legacy Data note below 

FY 2005 

Goal Not 

Achieved 

FY 2006 

Goal Not 

Achieved

FY 2007

Goal Not 

Achieved

Target 100% 100% 100% 

Result 100% 100% 98.4%** 

* Y Y N 

Percent of H-1B applications processed within seven days of the filing 

date for which no prevailing wage issues are identified 

Cost — — —

Target baseline 60% 65% 

Result 57% 86% 73.8% 

* Y Y Y 

Percent of employer applications for permanent labor certification under 

the streamlined system that are resolved within six months of filing 

Cost — — —

Target — 95% 95%30

Result — 53% 57.4%** 

* — N N 

Percent of accepted H-2A applications with no pending State actions 

processed within 15 days of receipt and 30 days from the date of need 

Cost — — —

Target 90% 90% 90% 

Result 85% 82% 56.2%** 

* N N N 

Percent of the H-2B applications processed within 60 days of receipt 

Cost — — —

Goal Net Cost (millions) $60 $46 $63 

Source(s): Program Electronic Review Management (PERM) system, Case Management System (CMS), H-1B 

Electronic Processing System 

Legacy Data: Complete indicators, targets and results for FY 2005 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goal 06-4.1A. 

Note: Costs for this goal are net costs as defined in a footnote to the Cost of Results discussion in Management’s 

Discussion and Analysis. 

 

Program Perspective and Logic 

The Office of Foreign Labor Certification (OFLC) reviews requests for Department of Labor certification from 

U.S. employers seeking to hire foreign workers on a temporary or permanent basis when qualified American 

workers are unavailable and there will be no adverse impact on similarly employed U.S. workers if certified. 

Labor certifications issued by the Department support employers’ petitions, filed with the U.S. Citizenship and 

Immigration Services, to authorize employment of foreign workers under temporary visas (like H-2A and H-2B) 

or under permanent, employment-based visas which may lead to lawful permanent residency. 

 

30 In FY 2006, ETA inadvertently reported an incorrect and significantly higher result for the H-2A processing indicator 

than the actual result, which was confirmed through a more recent data query.
Performance Section 

108 United States Department of Labor 

Performance indicators are tied to statutory, regulatory, or internal processing requirements for OFLC 

programs. The indicator for the permanent (PERM) program, the percent of employer applications for labor 

certification under the streamlined system that are resolved within six months of filing, reflects automation 

enhancements and measures improvement in timeliness and cost-effectiveness over pre-PERM processes. 

Targets are based on performance information, data analysis, and anticipated application caseloads. 

Analysis and Future Plans 

The goal was not achieved, with only one of the four indicator targets reached. The H-1B Specialty 

Occupations Program for highly skilled professionals (specialty workers) processed 98.4 percent of 

applications — now almost always filed electronically — within the statutory seven-day timeframe. This was 

almost 2 percentage points lower than the target of 100 percent. 

The target for the PERM program was reached. The Department has eliminated the backlog in the permanent 

program (see vignette). Further, 73.8 percent of new PERM applications were processed within six months, 

exceeding the target of 65 percent, though performance declined from the prior year. PERM performance 

was affected by the reallocation of resources to eliminate an applications backlog in the H-2B Temporary Nonagricultural Program. In FY 2008, the Department will closely monitor implementation of the Fraud Rule for 

impact upon PERM processing and redirect resources that were used to eliminate the H-2B backlog to the 

PERM program as needed. 

In FY 2007, DOL eliminated the backlog of 

permanent foreign labor certification 

applications, with nearly 99 percent of cases 

completed and the remainder awaiting 

responses from employers. In three years, 

processing centers reviewed approximately 

363,000 pending labor applications. 

Statutory changes to the Immigration and 

Nationality Act in 1997 and 2000 led to a 

dramatic increase in applications to this 

employment-based program. As a result, 

processing times rose, and applications 

sometimes languished for several years. In 

2004, the Department opened temporary 

facilities in Dallas and Philadelphia dedicated 

solely to eliminating the backlog. From the 

outset, the department pledged that the 

backlog would be eliminated by September 

30, 2007, when both of the Backlog 

Elimination Centers began shutting down. "Clearing up the Permanent Labor Certification backlog has been a 

Presidential Management Agenda priority and the job was completed on time, as promised," said Secretary of Labor 

Elaine L. Chao. "Thousands of people are no longer left waiting and wondering, and the Department is moving ahead 

with reforms to streamline existing foreign worker certification programs." [Photo credit: DOL/ETA] 

Results for the H-2A Temporary Agricultural Program were far below the target. OFLC is meeting the statutory 

processing timeframe to accept or request a modification of applications within seven days of receipt, but is 

experiencing delays in obtaining recruitment reports and housing inspections from employers and State 

Workforce Agencies (SWAs). The number of H-2A applications increased by 19 percent during this period. 

OFLC conducted training for the SWAs to provide guidance and clarification of the requirements for the H-2A 

program, including how to conduct housing inspections. The President has directed DOL to review regulations 

implementing the H-2A program and institute changes providing farmers with an orderly and timely flow of 

foreign legal workers, while protecting the rights of American laborers. 

H-2B Temporary Non-agricultural Program results were also far below the target. Employer demand for H-2B 

workers increased by over 20 percent; this reflected a disproportionate increase in applications at one 

National Processing Center. The spike in applications also delayed SWAs’ processing and forwarding of 
Strategic Goal 2 

FY 2007 Performance and Accountability Report 109

applications to DOL. Some employers seeking to hire H-2B foreign workers experienced delays. The 

Department conducted employer briefings, issued revised guidance, posted employer application filing tips on 

the OFLC Web site, redirected other program resources, and provided additional training to State staff. The 

Department intends to issue regulations streamlining the process for non-agricultural seasonal workers. 

DOL's proposed rule will speed processing by moving from a government-certified system to an employerattestation system akin to the PERM system that has reduced backlogs in that program. 

The decrease in costs in FY 2006 largely reflects a temporary drop in staff costs in the transition from 

processing foreign labor certification 

applications in ten regions to the new electronic 

processing system for PERM in two new 

National Processing Centers coupled with the 

Backlog Elimination Initiative undertaken in two 

Backlog Processing Centers. The subsequent 

increase in FY 2007 costs reflects the staffing 

up of the National Processing Centers as well as 

staffing of the Backlog Elimination Centers. 

From 2005 to 2007, grant related costs 

trended downward as the responsibilities of the 

states were reduced with the implementation of 

the PERM system. 

 

PART, Program Evaluations and Audits 

In 2004, the H-1B and PERM programs underwent a PART review and received ratings of Moderately Effective 

and Adequate, respectively. Findings included fraud concerns related to both programs and a need for 

measures of application backlogs for the PERM program. In response to H-1B program findings, DOL 

implemented a fraud detection module; streamlined the automated process developed for employers to 

submit Labor Certification Applications; and collaborated with the Departments of Homeland Security and 

State in a multi-agency effort to identify, address, and deter H-1B and other visa fraud. In response to PERM 

program findings, DOL developed a new data entry and application processing system; dedicated two facilities 

to the task of processing PERM applications; and is reporting on new performance and efficiency measures 

that are directly related to the new PERM process. 

 

Data Quality and Major Management Challenges

Data quality for this performance goal was rated Very Good. Strengths of the data include its timeliness and 

completeness. OFLC efforts to improve accuracy of reported wages and Employer Identification Numbers 

include expansion of the data validation checks built into the H-1B application system. See “Labor Could 

Improve its Oversight and Increase Information Sharing with Homeland Security” (GAO-06-720) for an 

explanation of key data quality issues. In addition, DOL continually assesses the quality of data, collection 

methods, and the Web-based case management systems to ensure that data are reliable, appropriate, and 

useful to management. 

Integrity of the foreign labor certification program and the ability to process applications in a timely manner 

remain among DOL’s top management challenges (see item VIII, Maintaining the Integrity of the Foreign 

Labor Certification Program, in the Major Management Challenges section of the Management’s Discussion 

and Analysis). Since FY 2005, DOL has worked aggressively on the backlog of older permanent cases; as of 

September 30, 2007, it was virtually eliminated. 

Fraud cases contribute to inefficiency by tying up resources that could help process the large volume of 

legitimate applications. Fraud cases involve applications filed on behalf of fictitious companies, the 

fraudulent use of legitimate companies without their knowledge, the collection of fees from fraudulent 

applications filed on behalf of foreign workers, and the substitution of aliens for named applicants. Employer 

compliance is improving as a result of actions such as the PERM Fraud Rule, which DOL published in the 

Federal Register on May 17, 2007. The new rule limits the certification period to 180 days, prohibits 

substitution and certain improper payments, and provides for debarment for prohibited practices.

Performance Goal 07-2H

Net Costs ($Millions)

60

46

63

0

20

40

60

80

2005 2006 2007

Fiscal Year
Performance Section 

110 United States Department of Labor 

Increase Employment Opportunities for Youth and Adults with Disabilities

 

Performance Goal 07-2I (ODEP) – FY 2007 

 

Build knowledge and advance disability employment policy that affects and promotes systems change. 

 

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not reached (N) 

Some indicators not shown for FY 2004-05 – see Legacy Data note 

below 

FY 2004 

Goal 

Achieved

FY 2005 

Goal 

Achieved 

FY 2006 

Goal 

Achieved

FY 2007

Goal 

Achieved

Target — — baseline 20 

Number of policy related documents Result — — 20 34 

* — — Y Y 

Target — — baseline 20 

Number of formal agreements Result — — 20 23 

* — — Y Y 

Target baseline 11 21 20 

Number of effective practices Result 10 19 26 24 

* Y Y Y Y 

Goal Net Cost (millions) — $52 $50 $34 

Source(s): ODEP Division of Program Management and Research & Evaluation Team 

Legacy Data: Complete indicators, targets and results for FY 2002-05 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goal 06-1.1B. 

Note: Costs for this goal are net costs as defined in a footnote to the Cost of Results discussion in Management’s 

Discussion and Analysis. Costs are not allocated to the indicator level because program activities are not 

separable into categories associated with one or the other. 

Program Perspective and Logic 

The Department’s Office of Disability Employment Policy (ODEP) develops and influences the implementation 

of policy to reduce barriers to employment for people with disabilities. Increasing workforce participation of 

people with disabilities requires the removal of barriers experienced by employers and employees. ODEP 

develops policy on and for workforce systems, employers and the workplace, and employment-related support 

services. Key components include fostering the implementation of effective policies and practices; 

conducting research and analysis that validates and identifies effective disability-employment strategies; and 

providing technical assistance on implementing policy and effective practices. 

ODEP’s response to the traditionally low employment rates among people with disabilities is comprehensive 

and aggressive. Success requires active involvement and cooperation of stakeholders including Federal, 

State, and local agencies; non-governmental organizations; and private and public sector employers. 

Collaboration with these stakeholders results in policy development and implementation that expands access 

to systems (such as employment and training, education, and vocational rehabilitation), and increases the 

availability and accessibility of employment-related supports (such as health care, transportation and 

technology). 

ODEP’s investments in research and technical assistance activities provide employers with the information 

they need to increase the recruitment, retention, and promotion of people with disabilities. The results of 

these initiatives and their activities – in the form of policy related documents, formal agreements, and 

effective practice identification – are reflected in the indicators and targets used to measure ODEP’s 

performance. 
Strategic Goal 2 

FY 2007 Performance and Accountability Report 111

M.W., a shy woman of short stature with significant 

physical challenges, had 8 years’ experience as a 

baker’s helper. When her position was eliminated, 

she came to a One-Stop Career Center for 

assistance. M.W. had always wanted to work in an 

office environment, but she did not have the 

resources necessary to explore this career field on 

her own. A Career Center assessment of M.W.’s 

clerical skills/abilities found that she had solid 

basic skills and was very good with numbers. She 

participated in a paid work experience to 

strengthen her skills and – more importantly, her 

self-confidence – while mobility accommodations 

were identified. Using the universal principles of 

Customized Employment developed by ODEP, 

Career Center staff customized a clerical position 

meeting the specific needs of an employer seeking 

administrative staff for M.W. Today, M.W. works 

part-time with benefits in the “job of her dreams.” 

[Photo credit: DOL/ODEP] 

Major external factors that influence performance outcomes include the trend of working beyond the 

traditional retirement age, projected workforce shortages, turn-over, and retirement. 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. Additionally, small businesses -- which 

employ half of all private sector employees and are expected to generate the majority of new jobs -- face 

unique challenges in hiring and retaining disabled workers. 

Brett, a young man with cerebral palsy, was shy and insecure when he entered 

Tech-Now, Oklahoma's High School/High Tech program. Using the framework of 

the Guideposts for Success, developed by ODEP, Tech-Now provided Brett with 

opportunities to function outside of his comfort zone—something that ODEP’s pilot 

projects have shown is necessary to gain the confidence needed to successfully 

transition to adulthood. Naturally, Brett was apprehensive when, after a year in 

the program, he was asked to work in his school's front office. After two difficult 

weeks, he came to love the job and his confidence increased. In 2005, Brett 

attended Oklahoma's Youth Leadership Forum for Students with Disabilities. In 

2006, he spoke at a Governor's Conference and three statewide competitions. 

Brett graduated in 2006 receiving two scholarships for college. Brett attends 

Oklahoma City Community College majoring in Political Science and plans to 

transfer to the University of Oklahoma. [Photo credit: DOL/ODEP] 

Analysis and Future Plans 

The goal was achieved; all three targets were reached. Since FY 2004, 

ODEP has been tracking the number of effective practices identified. 

ODEP identified 24 in FY 2007, exceeding its target of 20. For its two new 

indicators, the number of policy-related documents and the number of 

formal agreements, the agency set baselines at the close of FY 2006 – both at 20 – which also served as 

targets for FY 2007. Both targets were exceeded, with results of 34 and 23, respectively. 

In FY 2007, ODEP emphasized different strategies to continue its core mission activities of developing and 

influencing the implementation of policy to reduce barriers to employment for people with disabilities. ODEP 

moved away from reliance on pilot projects to a greater emphasis on using its internal staff to conduct policy 

analysis and research to influence the development and implementation of policy. ODEP entered into several 

cooperative agreements. These cooperative agreements, which require ongoing collaboration between ODEP 

and the other entity, fund national technical assistance efforts, disability and employment research, and the 

dissemination of effective practices.
Performance Section 

112 United States Department of Labor 

ODEP net costs dropped from $50 million in FY 

2006 to $34 million in FY 2007. Costs for 

both years reflect funds awarded in prior fiscal 

years. The impact of reduced funding was a 

significant reduction in pilot projects. In FY 

2008, some efficiencies are expected to result 

from staff experts’ assumption of work 

previously performed by grantees, including 

lower development and operation costs 

associated with pilot projects. ODEP expects 

that more effectively utilizing a variety of 

strategies, including entering into new 

cooperative agreements, will ensure continued 

achievement of its goal. 

PART, Program Evaluations and Audits 

ODEP underwent a PART review in 2006 and received a rating of Results Not Demonstrated. ODEP is acting 

on the three PART recommendations: maintain a consistent set of performance indicators to measure 

progress toward achieving long-term goals and developing a valid performance management tracking system 

for collecting data; collect baseline data and out-year data to measure program efficiency and effectiveness; 

and conduct a rigorous evaluation to assess the impact and effectiveness of the program's policy and 

coordination functions. 

 

In FY 2007, DOL initiated a program evaluation focused on performance measurement processes. 

Specifically, this study dealt with definitions of ODEP’s annual performance (output) measures, long-term 

measures and collection of data, including identification of data sources to generate the measures and 

development of a methodology to obtain the data identified. ODEP worked with a contractor to systematically 

address the effectiveness and feasibility of ODEP’s performance measures, whether other Federal agency 

data systems can inform ODEP’s performance measures, and what types of data collection instruments are 

necessary and cost effective. The contractor found that in general, ODEP has established annual performance 

(output) measures that are relevant to ODEP’s critical strategies and reflect ODEP activities. Refinements to 

the measures, such as clarification of the definitions and creation of sub-measures to facilitate linkages 

between outputs and long-term outcome measures, were recommended. ODEP will continue working with 

this contractor to make these refinements, improving the agency’s performance measurement system.

“Review of ODEP's Performance Measures and Development of Information Gathering Methods,” August 

2007 (ERG)

Purpose: Evaluate ODEP’s performance systems and design a methodology that will enable the Agency to capture 

information that is essential for analyzing the impact of policies and initiatives. 

Major Findings: 

1) Question: How effective are ODEP’s annual output measures? Strengths include: relevant to current program 

focus; apply to multiple critical strategies and cut across ODEP’s efforts; can be quantified and verified. 

Weaknesses include: Overlap across the three output measures; aggregated across efforts; cannot easily be 

linked to intermediate outcome measures. 

2) Question: How feasible are ODEP’s annual output measures? Strengths include: data readily available within 

ODEP; low resource requirements for data collection and documentation. Weaknesses include: data collection 

not automated or integrated with other program information. 

3) Question: How effective and feasible are ODEP’s current intermediate measures? Intermediate measures are 

not effective because they link to prior activities and are not relevant to current ODEP focus. Feasibility is not 

applicable. 

4) Question: How effective and feasible are ODEP’s current systems outcome measures? Systems outcome 

measures are not effective because they do not link to ODEP’s outputs and intermediate outcomes but might be 

adaptable to assess cumulative changes in service delivery systems based on revised intermediate outcomes. 

Performance Goal 07-2I

Net Costs ($Millions)

52 50

34

0

20

40

60

80

2005 2006 2007

Fiscal Year
Strategic Goal 2 

FY 2007 Performance and Accountability Report 113

Feasibility is not applicable. 

Recommendations: Recommendations included keeping established output measures, with refinements; starting 

to formulate new intermediate outcome measures that address extent of increased awareness/knowledge 

transfer and adoption/implementation of ODEP-related policies and practices; considering the types of internal 

data that can be generated for measures as part of ODEP’s ongoing activities and interactions; establishing an 

internal data system for performance measurement. 

Actions Taken and Remaining: ODEP is working to implement recommendations. Actions currently being 

undertaken include advancing the process of linking outputs to outcomes and providing a systematic, building 

block approach to identify effective and feasible long-term service delivery systems outcome measures. 

Additional Information: Please contact Lisa Lahrman or Richard Horne at 202-693-7880. 

Data Quality and Major Management Challenges 

Data quality for this goal was rated Good. Strengths of the data include timeliness, verifiability, and 

completeness. ODEP relies on contracted external independent evaluators to validate the data collection 

systems that support ODEP’s performance measures. As ODEP continues to implement its strategic and 

performance plan, data quality can be improved to ensure uniform guidelines for collecting and reporting data 

as well as increasing their validity in measuring program performance. ODEP continues to refine performance 

measurement and data systems in an effort to raise the bar on the quality and nature of performance 

information reported. 
Performance Section 

114 United States Department of Labor 

Promote Flexible Workplace Programs

Performance Goal 07-2J (OASP) – FY 2007 

Maximize regulatory flexibility and benefits and promote flexible workplace programs. 

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not reached (N) 

For Legacy Data see note below 

FY 2006 

Goal 

Achieved

FY 2007 

Goal 

Achieved

Target 90% 92% 

Percent of identified significant regulations that are reviewed Result 92% 95% 

* Y Y 

Target 85% 88% 

Percent of regulations identified for revision or withdrawal Result 93% 100% 

* Y Y 

Target — 62% 

Result — 65% Percent of participating employers who created or enhanced a flexible workplace 

practice 

* — Y 

Source(s): DOL's Spring 2007 Regulatory Agenda - Initiatives supplied by DOL agencies to OASP. Women's 

Bureau: Best Practice intake forms 

Legacy Data: Complete indicators, targets and results for FY 2004-06 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goal 06-4.2A. 

Note: 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. 

Program Perspective and Logic 

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. The Agenda delineates all the regulations DOL expects to have 

under consideration for publication, proposal, or review during the coming 1-year period. The focus of 

Departmental regulatory activity will be on the development of effective rules that advance the Department's 

goals and that are understandable and usable to the employers and employees in all affected workplaces. 

With OASP’s assistance, DOL regulatory agencies established plans and procedures to prioritize their 

regulatory initiatives to ensure they support this goal. It is important to note, however, that most of the items 

on the Agenda are required in order to implement new statutory requirements or court decisions or to 

implement policy and program priorities related to the Department’s other strategic goals. 

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. It is based on meaningful criteria 

that, where feasible, reflect public input and correct 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 and model flexibility practices. 

External factors impacting performance for this goal include court decisions and legislation that mandate 

regulatory changes or that require drafting new regulations within certain time frames. These unexpected 

regulatory projects must be given priority and, therefore, can disrupt the progress of other regulatory projects 

already underway. In FY 2007, the Deficit Reduction Act of 2005, the Pension Protection Act of 2006, and 
Strategic Goal 2 

FY 2007 Performance and Accountability Report 115

the MINER Act were regulatory actions completed in response to statutory requirements to complete within 

tight timeframes. 

 

Analysis and Future Plans 

This goal was achieved. DOL agencies continue to apply their regulatory review methodologies in order to 

make decisions about what should be 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 regulatory analyses to help 

assure that the major regulatory changes maximize net benefits. 

OASP, in its role as coordinator of agency efforts under this strategic goal, continued its regulatory review and 

clean-up project that began in the 4th quarter of FY 2005 to ensure that the Department’s regulatory structure 

promotes compliance flexibility and reduces regulatory burden. During the reporting period, the Department 

had 37 items on its regulatory agenda that were relevant to this performance goal and took action on 35 of 

them (95 percent), reaching the target of 92 percent. Actions included publishing notices of proposed 

rulemaking, final rules, interim final rules, etc. In each case, DOL agencies pursued actions that maximized 

net benefits, promoted regulatory flexibility, and/or replaced obsolete provisions with regulations that reflect 

current technology and market conditions and address current business practices. In addition, this initiative 

focuses on identifying routine, obsolete non-technical, or nomenclature changes to DOL regulatory text that 

could be accomplished without using public notice and comment procedures. In FY 2007, the Department 

published a direct final rule that affected 10 parts of the Code of Federal Regulations and made over 300 

discrete regulatory changes. OASP reached its target, taking action on 100 percent of these items. 

The Flex-Options for Women project, sponsored by the Women's Bureau, encourages business owners to 

develop workplace flexibility policies and procedures such as telecommuting, job sharing, and compressed 

work week schedules to respond to growing demand for such options by workers. Small businesses learn how 

to establish workplace flexibility practices for their employees through one-to-one mentorship relationships 

with corporate executives who have succeeded in establishing these practices in their own companies and 

from others who have years of experience in designing workplace flexibility practices. The audience includes 

all businesses, regardless of gender of ownership. In FY 2007, the Womens Bureau reached its target with 65 

percent of participating employers creating or enhancing their workplace practices. 

PART, Program Evaluations and Audits 

OASP is not subject to PART reviews. 

Data Quality and Major Management Challenges 

Data quality for this performance goal was rated Good. Data and results are not estimated, but are based on 

reporting from public actions taken as part of the rulemaking process. Strengths of the data include its 

accuracy and relevance. Regulatory data are taken directly from the Department of Labor’s Semi-Annual 

Regulatory Agenda. Items are added to the Regulatory Agenda through a transparent process that begins 

with the agency identifying provisions on which they propose to focus. After a rigorous Departmental review 

and clearance process, the approved items are added to the Department’s Regulatory Agenda, which is 

published in the Federal Register each Spring and Fall. Data for the flexible workplaces measure is reported 

by the regions based on the number of programs or policies created or enhanced by participant companies. 

Data are cross checked and verified at the regional and national level. 

One area for improvement is to identify performance data that better represent the desired outcomes, 

particularly with respect to the Department’s regulatory agenda. As noted by a GAO Report on retrospective 

reviews of regulations (http://www.gao.gov/new.items/d07791.pdf), agencies can incorporate various 

elements into their policies and procedures in order to improve the effectiveness and transparency of 

retrospective regulatory reviews. This includes high-level management support, pre-planning to identify data 

needed to conduct effective reviews, and a prioritization process to address time and resource barriers. 
Performance Section 

116 United States Department of Labor 

Reduce Child Labor in Developing Countries

 

Performance Goal 07-2K (ILAB) – FY 2007 

Contribute to the elimination of the worst forms of child labor internationally. 

Indicators, Targets and Results 

*Indicator target reached (Y), improved (I), or not 

reached (N) 

Some indicators not shown for FY 2002-05 – see 

Legacy Data note below 

FY 2002

Goal 

Achieved

FY 2003

Goal Not 

Achieved

FY 2004

Goal 

Achieved

FY 2005 

Goal 

Achieved 

FY 2006

Goal 

Achieved

FY 2007

Goal 

Achieved

Target 50,000 60,000 70,000 116,000 178,000 139,000

Result 51,927 69,915 91,724 161,821 238,733 228,966

Number of children prevented or 

withdrawn from exploitive child labor and 

provided education and/or training 

opportunities as a result of DOL-funded 

child labor elimination projects 

* Y Y Y Y Y Y 

Target — — 15 20 39 31 

Result — — 26 39 55 48 

Number of countries with increased 

capacities to address child labor as a 

result of DOL-funded child labor 

elimination projects * — — Y Y Y Y 

Goal Net Cost (millions) — — — $74 $95 $101 

Source(s): Grantee progress reports and other project monitoring sources. 

Legacy Data: Complete indicators, targets and results for FY 2002-05 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goal 06-3.3A. 

Note: In FY 2002-05, the first indicator reflected children withdrawn or prevented from the worst forms of child labor 

for USDOL-funded ILO-IPEC programs only. Costs for this goal are net costs as defined in a footnote to the 

Cost of Results discussion in Management’s Discussion and Analysis. Costs are not allocated to the indicator 

level because program activities are not separable into categories associated with one or the other. 

 

Program Perspective and Logic 

Through activities implemented by the Bureau of International Labor Affairs (ILAB), the Department has 

worked to reduce exploitive child labor worldwide since 1993. ILAB conducts Congressionally-mandated 

research on international child labor, works to increase public awareness of the issue, and funds and oversees 

projects in over 75 countries to eliminate exploitive child labor and increase access to quality basic education. 

DOL’s international child labor technical assistance programs are implemented through cooperative 

agreements with a broad array of non-governmental, faith-based and international organizations as well as 

private firms. Through ILAB’s Child Labor Education Initiative, DOL has provided funds for projects focusing 

specifically on access to and quality of basic education as a means of reducing exploitive child labor. The 

Department continues to increasingly direct its funds toward large-scale national programs to eliminate the 

worst forms of child labor. This approach integrates action to eliminate child labor with national policies and 

programs relating to poverty reduction and education. 

ILAB measures its success towards meeting this goal on two levels: first, through direct interventions made at 

the community level to withdraw or prevent children from exploitive labor; and second, through country-level 

actions that increase national capacity to eliminate exploitive child labor. ILAB establishes annual targets for 

its two indicators through analysis of baseline information, individual project targets, past performance, and 

external factors. ILAB’s FY 2007 target is lower than its FY 2006 results due to a decline in funding levels 

over the past several years and the conclusion of some projects serving high numbers of children. 

In FY 2007, Congress appropriated about $60 million to DOL’s child labor program. Ninety percent of the 

funds directly contributed to ILAB’s two performance indicators described above. Remaining funds 

contributed to ILAB’s performance goal indirectly through administration and oversight funds, including child 
Strategic Goal 2 

FY 2007 Performance and Accountability Report 117

labor research and reporting, project monitoring, project evaluation, and examination level attestation 

engagements. 

Various external factors influence ILAB’s targeted outcomes, such as the implementing environment of 

developing countries. DOL-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 can also impact the progress of project implementation. 

Analysis and Future Plans 

The goal was achieved. During FY 2007, DOL-supported international child labor projects prevented or 

withdrew 228,966 children from exploitive child labor by providing them with education and/or training 

opportunities. Since the beginning of DOL’s international child labor technical cooperation program in 1995, 

DOL-funded projects have prevented or withdrawn close to 1.1 million children around the world from 

exploitive child labor. Children served by these projects were working or at risk of working in places such as 

mines, commercial plantations, and manufacturing workshops. Others were exploited or at risk of 

exploitation in the worst forms of child labor such as trafficking, forced labor, debt bondage, recruitment for 

use in armed conflict, and commercial sexual exploitation. 

Apollo, an orphan, became part of a 20-year armed 

conflict in Northern Uganda when he was abducted 

by insurgents of the Lord's Resistance Army (LRA). 

Apollo was forced to carry weaponry and wounded 

soldiers in combat situations and served as an 

attendant to his brigade’s commander. During this 

time, Apollo witnessed the murder of several fellow 

abductees by LRA soldiers. He says of those days, 

“I would cry within my heart for fear of being 

killed.” When Apollo finally returned home, he had 

no family to support him through school. The 

International Rescue Committee offered him 

assistance via the DOL-funded ORACLE 

(Opportunities for Reducing Adolescent and Child 

Labor through Education) project, which paid his 

school fees and purchased a uniform, school books 

and materials. Now 16 years old, Apollo has 

passed his primary school exams and is enrolled in 

a secondary biology, chemistry, and math program. 

[Photo credit: DOL/ILAB] 

Since eliminating the worst forms of child labor requires a sustained effort and institutional change, DOLfunded projects also aim to increase countries’ capacity to address the issue. Increasing capacity to address 

child labor includes changes in a country’s legal framework, development and implementation of national 

policies, strengthening enforcement mechanisms, and creation of systems for monitoring of child labor. 

During FY 2007, with technical support from DOL-funded projects, 48 countries around the world increased 

their capacity to eliminate the worst forms of child labor by adopting laws increasing the minimum age for 

employment, defining the worst forms of child labor, providing for increased enforcement and penalties, and 

establishing anti-trafficking provisions.

In FY 2007, costs for this performance goal rose to $101 million from $95 million in FY 2006 – an increase of 

six percent. The increase is a result of normal spending fluctuations by grantees that have five years to 

expend obligated funds. 

In the coming year, ILAB plans to develop new evaluation methodologies that will improve its ability to assess 

program impact and effectiveness. In addition, ILAB will work with its grantees to identify specific project 

components and exit strategies that can lead to greater sustainability once DOL funding has ended. 
Performance Section 

118 United States Department of Labor 

PART, Program Evaluations and Audits 

ILAB underwent a PART review in 2004 and received a rating of Adequate. A principal finding was the need 

for more data to assess the impact of ILAB’s technical cooperation programs. The PART found that ILAB’s 

programs had not undergone a comprehensive evaluation. In response, ILAB conducted a project-level 

document review of its programs in 2005-2006 (see box below). Additionally, the Department funded a 

comprehensive program evaluation of its international child labor technical cooperation program in 2007. 

Also, in response to the PART assessment, ILAB implemented a cost efficiency measure. 

“Project-Level Review of the Bureau of International Labor Affairs Technical Cooperation Programs” 

October 2006 (SRA International)

Purpose: To conduct a project-level review of ILAB’s international child labor technical assistance programs to 

determine impact, effectiveness, and sustainability of those programs. This review compiled information on 

accomplishments, strengths, and weaknesses, lessons learned, and recommendations from project-related 

documents from a sample of 19 projects. 

Major Findings: 

1) ILAB projects have had some positive impacts, including increasing awareness of child labor; creating or 

strengthening legislation, policies and organizations seeking to eliminate child labor; increasing children’s 

education and skills levels; and removing children from exploitive child labor. 

2) In some cases, slow start-up, implementation delays, ambitious design or under-funding, and sometimes 

incomplete diagnosis of country conditions affected overall project implementation. 

Recommendations: 

1) ILAB should focus more attention on the front-end of the project cycle and make sure that project designs 

accurately reflect country conditions. 

2) ILAB should not over-commit to too many overarching goals, and project objectives should align with project 

funding levels. 

Actions Taken and Remaining: ILAB has taken actions to improve its collection of information about country 

conditions prior to funding projects, including conducting desk reviews prior to publishing solicitations for grant 

applications and requiring grant applicants to include needs assessments of target populations. In regard to 

aligning goals with funding, ILAB is working with project implementers to ensure they establish challenging but 

reasonable goals. In 2007, DOL will fund a program-level evaluation that will involve independent analysis and 

an expanded and more rigorous methodology, including site visits and interviews. 

Additional Information: For additional information, please contact Marcia Eugenio, Director of the Office of Child 

Labor, Forced Labor, and Human Trafficking at 202-693-4849. 

Data Quality and Major Management Challenges 

Data quality for this performance goal was rated Excellent. Strengths of the data include accuracy, relevance, 

and completeness. ILAB, which does not have an overseas presence, has developed a multi-pronged 

framework for monitoring data quality and project performance. DOL grantees submit semiannual projectlevel financial and technical progress reports including data for each ILAB indicator. In addition, DOL requires 

grantees to report on educational retention and completion. DOL also requires grantees to develop 

Performance Monitoring Plans specifying sources of data, methods and frequency of data collection, 

responsible personnel, and costs for monitoring project indicators. DOL requires independent mid-term and 

final evaluations of all projects. GAO noted DOL’s monitoring efforts in “Human Trafficking: Monitoring and 

Evaluation of International Projects are Limited, but Experts Suggest Improvements” (GAO-07-1034). GAO 

researchers stated, “We believe the overall monitoring of anti-trafficking projects is limited because the 

projects funded by the other five agencies [that also grant US government-funded anti-trafficking projects] did 

not have the elements of monitoring we found in Labor’s projects.” 

Furthermore, financial and performance-related examination-level attestation engagements are being 

conducted on many DOL-funded child labor projects. These attestation engagements review data to ensure 

that grantees are reporting data based on ILAB-established definitions, and that the data are supported by 

adequate records and observation. When issues in reporting are identified, grantees are required to provide a 

corrective action plan to revise the data as necessary. 
FY 2007 Performance and Accountability Report 119 

Strategic Goal 3: Safe and Secure Workplaces Promote workplaces that are safe, healthful and fair; guarantee workers receive the wages due 

them; foster equal opportunity in employment; and protect veterans’ employment and reemployment rights.

 

All workers are entitled to safe, healthful, and fair workplaces – and several DOL agencies have this as their 

primary mission. The Department has committed to achieving this goal by promoting practices that minimize 

safety and health hazards and provide equal opportunities for workers. Rapid technological advances and 

dynamic workplace environments have changed the nature of work, leading to new challenges for our safety 

and health mission. DOL promotes equal employment opportunity by enforcing regulations that deal with 

Federal contracting practices and the reemployment rights of veterans. Agencies with programs supporting 

this goal are: 

• Occupational Safety and Health Administration (OSHA) 

• Mine Safety and Health Administration (MSHA) 

• Employment Standards Administration (ESA), and 

• Veterans’ Employment and Training Service (VETS). 

On October 30, 2003, new construction on the Tropicana 

Casino in Atlantic City, New Jersey collapsed. In the 

Department’s ensuing lawsuit against the employer, DOL 

successfully argued that a contractor may not rely on poorly 

drafted building plans if the contractor has reason to know 

the plans are erroneous. By clarifying this previously 

unclear area of the law, the Department continues its 

mission of vigorously enforcing the nation’s labor laws and 

supporting a safe and secure workplace for every American. 

[Photo Credit: DOL/SOL] 

These Agencies provide a critical service to the 

American worker by ensuring that employers comply 

with major employment laws. These laws represent 

some of the most fundamental protections for 

workers, and ensure that workplaces are safe, 

healthful, and fair. The Agencies rely on a broad range of expertise – from front-line investigators to the 

strategic decision-makers – to administer these laws and to educate employers and the public. The 

performance goals and targets for this strategic goal focus on the effectiveness of these enforcement efforts 

and compliance programs. In FY 2007, DOL positively impacted the workplace by reducing injury and illness 

rates, improving working conditions, and by maintaining low rates of employment rights violations. The 

following results highlight some of DOL’s successes in FY 2007. 

For American Workers 

• The fatality rate decreased in OSHA covered sectors. 

• The injury and illness rate decreased, which means fewer workers suffered from conditions caused or 

worsened by their work environment. 

For Miners 

• The all injury and illness rate dropped for the fourth consecutive year. 

• Silica dust and noise levels in mines were reduced. 

For Employees of Federal Contractors 

• The discrimination rate among audited contractors remained at a low two percent. 

• Federal contractors reached an 88 percent compliance rate, which means most audited contractors 

have affirmative action plans and comply with equal employment opportunity laws. 
Performance Section 

120 United States Department of Labor 

For Returning Veterans 

• Claims under the Uniformed Services Employment and Reemployment Rights Act decreased by four 

percent, suggesting fewer Veterans faced unlawful barriers when returning to work after active duty. 

• Employer violations decreased by eight percent from last year. 

• Meritless claims decreased by 14 percent, meaning Veterans are better understanding their rights. 

These national results are realized one worker and one employer at a time. The vignettes below and 

throughout this chapter tell some of the stories behind Strategic Goal Three. For more specific information, 

please see the Performance Goal narratives. 

Within ESA, the Wage and Hour Division (WHD) administers 

standards for wages and working conditions – such as overtime, 

field sanitation standards in the agricultural industries, prevailing 

wage requirements for government contracts, and child labor 

protections. In 2007, the Wilkes-Barre District Office 

investigated five fatalities involving Amish and Mennonite minors 

during an eighteen month period that began in the summer of 

2005. Shaken by the rash of tragedies, the Amish and 

Mennonite communities agreed to meet with staff of the WilkesBarre District Office for the purpose of learning about the youth 

employment provisions of the Fair Labor Standards Act to protect 

an estimated 13,770 to 18,360 Amish minors of working age. 

WHD conducted youth employment outreach events directed at Mennonite business owners and the newly formed Safety 

Committee as well as the Mennonite Governing Board. Additionally, an article on youth employment, co-authored by the 

Wilkes-Barre District Office and the Amish Safety Committee appeared in the weekly Amish newspaper, Die Botschaft. 

[Photo Credit: DOL/ESA] 

The following table provides key information, goal statements, and achievement for DOL performance goals 

associated with this strategic goal. 

Net Cost (millions)31

Goal (Agency) and Statement Performance Summary 

FY 2005 FY 2006 FY 2007

07-3A (OSHA) Improve workplace safety and 

health through compliance assistance and 

enforcement of occupational safety and health 

regulations and standards.

Goal achieved. Both targets 

reached. $515 $519 $547

07-3B (MSHA) Reduce work-related fatalities, 

injuries, and illnesses in mines.

Goal substantially achieved. 

Four targets reached, one 

improved and one not reached. 

307 348 356

07-3C (ESA) Ensure workers receive the wages 

due them. 

Goal not achieved. Two targets 

reached and two not reached. 214 214 221

07-3D (ESA) Federal contractors achieve equal 

opportunity workplaces. 

Goal achieved. Both targets 

reached. 99 97 103

07-3E (VETS) Reduce employer-employee 

employment issues originating from service 

members’ military obligations conflicting with their 

civilian employment. 

Goal achieved. One target 

reached. 12 11 10

Total for Strategic Goal 3 

Three goals achieved, one 

substantially achieved and one 

not achieved. 

$1,147 $1,189 $1,237

 

31 Net cost as defined in a footnote to the Cost of Results discussion in Management’s Discussion and Analysis.
 Strategic Goal 3 

FY 2007 Performance and Accountability Report 121 

The net cost dedicated to Strategic Goal 3 in FY 2007 was $1.237 billion. The first chart below is based on 

total Departmental costs of $47.872 billion; the second is based on an adjusted net cost of $12.771 billion 

that excludes the major non-discretionary program costs associated with Strategic Goal 4.32 Net cost 

dedicated to Strategic Goal 3 in FY 2006 (restated to reflect current goal structure) was $1.189 billion. 

Simulating real events and emergencies is one of the most effective ways to train 

people. Recognizing this, MSHA created a Mine Simulation Laboratory at the National 

Mine Health and Safety Academy in Beckley, WV. This 48,000 square-foot facility is an 

above-ground simulated mine featuring a coal mine on the lower level and a 

metal/nonmetal mine on the second floor level. The simulated coal mine represents a 

room-and-pillar setup with four entries and nine crosscuts. The metal/nonmetal mine 

contains passageways, tunnels, stairways, and ladders to simulate different manways 

and other situations faced by mine rescue teams. Students are given simulated 

exercises to provide hands-on experience in mine ventilation, accident investigation, 

mine inspection, mine rescue and recovery, and mine emergency operations 

management. The training facility is unique and an internationally recognized center 

for practical training in mine safety and health. [Photo credit: DOL/MSHA] 

 

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 ($32.051 billion) plus disability benefit payments to individuals who 

suffered injury or illness on the job ($3.050 billion). 

Percent of Net Cost Excluding Income 

Maintenance

24%

40%

26%

10%

1 - Prepared

2 - Competitive

3 - Safe and Secure

4 - Economic

Protections

Strategic Goal 3 - Percent of Net Cost

6% 11%

3%

80%

1 - Prepared

2 - Competitive

3 - Safe and Secure

4 - Economic

Protections
Performance Section 

122 United States Department of Labor 

Reduce Occupational Fatalities 

Performance Goal 07-3A (OSHA) – FY 2007 

Improve workplace safety and health through compliance assistance and enforcement of occupational safety 

and health regulations and standards. 

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not reached (N) 

**Estimated 

FY 2007

Goal 

Achieved

Target 2.3 

Days away from work, job restriction and job transfer (DART) per 100 workers Result 2.2** 

* Y 

Target 1.73 

Result 1.64 Workplace fatalities per 100,000 workers (for sectors covered by the Occupational Safety and 

Health Act) 

* Y 

Goal Net Cost (millions) $547 

Source(s): OSHA Integrated Management Information System (IMIS); Bureau of Labor Statistics (BLS) Current 

Employment Statistics (CES) and Annual Survey of Occupational Injuries and Illnesses (ASOII). 

Legacy Data: Complete indicators, targets and results for FY 2003-06 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goals 06-3.1C and 06-3.1D. 

Note: A third indicator, “Rate of workplace injuries and illnesses in new worksites participating in VPP Programs,” 

appeared in the DOL FY 2008 Performance Budget Overview. However, this indicator has been eliminated. In 

addition, baselines and targets for the first two indicators were updated from the FY 2008 Performance Budget to 

reflect the latest data. This year, the method of calculating the fatality indicator results has changed from a 

three-year average to an annual average, invalidating a comparison of FY 2007 to FY 2003-FY 2006 targets and 

results. Costs for this goal are net costs as defined in a footnote to the Cost of Results discussion in 

Management’s Discussion and Analysis. Costs are not allocated to OSHA’s two performance indicators because 

the same activities contribute to reductions in fatality and injury/illness indicators, i.e., their costs are not 

separable. Calendar year is designated by “CY.” 

Program Perspective and Logic 

For over 35 years, OSHA has promoted employee safety and health in the United States by collaborating with 

employers and employees to create safer working environments. A strong, fair, and effective enforcement 

program underpins OSHA’s efforts to protect the safety and health of the nation’s employees. Outreach, 

education and compliance assistance complement enforcement and enable OSHA to play a vital role in 

preventing on-the-job injuries, illnesses and fatalities. 

Changes in the economy and employment, emerging and new technologies, and workforce characteristics 

affect OSHA’s performance. The majority of working Americans fall under the jurisdiction of Federal OSHA or 

federally-approved State plans (with the exception of as miners, transportation workers, some public 

employees, and the self-employed). OSHA helps to reduce on-the-job deaths by intervening at workplaces 

where it has evidence that fatalities are more likely to occur and by responding to reports about potentially 

life-threatening workplace hazards. 

OSHA tracks fatalities to develop targeted national and local programs and to measure performance. OSHA is 

working to reduce the workplace fatality rate by five percent between FY 2006-2011 and the injury and illness 

rate by 15 percent between CY 2005-2011. OSHA uses data from its Integrated Management Information 

System to track fatalities, to develop national and local programs, and to measure performance. OSHA uses 

data from the Bureau of Labor Statistics Survey of Injuries and Illnesses to estimate the rate of injuries and 

illnesses involving days away from work, job restriction, or job transfer (DART). 
 Strategic Goal 3 

FY 2007 Performance and Accountability Report 123 

Analysis and Future Plans 

This year, the injury and illness rate declined to an estimated 2.2 per 100 workers from the CY 2005 baseline 

of 2.4, and the fatality rate for sectors covered by the Occupational Safety and Health Act declined from the 

FY 2006 baseline of 1.75 to 1.64 deaths per 100,000 workers.

OSHA uses targeted 

enforcement strategies called 

Local Emphasis Programs 

(LEPs) to reduce or eliminate 

specific occupational hazards. 

LEPs address hazards or 

industries that pose a risk to 

workers in a particular 

locality, and are accompanied 

by outreach to help build 

awareness of the program 

and specific occupational 

hazards. In FY 2006, OSHA’s 

Bismarck, ND Area Office launched an LEP in response to six complaints involving three near-miss accidents where 

equipment failure could have resulted in crushing injuries to employees working with automotive lifts. Since inception, 

over 30 local establishments have been inspected through this LEP, and hazards such as inadequate automotive lifts 

and improper inspection protocol were identified and corrected. [Photo credits: DOL/OSHA] 

OSHA emphasized the importance of timely input of fatality data from OSHA’s field offices and from State 

plan partners operating their own OSHA programs. To work toward the targeted reductions in fatalities, OSHA 

identified and targeted sectors and hazards that required interventions and increased its compliance 

assistance efforts. For example, OSHA is addressing the growth in the construction field of immigrant and 

non-English speaking workers by translating more of the agency’s safety and health materials into other 

languages, especially Spanish. The agency is creating compliance assistance materials that employers can 

use to effectively communicate safety and health issues, such as workplace hazards, to employees. 

In June, the agency established a National Emphasis Program (NEP) to reduce or eliminate workplace hazards 

associated with the catastrophic release of highly hazardous chemicals at petroleum refineries. In July, OSHA 

established a separate NEP to identify and reduce or eliminate exposures to butter-flavoring chemicals used 

in facilities that manufacture microwave popcorn. To accomplish the goal of reduced exposures, OSHA’s 

efforts in both NEPs include targeted inspections and extensive compliance assistance. OSHA’s Site Specific 

Targeting (SST) Program uses establishment-specific injury and illness data collected through the OSHA Data 

Initiative (ODI) to identify and target for inspection worksites that experience high rates of injury and illness. 

The costs associated with this performance 

goal increased by 5.4 percent between FY 

2006 and FY 2007. The primary reasons for 

this change are budgetary increases to 

allocations for: pay adjustments and 

personnel benefits; development of the OSHA 

Information System to improve the agency's 

ability to identify cost-effective methods of 

collecting complete and comparable data on 

program outcomes; and a rise in agency and 

Department level indirect costs. Costs are 

allocated across the two performance 

indicators as reflected in the Indicators, 

Targets and Results table. 

Performance Goal 07-3A

Net Costs ($Millions)

515 519 547

0

200

400

600

800

2005 2006 2007

Fiscal Year
Performance Section 

124 United States Department of Labor 

PART, Program Evaluations and Audits 

OSHA underwent a PART reassessment in 2007 and received a rating of Adequate – the same rating as in 

2002. In response to the PART reassessment, OSHA will develop a cost efficiency measure that covers a 

substantial portion of its budget and will start regulatory reforms identified in GAO’s 2005 Report to Congress 

on the Costs and Benefits of Federal Regulation. Finally, DOL is conducting rigorous, independent evaluations 

to examine the effectiveness and efficiency of OSHA’s programmatic approaches. 

“Disaster Preparedness: Better Planning Would Improve OSHA’s Efforts to Protect Workers’ Safety and 

Health in Disasters,” March 2007 (GAO)

Purpose: Assess how well OSHA carried out its responsibilities under the National Response Plan (NRP) in the 

aftermath of Hurricane Katrina and lessons learned that will enable OSHA to perform better in the future. 

Major Findings: OSHA provided assistance to many agencies and workers, but its efforts to meet the safety and 

health needs of all workers were hampered by several factors, including the fact that not all agencies were 

cognizant of the assistance OSHA was providing and details of OSHA’s and FEMA’s roles were unclear. 

Recommendations: 

1) Clearly define the criteria to be used in deciding when OSHA will be responsible for carrying out its duties under 

the Worker Safety and Health Support Annex to the National Response Plan. 

2) Clearly define OSHA’s and FEMA’s roles under the Worker Safety and Health Support Annex. 

3) Proactively work to provide information to Federal, State, and local agencies about OSHA’s role in a disaster and 

the assistance it can provide under the Worker Safety and Health Support Annex. 

Actions Taken and Remaining: 

1) In March 2006, OSHA began working with FEMA to develop a Standard Operating Procedure (SOP) that 

provides guidance on how and when OSHA should be activated. 

2) The OSHA/FEMA SOP also addresses the roles and responsibilities of each Agency when the Annex is 

implemented. 

3) OSHA continues to seek opportunities to acquaint all involved in emergency response with the importance of 

worker safety and health measures and how OSHA can help protect responders in the aftermath of a disaster. 

Additional Information: The report (GAO-07-193) is available at http://www.gao.gov/new.items/d07193.pdf. 

Data Quality and Major Management Challenges 

Data quality for this performance goal was rated Good. Strengths of the data include accuracy and reliability. 

For the fatality goal, the agency relies on its Integrated Management Information System (IMIS) for fatality 

data and BLS Current Employment Statistics for employment data. IMIS data provides the best count of 

fatalities under OSHA jurisdiction. The IMIS and the BLS Current Employment Statistics data are complete, 

reliable, accurate, and verifiable. IMIS, which has numerous automated quality control and edit checks, uses 

a well-defined and tested protocol for counting. For the injury and illness goal, the agency uses data from the 

BLS Annual Survey of Occupational Injuries and Illnesses. While this survey provides the most comprehensive 

and reliable injury and illness data currently available on a national level, results are not available until nine 

and a half months after the end of the calendar survey year. Consequently, OSHA’s estimate for the fiscal 

year is a projection based on available data from calendar year 2003 onward. 

Collecting complete and comprehensive data on OSHA’s Voluntary Programs is a Major Management 

Challenge (MMC) for the Department (see item I, Protecting the Safety and Health of Workers, in the MMC 

section of Management’s Discussion and Analysis). While OSHA’s voluntary compliance programs yield many 

positive outcomes, much of the agency’s data is limited according to the OIG. GAO recommended that OSHA 

identify cost-effective methods of collecting complete and comparable data on program outcomes. In 

response, OSHA now collects more complete and sufficient data on voluntary programs as a result of program 

refinements and is developing a new OSHA Information System – to be completed in September 2009. Also, 

at the 2007 Annual Consultation Conference, OSHA clarified the conditions in which Consultation Program 

Officers may grant extensions to employers with serious workplace hazards. OSHA's new Information System 

will alert Consultation Program Officers to report these employers for enforcement action and will 

not allow program officers to grant extensions to employers to correct serious hazards unless they have the 

proper interim protections for their employees in place. 
 Strategic Goal 3 

FY 2007 Performance and Accountability Report 125 

Reduce Mine Fatalities and Injuries

Performance Goal 07-3B (MSHA) – FY 2007 

Reduce work-related fatalities, injuries, and illnesses in mines. 

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not reached 

(N) 

**Estimated 

Some indicators not shown for FY 2003-06 – see Legacy 

Data note below 

FY 2003 

Goal Not 

Achieved 

FY 2004

Goal 

Substantially 

Achieved

FY 2005 

Goal Not 

Achieved 

FY 2006

Goal Not 

Achieved

FY 2007

Goal 

Substantially 

Achieved

Target .020 .022 .022 .021 .0201

Result .023 .017 .018 .022 .0142**

* N Y Y N Y

Mine industry fatal injury incidence rate (per 

200,000 hours worked) 

Cost — — — — $121 

Target 3.79 3.85 3.48 3.13 2.82 

Result 4.26 4.07 3.90 3.69 3.43**

* N N N N I

Mine industry all-injury incidence rate (per 200,000 

hours worked) 

Cost — — — — $107 

Target 14.2% 11.1% 10.1% 9.5% 9.0%

Result 11.7% 10.2% 10.8% 11.3% 13.6%**

* Y Y N N N

Percent of respirable coal dust samples exceeding 

the applicable standards for designated 

occupations 

Cost — — — — $50 

Target — — — — 75.5%

Result — — — — 32.0%**

* — — — — Y

Percent of silica dust samples taken with a result 

that is less than half of the exposure limit in metal 

and nonmetal mines 

Cost — — — — $35 

Target — — — — 71.3%

Result — — — — 64%**

* — — — — Y

Percent of noise samples taken with a result that is 

less than half of the exposure limit in metal and 

nonmetal mines 

Cost — — — — $18 

Target — — baseline 5.0% 4.8% 

Result — — 5.3% 4.4% 3.3%** 

* — — N Y Y 

Percent of noise exposures above the citation level 

in coal mines 

Cost — — — — $25 

Goal Net Cost (millions) — — $307 $348 $356 

Source(s): Mine Accident, Injury, and Employment information that mine operators and non-exempt contractors 

report to MSHA under Title 30 Code of Federal Regulations Part 50; dust samples collected by MSHA 

inspectors; Coal Mine Safety and Health MIS; and Metal and Non-Metal Mine Safety and Health MIS. 

Legacy Data: Complete indicators, targets and results for FY 2002-06 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goals 06-3.1A and 06-3.1B. 

Note: In FY 2003-06, MSHA had separate safety and health goals and in FY 2005, OSHA and MSHA shared 

performance goals. Achievement is restated as if there had been a single MSHA goal. Costs for this goal are 

net costs as defined in a footnote to the Cost of Results discussion in Management’s Discussion and Analysis. 
Performance Section 

126 United States Department of Labor 

Program Perspective and Logic 

MSHA ensures compliance with the Federal Mine Safety and Health Act (Mine Act) of 1977 and the Mine 

Improvement and New Emergency Response (MINER) Act of 2006, laws designed to prevent serious 

occupational injuries and illnesses in the mining industry. America’s mining industry has made significant 

strides over the last 30 years. In FY 1978, the first year that MSHA operated under the Mine Act, 242 miners 

died in mining accidents. In FY 2000-2005, fatalities in the mining industry and the fatal injury rate both 

declined by 35 percent. In FY 2006, 72 fatalities were reported. 

Remembering Gary Jensen 

On August 16, 2007, Gary L. Jensen, a Coal Mine Safety and 

Health Inspector from MSHA District 9, lost his life while 

working as a member of a mine rescue team trying to save 

six miners who were trapped underground at the Crandall 

Canyon Mine in Utah. In his tribute to Gary, MSHA District 

Manager Allyn Davis, shared these sentiments: “Gary was 

one of our best and a member of our mine rescue team. He 

was the ultimate mining safety professional. He worked 

tirelessly in an attempt to ensure that the nation’s coal 

miners could return home after work to their loved ones.” 

The mining workplace is hazardous. Methane gas and 

airborne particulates, unseen geologic instabilities, 

constantly changing terrain, and other environmental 

conditions inside the mines make mine safety and 

health a continuing challenge. MSHA’s performance 

indicators assess effectiveness of its efforts to protect 

the safety and health of the Nation’s miners. Incidence 

rates, the number of fatalities and injuries per 200,000 hours worked by miners, are used by MSHA to 

measure its performance. These rates reflect not only the number of fatalities and injuries but also the 

amount of time miners are exposed to potential hazards. There are two sets of health indicators for this 

performance goal -- two for coal mines and two for metal and non-metal mines. 

 

Analysis and Future Plans 

MSHA substantially achieved its performance goal, reaching four of six indicator targets, improving results for 

one and not reaching another. The fatality rate indicator target was reached, while the all-injury incidence 

rate dropped for the fourth consecutive year but did not reach the target. The coal dust exposure target was 

not reached, but the three targets for silica dust and noise were reached. 

MSHA set an ambitious target to reduce the mine all-injury rate by over 25 percent from FY 2003 to FY 2007. 

The agency did not revise the target even though mining activity increased in response to heightened demand 

for mined resources, including coal. Although MSHA did not reach its ambitious target, the all-injury rate has 

decreased by over 20 percent since FY 2003. This significant accomplishment was in part attributable to 

MSHA’s ambitious target-setting which helped drive the agency’s performance to achieve the reduction. 

Fatality Rate - All Mines

Incidents per 200,000 hours worked

0

0.01

0.02

0.03

2003 2004 2005 2006 2007

Result Target

All-Injury Rate - All Mines

Incidents per 200,000 hours worked

0

1

2

3

4

5

2003 2004 2005 2006 2007

Result Target
 Strategic Goal 3 

FY 2007 Performance and Accountability Report 127 

MSHA did not meet its coal dust exposure reduction 

target. As was the case last year, attainment of the 

target was complicated by increased coal production, 

which is correlated with new mining entities that lack 

adequate dust control and more difficult mining 

processes that generate dust at a higher rate. To prevent 

overexposures, MSHA continues its targeted enforcement 

and compliance assistance efforts at problem mines. In 

FY 2008, MSHA will increase its technical assistance on 

the implementation of the MINER Act, which contains 

numerous provisions to enhance miner safety and 

health. 

Between FY 2006 and FY 2007, costs for this performance goal increased by less than two percent, which is 

considered within normal variance connected with the timing of expenditures. The more significant increase 

from FY 2005-06 is partially attributed to higher compensation and rent expenses. 

 

PART, Program Evaluations and Audits 

The MSHA program underwent a PART review in 2003 received a rating of Adequate. The improvement plan 

includes continuing targeted enforcement and compliance assistance actions at high-risk mines beyond the 

requirements of the Mine Act with initiatives such as the Cooperative Accident Reduction Effort, analyzing the 

costs and benefits of major regulatory alternatives in the agency's Regulatory Impact Analyses for proposed 

regulations, and developing efficiency and cost-effectiveness measures for a larger percentage of MSHA's 

program activities. In FY 2007, MSHA targeted compliance assistance to the cement industry based on 

numerous explosions associated with the pulverized coal that is used to fuel kilns that heat crushed limestone 

to produce cement. MSHA issued a hazard alert and followed up with letters that described practices and 

asked each plant to perform a risk analysis and implement controls and process modifications. As a result, 

the incidence of explosions decreased. 

MSHA Revises Mine Evacuation and Safety Regulations 

On June 15, 2006, President Bush signed the MINER Act of 2006, which was designed to enhance mine safety training, 

improve safety and communications technology for miners, and provide more emergency supplies of breathable air 

along mine escape routes. In December 2006, MSHA adopted a revised Emergency Temporary Standard for Mine 

Evacuation, which requires increased availability of portable breathing devices in underground mines and training in the 

use of the breathing devices. The rule also requires improved emergency evacuation drills; installation and maintenance 

of ropes (lifelines) to guide miners to an escape route when smoke reduces visibility in underground coal mines; and 

mine operators to immediately notify MSHA once a mine operator knows or should have known a mine accident 

occurred. MSHA estimates that annual cost to the underground mining industry will be approximately $44 million and 

that, if the final rule had been in effect, 45 fatalities might have been prevented in four previous mining accidents. 

MSHA programs have been audited by both OIG and GAO over the past year. The audits have resulted in 

numerous recommendations, which MSHA is implementing. Recommendations include hiring of new mine 

inspectors, improving tracking systems to ensure that mine operators correct identified hazards, and 

improving miner training. More details regarding these recommendations are discussed in the audit report 

summaries below. Also, the Department, working through the National Science Foundation’s 

Industry/University Cooperative Research Center enables Dr. Robin Murphy, a renowned robotics expert, to 

assist in mine research. The partnership, which focuses on underground communication devices and new 

mine rescue technologies, will provide MSHA with an independent appraisal of these cutting-edge 

technologies to assist in efforts to rescue miners. 

“Mine Safety: Better Oversight and Coordination by MSHA and Other Federal Agencies Could Improve 

Safety for Underground Coal Miners,” May 2007 (GAO)

Purpose: In Report No. GAO-07-622, GAO examined the challenges underground coal mines face in preparing for 

emergencies, how well MSHA oversees mine operators’ training efforts, how well MSHA and National Institute 

for Occupational Safety and Health (NIOSH) coordinate to enhance the development and approval of mine 

Percent of Respirable Coal Dust Samples 

Exceeding Applicable Standards for 

Designated Occupations

0

5

10

15

20

2002 2003 2004 2005 2006 2007

Result Target
Performance Section 

128 United States Department of Labor 

safety technology, and how MSHA assesses civil penalties. 

Major Findings: 

1) MSHA did not provide all mine operators with information for training under simulated emergency conditions and 

its oversight of miner training was hampered by inconsistent guidelines for approving new instructors and a lack 

of continuing education requirements. 

2) MSHA did not adequately monitor instructors, evaluate training sessions, or assess how well miners learned 

skills being taught. 

3) The MOU with NIOSH is out of date, and, while most penalties proposed by MSHA are paid by mine operators 

without opposition, a small percentage are appealed and reduced significantly.

Recommendations: Strengthen the efforts to improve mine operators’ access to tools to train their workers, 

strengthen MSHA’s oversight of training, improve the effectiveness of information sharing between MSHA and 

NIOSH, and ensure that there is transparency in penalty appeal determinations. 

Actions Taken and Remaining: 

1) MSHA has begun implementing GAO’s recommendations to establish a "single-source" page identifying facilities 

for simulated mine rescue training and electronically track instructors and improve training reviews to ensure that 

information and objectives are met. 

2) MSHA will conduct a sample survey of miners to determine if the training is adequate and beneficial. MSHA is 

also developing an instructor evaluation and feedback plan to determine the effectiveness of instruction. 

3) MSHA renewed its efforts to develop an MOU with NIOSH and committed to ensuring that litigation 

representatives and attorneys are adequately documenting rationales for all civil penalty settlement agreements.

Additional Information: To view a copy of the report, please visit http://www.gao.gov/new.items/d07622.pdf. 

“MSHA's Revised Hiring Process Has Improved the Agency's Recruiting Efforts, but Its Human Capital 

Strategic Plan Does Not Adequately Project or Address Its Future Workforce Needs,” May 2007 (GAO)

Purpose: GAO conducted a follow-up evaluation (GAO-07-704R) to review MSHA’s plan for addressing anticipated 

shortages in the number of qualified inspectors due to upcoming retirements. 

Major Findings: In 2003, GAO recommended that MSHA develop a plan for addressing anticipated shortages in 

the number of qualified inspectors due to upcoming retirements, including streamlining the agency's hiring 

process. While MSHA has taken significant steps to improve its hiring process, the agency's human capital plan 

does not include a strategic approach for addressing the large number of retirements expected in the next five 

years. MSHA estimates that over 40 percent of its inspectors will be eligible for retirement by 2012. District 

officials expressed concerns about the impact that losing experienced inspectors may have on the agency's 

ability to achieve its goals, particularly completing required safety and health inspections on time. 

Recommendations: GAO recommended that MSHA engage in a strategic planning effort that utilizes the data it 

collects on expected retirements and actual attrition to develop goals that can be monitored and evaluated. 

Actions Taken and Remaining: In response to the GAO’s recommendations, MSHA revised its Human Resources 

Strategic Plan so that it will serve as a strategy roadmap and a means to measure performance. The plan is 

available from David Meyer at (202) 693-9802. 

Additional Information: A copy of the follow-up report is available at http://www.gao.gov/new.items/d07704r.pdf. 

“MSHA’s Office of Coal Mine Safety and Health Needs to Strengthen its Accountability Program” 

 August 2007 (OIG)

Purpose: Because of the increase in coal mining accidents in 2006, the OIG audited MSHA’s Accountability 

Program, which was established to evaluate the quality of MSHA enforcement activities. 

Major Findings: MSHA’s Accountability Program did not provide adequate assurance that Coal Mine Safety and 

Health oversight responsibilities were effectively and consistently performed and the results were not effectively 

used to improve operations timely and consistently. 

Recommendations: The OIG made 14 recommendations to improve the accountability program. These included 

ensuring that the selection of enforcement activities is objective and includes on-site mine visits. Use of a 

standard format for reports and a centralized tracking system to ensure that identified common deficiencies, 

corrective actions, and best practices are communicated were also recommended. 

Actions Taken and Remaining: Nine recommendations will be resolved pending MSHA revising its Accountability 

Program by January 2008. Three recommendations were unresolved pending MSHA’s submission of specific 

corrective actions and milestone dates. For two recommendations, MSHA did not fully concur. 
 Strategic Goal 3 

FY 2007 Performance and Accountability Report 129 

Additional Information: Please see: http://www.oig.dol.gov/public/reports/oa/2007/05-07-002-06-001.pdf 

“MSHA Needs to Improve Controls Over Performance Data” December 2006 (OIG)

Purpose: The OIG conducted the audit to determine the completeness and reliability of MSHA’s performance data. 

Major Findings: MSHA could not ensure it had accounted for all miner hours worked by mine operators or 

independent contractors. Certain contractors are exempt from reporting work hour information, and MSHA does 

not expend sufficient resources conducting reviews or audits to verify that work hour information submitted by 

mine operators or contractors is valid. In addition, the OIG found that MSHA did not have data to support the 

testing to ensure that noise exposures did not exceed established limits. 

Recommendations: OIG recommended that MSHA verify and validate mine operators’ reporting of all hours 

worked for both employees and contractors and that MSHA develop and implement controls for procedures that 

require systematic and regular entry of noise sample data.

Actions Taken and Remaining: MSHA updated coal noise sampling procedures and revised the Metal and 

Nonmetal Handbook to require inspectors to verify accuracy of noise sampling reports. MSHA does not concur 

with findings and recommendations regarding mine operator and contractor work hour data.

Additional Information: Please see: http://www.oig.dol.gov/public/reports/oa/2007/22-07-008-06-001.pdf 

Data Quality and Major Management Challenges 

Data quality for this goal was rated Good. Fatality and all-injury rates are calculated using actual hours 

worked at mines. Accidents and hours worked are obtained from reports required of mine operators.33 

Information quality is maintained through built-in checks at the electronic and manual points of data entry as 

well as through audits conducted by MSHA enforcement personnel. MSHA safety and health compliance 

specialists conduct dust and noise sampling in accordance with established written procedures. While data 

for some health indicators lacked timeliness in the past, MSHA has worked diligently to correct this issue. 

MSHA has a Departmental Major Management Challenge (see item I, Protecting the Safety and Health of 

Workers, in the MMC section of Management’s Discussion and Analysis). OIG and GAO have pointed out the 

lack of data on contractor hours worked at the mine level. Most recently, OIG conducted an audit of MSHA’s 

performance data, which resulted in a recommendation that mine operators report all hours worked for both 

employees and contractors to allow verification that all data needed to support the reported injuries and 

fatalities have been included. MSHA officials did not agree with the recommendation because they believe 

that the data on contractor hours are sufficient at the national level for calculating the all-injury and fatality 

rates. However, having contractor data at the mine level could enhance enforcement effectiveness; MSHA 

may require non-exempt contractor hours to be reported at the mine level. OIG also pointed out that some 

MSHA District or Field Offices did not record their noise sample results and some did not record the correct 

date of the sample results. Consequently, MSHA revised its Metal and Nonmetal Handbook to require 

inspectors to verify that their noise sampling results are entered accurately into MSHA’s information system. 

OIG also conducted an audit of MSHA’s accountability program and determined that the program, as 

designed, did not provide adequate assurance that Coal Mine Safety and Health’s oversight responsibilities 

were effectively and consistently performed and that MSHA did not always use the results of the reviews to 

improve its operations. In addition, in response to previous GAO audit recommendations, MSHA has a 

succession planning initiative in place to replace the mine inspectors who will be retiring in the near future. 

MSHA has developed and implemented systems that ensure that mine operators and contractors comply with 

the Mine Act. This includes the Mine Plan Approval Database, which enables headquarters to monitor the 

timely submission and approval of all required and optional plans including critical ventilation and roof control 

plans; and the Hazardous Condition Complaints Database, which tracks hazardous condition complaints from 

receipt to investigation and resolution. Complaints can be submitted online, via telephone, in writing or 

verbally. Headquarter and district management can monitor daily activities to ensure that complaints that 

allege imminent danger are followed up with timely field office inspections. 

 

33 Certain independent contractors are exempt from reporting employment and injury information if they participate in 

“low hazard” mining activities as defined by MSHA policy. Non-exempt contractors report employment information for 

aggregate work locations, not by individual mine site. 
Performance Section 

130 United States Department of Labor 

Protect Workers’ Wages

Performance Goal 07-3C (ESA) – FY 2007 

 

Ensure workers receive the wages due them. 

Indicators, Targets and Results 

*Indicator target reached (Y), improved (I), or not reached (N) 

Some indicators not shown for FY 2004-06 – see Legacy Data note 

below 

FY 2004 

Goal 

Achieved

FY 2005 

Goal 

Achieved 

FY 2006 

Goal 

Achieved

FY 2007

Goal Not 

Achieved

Target — — baseline 296 

Result — — 293 271 

* — — Y N 

Number of workers for whom there is an agreement to pay or 

an agreement to remedy per 1,000 enforcement hours in 

complaint cases 

Cost — — $112 $123 

Target 74% 72% 73% 77% 

Result 71% 72% 76% 66% 

* N Y Y N 

Percent of prior violators who achieved and maintained FLSA 

compliance following a full FLSA investigation 

Cost — — $27 $30 

Target — — — 304 

Result — — — 418 

* — — — Y 

Low-wage workers assisted per 1,000 case hours 

Cost — — $39 $45 

Target baseline 1,506 1,491 1,852 

Result 1,491 1,667 1,834 2,636 

* Y Y Y Y 

Number of wage determination data submission forms 

processed per 1,000 hours 

Cost — — $23 $23 

Goal Net Cost (millions) — $214 $214 $221 

Source(s): Wage and Hour Investigator Support and Reporting Database (WHISARD); significant activity reports; 

regional logs and reports on local initiatives; and investigation-based compliance surveys. 

Legacy Data: Complete indicators, targets and results for FY 2003-06 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goal 06-2.1A. 

Note: Costs for this goal are net costs as defined in a footnote to the Cost of Results discussion in Management’s 

Discussion and Analysis. 

Program Perspective and Logic 

The Employment Standards Administration’s Wage and Hour Division (WHD)’s mission is to promote and 

achieve compliance with labor standards that protect and enhance the welfare of the Nation’s workforce. 

Through WHD, the Department assures compliance with laws establishing minimum standards for wages and 

working conditions. These include the minimum wage, overtime, and youth employment provisions of the Fair 

Labor Standards Act (FLSA) and the protections afforded to workers under the Migrant and Seasonal 

Agricultural Worker Protection Act and the Family and Medical Leave Act. WHD enforces field sanitation 

standards in agriculture and government contract prevailing wage statutes and administers the wage 

determination provisions of the Davis-Bacon and Service Contract Acts. 

The program’s performance objectives are to maximize benefits for the greatest number of workers through 

efficient complaint resolution, to promote sustained compliance among investigated employers, to increase 
 Strategic Goal 3 

FY 2007 Performance and Accountability Report 131 

compliance on behalf of low-wage workers in industries with the most persistent and serious violations, and to 

ensure accurate and timely wage rates. WHD balances its resources among key strategies – compliance 

assistance, partnerships and collaborative efforts, and complaint-driven and directed enforcement. 

Compliance assistance activities promote voluntary compliance by employers. Partnerships broaden the 

program’s impact. Directed enforcement in low-wage industries -- where workers are reluctant to complain -- 

detects, remedies, and deters violations. Complaint investigations serve individual complainants and provide 

opportunities for detecting and remedying violations on behalf of other employees. 

In 2005, WHD’s southeast region began a 

concerted effort to reduce the number of 

farmworker fatalities and injuries. The State 

of Florida requires Farm Labor Contractors 

(FLCs) and employees who transport workers 

to pass a certification examination, so WHD 

and the State agreed to update the State 

study guide with safety information on 15-

passenger vans. WHD provided this 

information to registered FLCs and 

conducted presentations on the Migrant and 

Seasonal Agricultural Worker Protection Act 

transportation safety requirements, including 

operation of buses, environmental factors 

affecting safe operation, driver impairment, 

and use of cell phones. Since 2004, reported 

annual agriculture-related transportation 

fatalities in Florida have declined from 13 to 

4, and the number involving 15-passenger 

vans declined from 11 to 2. [Photo credit: 

DOL/ESA] 

WHD measures results for each of its four performance objectives. The wage determination program 

indicator monitors the survey process to improve the timeliness of Davis-Bacon Act wage determinations. The 

performance indicators for complaint investigations and low-wage industries promote efficiencies and 

encourage remedies for all potentially affected workers. WHD conducts an annual survey of prior violators in 

order to track long-term recidivism trends, which are used to establish 

goals and assess the agency’s impact on employer behavior. Through the 

strategic use of complaint investigations, which represent approximately 

70 to 75 percent of enforcement resources, WHD strives to increase 

outcomes for the greatest number of workers. Time spent by WHD staff 

in these key activities is the primary basis for tracking the resources 

allocated for each indicator. 

The WHD New York City District Office’s, the Rapid Employee Assistance in 

Chinese Hotline (REACH) initiative offers a Chinese language hotline in New York 

City for Chinese-speaking workers who have questions about their pay. Through 

this initiative, WHD partners with Chinatown employment agencies, distributes 

Chinese language posters and handouts, and maintains a dedicated telephone 

line to provide information to workers. Since its inception in 2004, the New York 

City District Office has received and handled nearly 1,000 telephone calls on the 

REACH hotline, including requests for general information and referrals to other 

agencies. To date, the hotline has resulted in payment of wages of more than 

$775,000 to close to 500 low-wage workers. [Photo credit: DOL/ESA] 

Analysis and Future Plans 

In FY 2007, WHD established ambitious targets for the agency’s four indicators. The resulting number of 

workers assisted per 1,000 enforcement hours in complaint cases – 271 in FY 2007 – fell short of the 296 

target. WHD attributes this performance shortfall to the decline in senior investigator levels and the loss of 
Performance Section 

132 United States Department of Labor 

experienced investigators to retirement. WHD exceeded its target of 304 workers per 1,000 enforcement 

hours in a similar efficiency measure when it assisted 418 low-wage workers per 1,000 enforcement hours. 

Although performance for this measure was also adversely affected by investigator staffing issues, several 

significant cases helped WHD to exceed its target. The increased reliance of employers on foreign-born labor, 

the growth of undocumented immigration, and the increase in informal work relationships also challenge the 

agency’s effort to efficiently resolve complaints and complete low-wage industry investigations in a timely 

manner. These economic and workforce trends, including associated language barriers between WHD 

personnel and the working community, complicate the agency’s investigations and its ability to meet 

efficiency objectives. 

Only 66 percent of prior violators were found in compliance in FY 2007, a decrease of ten percentage points 

from FY 2006; however, the severity of violations decreased as evidenced by fewer affected employees and 

less back wages owed to workers. The results for the recidivism indicator are derived from a random, 

investigation-based survey of employers, which makes it difficult to accurately identify a reason for the 

decreased level of employer compliance. The improvements with respect to the number of affected 

employees and resulting amount of back wages owed them, however, reflect a continued trend among 

recidivist employers—which is explained by WHD’s focus on thorough enforcement and compliance 

assistance. WHD continues to significantly improve the efficiency of the wage survey process through 

enhanced technology. WHD processed 2,636 wage data forms per 1,000 hours, a 39 percent increase from 

FY 2006. 

WHD will reallocate resources as opportunities to improve performance emerge. In support of its compliance 

priorities in low-wage industries, WHD’s FY 2008 performance plan focuses on addressing the violations that 

may arise from informal employment relationships such as those involving contingent workforces, 

misdesignated independent contractors, and multiple subcontracting arrangements. Each of the agency’s 

regional and local district offices’ low-wage initiatives will include compliance activities in at least one of the 

low-wage industries in which contingent worker issues are common. In the coming year, the agency will 

analyze data and evaluations to better target those low-wage industries in which violations are likely to occur. 

The costs for this performance goal increased by three percent between FY 2006 and FY 2007. The primary 

reason for this increase is a rise in agency and Department level indirect costs that include legal services for 

enforcement-related case work and audit services. Costs are allocated across the four performance indicators 

as reflected in the Indicators, Targets and Results table. 

PART, Program Evaluations and Audits 

WHD’s enforcement and compliance program underwent a PART review in 2006 and received a rating of 

Moderately Effective. In response to a recommendation from the review, WHD began requiring regional and 

local offices to report outputs for all partnerships. The PART determined that WHD’s measures were 

outcome-oriented, but recommended examining the ambitiousness of targets. WHD is undergoing an 

independent evaluation of its performance and efficiency measures, which will provide recommendations to 

more effectively target low-wage industries and to establish more ambitious targets. The prevailing wage 

determination program underwent a PART review in 2003 and received a rating of Results Not Demonstrated. 

The review found the program lacked ambitious, outcome-oriented performance measures and procedures to 

measure and achieve efficiencies and cost effectiveness. In response, WHD developed performance 

indicators and targets and conducted an external review of the program. WHD continues to examine changes 

to the wage survey and outreach to improve data collection processes. 

External evaluations and audits highlight successes and opportunities in low-wage industries. Boston 

University, working with Mathematica Policy Research, Inc., completed an evaluation of business structures in 

two low-wage industries: eating and drinking and hotel and motel. This evaluation suggests that business 

structure could play a role in promoting compliance and further supports the agency’s prioritization of lowwage industries. 
 Strategic Goal 3 

FY 2007 Performance and Accountability Report 133 

“Low-Wage Industry Prioritization Evaluation,” August 2007 (Mathematica Policy Research, Inc./ Boston 

University)

Purpose: Improve targeting and compliance strategies by identifying factors and variables related to noncompliance in low-wage establishments, franchises, and industries. 

Major Findings: 

1) Business structure may influence regulatory compliance in low-wage industries. 

2) Relative to establishments in the eating and drinking industry, fast food sector: 

• Franchised establishments are nearly twice as likely to disclose back wage violations as investigations of 

company-operated establishments. 

• Franchised outlets have higher rates of back wages owed per employee paid in violation compared to 

company-owned outlets. 

• Franchisees respond to a related, but different, set of pressures and incentives within a fast food company 

than do their company-owned counterparts. 

• Franchisee compliance tends to be worst the “first” time a unique franchisee is investigated. 

• Very large franchisees exhibit high levels of compliance as their incentives become more aligned with those 

of their franchisors. 

3) Relative to establishments in the hotel and motel industry: 

• Ownership and management structures potentially provide methods for gaining significant impacts across 

hotel properties of a given brand. 

• Variation in the hotel segment may be related to predicting regulatory performance and affecting compliance 

behavior. 

• Franchising has become the standard ownership form in hotel and motel. 

• Where present, variation in franchise structure may be related to regulatory performance as well as other 

relevant outcomes.

Recommendations: 

1) In addition to the eating and drinking industry, examine other industries where similar dynamics may be present. 

2) Devise different interventions that draw on distinctive features of identified low-wage industries, in particular, the 

eating and drinking and hotel and motel industries. 

Actions Taken and Remaining: As appropriate, WHD incorporated preliminary findings related to the eating and 

drinking and hotel and motel industries into initiatives planned for FY 2008. In FY 2008, the agency will work 

with contractors to devise intervention strategies that leverage industry-specific findings, as well as previous 

recommendations involving strategic enforcement concepts. 

Additional Information: Wage and Hour Division, Office of Performance, Budget and Departmental Liaison, 200 

Constitution Avenue, NW, S-3502, Washington, DC 20210, or call (202) 693-0051

 

Data Quality and Major Management Challenges 

Data quality for this performance goal was rated Very Good, an improvement from the prior year’s rating of 

Good. By revising one performance indicator to track annual data reported from the agency’s Wage Hour 

Investigator Support and Reporting Database (WHISARD), WHD improved the reliability of its data quality -- to 

the extent the agency is no longer dependent on a lengthy analysis of survey data. Strengths of program data 

include relevance, completeness and the quality controls in place to verify the data. With the exception of the 

wage determination measures, performance information is extracted from the WHISARD, the agency’s record 

of investigative case findings and investigator enforcement time. Investigative case records are reviewed by 

WHD management staff and are the subject of WHD internal accountability reviews. The data are reported 

quarterly and performance statistics are considered throughout the agency’s strategic planning process. 

 
Performance Section 

134 United States Department of Labor 

Foster Equal Opportunity Workplaces

 

Performance Goal 07-3D (ESA) – FY 2007 

Federal contractors achieve equal opportunity workplaces. 

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not reached 

(N) 

FY 2003 

Goal 

Achieved

FY 2004 

Goal 

Achieved

FY 2005 

Goal 

Achieved 

FY 2006 

Goal 

Achieved

FY 2007

Goal 

Achieved

Target 9% 9% 7% 6% 2% 

Result 1.2% 1% 2% 1.7% 1% 

* Y Y Y Y Y 

Discrimination rate for audited Federal contractors 

Cost — — — $68 $72 

Target 59% 61% 62% 64% 86% 

Result 72.4% 91% 86% 87.2% 88% 

* Y Y Y Y Y 

Compliance rate for all other EEO requirements 

Cost — — — $29 $31 

Goal Net Cost (millions) — — $99 $97 $103 

Source(s): Case Management System (CMS) 

Note: Costs for this goal are net costs as defined in a footnote to the Cost of Results discussion in Management’s 

Discussion and Analysis. 

Program Perspective and Logic 

The Employment Standards Administration's Office of Federal Contract Compliance Programs (OFCCP) 

administers and ensures compliance with three equal employment opportunity laws that prohibit Federal 

contractors and subcontractors from discriminating on the basis of race, color, religion, sex, national origin, 

disability, and protected veterans' status: Executive Order 11246, Section 503 of the Rehabilitation Act of 

1973, and the Vietnam Era Veterans' Readjustment Assistance Act of 1974. 

For more than 30 years, OFCCP has been ensuring 

that Federal contractors and subcontractors 

comply with veteran protections under the Vietnam 

Era Veterans’ Readjustment Assistance Act of 

1974. Shown here are OFCCP Compliance Officers 

Ray (on the left) and Marv preparing for Operation 

Stand Down, Nashville’s annual event to assist 

homeless veterans. Operation Stand Down 

provides services to honorably discharged veterans 

of the United States Armed Forces, including 

employment services, transitional housing, and 

referrals to other agencies’ services. Operation 

Stand Down was recognized twice by the 

Department for its support of OFCCP’s mission. 

[Photo credit: DOL/ESA] 

Through fair and effective enforcement of 

these laws by OFCCP, the Department seeks 

to ensure that Federal contractors provide 

equal employment opportunity to all applicants. By continuing to reduce the incidence of discrimination 

among Federal contractors, OFCCP is able to demonstrate a positive correlation between targeted 
 Strategic Goal 3 

FY 2007 Performance and Accountability Report 135 

enforcement and compliance assistance activities and its performance goal of achieving equal opportunity in 

Federal contractor workplaces. Budgetary resources are allocated to both enforcement and compliance 

assistance. Program strategies are shaped by several external trends and factors, such as the total number of 

Federal contractors, company acquisitions and mergers, and turnover in the Federal contractor community. 

Compliance assistance efforts focus on raising contractor awareness of equal opportunity obligations and 

encouraging self-evaluations. The Compliance Assistance Program provides one-on-one customer assistance, 

including online tools and resources that teach contractors how to comply with Federal employment laws. 

Analysis and Future Plans 

OFCCP’s performance indicators track compliance levels among each new group of contractors audited 

annually. In FY 2007, OFCCP completed 4,923 compliance evaluations, of which 60 were classified as having 

systemic violations. OFCCP reached its targets of reducing the incidence of discrimination among Federal 

contractors to two percent of all audited Federal contractors and increasing the compliance rate to 86 percent 

among Federal contractors in all other aspects of Equal Employment Opportunity standards. 

In FY 2005, OFCCP implemented the Contracts First (C1) project to produce a contractor selection list that is 

based on evidence of contracts rather than voluntary self-identification provided by EEO-1 summary data. C1 

continues to provide more up-to-date contract information than the EEO-1 summary data that OFCCP used in 

the past. In FY 2007, C1 identified almost 1500 Federal contractor establishments, in addition to those 

establishments identified from EEO-1 data. By using more accurate selection lists, compliance officers are 

able to concentrate on cases where OFCCP has established jurisdiction. 

In FY 2007, OFCCP published in the Federal Register new regulations to implement the Jobs for Veterans Act 

(JVA), which amended the affirmative action provisions of the Vietnam Era Veterans’ Readjustment Assistance 

Act of 1974 (VEVRAA). The JVA amendments raised the threshold dollar amount of the Government contracts 

that are subject to the affirmative action provisions of VEVRAA, changed the categories of veterans protected 

by the law, and changed the manner in which the mandatory job listing requirement is to be implemented. 

OFCCP will modify its existing compliance assistance program to aid Federal contractors in satisfying the 

requirements outlined in the new regulations. 

Costs associated with this goal rose by four 

percent over the past two years. Some of this 

increase can be attributed to the rising costs of 

personnel, which represent almost 80 percent 

of OFCCP’s budget. The other significant factor 

is an increase in agency and Department level 

indirect costs that include audit services and 

Information Technology (IT) support. OFCCP’s 

resource allocations seek to eliminate 

unproductive hours. For example, the agency’s 

Active Case Management process decreases 

the amount of time spent evaluating 

companies with good affirmative action 

program results so that compliance officers can spend that time investigating the worst offenders. OFCCP 

continues to develop its performance and cost information using a logic model. OFCCP has calculated unit 

costs for program outputs on national, regional, and individual compliance officer basis. The program also 

identified cost drivers that were most likely to impact the cost of a particular activity. Outputs were selected 

based on the percentage of their contribution to reaching performance indicator targets. 

OFCCP will build upon its comprehensive compliance assistance program, having conducted more than two 

thousand compliance assistance events in the last three years. Compliance assistance outreach helps 

employers prevent unlawful discrimination by providing them with the information necessary to monitor their 

workplace practices effectively. The ability to identify systematic discrimination is also central to OFCCP’s 

enforcement strategies. In selecting establishments for evaluation in FY 2008 and FY 2009, OFCCP will seek 

to improve the statistical model used to select Federal contractor establishments for evaluation. 

Performance Goal 07-3D

Net Costs ($Millions)

99 97 103

0

50

100

150

2005 2006 2007

Fiscal Year
Performance Section 

136 United States Department of Labor 

PART, Program Evaluations and Audits 

In 2004, a PART reassessment rated OFCCP Adequate, an improvement over their initial 2002 PART rating of 

Results not Demonstrated. The initial PART found that OFCCP could not quantify the impact of its civil rights 

enforcement efforts, and in response OFCCP implemented measures tracking the incidence of discrimination 

and levels of compliance. OFCCP improved its rating based on these new measures and its overall 

performance. 

 

OFCCP has continued to implement PART improvement plan recommendations, which include setting more 

ambitious targets, reviewing program regulations and requirements to identify areas for improvement, and 

continuing to evaluate and modernize agency data collection processes. During last year’s Departmental 

strategic planning process, OFCCP revised its performance targets to reflect a history of consistently and 

significantly exceeding past targets. The agency eliminated the Equal Opportunity Survey data collection 

requirement after an independent study found that it was an ineffective tool. OFCCP also updated its 

regulation on veterans’ non-discrimination requirements and initiated revisions to its requirements regarding 

the collection and maintenance of gender, race and ethnicity data by Federal contractors. 

Data Quality and Major Management Challenges 

Data quality for this performance goal was rated Very Good, representing an improvement from last year’s 

rating of Good. Strengths of the data include its timeliness and accuracy. Field offices routinely update the 

Case Management System with compliance audit data supporting performance goals, which are available in 

monthly, quarterly, and annual reports. OFCCP continues to improve its current information system, including 

enhanced data reporting capabilities and new data integrity checks. 

OFCCP indirectly addressed the reliability criterion by revising performance measurement targets during the 

FY 2006-11 strategic planning process. OFCCP measures discrimination and compliance rates among each 

unique group of contractors audited each year. The reliability criterion requires that agencies demonstrate 

meaningful performance trends with their annual data. By taking a long-term view of performance, OFCCP 

will use multi-year trend data representing several groups of contractors within an audit cycle to demonstrate 

improvement and set ambitious long-term goals. 

In addition, recognizing that validity is still a concern, OFCCP is considering ways to expand data collection to 

measure new performance areas using recommendations from prior program evaluations. Given its track 

record of consistently exceeding targets, OFCCP performance monitoring would be strengthened by 

measuring areas where significant improvements are possible. 
 Strategic Goal 3 

FY 2007 Performance and Accountability Report 137 

Assist Veterans’ Return to Jobs After Military Obligations 

 

Performance Goal 07-3E (VETS) – FY 2007 

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

conflicting with their civilian employment. 

Indicators, Targets and Results 

*Indicator target reached (Y), improved (I), or not reached (N) 

**Estimated 

FY 2006 

Goal 

Achieved

FY 2007 

Goal 

Achieved

Target 105% 101% 

USERRA Progress Index (measures comp Result 108% 110%** liance and assistance performance 

* Y Y 

Goal Net Cost (millions) $11 $10 

Source(s): USERRA Information Management System (UIMS) 

Note: Costs for this goal are net costs as defined in a footnote to the Cost of Results discussion in Management’s 

Discussion and Analysis. 

Program Perspective and Logic 

The Department’s Veterans’ Employment and Training Service (VETS) is responsible for protecting 

employment and reemployment rights of persons who are current or former members of the uniformed 

services, and who encounter barriers in civilian employment related to their service. These rights and 

protections were established by the Uniformed Services Employment and Reemployment Rights Act 

(USERRA). 

VETS provides a range of USERRA-related services, including compliance assistance to employers and 

protected individuals and investigation of individuals’ complaints alleging violation of their rights. VETS seeks 

to reduce both employer violations and the filing of meritless complaints by protected individuals. The 

indicators for this goal focus on resolving filed claims. DOL has found that most violations and meritless 

complaints could be avoided with greater knowledge of the rights and protections established by USERRA. 

For this reason, VETS has an active compliance assistance program directed at employers and members of 

National Guard and Reserve units to increase knowledge and understanding of USERRA’s key provisions. 

Two external factors have the greatest impact on achievement of this goal: the economy and increases in 

military active duty periods. Both of these factors cause more service members to face difficulties associated 

with their civilian employment or reemployment. While the economy remains steady, the U.S. war effort 

continues to increase Guard and Reserve active duty periods – a trend that will likely increase USERRA 

activity. 

Goal achievement is measured using a comprehensive Progress Index that demonstrates reduction of 

violations and meritless complaints by consolidating indicators of cases and assistance (non-case-related 

contacts) using weights for each element that are determined by service priorities. It consists of seven 

compliance indicators and one assistance indicator. The compliance indicators are: 

1) Number of Guard/Reserve demobilized per USERRA claim filed by Guard/Reserve; 

2) Number of Guard/Reserve demobilized per USERRA claim filed by Guard/Reserve in primary issues; 

3) Number of USERRA violations; 

4) Number of USERRA violations in primary issues; 

5) Number of meritless USERRA claims; 

6) Number of meritless USERRA claims in primary issues; and 

7) Average days cases remain in VETS jurisdiction. 
Performance Section 

138 United States Department of Labor 

The assistance indicator is the number of USERRA assistance contacts per Guard/Reserve mobilized and 

demobilized. Other Federal agencies that handle USERRA inquiries or process USERRA claims are outside the 

scope of VETS' Progress Index. Those agencies include the Employer Support of the Guard and Reserve, an 

agency in the Department of Defense; and the U.S. Office of Special Counsel, which is participating in a 

demonstration project to test an alternate method of handling USERRA complaints filed by Federal 

employees. 

Analysis and Future Plans 

The goal was achieved. Preliminary reports indicate that USERRA claims decreased by four percent in FY 

2007 compared to the previous year, with violations decreasing by eight percent and meritless claims 

decreasing by 14 percent. This progress reflects the impact of VETS’ aggressive compliance assistance 

efforts, with over 458,000 individual contacts since September 2001. Compliance assistance efforts will 

continue to focus on National Guard and Reserve components, because they are the source of most USERRA 

claims. In FY 2006, for example, Guard/Reserve claims accounted for 84 percent of total claims. VETS 

expects this trend to continue and possibly increase due to mobilizations/demobilizations relating to the War 

Against Terrorism. 

Costs associated with this goal were virtually unchanged from FY 2006-07.

 

PART, Program Evaluations and Audits 

“Military Personnel: Additional Actions Needed to Improve Oversight of Reserve Employment Issues,” 

February 2007 (GAO)

Purpose: “As reservists demobilize, concerns exist about difficulties with their civilian employment. [In Report No. 

GAO-07-259], GAO assessed (1) the status of DOD’s efforts to capture reservists’ employer data; (2) DOD, 

Labor, Justice, and Office of Special Counsel processes to track and address reservists’ USERRA complaints; 

and (3) the four Federal agencies’ efforts to track reservists’ USERRA complaints related to disabilities incurred 

while on active duty.” 

Major Findings: 

1) Between fiscal years 2004 and 2006, the four agencies addressed approximately 16,000 informal and formal 

complaints. However, no one agency has total visibility over all the complaints, and only a small percentage of 

complaints are reported to Congress. 

2) Agencies responsible for assisting reservists with USERRA issues cannot systematically record and track 

disability-related employment complaints because they do not use consistent and compatible complaint 

categories or have a mechanism in place for distinguishing disability-related complaints from others. 

Recommendations: 

3) Congress should consider changing the law to require Labor’s annual report to include DOD complaint data; 

DOD should improve its reporting of employer information; Labor should make aggregate complaint data 

available to DOD. 

4) Agencies should adopt uniform data elements and track disability-related USERRA complaints. 

Actions Taken and Remaining: 

1) DOL is making aggregate USERRA complaint data available to DOD, quarterly and when requested. 

2) DOL has achieved consensus among all four USERRA agencies to establish uniform data elements, including 

pertinent data involving USERRA disability issues, which are being tracked in Labor’s enhanced USERRA 

Information Management System (UIMS) version 2.0 (implemented at the beginning of FY 2007). 

Additional Information: Report No. GA-07-259 is available online at http://www.gao.gov/new.items/d07259.pdf.

“Military Personnel: Improved Quality Controls Needed over Servicemembers’ Employment Rights Claims 

at DOL,” July 2007 (GAO)

Purpose: “Under a demonstration project, from February 8, 2005, through September 30, 2007, OSC [Office of 

Special Counsel] is authorized to receive and investigate certain USERRA claims, with DOL continuing its 

investigative role for others. As required by Pub. L. No. 108-454, [Report GAO-07-907] describes the (1) 

processes, (2) outcomes, and (3) major changes during the demonstration project.” 
 Strategic Goal 3 

FY 2007 Performance and Accountability Report 139 

Major Findings: 1) DOL did not consistently notify claimants concerning the right to have their claims referred to OSC for further 

investigation or to bring their claims directly to the Merit Systems Protection Board. 

2) At DOL, inaccurate data were included in the agency’s annual report to Congress. Duplicate, reopened, and 

transferred claims accounted for most of this difference. GAO found the closed dates in DOL’s database, which 

it uses to report to Congress on the number and percentage of claims it closes within 90, 120, and 365 days, 

were not reliable. 

Recommendations: GAO recommends that: 

1) DOL develop an internal review mechanism for all unresolved claims before they are closed and claimants are 

notified, and 

2) DOL establish internal controls to ensure the accuracy of data entered into DOL’s database.

Actions Taken and Remaining: 

1) All VETS investigators received new instructions on notifying claimants of their right to referral and on recording 

the appropriate closure date for a claim. Furthermore, DOL is revising the USERRA Operations Manual for 

VETS investigators to institute systemic procedures to notify claimants in writing of their right to referral and to 

enter closure dates into the VETS database. 

2) A new Quality Assurance Review process will ensure that 100% of the cases investigated, Federal and nonFederal, adhere to systemic procedures and standards; and that data entered into the VETS database 

accurately reflects USERRA claims processing. The process will require a higher-level review before a claimant 

is notified of the determinations and before cases are closed.

Additional Information: Report GAO-07-907 is available online at http://www.gao.gov/new.items/d07907.pdf. 

Data Quality and Major Management Challenges 

Data quality for this performance goal was rated Good, a downgrade from last year’s Excellent rating. 

Validation and verification of UIMS data is accomplished periodically via Quality Assurance Reviews at State, 

regional, and national levels. UIMS data reflects official data documented in the hard-copy case records. GAO 

report findings (GAO-07-907) highlighted management challenges in data quality. GAO described 

improvements needed in USERRA data accuracy and reliability, which are being addressed through the new 

Quality Assurance Review process. As discussed above, VETS’ Operations Manual and Quality Assurance 

Review process are being updated in FY 2008 to address these needs. 

FY 2007 Performance and Accountability Report 141 

Strategic Goal 4: Strengthened Economic Protections Protect and strengthen worker economic security through effective and efficient provision of 

unemployment insurance and workers’ compensation; ensuring union transparency; and securing 

pension and health benefits.

DOL increases the economic security of America's working families by administering payment of temporary 

benefits for the unemployed, protecting Federal workers from the economic effects of work-related injuries 

and illness, ensuring that labor union operations are transparent, protecting employee benefits plans against 

fraud and abuse, and insuring defined benefit pension plan payments. These operations are carried out by 

three DOL agencies and a government corporation whose board is chaired by the Secretary of Labor. 

Agencies with programs supporting this goal are: 

• Employment and Training Administration (ETA) 

• Employment Standards Administration (ESA) 

• Employee Benefits Security Administration (EBSA) 

• Pension Benefit Guaranty Corporation (PBGC) 

An OLMS investigation revealed that a union official had 

embezzled more than $50,000 from a local union. After 

the sentencing, during which the official was ordered to 

make restitution to the union, OLMS Investigator Laura 

Rola discussed the successful conclusion of the case 

with Shane Preston, a trustee of the union, and 

Assistant United States Attorney Richard Southwick. 

[Photo credit: DOL/ESA/OLMS] 

For these agencies, Protecting America’s workers 

mean protecting their economic security. DOL 

provides benefits and enforces laws that provide a 

safety net for workers and ensure transparency 

among the unions that protect them. Every 

employee faces unforeseen risks, and these 

Agencies work to ensure that unemployed workers 

receive benefits; that workers in special industries 

receive compensation when injured or ill; that pension contributions and health benefits are secure; and that 

unions deliver honest elections and financial records. DOL monitors its effectiveness using performance 

indicators linked to each of these unique programs. In FY 2007, DOL provided resources for the unemployed, 

ensured covered workers timely received their benefits, provided superior customer service on pension plan 

issues, and increased the transparency of union reporting. 

For the Unemployed 

• Nearly 70 percent of unemployed workers found jobs within months of collecting their first payment. 

• DOL increased the timeliness of those first payments. 

For the Injured or Ill Worker 

• The backlog of claims from workers in the nuclear weapons industry, formerly handled by the 

Department of Energy, was eliminated, which totaled to nearly $500 million in benefits. 

• Federal workers returned to work more quickly after a work-related injury or illness. Returning to work 

more quickly means employees received the appropriate medical care, and employers could find work 

that would allow them to transition back into their jobs. 

For Workers with Pensions 

• Significantly more employers suspected of violating pension laws were going to be prosecuted. 

• More employers volunteered to participate in programs designed to ensure compliance with pension 

laws, further protecting workers’ funds from possible violations. 
Performance Section 

142 United States Department of Labor 

For Union Members 

• Financial reporting among unions continued to improve, and indications of fraud remained low. 

These national results are realized by delivering excellent service and careful consideration to each worker’s 

claim and situation. The vignettes below and throughout this section link Strategic Goal Four to the people we 

serve. For more specific information on the programs, see the Performance Goal narratives. 

Representatives from the Paducah Resource Center 

(Valerie-right) and Jacksonville District Office (Gingerleft) of DOL’s Energy Employees Occupational Illness 

Compensation Act Program (EEOICPA) provide 

program information at the Kentucky Governor’s 

Health and Safety Conference in Louisville – an annual 

meeting of labor, management, State and Federal 

government representatives. The event provided an 

excellent opportunity to educate the participants about 

the EEOICPA program and to improve the agencies’ 

information-sharing with DOL and their assistance to 

covered workers. [Photo Credit: OWCCP/ESA] 

The following table provides key information, goal 

statements, and achievement for DOL 

performance goals associated with this strategic 

goal. 

Net Cost (millions)34

Goal (Agency) and Statement Performance Summary 

FY 2005 FY 2006 FY 2007

07-4A (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 not achieved. Two targets 

reached, one improved and one not 

reached. 

$34,243 $33,340 $34,697

07-4B (ESA) Reduce the consequences of 

work-related injuries. 

Goal substantially achieved. Eight 

targets reached and one improved. 6,13135 2,130 3,554

07-4C (ESA) Ensure union financial 

integrity, democracy and transparency. 

Goal substantially achieved. One 

target reached and two improved. 63 56 68

07-4D (EBSA) Enhance pension and 

health benefit security. 

Goal achieved. All three targets 

reached. 160 179 176

07-4E (PBGC)36 Improve the pension 

insurance program. 

Goal substantially achieved. Five 

targets reached and one improved. − − −

Total for Strategic Goal 4 

One goal achieved, three 

substantially achieved and one not 

achieved. 

$40,597 $35,705 $38,495

The net cost dedicated to Strategic Goal 4 in FY 2007 was $38.495 billion. The first chart below is based on 

total Departmental costs of $47.872 billion; the second is based on an adjusted net cost of $12.771 billion 

 

34 Net cost as defined in a footnote to the Cost of Results discussion in Management’s Discussion and Analysis. 35 This anomaly is explained in the Analysis and Future Plans section of the Performance Goal 07-4B narrative. 36 PBGC is not included in the Consolidated Statements of Net Cost; hence the cost of its programs is not reflected here. 
Strategic Goal 4 

FY 2007 Performance and Accountability Report 143 

that excludes the major non-discretionary program costs associated with this goal.37 The adjusted net cost 

dedicated to Strategic Goal 4 for FY 2007 was $3.394 billion; the corresponding net cost in FY 2006 (restated 

to reflect current goal structure) was $3.491 billion. 

 

EBSA investigated an Oakland, Maryland company’s self-funded health plan after receiving a participant complaint that 

there were unpaid health claims. DOL found that the company had gone out of business, filed bankruptcy and did not 

pay health claims for seven months. As a result of the investigation, the company forwarded $285,197 to the third party 

administrator to pay the unpaid claims. 

A widow was being denied her life insurance and survivor pension benefits and over a period of four months tried, 

without success, to have her claims addressed. Without the benefits, she was unable to pay her debts, including funeral 

expenses for her late husband, and was being pursued by creditors. After she contacted the Department, an EBSA 

Benefits Advisor contacted her plan administrator and was instrumental in securing payment of her late husband’s 

$32,750 life insurance benefit and her survivor pension. As a result of this intervention, she was able to pay her debts. 

 

37 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 ($32.051 billion) plus disability benefit payments to individuals who 

suffered injury or illness on the job ($3.050 billion).

Strategic Goal 4 - Percent of Net Cost

6% 11%

3%

80%

1 - Prepared

2 - Competitive

3 - Safe and Secure

4 - Economic

Protections

Percent of Net Cost Excluding Income 

Maintenance

24%

40%

10%

26%

1 - Prepared

2 - Competitive

3 - Safe and Secure

4 - Economic

Protections
Performance Section 

144 United States Department of Labor 

Pay Unemployment Insurance Claims Accurately and Promptly

Performance Goal 07-4A (ETA) – FY 2007 

 

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

*Indicator target reached (Y), improved (I), or not 

reached (N) 

**Estimated 

Some indicators not shown for FY 2002-05 – see 

Legacy Data note below 

FY 2002

Goal Not 

Achieved

FY 2003

Goal Not 

Achieved

FY 2004

Goal Not 

Achieved

FY 2005 

Goal Not 

Achieved 

FY 2006

Goal Not 

Achieved

FY 2007

Goal Not 

Achieved

Target 91% 91% 89.2% 89.9% 89.9% 90.0% 

Result 88.7% 89% 90.3% 89.3% 87.6% 88.4%** Percent of intrastate first payments made 

within 21 days 

* N N Y N N I 

Target — 59% 59% 59.5% 59.5% 60.0% 

Result — 54% 57.4% 58.7% 62.1% 55.4%**

Percent of the amount of estimated 

detectable/recoverable overpayments 

that the States can establish for recovery * — N N N Y N 

Target — — — — baseline 65.0% 

Result — — — — 62.4% 67.9%**

Percent of UI claimants who were 

reemployed by the end of the first quarter 

after the quarter in which they received 

their first payment * — — — — Y Y 

Target 80% 80% 82.2% 82.4% 82.5% 82.8% 

Result 81.7% 83% 83.6% 82.4% 83.7% 84.7%**

Percent of new employer liability 

determinations made within 90 days of 

the end of the first quarter in which 

liability occurred * Y Y Y Y Y Y 

Goal Net Cost (millions) — — — $34,243 $33,340 $34,697

Source(s): Payment Timeliness: 9050, 9050p. Reports Payment Accuracy: Benefit Accuracy Measurement (BAM) 

program and ETA 227 report. Facilitate Reemployment: ETA 9047 Report. New Status Determinations 

Timeliness: ETA 581 report 

Legacy Data: Complete indicators, targets and results for FY 2002-05 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goal 06-2.2B. 

Note: Costs for this goal are net costs as defined in a footnote to the Cost of Results discussion in Management’s 

Discussion and Analysis. Approximately $2 billion of the net cost is for administration; the rest is for benefit 

payments to individuals. Costs are not allocated to the indicator level because performance indicators do not 

map to administrative cost categories or benefit payments. See Analysis and Future Plans section in the 

following narrative. 

Program Perspective and Logic 

By temporarily replacing part of unemployed workers’ lost wages, the Federal-State Unemployment Insurance 

(UI) system minimizes individual financial hardship due to unemployment and stabilizes the economy during 

economic downturns. For both workers and employers, the system’s success depends on the timely payment 

of benefits, prevention or prompt detection of erroneous payments, timely establishment of new employers’ 

tax accounts to ensure the reporting of workers’ wages and payment of taxes to fund benefits, and promoting 

and facilitating workers’ return to suitable work. States operate their own programs under their own laws, 

which must conform to and substantially comply with Federal law. As the Federal partner, DOL provides 

program leadership, allocates administrative funds, provides technical assistance, and exercises performance 

oversight to ensure that State partners meet Federal UI laws and regulations. Measuring efficiency and 

effectiveness of States’ administrative operations is an important aspect of program management. 
Strategic Goal 4 

FY 2007 Performance and Accountability Report 145 

Economic conditions and resulting workloads affect many aspects of the UI system performance. For 

example, when unemployment rises, more claims are filed and UI payment timeliness generally declines. On 

the other hand, when new business creation slows, it reduces the number of new employer tax accounts and 

the timeliness of tax liability determinations generally goes up. In addition, external factors can be extensive 

enough to affect aggregate UI system performance negatively (for example, the series of hurricanes that hit 

the Gulf region during 2005). Performance targets are based on the Administration’s current economic 

assumptions. 

 

Robert and his colleagues at the Missouri Division of 

Employment Security implemented the National 

Directory of New Hires (NDNH) in January 2006 to detect 

whether persons receiving unemployment insurance 

benefits have returned to work with a new employer 

virtually anywhere in the country. In the first year of use, 

the NDNH helped Missouri detect 5,459 overpayments 

worth over $3.7 million. The NDNH facilitates earlier 

detection of individuals who have returned to work but 

are unlawfully collecting unemployment insurance. In 

the first year of usage, the average overpayment 

detected through the NDNH is less than the total average 

overpayment – indicating earlier detection and cessation 

of wrongful benefit payments. The average overpayment 

established in 2006 using all methods of detection was 

$801 while the average overpayment from NDNH 

detection was $680. [Photo credit: Tammy Cavender] 

Analysis and Future Plans 

The goal was not achieved. As economic conditions remained strong, the number of unemployment 

insurance beneficiaries declined slightly from 7.4 million to 7.3 million between FY 2006 and FY 2007. UI 

met two of its four key performance targets, those for claimant reemployment and timely liability 

determinations. Performance on the timely first payment indicator improved from the FY 2006 level of 87.6 

percent, but remained below the 90 percent target. About a quarter of the improvement was due to recovery 

in performance in three of the States affected by the 2005 hurricanes. If all 10 States whose performance 

was below the Secretary of Labor’s standard of 87 percent in 2007 had reached it, the 90 percent target 

would have been met. As part of the State Quality Service Plan, those 10 States have corrective action plans 

to attain the standard in FY 2008. 

After exceeding the Detection of 

Overpayment target (calculated by dividing 

overpayments established by estimated 

recoverable overpayments) of 59.5 percent 

in 2006, the system fell almost five points 

below the 60 percent target in 2007. The 

chief reason was a 12 percent increase in 

the estimated recoverable overpayments -- 

due in part to improvements made in the 

ability of the Benefit Accuracy 

Measurement System to detect 

overpayments -- while overpayments 

established remained virtually unchanged 

from 2006. DOL is continuing its vigorous 

efforts to reduce the principal causes of 

overpayments by promoting and 

facilitating States’ connection with the 

National Directory of New Hires (NDNH), 

training in adjudication of eligibility issues, 

UI Indicators and Total Unemployment Rate

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

2002 2003 2004 2005 2006 2007

Fiscal Year

UI Indicators

3.5%

4.0%

4.5%

5.0%

5.5%

6.0%

6.5%

7.0%

Unemployment Rate

Payment Timeliness

Liability Determinations

Detect Overpayments

Total Unemployment Rate
Performance Section 

146 United States Department of Labor 

and increasing the number of Reemployment and Eligibility Assessments (REA) programs funded – pending 

additional funding. 

 

In FY 2007, the UI system costs were $1.357 billion higher than in FY 2006. Benefit payments, which rose 

five percent to $32.051 billion in FY 2007 from $30.506 billion in FY 2006, accounted for the increase. 

Administrative costs actually fell by seven percent, from $2.834 billion to $2.646 billion. DOL collects 

information on State spending of UI grant funds; however, the categories in which cost data are collected are 

generally functional or workload categories – initial claims, continued claims, eligibility determination, 

appeals, employer accounts, tax audits, 

overhead, and infrastructure costs such as 

space and information technology. These 

categories do not align well with UI 

performance measures, which span multiple 

functions. For example, the cost of timely first 

payments would include some portion of the 

costs attributable to initial claims, eligibility 

determinations, employer accounts, tax audits, 

and a share of overhead and infrastructure 

costs. Therefore, separating costs by 

performance indicator is not currently feasible. 

 

PART, Program Evaluations and Audits 

The UI system underwent a PART review in 2003 and received a rating of Moderately Effective. The 

improvement plan includes a recommended greater use of the NDNH to quickly detect and prevent 

overpayments to claimants who have returned to work. In 2007, 35 States were matching against NDNH, and 

in 2008, all States will be required to do so. The improvement plan also included a recommendation to fund 

REA programs for 19 States in 2007 in order to enforce continuing eligibility for UI benefits and connect 

claimants with reemployment services. 

Two recent studies evaluated the implementation and operation of the worker profiling initiative, adequacy of 

program reporting, and accuracy of States’ models to predict benefit exhaustion among UI claimants. Both 

identified best practices. Among the actions taken to address the recommendations, ETA is training State 

staff to evaluate profiling data, updating policy direction, and offering technical assistance to poor-performing 

States. 

“Unemployment Insurance: More Guidance and Evaluation of Worker-Profiling Initiative Could Help 

Improve State Efforts,” June 2007 (GAO)

Purpose: In Report No. GAO-07-680, GAO evaluated the effectiveness of the worker profiling initiative – a program 

designed to determine UI claimants most likely to exhaust their benefits and refer them to reemployment services

– in terms of its implementation and its effect on duration of unemployment. 

Major Findings: 

1) The broad guidelines established by DOL for States on the design and maintenance of profiling models have 

been inadequate. 

2) Many States’ profiling models are outdated; many models may have lost predictive accuracy, resulting in 

inappropriate referrals to employment services or missing the opportunity to make an appropriate referral. 

3) National data on worker profiling are of limited usefulness. 

Recommendations: 

1) ETA needs to take a more active role to ensure the accuracy of the State profiling models. 

2) Evaluate the impact of the worker-profiling program on the reemployment of UI recipients to ensure the benefits 

are commensurate with the resources invested. 

Performance Goal 07-4A

Net Costs ($Millions)

34,243 33,240 34,697

0

10,000

20,000

30,000

40,000

50,000

2005 2006 2007

Fiscal Year
Strategic Goal 4 

FY 2007 Performance and Accountability Report 147 

Actions Taken and Remaining: 

1) DOL is developing training for State staff in evaluation of profiling data and will market its technical assistance in 

profiling model use/improvement more aggressively to States. 

2) DOL will consider, if resources permit, an evaluation of the impact of the worker-profiling initiative. 

Additional Information: Report No. GAO-07-680 is available at http://www.gao.gov/new.items/d07680.pdf. 

“Worker Profiling And Reemployment Services: Evaluation of State Worker Profiling Models,” March 2007 

(Coffey Communications) 

Purpose: To evaluate how well existing State worker profiling models predict UI benefit exhaustion and identify 

best practices for designing, operating, and maintaining such models. 

Major Findings: 

1) State profiling models are generally effective tools for targeting reemployment services, but their effectiveness 

varies. Those employing statistical models appear to be most effective.

2) Many States have not updated or revised their models since they were first developed in the late 1990s.

Recommendations: 

1) More effective statistical modeling methods are needed for building profiling models. 

2) States and DOL should employ statistical controls that take into account the services claimants have received 

when evaluating the effectiveness of profiling models.

Actions Taken and Remaining: DOL will contact States that have demonstrated poor model performance to offer 

technical assistance for updating or revising their models. The report’s recommendations will be used to further 

develop specific guidance to States on evaluating, improving and maintaining their profiling models.

Additional Information: The report is available at 

http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_resultDetails&pub_id=2346&mp=y

Data Quality and Major Management Challenges 

Data quality for this performance goal was rated Very Good. Strengths of the data include timeliness and 

reliability, which result from the use of consistent data collection and reporting methods. Quality controls and 

procedures for verifying program data could be strengthened to reduce instances of overpayment and worker 

misclassification by assuring that definitions are uniformly applied among the States and that performance 

data are correctly reported. ETA is implementing an updated automated validation system. 

Reducing improper payments and improving the integrity and solvency of the UI program remain among the 

Department’s top management challenges (see item IV, Safeguarding Unemployment Insurance, in the Major 

Management Challenges section of Management’s Discussion and Analysis). ETA is aggressively addressing 

the two leading causes of overpayments - individuals who claim benefits after returning to work and issues 

involving separation from work – by promoting use of the NDNH and sponsoring related training (for 400 

State adjudication staff by the end of FY 2008). To improve the accuracy of the overpayment detection 

measure, all States are required to cross-match Benefit Accuracy Measurement System audits with NDNH 

data by no later than January 2008. Unemployment Trust Fund solvency has improved; as of July 2007, no 

State had an outstanding loan from the Federal UI Trust Fund. Most States’ Trust Fund accounts had a 

positive cash flow over the last 12 months, and overall Trust Fund balances are projected to be at least 15 

percent higher than in 2006. 
Performance Section 

148 United States Department of Labor 

Reduce the Consequences of Work-Related Injuries 

 

Performance Goal 07-4B (ESA) – FY 2007 

Reduce the consequences of work-related injuries. 

Indicators, Targets and Results 

*Indicator target reached (Y), improved (I), or not 

reached (N) 

**Estimated 

Some indicators not shown for FY 2002-06 – see 

Legacy Data note below 

FY 2002

Goal Not 

Achieved

FY 2003

Goal 

Substantially

Achieved

FY 2004

Goal 

Substantially

Achieved

FY 2005 

Goal 

Substantially

Achieved 

FY 2006

Goal 

Achieved

FY 2007

Goal 

Substantially 

Achieved

Target 115 130 146 148 146 129.8 

Result 131 143 147 135 142 135.7** 

* N N N Y Y I 

Lost production days rate (per 100 

employees) for Federal Employees’ 

Compensation Act (FECA) cases of the 

United States Postal Service 

Cost — — — — $7 $7 

Target 55 54.7 55.4 61 60 49 

Result 54 55 61.9 56 52.2 44.9** 

* Y N N Y Y Y 

Lost production days rate (per 100 

employees) for FECA cases of All Other 

Government Agencies 

Cost — — — — $7 $7 

Target $19 $20 $18 $17 $13 $8 

Result $26 $25 $24 $23 $16 $17.1 

* Y Y Y Y Y Y 

Savings resulting from Periodic Roll 

Management case evaluations ($million) 

Cost — — — — $20 $34 

Target — +9.1% +8.8% +8.8% +8.7% +8.5% 

Result — -2.8% +2.4% +2.8% +6.3% +7.2% 

* — Y Y Y Y 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 

Cost — — — — $22 $39 

Target — baseline 3 3 4 4 

Result — 5 4 3 4 4 

* — Y Y Y Y Y 

Targets for five communications 

performance areas 

Cost — — — — $7 $12 

Target 242 279 273 245 250 248 

Result 285 266 247 254 235 230 

* N Y Y N Y Y 

Average days required to resolve 

disputed issues in Longshore and Harbor 

Worker’s Compensation Program 

contested cases 

Cost — — — — $6 $6 

Target — — — — — 247 

Result — — — — — 224 

* — — — — — Y 

Average number of days to render a 

decision on a claim for Black Lung 

benefits 

Cost — — — — $24 $26 

Target — — — — — baseline

Result — — — — — 252 

Average number of days to process initial 

claims for Energy Employees 

Occupational Illness benefits Cost — — — — $155 $185 
Strategic Goal 4 

FY 2007 Performance and Accountability Report 149 

Indicators, Targets and Results 

*Indicator target reached (Y), improved (I), or not 

reached (N) 

**Estimated 

Some indicators not shown for FY 2002-06 – see 

Legacy Data note below 

FY 2002

Goal Not 

Achieved

FY 2003

Goal 

Substantially

Achieved

FY 2004

Goal 

Substantially

Achieved

FY 2005 

Goal 

Substantially

Achieved 

FY 2006

Goal 

Achieved

FY 2007

Goal 

Substantially 

Achieved

Target — — — — 80% 85% 

Result — — — — 89% 87.5% 

* — — — — Y Y 

Percent of Final Decisions in the Part B 

and Part E Energy Program processed 

within 180 days (hearing cases) or 75 

days (all other cases) Cost — — — — $16 $18 

Target — — — — 75% 100% 

Result — — — — 85% 100% 

* — — — — Y Y 

Percent of Part E claims backlog 

receiving initial decisions 

Cost — — — — — —

Goal Net Cost (millions) — — — $6,131 $2,130 $3,554 

Source(s): FECA Integrated Federal Employees’ Compensation System; Federal agency payroll offices; Office of 

Personnel Management employment statistics; FECA Central Medical Bill Processing system; Milliman USA 

Cost Index Report; FECA Tele-communications system standard reports; FECA district office and national MIS 

reports; Longshore Case Management System; Black Lung Automated Support Package; and Energy Program 

Case Management System. 

Legacy Data: Complete indicators, targets and results for FY 2002-06 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goal 06-2.2B. 

Note: Goal Net Cost includes DOL/OWCP program administration, Black Lung Trust Fund interest payments, and 

OWCP disability benefits. Individual indicator costs include only direct administrative costs for the workload 

outputs measured for the indicator results. FY 2006 costs, but not performance data, are shown for the Black 

Lung and Energy program initial claims indicators because they are only slightly different measures of the same 

processes. 

 

Program Perspective and Logic 

DOL protects workers, their dependents and survivors from the economic effects of work-related 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 Act (FECA) program 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. 

Activities of the Employment Standards Administration’s Office of Workers' Compensation Programs (OWCP) 

emphasize adjudicating claims and paying benefits accurately and timely, efficiently mediating disputed 

claims, assisting with injury recovery and return to work, controlling costs, providing responsive informational 

and other assistance to customers, and assisting employers with regulatory compliance and program 

administration. OWCP examines the relationships among investments, activities and program results to 

allocate funds to achieve program goals. 

Ten performance indicators measure the outcomes of key OWCP strategies and program priorities. Lost 

production rates determine the effectiveness of FECA’s case management. Periodic Roll Management 

generates benefit cost savings through the careful review of cases to determine if continued disability status 

is warranted and to determine the reemployment potential of those currently receiving compensation. FECA 

also measures medical benefit cost containment in order to maintain financial integrity. Communications 

goals promote improved customer services by increasing accessibility, quality, and responsiveness. By 
Performance Section 

150 United States Department of Labor 

reducing the average processing time for disputed claims, Longshore contributes to its chief outcome of 

resolving claims appropriately and equitably at minimum cost to all parties. The Black Lung program 

measures average time to render claims decisions and its efficiency in producing quality decisions. 

Prioritizing claims processing accuracy and timeliness, and reduction of the backlog of cases inherited from 

the Department of Energy have improved the efficiency of the EEOIC program. 

Several external factors challenge the achievement of the OWCP program mission. The number and type of 

jobs available are driven by employment and business technology trends. These trends determine the 

availability of jobs and their skill requirements for injured workers trying to return to duty. Changes in the 

physical demands and exposures associated with today’s jobs are changing the nature of new injury cases 

and the type of assistance they require. The cost of medical care continues to rise with the expanded use of 

new technology, medicines and treatment procedures. The nation’s expanded use of private contractor 

resources to support the wars in Iraq and Afghanistan has accelerated the number of deaths and injuries 

compensable under the Defense Base Act and the War Hazards Compensation Act. New technologies and 

higher customer expectations continue to challenge OWCP to provide greater information at higher access 

speeds. The EEOIC program structure mandates that certain cancer claims be transferred to the Department 

of Health and Human Services’ National Institute for Occupational Safety (NIOSH). Length of processing times 

in these cases impacts EEOIC program performance. 

 

Analysis and Future Plans 

In FY 2007, DOL substantially achieved this performance goal. The following discussion is organized into 

three categories: Return to Work, Containing Program Costs, and Customer Service. 

Returning Injured Employees to Work 

With more effective Quality Case Management, FECA reduced average lost production days as measured for 

first-year FECA wage-loss cases by five percent and increased the number of cases returned to work with 

nurse assistance by nearly one-third. This work, combined with continuing declines in new Federal injury 

cases, enabled FECA to reach its lost production days (LPD) target for all other government agencies 

(excluding the U.S. Postal Service (USPS)). However, the lost production days target for the USPS was not 

reached after two successful years of meeting that goal. The number of USPS claims remained constant from 

the prior year while opportunities for reemployment to light duty in that agency decreased, particularly as 

more job functions are automated. As a result, DOL is examining strategies targeted to the USPS claimant 

population through its case management and vocational rehabilitation activities. 

The Administration also has proposed legislation to reform and update the FECA program, which would build 

return-to-work incentives into the Federal Employees’ Compensation Act. The enhanced Act would contribute 

to FECA’s effectiveness as a leader in the field, particularly with initiatives such as Safety, Health and Returnto-Employment (SHARE). In 2006, President Bush extended the SHARE initiative for three years. Originally 

launched in 2004 and scheduled to run for three years, SHARE has helped the Federal government make 

great strides in reducing injury and illness case and lost production day rates, and substantially improve timely 

filing of injury and illness notices. The Secretary of Labor leads the SHARE initiative and measures the 

performance of each Federal department and agency against the goals. In FY 2006, President Bush extended 

the SHARE initiative for three years. 

Containing Program Costs 

Measured in financial terms, DOL workers’ compensation outcomes reflect the efficiency and quality of 

benefit payment activities and the impact of case management and benefit services. DOL reached its FY 

2007 Periodic Roll Management (PRM) savings goal of $17 million through directed review of long-term 

disability cases. Through PRM, DOL has saved over $1 billion since FY 1999. DOL’s goal for medical costs 

was also reached as costs were contained below the national rate of health care inflation, as measured by the 

Milliman USA Health Cost Index. In the past year, average FECA medical treatment costs rose by 7.2 percent 

compared to a projected 8.5 percent for the Nation’s average. FECA effectively manages cost through 

centralized bill processing, strengthened reviews of treatment authorization requests, fee schedules, and 

stronger automated edits and other controls. Since FY 2000, the growth rate for FECA medical costs has 

remained below the nationwide rate, resulting in nearly $31 million savings annually. 
Strategic Goal 4 

FY 2007 Performance and Accountability Report 151 

Customer Service 

DOL continued to improve communications service levels in the FECA program by reducing average caller hold 

times, resolving more inquiries at the time of the call, reducing the average time to return calls, and meeting 

call handling quality standards. The Longshore program has met its ambitious target to timely resolve 

disputed issues in contested cases four of the last five years, reducing the number of days to resolution by 

over 15 percent during that time. The Longshore program attributes this success to its commitment to 

ensuring timely and amicable dispute resolutions in contested cases through effective mediation. Longshore 

will continue conducting outreach and working closely with parties to contested cases in order to reach a 

timely resolution. 

OWCP exceeded the goal to reduce average processing time to render decisions on Black Lung benefits 

claims. Black Lung consistently outperforms its targets; therefore, in FY 2008 a refined measure will capture 

new improvements in claims adjudication activities. 

 

The Black Lung offices in Parkersburg, WV and 

Columbus, OH participated in a Coal Miners’ Health Fair 

on April 27, 2007, in Martin’s Ferry, Ohio. The Health 

Fair was sponsored by the Respiratory and 

Occupational Lung Disease Clinic at East Ohio Regional 

Hospital, a clinic funded in part by the Department of 

Health and Human Services. Over 100 miners and 

family members from Ohio and West Virginia attended, 

and several DCMWC employees were on hand to assist 

claimants in filing their claims and to answer their 

questions about the claims process. This photo shows 

coal miner Leonard of Wheeling, WV being assisted 

with his claim by claims examiner Matthew of the 

Parkersburg office. Matthew is a Veteran and recently 

returned from a tour of duty in Iraq with the US Army. 

[Photo credit: DOL/ESA] 

Elimination of the case backlog inherited from the 

Department of Energy has been a major priority and challenge for the EEOIC program due to the complexity of 

additional covered exposures, illnesses, and benefit provisions under Part E, the section of the Act that covers 

these particular cases. EEOIC successfully reached 100 percent of initial decisions on Part E backlog claims. 

The program also established a baseline for processing initial decisions and achieved its target for processing 

final decisions on all claims. OWCP has made substantial progress on EEOIC wage-loss and impairment 

claims processing, continued its comprehensive quality review process, and is pursuing an outreach program 

to educate claimants and solicit their feedback on program services. 

A large proportion of the change in costs for this performance goal from FY 2005 to FY 2007 is due to 

actuarial liabilities incurred for benefits under the Energy Part E program, which Congress transferred to DOL 

from the Department of Energy. In FY 2005, Energy Part E assumed an initial $3.5 billion in benefit liabilities. 

In FY 2006, Part E liabilities were reduced by $500 million and in FY 2007 they increased by $500 million. 

Consequently, costs in FY 2007 compared to FY 2006 were higher by $1 billion. The remainder of the rise in 

costs consists primarily of a $300 million (7.3 percent) increase in OWCP benefit payments. 

PART, Program Evaluations and Audits 

As noted below, all OWCP divisions have been reviewed using the PART and are working on their respective 

improvement plans. The EEOIC Program underwent its first PART review in 2007 and received an Adequate 

rating. A recommendation was that OWCP work with the National Institute for Occupational Safety and 

Health to develop performance measures and report that performance against EEOIC goals. The assessment 

also advised that DOL conduct an independent, comprehensive evaluation of the program and improve 

coordination of the EEOIC program with State workers’ compensation systems. 
Performance Section 

152 United States Department of Labor 

The FECA Program received a PART rating of Moderately Effective in 2004. DOL worked with Congress on 

reforms to FECA to update the benefit structure, allow for the adoption of State best practices, and convert 

benefits for retirement-age individuals to a typical retirement level. OWCP implemented recommendations of 

an independent evaluation and identified best practices for early case intervention and improved return-towork assistance. The recently implemented electronic case management system will play an important role 

in supporting business process improvements that are sustainable and will result in increased efficiency. 

In 2003, the Black Lung Program received a rating of Moderately Effective. Entering its fourth year since the 

assessment, the Black Lung program has demonstrated significant progress on its PART improvement plan. 

An independent evaluation (see report outline below) provided recommendations for improving performance 

measurement, thereby addressing the need for an evaluation and more ambitious performance goals. The 

program will begin reporting on a cost index for its medical cost containment goal in 2008, a noteworthy 

addition for better managing cost as well as a goal of reducing the average time to make a claims decision. 

The purpose of the cost containment measure is to maintain Black Lung medical costs at or below a 

nationwide comparable trend, the National Health Expenditure published by the Centers for Medicare and 

Medicaid. 

The Longshore Program underwent its PART review in FY 2005 and was rated Adequate. The PART found 

consistent progress in achieving its performance goals, but a lack of comprehensive data to gauge the 

program’s effectiveness and efficiency. Recommendations included: Identifying needed reforms to 

strengthen the Longshore and Harbor Workers' Compensation Act (LHWCA), evaluating automated system 

alternatives for tracking employer and carrier benefit delivery services and to allow comparisons of Longshore 

to similar programs, and evaluating recent efforts to improve processes and controls in the program's 

disbursement system. An independent evaluation of the program’s effectiveness and efficiency will conclude 

at the end of FY 2007. DOL will then evaluate the recommendations, which will include possible 

improvements to the Longshore Case Management System. 

“OWCP Licensing and Confidentiality Procedures for Contract Nurses,” September 2006 (OIG) 

Purpose: This audit was conducted in response to a complaint from a former OWCP contract nurse whose 

allegations included noncompliance with nurse licensure policies and unnecessary access to confidential 

medical records. 

Major Findings: 

1) Consistent license verification can reduce OWCP’s risk of not timely identifying license restrictions or the failure 

to renew licenses. 

2) OWCP communications with claimants do not state the claimant’s level of responsibility for notifying medical 

providers regarding nurse access to medical information and claimants were not notified when contract nurses 

were no longer actively assigned to them. 

Recommendations: 

1) Establish and implement policies and procedures for verification of licenses to determine renewal and good 

standing at regular intervals for its contract nurses. 

2) Establish practices to clearly and consistently communicate with claimants delineating their responsibilities so 

that contract nurses do not have unnecessary access to confidential medical records. 

Actions Taken and Remaining: In January 2007, the OIG was provided a copy of the procedures implemented by 

OWCP to address both of the recommendations. There are no actions remaining. 

Additional Information: A copy of the report can be obtained at http://www.oig.dol.gov/public/reports/oa/2006/02-

06-207-04-431.pdf. 

“Report Relating to the Federal Employees’ Compensation Act Special Benefit Fund,” October 2006 (OIG) 

Purpose: This schedule has been prepared to report the actuarial liability, net intra-governmental accounts 

receivable, and benefit expense of the FECA Special Benefit Fund. 

Major Findings: The benefit expenses for the year ending September 30, 2006, was comprised of the following 

(dollars in thousands): 

a) Benefits paid for compensation = $1,814,705 

b) Benefits paid for medical benefits = $694,588 
Strategic Goal 4 

FY 2007 Performance and Accountability Report 153 

c) Change in accrued benefits = $(21,370) 

d) Change in actuarial liability = $(156,188) 

e) Total benefit expense = $2,331,735 

Recommendations: None made

Actions Taken and Remaining: Not applicable 

Additional Information: A copy of the report can be obtained at http://www.oig.dol.gov/public/reports/oa/2007/22-

07-002-04-431.pdf. 

“Findings and Recommendations Identified in an Audit of the Consolidated Financial Statements for the 

Year Ended September 30, 2006,” May 2007 (OIG) 

Purpose: The objective of the audit was to express an opinion on the fair presentation of DOL’s consolidated 

financial statements. 

Major Findings: 

1) Weaknesses noted in the change control process for a benefits system. 

2) Weaknesses noted in Federal Employees’ Compensation Act (FECA) accounting and financial reporting. 

3) Delinquent forms CA-1032, Request for Information on Earnings, Dual Benefits, Dependents and Third Party 

Settlement Form 

Recommendations: 

1) Coordinate efforts with the ESA to develop and/or enforce procedures and controls to address change control 

weaknesses. 

2) Develop and implement quarterly ESA procedures to adequately reconcile the FECA history databases to the 

charge-back reports. 

3) Utilize the PER screen within iFECS to track CA-1032 status and document their receipt and review using a 

system configuration or manual control. 

4) Require supervisory review of CE receipt and review of CA-1032 forms. 

Actions Taken and Remaining: 

1) The iFECS POA&M has been updated to include the change control weakness. Additionally, ESA has 

documented and implemented a standard process for requesting, reviewing, developing, testing, and approving 

changes to iFECS. 

2) OWCP’s management developed and implemented reconciliation procedures to ensure that there is no material 

difference between charge-back reports and the payment histories. The procedures were completed June 15, 

2007, in preparation for the reconciliation after the close of the charge-back year. The reconciliation was 

completed August 5, 2007. 

3) A bulletin requiring use of the PER was issued on 12/31/06. 

4) To accomplish appropriate review the program has maintained compliance with accountability reviews and other 

performance management tools. 

Additional Information: A copy of the report can be obtained at http://www.oig.dol.gov/public/reports/oa/2007/22-

07-001-13-001.pdf 

“Evaluation of the Efficiency and Effectiveness of the Black Lung Program,” June 12, 2007 

(ICF International) 

Purpose: To assess the efficiency and effectiveness of the program according to six performance measures and 

as compared to three other similar workers’ compensation programs. 

Major Findings: The program is operating at a high level of efficiency and effectiveness. 

Recommendations: 

1) Establish national program performance objectives. 

2) Strengthen and expand national program data collection and analysis. 

3) Consider implementing various procedural and process improvements. 

4) Develop a formal training process for staff and personnel planning. 

5) Conduct a customer and stakeholder satisfaction survey. 

Actions Taken and Remaining: 

1) The Black Lung Program has established national performance objectives for the appointment and monitoring of 

representative payees. In FY 2008 it will streamline and tighten its timeliness goals for claims adjudication. 

2) The Black Lung Program is expanding its data collection to include more information about accounts receivable 
Performance Section 

154 United States Department of Labor 

from coal mine operators, and is considering other ICF recommendations regarding data collection. 

3) The Black Lung Program has included ICF proposals during its accountability review process and will finalize this 

process early in FY 2008. 

4) The Black Lung Program will consider ICF’s recommendations concerning staff training and personnel planning 

in FY 2008 and beyond. 

5) The Black Lung Program plans to conduct customer satisfaction surveys of stakeholder segments in FY 2008. 

Additional Information: A copy of the complete report can be obtained from the Office of Workers’ Compensation 

Programs, Employment Standards Administration, U.S. Department of Labor, FPB N3464, 200 Constitution 

Avenue, NW, Washington, D.C. or by calling 202-693-0047. 

“Evaluation of DEEOIC’s Part B Cancer Claims Adjudication Process,” May 30, 2007 (ICF International) 

Purpose: To evaluate the Division of Energy Employees Occupational Illness Compensation (DEEOIC) 

adjudication process for cancer claims under Part B of the EEOICPA and compare its processes and certain 

identified impacts to adjudication of cancer claims in three other workers’ compensation programs. 

Major Findings: Research on comparison programs revealed substantial diversity of program structures and 

processes, performance measurement and reporting capabilities, types of performance data collected, and scale 

of cancer claims adjudication. Based on the careful consideration of these factors, it was determined that a direct 

comparison of the programs to DEEOIC would not result in meaningful conclusions; however, the research 

process did identify certain promising practices being used in other programs and reinforced the value of some 

of DEEOIC’s existing practices, as well as its performance monitoring infrastructure and systems. 

Recommendations: 

1) Consider process improvements and oversight mechanisms to enhance external partnerships 

2) Explore new dose reconstruction methodologies as a means to expedite the process 

3) Expand the use technology to streamline operations among District and National offices 

4) Develop long-term staff training 

Actions Taken and Remaining: 

1) DEEOIC plans to conduct a comprehensive program evaluation once pending GAO and OIG reports are 

completed. 

2) DEEOIC is working with NIOSH to establish the performance standards required under the PART evaluation. 

3) A Unified Energy Case Management System project is already expanding the use of technology among District 

and National Offices. 

4) OWCP is in the process of developing comprehensive training for staff. 

Additional Information: A copy of the complete report can be obtained from the Office of Workers’ Compensation 

Programs, Employment Standards Administration, U.S. Department of Labor, FPB C3321, 200 Constitution 

Avenue, NW, Washington, D.C. or by calling 202-693-0081. 

 

Data Quality and Major Management Challenges 

Data quality for this performance goal was rated Excellent, reflecting OWCP’s long history of managing 

workers’ compensation case record data and benefit payment histories. Performance measurement, also a 

long-standing fixture in OWCP, relies primarily upon data extracted from internal automated case 

management and benefit payment systems. Outside sources, including other Federal agencies and the 

nationally known research institute, Milliman USA, also provide performance data. OWCP maintains strict 

oversight of data entry into its internal systems, with regular on-site review by local managers and formal 

periodic reviews that check the quality of the claims data record. Other quality tools include extensive checks 

and edits built into Automated Data Processing system programming, second-tier certifications of claims and 

payment decisions, telephone call monitoring, and ongoing performance reviews by district management. 

Multiple OWCP analytical staff collaborate in the report production, data collection and results measurement 

processes. Performance results are reviewed frequently, in formal sessions, by OWCP management. 

OIG considers aspects of FECA program design and operation to be Departmental and government-wide major 

management challenges. DOL is spearheading efforts to make FECA more cost-effective through the SHARE 

initiative (see item V in the Major Management Challenges section of Management’s Discussion and 

Analysis). As noted earlier, the SHARE initiative has been extended for another three years to FY 2009. 

Coordinating with OSHA, FECA has updated the initiative’s government-wide goals, publicized the initiative’s 

objectives and sharpened agency participation, and continues to track agency performance. Complementing 
Strategic Goal 4 

FY 2007 Performance and Accountability Report 155 

administrative strategies that assist medical recovery and return to duty, DOL is seeking legislative reforms to 

the FECA benefit structure that will enhance incentives for injured employees to return to work, address 

benefit equity issues, discourage unsubstantiated claims, and make other improvements. Estimated cost 

savings of this reform to the government over 10 years is $608 million. 

With input from the Inspectors General community, DOL’s OIG developed a protocol for use by IGs across the 

government to reduce fraud and overpayments. The Employment Standards Administration has begun 

refining reconciliation procedures that address financial reporting for FECA. Research and design, initial 

testing, and system-wide program analysis have already been completed. 

FECA is classified by OIG as high-risk for improper payments and has recommended updating medical 

information for claimants to prevent payment to those who are no longer disabled. DOL has met its improper 

payments reduction and recovery targets for the FECA program. Using the Integrated Federal Employee 

Compensation System, tracking of due dates of medical evaluations was installed and new controls 

implemented to ensure that claims examiners obtain and review current medical evidence. 
Performance Section 

156 United States Department of Labor 

Union Financial Integrity and Transparency 

Performance Goal 07-4C (ESA) – FY 2007 

 

Ensure union financial integrity, democracy, and transparency. 

Indicators, Targets and Results

*Indicator target reached (Y), substantially reached (S), improved (I), or 

not reached (N) 

**Estimated 

Some indicators not shown for FY 2004-05 – see Legacy Data note 

below 

FY 2004

Goal 

Achieved

FY 2005 

Goal 

Substantially

Achieved 

FY 2006 

Goal Not 

Achieved

FY 2007

Goal 

Substantially

Achieved

Target baseline — 8% 7.5% 

Result 9% — 8% 7% 

* Y — Y Y 

Percent of unions with fraud 

Cost — — $18 $35 

Target — — Baseline 92.5% 

Result — — 92% 92.3% 

* — — Y I 

Percent of unions in compliance with LMRDA standards for 

democratic union officer elections 

Cost — — $11 $13 

Target 75% 95% 96% 97% 

Result 92% 94% 93% 95% 

* Y S N I 

Percent of union reports meeting standards of acceptability 

Cost — — $8 $16 

Goal Net Cost (millions) — $63 $56 $68 

Source(s): OLMS union compliance audit information and e.LORS data system 

Legacy Data: Complete indicators, targets and results for FY 2003-05 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goal 06-2.1B. 

Note: Costs for this goal are net costs as defined in a footnote to the Cost of Results discussion in Management’s 

Discussion and Analysis. 

Program Perspective and Logic 

The Employment Standards Administration’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). The LMRDA 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 and union 

audits, and administers the reporting and public disclosure program. 

Union transparency underpins the achievement of union democracy and financial integrity objectives and is 

measured by tracking the acceptability of union financial reports filed for public disclosure. An initial study 

indicated that approximately 73 percent of union reports met standards of acceptability in 2003. OLMS 

established aggressive goals for increasing transparency and, in 2007, the union compliance rate increased 

to over 95 percent. OLMS measures the effectiveness of its audits and embezzlement investigations by 

tracking indicators of fraud in unions. This is measured by auditing a random sampling of unions. In 2004, a 

study indicated that approximately nine percent of unions had indicators of fraud. OLMS studies have found 

that indicators of fraud have declined to seven percent in 2007. 
Strategic Goal 4 

FY 2007 Performance and Accountability Report 157 

Through compliance assistance and complaint-driven enforcement, OLMS ensures that union elections are 

run fairly and that union members have access to the rights guaranteed them under the LMRDA. In FY 2006, 

OLMS conducted a study to determine the rate of union compliance with standards for democratic union 

officer elections. The study found that unions were in compliance with 92 percent of critical LMRDA 

standards for democratic union officer elections. Measurement in 2007 indicates a slight increase in the 

compliance rate to 92.3 percent. 

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. 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 dedicates about 20 percent of its budget to investigating union 

member complaints of election misconduct and supervising union officer election reruns to assure 

compliance with LMRDA union democracy provisions. 

 

OLMS continues to promote increased electronic filing of union financial reports, which has improved 

reporting transparency and accuracy. While currently only the largest unions submit reports electronically, 

OLMS will seek increased use of electronic filing by all unions. In addition to promoting electronic filing, OLMS 

will also continue its outreach and compliance assistance programs to better inform union leaders and 

members as to the requirements of the LMRDA. 

 

Analysis and Future Plans 

OLMS substantially achieved its performance goal by improving results for two performance indicators and 

reaching one target. OLMS met its target, 7.5 percent, for the percentage of unions with indicators of fraud. 

Private sector research indicates that this rate of fraud is significantly lower than fraud in corporations, which 

is estimated at 10 percent. The ability to surpass current performance levels is unlikely. Consequently, OLMS 

plans to revise its measure to refocus on key financial integrity program areas that directly impact the 

program’s effectiveness. 

OLMS improved its prior year baseline result for the union democracy measure, but just missed the targeted 

92.5 percent. Under the LMRDA, OLMS responds to formal complaints filed by a union member regarding an 

election. As such, OLMS does not conduct targeted enforcement on elections. OLMS is exploring a revised 

measure that would better measure performance of its statutory role. 

OLMS fell short of its ambitious financial reporting target, but still improved upon prior year results. Since FY 

2003, union reports acceptable for public disclosure increased from 73 to 95 percent. As the targets near 

100 percent, OLMS intends to focus efforts on increasing the number of electronic filers, which would drive 

continuing improvements in LMRDA reporting compliance, provide more timely public disclosure of reports 

and improve agency efficiency in managing reports and public disclosure. 

OLMS has been able to leverage its use of technology, such as the implementation of electronic filing 

procedures, as well as its streamlined auditing procedures to improve its overall performance with available 

resources. OLMS is exploring indicators that will more closely link performance results to program 

improvements. OLMS believes that its performance measurement program can be used to identify greater 

resource efficiencies in its programs and as an outgrowth, more effectively protect union members’ assets (by 

more accurately targeting instances of fraud and embezzlement), and increase financial transparency (by 

making better use of technology to offer more accurate and timely financial reports to union members and 

other interested parties). 

Lastly, OLMS has initiated work on legislation to obtain civil monetary penalty authority. This legislation would 

place the agency on par with its worker protection counterparts at the Department and strengthen OLMS’ 

efforts in LMRDA reporting compliance. 
Performance Section 

158 United States Department of Labor 

OLMS net costs rose by 21 percent in FY 2007 

after dropping by 11 percent in FY 2006. 

OLMS attributes the increase to a rise in 

agency and Department level indirect costs 

that include audit services. In FY 2007, OLMS 

was able to assign 94 percent of net costs to 

performance indicators, up from 64 percent in 

FY 2006. Each indicator represents a major 

performance goal within OLMS, and as noted 

above, resources are budgeted across these 

three areas. 

 

PART, Program Evaluations and Audits 

OLMS underwent a PART review in 2005 and received a rating of Adequate. The assessment found the 

program well defined, but lacked sufficient tools to effectively enforce the LMRDA public disclosure reporting 

provisions and a performance measure for mission-critical union democracy goals. In response to PART 

recommendations, OLMS completed a study in FY 2006 to determine compliance with standards for 

democratic union officer elections and established a baseline and goals for an indicator measuring 

compliance with union officer election standards under the LMRDA. In 2007, OLMS continued reporting on 

this measure, but also examined alternative measures for union democracy, financial integrity, and 

transparency goals to achieve program improvements in support of its critical mission. The PART also found 

that no recent independent review of OLMS’ programs had been conducted, noting that such a review could 

help identify and address weaknesses in procedures, compliance and enforcement strategies, or program 

design. An independent evaluation will provide an assessment of the LMRDA reporting and public disclosure 

program and make recommendations for improvements. 

 

Data Quality and Major Management Challenges 

Data quality for this performance goal was rated Good. OLMS uses its Case Data System to track 

investigations and performance. The electronic reporting and disclosure database provides quick access to 

accurate and timely union financial data. Overall, strengths of this data include its relevance to program 

performance and accuracy. OLMS will continue refining data collection protocols to ensure the development 

of meaningful long-term trends for each of its performance indicators. OLMS acknowledges its sampling and 

collection protocols for the data underlying the fraud and democracy performance goals are not optimal. New 

performance measures are being explored that will rely on more robust data collection methods. OLMS will 

continue to promote the use of electronic filing for union financial reports that will enable additional error 

checking for data accuracy. 

Performance Goal 07-4C

Net Costs ($Millions)

63

56

68

0

20

40

60

80

2005 2006 2007

Fiscal Year
Strategic Goal 4 

FY 2007 Performance and Accountability Report 159 

Provide for Secure Pension and Health Plans

Performance Goal 07-4D (EBSA) – FY 2007 

Enhance pension and health benefit security. 

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not reached (N) 

Some indicators not shown for FY 2005-06 – see Legacy Data note below 

FY 2005 

Goal 

Achieved 

FY 2006

Goal 

Achieved

FY 2007

Goal 

Achieved

Target — — 48% 

Result — — 67% 

* — — Y 

Ratio of criminal cases accepted for prosecution to cases referred 

Cost — — $103 

Target — — 61% 

Result — — 69% 

Ratio of closed civil cases with corrected fiduciary violations to civil closed 

cases 

* — — Y 

Target — — baseline

Result — — 81.5 

Customer Satisfaction Index for employers, plan sponsors, employee 

representatives, trustees of multiemployer plans, and other plan 

professionals who have contacted EBSA for assistance Cost — — $29 

Target 8,340 13,500 13,838 

Result 14,082 17,214 20,123 

* Y Y Y 

Applications to Voluntary Compliance programs 

Cost — — —

Goal Net Cost (millions) $160 $179 $176 

Source(s): Enforcement Management System (EMS), Delinquent Filer Voluntary Compliance (DFVC) Tracking 

System, and The Gallup Organization/Technical Assistance and Inquiry System (TAIS) 

Legacy Data: Complete indicators, targets and results for FY 2003-06 are available in the FY 2006 report at 

http://www.dol.gov/_sec/media/reports/annual2006/PGD.htm. See Performance Goal 06-2.2C. 

Note: Costs for this goal are net costs as defined in a footnote to the Cost of Results discussion in Management’s 

Discussion and Analysis. The cost listed for the first indicator also includes the costs associated with the civil 

ratio measures. Costs are not allocated to the indicator level for the civil and criminal ratio measures because 

these programs are not separable into individual costs. 

Program Perspective and Logic 

The Department’s Employee Benefits Security Administration (EBSA) is responsible for assuring compliance 

with the Employee Retirement Income Security Act (ERISA). EBSA’s activities are essential to maintaining the 

public’s trust and confidence in the employee benefits system. By achieving successful civil and criminal case 

closure and acceptance rates, DOL demonstrates its success in identifying and pursuing wrongdoers. By 

providing outreach and education and directly assisting plan participants, beneficiaries, employers and plan 

officials in understanding their rights and responsibilities under the law, DOL helps ensure workers’ and 

retirees’ benefits are protected. 

EBSA oversees benefit security for nearly 3.2 million private sector pension and health plans, and similar 

numbers of other welfare benefit plans, such as those providing life or disability insurance. The benefit plans 

under EBSA’s jurisdiction cover approximately 150 million participants and beneficiaries, and in excess of 

$5.6 trillion in assets. External factors, such as the economy and tax policy, have a significant impact on 
Performance Section 

160 United States Department of Labor 

whether employers opt to offer benefits, and whether employees choose to participate in benefit plans and to 

what extent. 

 

After receiving a participant complaint, the Department investigated an Independence, Missouri, truck servicing 

company. The investigation revealed that over a period of three and a half years, the company withheld approximately 

$36,500 from 17 employees’ paychecks which was intended to be deposited into the company’s 401(k) plan. Instead, 

the money was used to fund the business in violation of the law. As a result of the Department’s investigation, the 

company’s owner was charged with embezzling from an employee benefit plan. The owner pled guilty, was sentenced to 

five years’ probation, and made restitution to the plan -- including lost earnings. 

 

Analysis and Future Plans 

For the first time in FY 2007, EBSA performed under more rigorous enforcement performance indicators as 

reflected in the Department’s Strategic Plan. EBSA achieved its performance target of the ratio of closed civil 

cases with corrected fiduciary violations to closed civil cases -- a more challenging measure than the previous 

performance indicator which included the correction of lower priority non-fiduciary violations. With respect to 

criminal case work, EBSA achieved its target to report cases accepted for prosecution rather than the less 

ambitious measurement of cases referred for litigation. 

In addition to tracking long-term targets for civil and criminal ratios, EBSA monitored annual targets to 

evaluate the success of five national enforcement initiatives (see table below). These initiatives are part of 

the civil cases measurement and may change from year-to-year as the agency satisfies its commitments and 

assumes new priorities. This year, EBSA eliminated its Orphan Plan Project because it fulfilled its goal of 

establishing an efficient framework for the completion and distribution of abandoned plan benefits to 

workers. EBSA replaced this indicator with the new Consultant Advisor Project ratio, which includes a 

relatively small number of carefully targeted cases. EBSA opened several cases this year, but only completed 

one, an insufficient number to establish a baseline. The agency will establish a baseline in FY 2008 to the 

extent sufficient investigations are closed. The Employee Stock-Ownership Plans (ESOP) project target 

remained elusive for a second year. EBSA is reviewing the ESOP target and strategies in an effort to improve 

its performance. 

 

Target 77% Employee Contribution Project ratio

Result 82% 

Target 58% Employee Stock-Ownership Plans ratio 

Result 51% 

Target 55% Multiple Employer Welfare Arrangements ratio 

Result 55% 

Target 48% Rapid ERISA Action Team ratio 

Result 69% 

Target baseline Consultant/Advisor Project (CAP) ratio 

Result NA 

EBSA reached its customer service and voluntary compliance targets. In FY 2007, DOL obtained monetary 

results of approximately $1.5 billion. Monetary results are a product of EBSA's investigative, compliance and 

participant assistance activities. This year, Benefit Advisors continued to provide superior participant 

assistance as they responded to 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. 

EBSA began work with The Gallup Organization to launch its compliance assistance customer service 

satisfaction index evaluation, modeled after the highly successful participant assistance evaluation conducted 

between 2003 and 2006. EBSA achieved its performance target for customer service in its participant 

assistance program two years early. With respect to customer service performance for its compliance 

assistance programs, EBSA achieved a highly regarded score of 81.5. The Gallup Organization has deemed 
Strategic Goal 4 

FY 2007 Performance and Accountability Report 161 

certain aspects of the agency’s customer service program as World Class, a designation reserved for only the 

highest performing organizations – demonstrating that EBSA balances its performance goals with providing 

quality service to its customers. EBSA continued to monitor its compliance assistance measure that 

demonstrates success in voluntary compliance programs, such as the Voluntary Fiduciary Correction Program 

and the Delinquent Filer Voluntary Compliance Program. To meet the demands of a rapidly changing and 

complex employee benefits environment, EBSA will deter and correct violations of relevant statutes, facilitate 

compliance assistance by plan sponsors, plan officials, providers of services to benefit plans, and other 

members of the regulated community; and assist workers in understanding their rights and responsibilities via 

aggressive, grassroots outreach and education next year.

A self-funded health plan was not paying its participants’ claims. One of the participants called the Department and 

explained that she was unable to receive additional medical treatment because her health care provider refused to 

provide any further services without payment of the outstanding claims. A Benefits Advisor contacted the plan and 

discovered that many more participants were similarly affected, and that the plan had over $200,000 in delinquent 

claims. As a result of this single complaint and the Department’s efforts, $221,713 in outstanding medical claims were 

paid, enabling the participant who called to resume her treatments and assisting dozens more participants. 

The two percent decrease in net cost of this performance goal between FY 2006 and FY 2007 reflects 

changes in DOL support agency and overhead expenses. 

To protect workers and retirees and to encourage continued sponsorship of pension plans, the President 

signed the Pension Protection Act (PPA) in FY 2006. EBSA has the primary responsibility for developing more 

than two dozen regulations to implement the PPA and began reallocating resources in FY 2007 to meet the 

demanding work schedule. 

 

PART, Program Evaluations and Audits 

EBSA underwent a PART review in 2004 and received a rating of Moderately Effective. EBSA conducted 

evaluations and regulatory reviews in response to PART recommendations. DOL contracted with Gallup to 

evaluate EBSA's participant assistance program. EBSA received detailed performance information that 

helped to improve its customer satisfaction score. With Gallup's assistance, EBSA also conducted targeted 

training to address employee weaknesses and share best practices. Finally, field offices implemented plans 

to improve their customer satisfaction scores. In FY 2006, Gallup conducted a follow-up study of EBSA's 

participant assistance program. EBSA ended its four-year study with a 69 percent satisfaction rate, up from 

its baseline year of 53 percent. 

With respect to the regulatory review program, ICF is conducting a cost benefit analysis of selected 

regulations. Given the complex nature of regulatory reviews, EBSA will more fully report the results of this 

effort next year. Preliminary results indicate that EBSA is publishing regulations where benefits outweigh 

costs. In late FY 2007, EBSA launched a performance improvement analysis by Gallup of its participant 

assistance program in one field office. The analysis will provide insight and specific management advice 

aimed at program improvement. 

The GAO concluded a review of EBSA’s enforcement program in FY 2007. The GAO commended EBSA for 

addressing recommendations made in their FY 2002 review. EBSA will work with the GAO in implementing 

new recommendations, including their recommendation to assess the nature and extent of ERISA 

noncompliance. 

 

“Office of Participant Assistance Program Evaluation Studies,” December 2006 (The Gallup Organization)

Purpose: To provide information enabling EBSA to address program performance issues to the greatest extent 

possible and thus improving the interaction customers have directly with EBSA representatives. 

Major Findings: Participant Assistance Customer Satisfaction Surveys: 

1) EBSA achieved a customer satisfaction score of 69 percent (percentage rating 4 or 5 on a 5-point scale). 

2) Individual employee performance drives the customer service experience. 

3) Surveys suggest that 57 percent of respondents indicated EBSA performs better than other agencies and 50 
Performance Section 

162 United States Department of Labor 

percent stated that EBSA performed better than private sector businesses. 

Recommendations: 

1) Use study results to maintain achievements in the absence of further participant assistance studies. 

2) Rely on best and brightest Benefit Advisors (BA) for Customer Satisfaction tips in training new BAs. 

3) Share the Agency’s success publicly to create a sense of pride among the staff that achieved the success. 

Actions Taken and Remaining: None outstanding 

1) EBSA institutionalized BA meetings to refine and update plans for improving their office’s performance based on 

the Gallup evaluations.

2) EBSA holds its executive leadership accountable for achieving the agency’s customer satisfaction goals.

3) Customer Service training is now a regular part of the Basic Training Program for new BAs. 

Additional Information: A copy of this report 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. 

“Enforcement Improvements Made but Additional Actions Could Further Enhance Pension Plan Oversight,”

January 2007 (GAO) 

Purpose: Report GAO-07-22 follows up on a 2002 GAO review, in which the GAO reported that EBSA 

strengthened its enforcement program and is a well managed organization, but improvements could be made. 

Major Findings: Since the last GAO review: 

1) EBSA made several improvements to coordinate regional investigations, to increase participation in its voluntary 

correction programs, and to recruit investigators with advanced skills. 

2) EBSA has not adequately assessed the nature and extent of ERISA noncompliance. 

3) EBSA has taken limited steps to evaluate the effect staff attrition rates have on its operations. GAO also 

concluded that certain statutory obstacles limit EBSA’s oversight of private sector pension plans. 

Recommendations: 

1) Evaluate the extent to which EBSA could supplement its current enforcement practices with strategies used by 

similar enforcement agencies. 

2) Conduct a formal review to determine the effect ERISA’s statutory filing deadlines have on investigators’ access 

to timely information. 

3) Evaluate the factors affecting staff attrition. 

Actions Taken and Remaining: 

1) EBSA will follow the assessment of the IRS noncompliance program next year and will analyze its applicability to 

EBSA. With respect to risk assessment, EBSA’s national and regional projects accomplish the spirit of GAO’s 

recommendation. 

2) EBSA will review a sample of cases opened based on an analysis of Form 5500 information beginning in FY 

2007. 

3) EBSA revised its employee exit survey to better identify effective retention strategies. 

Additional Information: A copy of report no. GAO-07-22 is available at http://www.gao.gov/new.items/d0722.pdf. 

“Regulatory Review for the Employee Benefits Security Administration,” December 2007 (ICF International)

Purpose: To guide and inform the regulatory decision-making process through regulatory analysis, EBSA is 

obligated under E.O. 12866 to conduct cost and benefit analyses of “economically significant” regulations. 

Major Findings: 

1) EBSA appropriately attempts to minimize the economic cost of regulation and preserve opportunity for industry 

innovation and competition. 

2) EBSA’s process for regulatory analysis is collaborative and collegial, but could benefit from more explicit routing 

plans and schedules. 

3) There are advantages and disadvantages to rules being written concurrently with the regulatory analysis. More 

upfront analysis supports a better informed evaluation of alternatives, but requires a greater level of effort. 

4) ICF reviewed the Reasonable Contract or Arrangement Under Section 408(b)(2) – Fee Disclosure Regulation 

and concluded that the benefits of the proposed regulation and class exemption will outweigh the anticipated 

costs of compliance. 

Recommendations: 

1) Continue conducting analysis as part of a separate regulatory analysis team as EBSA currently does, rather than 

having rulemaking and the regulatory analysis done by the same program. 
Strategic Goal 4 

FY 2007 Performance and Accountability Report 163 

2) Ensure all necessary staff are involved early in the process and all parties communicate regularly. 

3) Continue planning regulatory evaluations using the regulatory review process. 

Actions Taken and Remaining: 

1) EBSA will consider ways to facilitate the regulation making process and to use resources in the most efficient 

manner. 

2) EBSA will evaluate the appropriate skills of employees working on regulatory impact analyses and team 

organization. 

3) ICF will conduct a regulatory analysis of ERISA section 105(a) (Periodic Pension Benefit Statements) and 

existing Field Assistance Bulletin 2006-03 to complete their activities. 

4) ICF will conduct reviews of selected regulations in FY 2008. 

Additional Information: A copy of this report can be obtained from the Employee Benefits Security Administration, 

200 Constitution Avenue, N.W., Room N-5718, Washington, DC 20210; or by calling 202-693-8417.

Data Quality and Major Management Challenges 

Data quality for this performance goal was rated Excellent. Strengths of the data include its timeliness and 

reliability. EBSA's Enforcement Management System (EMS) provides the data for the enforcement ratios. 

EBSA's quality assurance processes require that individuals not directly involved with the investigation at hand 

approve all case openings. Cases with monetary results receive several levels of scrutiny, including national 

office oversight and review. Additionally, EBSA uses a peer review method to conduct quality assurance of 

randomly selected closed cases. In the customer satisfaction area, Gallup provided the performance data. 

The Voluntary Fiduciary Correction Program data is maintained in the EMS and the Delinquent Filer Voluntary 

Compliance Program tracking system. 

EBSA has one Major Management Challenge (MMC): Ensuring the Security of Employee Benefit Plan Assets

(item III in the MMC section of Management’s Discussion and Analysis). The specific areas of concern include 

benefit plan audits, benefit plan fraud, and corrupt multiple employer welfare arrangements. Because the 

risks associated with this challenge go to the heart of EBSA’s goal to secure pension and health plans, EBSA 

has taken specific actions to address this challenge, including strengthening benefit plan audits through 

increased oversight of accounting firms, meeting ambitious targets for civil and criminal cases, and vigorously 

pursuing fraudulent Multiple Employer Welfare Arrangements. 
Performance Section 

164 United States Department of Labor 

Improving Pension Insurance

 

Performance Goal 07-4E (PBGC) – FY 2007 

Improve the pension insurance program. 

Indicators, Targets and Results 

*Indicator target reached (Y), improved (I), or not reached (N) 

FY 2004

Goal Not 

Achieved

FY 2005 

Goal Not 

Achieved 

FY 2006

Goal Not 

Achieved

FY 2007 

Goal 

Substantially 

Achieved

Target — — — 50% 

Result — — — 100% 

Implement premium reforms in the Pension Protection Act of 2006 

and Deficit Reduction Action of 2005: Issue Proposed Regulation 

for Variable Rate Premium (PPA) * — — — Y 

Target — — — 50% 

Result — — — 100% 

Implement premium reforms in the Pension Protection Act of 2006 

and Deficit Reduction Action of 2005: Issue Proposed Regulation 

for Flat Rate Premium Increase (DRA) * — — — Y 

Target — — — 50% 

Result — — — 100% 

Implement premium reforms in the Pension Protection Act of 2006 

and Deficit Reduction Action of 2005: Issue Proposed Regulation 

for Termination Premium (both) * — — — Y 

Target 71 72 74 68 

Customer Satisfaction score for premium filers Result 69 68 68 70 

* N N N Y 

Target 77 78 80 80 

Customer Satisfaction score for trusteed plan participant callers Result 78 79 75 78 

* Y Y N I 

Target — 84 84 85 

Result — 85 85 88 Customer Satisfaction score for retirees receiving benefits from 

PBGC 

* — Y Y Y 

Source(s): American Customer Satisfaction Index (ACSI) and Federal Register. 

Note: Costs are not provided because PBGC is not included in the Consolidated Statement of Net Costs. However, 

in accordance with the requirements of the Government Performance and Results Act (GPRA), PBGC’s 

performance reporting is included in this report because PBGC’s performance goals are included in the 

Department’s performance budget. 

 

Program Perspective and Logic

PBGC operates under the guidance of its Board of Directors, which consists of the Secretaries of Labor, 

Commerce and the Treasury. The Secretary of Labor chairs the Pension Benefit Guaranty Corporation 

(PBGC)’s Board of Directors. PBGC protects the retirement incomes of 44 million American workers in over 

30,000 defined benefit pension plans. Defined benefit plans provide specified monthly benefits at retirement, 

often based on a combination of salary and years of service. PBGC safeguards the pension insurance 

program and provides exceptional service to its customers, while it exercises effective stewardship over its 

resources. 

PBGC receives no funds from tax revenues. Operations are financed by insurance premiums set by Congress 

and paid by sponsors of defined benefit plans, investment income, assets from pension plans trusteed or 
Strategic Goal 4 

FY 2007 Performance and Accountability Report 165 

insured by PBGC, and recoveries from the companies formerly responsible for the plans. Approximately 75 

percent of funds are allocated to participant activities, while 25 percent are used for plan sponsor and 

pension practitioner activities. PBGC’s operating budget was $386 million in FY 2006 and $399 million in FY 

2007. It is responsible for the current and future pensions of about 1.3 million people, including those who 

have not yet retired and participants in multi-employer plans receiving financial assistance. 

PBGC monitors its progress in meeting participant, premium filer, and stakeholder needs and expectations by 

using the American Customer Satisfaction Index (ACSI) survey methodology, which provides comparisons to 

both private businesses and the Federal government. PBGC uses customer feedback to make targeted 

improvements to processes and services directly impacting its customers. 

The Deficit Reduction Action (DRA) and the Pension Protection Act (PPA), both enacted in 2006, included 

amendments to the Employee Retirement Income Security Act. These provisions included new plan funding 

rules and provisions for pension plan transparency, and reforms to the premium structure for defined benefit 

plans. On February 20, 2007 PBGC issued proposed regulations to implement provisions of the PPA and the 

DRA that change the flat premium rate, cap the variable-rate premium, and create a new termination 

premium. On May 21, 2007 PBGC also issued proposed regulations that change the variable-rate premium 

for the plan years beginning on or after January 1, 2008. PBGC has met this indicator for FY 2007.

Analysis and Future Plans

Practitioner Performance Indicators: PBGC’s customer satisfaction index for premium filers increased from 

68 to 70 in 2007, the highest 

score since the survey began 

in 2002. The increase is 

primarily due to improved 

customer perceptions of 

PBGC’s viability and the 

health of the defined benefit 

pension insurance system. 

In 2008, PBGC will focus on 

its new Premium and 

Practitioner System (which is 

expected to improve 

timeliness and accuracy of 

service to practitioners), and 

implementing mandatory 

electronic premium filing and 

PPA provisions. PBGC also 

aims to maintain quality 

service during the transition. 

Participant Performance Indicators: The 2007 survey of retirees receiving monthly pension benefits from 

PBGC showed a high level of satisfaction with PBGC service. Using the ACSI, PBGC scored 88 from retirees 

receiving benefits, representing a three point increase from 2006. Preliminary analysis of customer 

responses show that the highest scoring components driving customer satisfaction are receipt of benefits at a 

regular time each month and efficiency of the benefit payment process. PBGC attributes this success to its 

exceptional customer service and expansion of online services available to retirees. The 2007 ACSI survey of 

participant callers showed an improvement of three points, from 75 to 78 percent. Participants scored PBGC 

higher in responsiveness and accuracy of concern resolution, timeliness of issuing benefit estimates, and 

ability to meet expectations. In 2008, PBGC will begin restructuring its service delivery model. While the 

change is expected to result in performance-based contracting and more streamlined processing in the longer 

term, PBGC will strive to maintain the current levels of satisfaction throughout the transition period.

Customer Satisfaction

65

70

75

80

85

90

2002 2003 2004 2005 2006 2007

Retiree Target

Retiree Result

Participant Target

Participant Result

Premium Target

Premium Result
Performance Section 

166 United States Department of Labor 

Improving Efficiency 

PBGC’s administrative costs per participant dropped 25 percent from 2000 to 2006 and decreased 14 

percent in 2007 for pension plans it has assumed. Continuous technological upgrades enable PBGC to 

provide better and faster service to participants. 

PART, Program Evaluations and Audits 

PBGC underwent a PART review in 2007 and received a rating of Moderately Effective. PBGC is now focusing 

on implementing a comprehensive approach to improving information technology and infrastructure security, 

and using performance information to better manage the program and improve performance. 

PBGC continues to be included in the Government Accountability Office’s list of High Risk Federal Programs 

because of “its large deficit and the uncertainty of the future of the defined benefit system.” A summary of 

the GAO reports follows: 

“High Risk Series: An Update,” January 2007 (GAO) 

Purpose: In Report No. GAO-07-310, GAO updated its 2005 list of high risk areas warranting attention by 

Congress and the executive branch. With the passage of the Pension Protection Act (PPA) of 2006 that 

included major pension reforms, PBGC still remains high risk. 

Major Findings: PPA’s overall impact on the single employer program’s deficit remains unclear. Also, PPA did not 

fully close potential funding gaps and provided funding relief to plan sponsor in troubled industries. Furthermore, 

PPA is unlikely to reverse the long-term decline in defined benefit system or help PBGC make up its current 

deficit. 

Recommendations: Carefully monitor the effects of PPA on PBGC and defined benefit plans, and consider taking 

additional action to safeguard the private pension system’s role in national security. 

Actions Taken and Remaining: PBGC made significant progress in implementing provisions of the Pension 

Protection Act (PPA ) of 2006 and the Deficit Reduction Action (DRA) of 2005. In February 2007, PBGC issued 

proposed regulations to implement provisions of PPA and DRA that change the flat premium rate, cap the 

variable-rate premium and create a new termination premium. In May 2007, PBGC issued proposed regulations 

that change the variable-rate premium for the plan years beginning on or after January 1, 2008. 

Additional Information: GAO-07-310 is available at http://www.gao.gov/new.items/d07310.pdf.

“Defined Benefit Pensions: Conflicts of Interest Involving High Risk or Terminated Plans Pose 

Enforcement Challenges,” June 2007 (GAO) 

Purpose: GAO report no. GAO-07-703 assessed conflicts of interest affecting private-sector defined benefit 

pension plans and the procedures Federal agencies employ to identify and recover losses from conflicts. 

Major Findings: Without a detailed audit, GAO could not conclude that specific financial harm was caused by 

conflicts of interest. Different missions among EBSA, PBGC and SEC pose challenges in coordinating a focused 

approach to pursuing conflicts of interest. 

Recommendations: EBSA, PBGC and SEC should share data on and assess the risk of conflicts of interest. 

Actions Taken and Remaining: PBGC has instituted an enhanced plan intake process that includes a screening 

mechanism to identify potential indicators of fiduciary breaches, such as the existence of conflicts of interest. 

PBGC is working with EBSA and the SEC to establish an information-sharing agreement that would be useful in 

identifying and protecting PBGC’s insurance programs. PBGC is piloting an information-sharing protocol in a 

test case. 

Additional Information: GAO-07-703 is available at http://www.gao.gov/cgi-bin/getrpt?GAO-07-703. 

“Pension Benefit Guaranty Corporation: Governance Structure Needs Improvements to Ensure Policy 

Direction and Oversight,” July 2007 (GAO) 

Purpose: In study no. GAO-07-808, GAO assessed the PBGC’s governance structure, policy direction and 

oversight, and administrative responsibilities among its Board of Directors, DOL, and PBGC management. 

Major Findings: The board structure does not guarantee that PBGC’s board is active and diverse. Lack of 

guidelines for the roles and responsibilities among the board, board chair, and management often lead to 

confusion and inefficiencies. 
Strategic Goal 4 

FY 2007 Performance and Accountability Report 167 

Recommendations: Develop policies and mechanisms consistent with corporate governance practices, including 

roles and responsibilities. Consider expanding PBGC’s Board of Directors. 

Actions Taken and Remaining: PBGC will work closely with the Board of Directors as they address the 

recommendations. 

Additional Information: GAO-07-808 is available at http://www.gao.gov/new.items/d07808.pdf. 

“Employer-Sponsored Benefits: Many Factors Affect the Treatment of Pension and Health Benefits in 

Chapter 11 Bankruptcy,” September 2007 (GAO) 

Purpose: Examine impact of the Bankruptcy Abuse Prevention and Consumer Protection Act of 2005 (BAPCPA) 

and the Pension Protection Act of 2006 (PPA) on the Chapter 11 Bankruptcy filing process. 

Major Findings: Bankruptcy professionals generally agreed that BAPCPA will have a limited effect on employers’ 

decisions to maintain their defined benefit plans. Changes included in the PPA, such as the change in 

termination date, may affect employers’ decisions to maintain their defined benefit plans. Several other factors, 

such as market conditions and benefit obligations, can also influence employers’ decisions in bankruptcy. 

Recommendations: Additional time may be needed to more fully understand how BAPCPA and PPA affect 

benefits in specific cases; the full impact of legislation may never be known because employers’ decisions to 

modify benefits are part of a more complex process including bankruptcy and pension laws. 

Actions Taken and Remaining: PBGC will monitor the effects of the legislation on its insurance programs.

Additional Information: GAO-07-1101 is available at http://www.gao.gov/new.items/d071101.pdf. 

Data Quality and Major Management Challenges 

Data quality for this performance goal was rated Data Quality Not Determined due to the relevance criterion. 

Measures of customer satisfaction are not representative of PBGC’s efforts to improve the pension insurance 

program. During 2007, PBGC focused on implementing premium reforms required by the PPA and DRA and 

set performance measures and targets for proposing regulations. This goal was achieved successfully. In 

addition, during the PART review, PBGC developed two new mission-related performance measures focusing 

on eliminating the deficit and reducing the cycle time to determine a participant’s benefit amount. 

Implementation of these measures in 2008 addresses the relevance criterion and will improve the data 

quality rating. 

Though PPA made significant reforms to the pension system, GAO reports in its 2007 High Risk Update that 

“while some of [PPA] reforms represent progress, their ultimate impact on the single-employer program’s 

deficit is unclear. Many of these reforms will be phased in gradually, postponing their potentially positive 

effect on plan funding, while other changes could have the effect of increasing PBGC’s financial exposure.” 

Addressing PBGC’s deficit will require additional legislative action by Congress and the President. PBGC will 

take the statutory actions that are within its purview to eliminate the deficit and account for expected losses – 

so that workers and retirees can continue to receive qualified benefit payments from the PBGC. 

Financial Section 
Financial Section 

170 United States Department of Labor 

Message from the Chief Financial Officer 

The FY 2007 Performance and Accountability Report is the Department’s 

principal publication and report to the President and the American people on 

our stewardship and management of the public funds with which we have been 

entrusted. I am pleased to report that for the eleventh year in a row, the 

Department of Labor received an unqualified or “clean” opinion from our 

Inspector General on our consolidated financial statements. 

This past spring the Department received a seventh consecutive Certificate of 

Excellence in Accountability Reporting from the Association of Government 

Accountants and once again the Mercatus Center ranked our Performance and 

Accountability Report as one of the best in the Federal government in terms of 

accuracy, transparency, and public benefit. This year’s report continues this 

trend of transparency in reporting. With these accomplishments, the American 

people can have confidence that the financial and performance information 

presented in this report is timely, accurate and reliable. 

Financial management highlights at the Department over the past year include the following: 

• In keeping with the Department’s commitment to create an environment where managers routinely 

use cost information to make well-informed decisions, we continue to refine our Department wide 

Managerial Cost Accounting (MCA) system. With our primary focus on meeting end-user needs, we 

are enhancing the value of the MCA system to managers. Our efforts to transform MCA usage from a 

compliance initiative to a “must have” management tool is leading to better information for making 

decisions and enhancing accountability across the Department. 

• We also moved forward into the second year of a refined program to comply with requirements for 

internal controls over financial reporting under the direction of the Department’s Internal Control 

Board. We will aggressively continue our efforts to create an environment in which managers 

throughout the Department integrate internal controls into their financial systems as a routine 

practice. 

• Due to funding uncertainties and constraints, the development of a new financial management 

system to supersede the Department’s existing core accounting system was reassessed through a 

new cost-benefit analysis. In an effort not to falter in meeting the future needs of the Department and 

provide up-to-date financial tools to both the Department’s financial and management communities, 

we are pursuing the use of a shared service provider in line with the government-wide Financial 

Management Line of Business initiative. 

• With respect to the President’s Management Agenda (PMA), the Department has maintained a 

“green” status score on the Improving Financial Performance and Eliminating Improper Payments 

scorecards while continuing to look beyond scorecard achievement toward shaping a lasting 

environment in which timely and accurate financial information is routinely a part of all critical 

decision making. 

• We made service improvements to the Department’s e-Gov Travel system to improve end-user 

satisfaction. 
Message from the Chief Financial Officer 

FY 2007 Performance and Accountability Report 171 

We are pleased with our accomplishments in FY 2007, and we will strive to improve all aspects of 

performance and to maintain higher financial management standards in FY 2008. 

Lisa D. Fiely 

Acting Chief Financial Officer 

November 15, 2007 
172 United States Department of Labor 

KPMG LLP 

2001 M Street, NW 

Washington, DC 20036 

Independent Auditors’ Report 

Secretary and Inspector General 

U.S. Department of Labor: 

We have audited the accompanying consolidated balance sheets of the U.S. Department of Labor (DOL) as of 

September 30, 2007 and 2006, and the related consolidated statements of net cost, changes in net position, and 

custodial activity, and combined statements of budgetary resources for the years then ended; and the statements of 

social insurance as of September 30, 2007 and 2006 (hereinafter referred to as “consolidated financial statements”). 

The objective of our audits was to express an opinion on the fair presentation of these consolidated financial 

statements. In connection with our fiscal year 2007 audit, we also considered the DOL’s internal controls over 

financial reporting and performance measures and tested the DOL’s compliance with certain provisions of applicable 

laws, regulations, contracts, and grant agreements that could have a direct and material effect on these consolidated 

financial statements. 

We have also examined DOL’s compliance with section 803a of the Federal Financial Management Improvement 

Act of 1996 (FFMIA) as of September 30, 2007. 

SUMMARY 

As stated in our opinion on the consolidated financial statements, we concluded that the DOL’s consolidated 

financial statements as of and for the years ended September 30, 2007 and 2006, are presented fairly, in all material 

respects, in conformity with U.S. generally accepted accounting principles. 

As discussed in our opinion on the consolidated financial statements, DOL changed its method of reporting the 

reconciliation of budgetary resources obligated to the net cost of operations and its method of reporting the 

proprietary activities related to its allocation transfers in fiscal year 2007. 

Our consideration of internal control over financial reporting resulted in the following conditions being identified as 

significant deficiencies:

1. Lack of Adequate Controls over Access to Key Financial and Support Systems 

2. Weakness Noted over Payroll Accounting 

3. Weakness Noted over Budgetary Accounting 

4. Lack of Segregation of Duties over Journal Entries 

However, none of the significant deficiencies are believed to be material weaknesses. 

We noted no deficiencies involving the design of the internal control over the existence and completeness assertions 

related to key performance measures. 

The results of our tests of compliance with certain provisions of laws, regulations, contracts, and grant agreements 

disclosed two instances of Anti-deficiency Act noncompliance that are required to be reported under Government 

KPMG LLP, a U.S. limited liability partnership, is the U.S. 

member firm of KPMG International, a Swiss cooperative. 
Independent Auditors’ Report 

FY 2007 Performance and Accountability Report 173 

Auditing Standards, issued by the Comptroller General of the United States, and Office of Management and Budget 

(OMB) Bulletin No. 07-04, Audit Requirements for Federal Financial Statements. 

As stated in our opinion on DOL’s compliance with FFMIA, we concluded that DOL complied, in all material 

respects, with the requirements of FFMIA as of September 30, 2007. 

The following sections discuss our opinion on the DOL’s consolidated financial statements; our consideration of the 

DOL’s internal controls over financial reporting and performance measures; our tests of the DOL’s compliance with 

certain provisions of applicable laws, regulations, contracts, and grant agreements; and management’s and our 

responsibilities. 

OPINION ON THE FINANCIAL STATEMENTS 

We have audited the accompanying consolidated balance sheets of the DOL as of September 30, 2007 and 2006, and 

the related consolidated statements of net cost, changes in net position, and custodial activity, and the combined 

statements of budgetary resources for the years then ended; and the statement of social insurance as of September 30, 

2007 and 2006. The accompanying statements of social insurance as of September 30, 2003 through 2005 were not 

audited by us and, accordingly, we do not express an opinion on them. 

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the 

financial position of the U.S. Department of Labor as of September 30, 2007 and 2006, and its net costs, changes in 

net position, budgetary resources, and custodial activity for the years then ended, and the financial condition of its 

social insurance program as of September 30, 2007 and 2006, in conformity with U.S. generally accepted accounting 

principles. 

As discussed in Note 1B to the consolidated financial statements, DOL changed its method of reporting the 

reconciliation of budgetary resources obligated to the net cost of operations and its method of reporting the 

proprietary activities related to its allocation transfers in fiscal year 2007. 

The information in the Management’s Discussion and Analysis, Required Supplementary Stewardship Information, 

and Required Supplementary Information sections is not a required part of the consolidated financial statements, but 

is supplementary information required by U.S. generally accepted accounting principles and OMB Circular No. A136, Financial Reporting Requirements. We have applied certain limited procedures, which consisted principally of 

inquiries of management regarding the methods of measurement and presentation of this information. However, we 

did not audit this information and, accordingly, we express no opinion on it.

The information in the Secretary’s Message, Performance Section, and Appendices are presented for purposes of 

additional analysis and are not required as part of the consolidated financial statements. This information has not 

been subjected to auditing procedures and, accordingly, we express no opinion on it. 

INTERNAL CONTROL OVER FINANCIAL REPORTING 

Our consideration of the internal control over financial reporting was for the limited purpose described in the 

Responsibilities section of this report and would not necessarily identify all deficiencies in the internal control over 

financial reporting that might be significant deficiencies or material weaknesses. 

A control deficiency exists when the design or operation of a control does not allow management or employees, in 

the normal course of performing their assigned functions, to prevent or detect misstatements on a timely basis. A 

significant deficiency is a control deficiency, or combination of control deficiencies, that adversely affects the DOL’s 

ability to initiate, authorize, record, process, or report financial data reliably in accordance with U.S. generally 

accepted accounting principles such that there is more than a remote likelihood that a misstatement of the DOL’s 
Financial Section 

174 United States Department of Labor 

consolidated financial statements that is more than inconsequential will not be prevented or detected by the DOL’s 

internal control over financial reporting. A material weakness is a significant deficiency, or combination of 

significant deficiencies, that results in more than a remote likelihood that a material misstatement of the financial 

statements will not be prevented or detected by the DOL’s internal control. 

In our fiscal year 2007 audit, we consider the deficiencies described in Exhibit I to be significant deficiencies in 

internal control over financial reporting. However, we believe that none of the significant deficiencies presented in 

Exhibit I are material weaknesses. 

We noted certain additional matters that we will report to management of DOL in a separate letter. 

INTERNAL CONTROL OVER PERFORMANCE MEASURES 

Our tests of internal control over performance measures, as described in the Responsibilities section of this report, 

disclosed no deficiencies involving the design of the internal control over the existence and completeness assertions 

related to key performance measures. 

COMPLIANCE AND OTHER MATTERS 

Our tests of compliance with certain provisions of laws, regulations, contracts, and grant agreements, as described in 

the Responsibilities section of this report, exclusive of those referred to in the Federal Financial Management 

Improvement Act of 1996 (FFMIA), disclosed two instances of Anti-deficiency Act noncompliance that are required 

to be reported herein under Government Auditing Standards or OMB Bulletin No. 07-04, and are described in 

Exhibit II. 

The results of our tests of compliance as described in the Responsibilities section of this report, exclusive of those 

referred to in FFMIA, disclosed no other instances of noncompliance or other matters that are required to be reported 

herein under Government Auditing Standards or OMB Bulletin No. 07-04. 

Other Matter. DOL is currently reviewing two incidents regarding potential violations of the Anti-deficiency Act. 

As of the date of this report, no final noncompliance determination has been made for either of the two incidents. 

We noted certain additional matters that we will report to management of DOL in a separate letter. 

OPINION ON COMPLIANCE WITH FFMIA 

DOL represented that, in accordance with the provisions and requirements of FFMIA, the Secretary of Labor 

determined that the U.S. Department of Labor’s financial management systems are in substantial compliance with 

FFMIA. 

We have examined the U.S. Department of Labor’s compliance with section 803a of the Federal Financial 

Management Improvement Act of 1996 as of September 30, 2007. Under section 803a of FFMIA, DOL’s financial 

management systems are required to substantially comply with (1) Federal financial management systems 

requirements, (2) applicable Federal accounting standards, and (3) the United States Government Standard General 

Ledger at the transaction level. We used OMB’s Revised Implementation Guidance for the Federal Financial 

Management Improvement Act, dated January 4, 2001, to determine compliance. 

In our opinion, the U.S. Department of Labor complied, in all material respects, with the aforementioned 

requirements as of September 30, 2007. 
Independent Auditors’ Report 

FY 2007 Performance and Accountability Report 175 

RESPONSIBILITIES 

Management’s Responsibilities. The United States Code Title 31 Section 3515 and 9106 require agencies to report 

annually to Congress on their financial status and any other information needed to fairly present their financial 

position and results of operations. To meet these reporting requirements, the DOL prepares and submits financial 

statements in accordance with OMB Circular No. A-136. 

Management is responsible for the consolidated financial statements, including: 

• Preparing the consolidated financial statements in conformity with U.S. generally accepted accounting principles; 

• Preparing the Management’s Discussion and Analysis (including the performance measures), Required 

Supplementary Information, and Required Supplementary Stewardship Information; 

• Establishing and maintaining effective internal control; and 

• Complying with laws, regulations, contracts, and grant agreements applicable to the DOL, including FFMIA. 

In fulfilling this responsibility, management is required to make estimates and judgments to assess the expected 

benefits and related costs of internal control policies.

Auditors’ Responsibilities. Our responsibility is to express an opinion on the fiscal year 2007 and 2006 

consolidated financial statements of the DOL 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 OMB 

Bulletin No. 07-04. Those standards and OMB Bulletin No. 07-04 require that we plan and perform the audits to 

obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. 

An audit includes consideration of internal control over financial reporting as a basis for designing audit procedures 

that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the 

DOL’s internal control over financial reporting. Accordingly, we express no such opinion. 

An audit also includes: 

• Examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial 

statements; 

• Assessing the accounting principles used and significant estimates made by management; and 

• Evaluating the overall consolidated financial statement presentation. 

We believe that our audits provide a reasonable basis for our opinion. 

In planning and performing our fiscal year 2007 audit, we considered the DOL’s internal control over financial 

reporting by obtaining an understanding of the DOL’s internal control, determining whether internal controls had 

been placed in operation, assessing control risk, and performing tests of controls as a basis for designing our auditing 

procedures for the purpose of expressing our opinion on the consolidated financial statements. We limited our 

internal control testing to those controls necessary to achieve the objectives described in Government Auditing 

Standards and OMB Bulletin No. 07-04. We did not test all internal controls relevant to operating objectives as 

broadly defined by the Federal Managers’ Financial Integrity Act of 1982. The objective of our audit was not to 
Financial Section 

176 United States Department of Labor 

express an opinion on the effectiveness of the DOL’s internal control over financial reporting. Accordingly, we do 

not express an opinion on the effectiveness of the DOL’s internal control over financial reporting. 

As required by OMB Bulletin No. 07-04 in our fiscal year 2007 audit, with respect to internal control related to 

performance measures determined by management to be key and reported in the Management’s Discussion and 

Analysis and Performance sections, we obtained an understanding of the design of internal controls relating to the 

existence and completeness assertions and determined whether these internal controls had been placed in operation. 

We limited our testing to those controls necessary to report deficiencies in the design of internal control over key 

performance measures in accordance with OMB Bulletin 07-04. However, our procedures were not designed to 

provide an opinion on internal control over reported performance measures and, accordingly, we do not provide an 

opinion thereon. 

As part of obtaining reasonable assurance about whether the DOL’s fiscal year 2007 consolidated financial 

statements are free of material misstatement, we performed tests of the DOL’s compliance with certain provisions of 

laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect 

on the determination of the consolidated financial statement amounts, and certain provisions of other laws and 

regulations specified in OMB Bulletin No. 07-04, including certain provisions referred to in FFMIA. We limited our 

tests of compliance to the provisions described in the preceding sentence, and we did not test compliance with all 

laws, regulations, contracts, and grant agreements applicable to the DOL. However, providing an opinion on 

compliance with laws, regulations, contracts, and grant agreements was not an objective of our audit and, 

accordingly, we do not express such an opinion. 

Our responsibility also included expressing an opinion on DOL’s compliance with FFMIA section 803a requirements 

as of September 30, 2007, based on our examination. Our examination was conducted in accordance with attestation 

standards established by the American Institute of Certified Public Accountants and the standards applicable to 

attestation engagements contained in Government Auditing Standards issued by the Comptroller General of the 

United States and, accordingly, included examining, on a test basis, evidence about DOL’s compliance with the 

requirements of FFMIA section 803a 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 on DOL’s compliance with specified requirements. 

______________________________

The DOL’s response to the findings identified in our audit is summarized in Exhibit I. We did not audit the DOL’s 

response and, accordingly, we express no opinion on it. 

This report is intended solely for the information and use of the DOL’s management, the DOL’s Office of Inspector 

General, OMB, the U.S. Government Accountability Office, and the U.S. Congress and is not intended to be and 

should not be used by anyone other than these specified parties. 

November 9, 2007
Independent Auditors’ Report 

Significant Deficiencies 

Exhibit I 

FY 2007 Performance and Accountability Report 177 

1. Lack of Adequate Controls over Access to Key Financial and Support Systems 

The Office of Inspector General (OIG) has been reporting access control weaknesses over the U.S. Department of 

Labor’s (DOL) financial systems since fiscal year (FY) 2001 and application access control weaknesses since FY 

2004. In FY 2006, we reported two reportable conditions relating to system access controls over financial 

reporting: 

• Lack of Strong Application Controls over Access to and Protection of Financial Information, and 

• Lack of Strong Logistical Security Controls to Secure DOL’s Networks and Information. 

The OIG recommended that management: 

• Verify that specific security weaknesses identified during the audits are communicated to DOL agencies and 

included in each individual agency’s Plan of Actions & Milestones (POAM), and that appropriate and timely 

corrective action is taken on the identified weaknesses; 

• Coordinate efforts among the DOL agencies to develop and/or enforce procedures and controls to address 

logical access and security control weaknesses on current financial management systems; and 

• Coordinate efforts among the DOL agencies to develop and/or enforce procedures and controls to address 

systemic application access control weaknesses in current financial management systems 

During our FY 2007 audit, we noted that 51 prior year agency-specific recommendations addressing access 

controls have not been corrected (12 in the Office of the Chief Financial Officer (OCFO), 13 in the Employment 

and Training Administration (ETA), 12 in the Office of the Assistant Secretary for Administrative Management 

(OASAM), and 14 in the Employment Standards Administration (ESA)). In addition, in FY 2007, we identified 

weaknesses that resulted in 112 new recommendations related to access controls (23 in the OCFO, 52 in ETA, 20 

in OASAM, and 17 in ESA). The specific nature of these weaknesses, their causes, and the systems impacted by 

them has been communicated separately to management. 

New weaknesses detected during FY 2007 and the prior year control weaknesses represent a significant 

deficiency over access to key financial and support systems. These weaknesses include deficiencies in key 

financial information technology (IT) controls in the areas of security and system software controls that directly 

impact access to financial systems. 

In summary, we noted issues with account management, configuration management, and review of system audit 

logs in our FY 2007 testing of DOL’s IT systems, each of which present a reasonably possible chance to 

adversely affect DOL’s ability to initiate, authorize, record, process or report DOL financial data. Specifically, 

the following control weaknesses were present in multiple financial systems across various DOL agencies. 

• Account Management 

- Account management controls were not consistently performed, such as incomplete or missing access 

request, modification, and termination forms; 

- Periodic user account reviews or re-certifications were not performed; 

- Inactive accounts were not disabled or deleted in a timely manner; 

- Generic accounts existed on systems; 

- Access authorization, recertification, and periodic reviews of data center access were not consistent with 

policies; and 

- Terminated personnel had active system accounts, and in some cases terminated employees accessed 

systems after their termination date. 
Financial Section 

178 United States Department of Labor 

• Configuration Management 

- Technical security standards and policies need to be updated and implemented to include stronger logical 

access security controls. Specifically, patches were not applied to systems in a timely manner; 

unnecessary services were not disabled; and access to sensitive files, directories, or software was not 

restricted; 

- Production servers were not configured in accordance with baseline configurations or to the most 

appropriate settings; 

- Password settings do not comply with the Office of the Chief Information Officer (OCIO) Computer 

Security Handbook (CSH); and 

- Network permissions which allow users to access resources remotely that was not appropriately 

restricted. 

• Review of System Audit Logs 

- Audit logs monitoring user and administrator activity, changes to security profiles, remote access logs, 

access to sensitive directories, and failed login attempts are not reviewed, or documentation of audit log 

reviews was not maintained; 

- Audit log review procedures were not documented; 

- Audit logs were not secured against editing by system administrators; and 

- Application level audit logs (e.g., significant transactions and changes to sensitive tables) were not 

proactively reviewed. 

These findings are a result of issues in the implementation and monitoring of Departmental processes and 

procedures. For example, management has not incorporated adequate testing of system controls as part of their 

Office of Management and Budget (OMB) Management and Control (OMB Circular No. A-123) program. 

These access control weaknesses could lead to users with inappropriate access to financial systems; inefficient 

processes; lack of completeness, accuracy, or integrity of financial data; and/or the lack of detection of unusual 

activity within financial systems. In addition, as a result of the identified weaknesses, the DOL OIG reported an 

access control significant deficiency in conjunction with its FY 2007 testing of compliance with the Federal 

Information Security Management Act (FISMA), which was passed as part of the Electronic Government Act of 

2002. 

Based on these facts noted as part of our FY 2007 audit, we revised the status of the recommendations related to 

this finding from resolved and open to unresolved. Additionally, we recommend that management complete 

the following actions to address the specific issues identified during our FY 2007 audit: 

1. Identify key financial IT controls and incorporate them into DOL’s internal control OMB Circular No. A-123 

testing process, to ensure that these controls are documented and operating effectively during the year. 

2. Coordinate efforts among the DOL agencies to develop and/or enforce procedures and controls to address 

access control weaknesses in current financial management systems. 

Management’s Response: Management is pursuing an aggressive remediation process that has resulted in 

substantial improvements to the Department’s overall IT control environment. Management continues to believe 

that controls inherent to specific applications, as well as manual and other compensating controls already in 

place, are sufficiently designed and effective to prevent or detect unauthorized access to DOL financial systems. 

Management concurs with and will implement the auditor’s 2007 recommendations to enhance the testing of key 

controls as part of DOL’s A-123 program. DOL’s Office of Chief Information Officer operates a monitoring 

program that is applied on a quarterly, semiannual and annual basis for every DOL major information system to 

determine security control implementation compliance. The monitoring program ensures that agencies document 

all identified weaknesses, regardless of the oversight sources in the agencies’ system-specific Plans of Actions 

and Milestones (PO&AM). DOL has enhanced its security control testing and evaluation (SCT&E) program 
Independent Auditors’ Report 

Significant Deficiencies 

Exhibit I 

FY 2007 Performance and Accountability Report 179 

which will provide detailed reporting on and tracking of agency access control deficiencies and will closely 

address the access control and configuration management controls areas identified by the OIG in the FY 2007 

FISMA consolidated report. 

Auditor Response. Based on management’s response, the unresolved recommendations cited above are now 

resolved and open. 

2. Weakness Noted over Payroll Accounting 

During FY 2006, the U.S. Department of Agriculture’s (USDA) Office of Chief Financial Officer 

(OCFO)/National Finance Center (NFC) processed DOL’s payroll. The Fiscal Year 2006 – Office of the Chief 

Financial Officer/National Finance Center General Control Review dated September 21, 2006, and issued by the 

USDA’s Office of Inspector General (Report No. 11401-24-FM) reported a qualified opinion regarding the 

effectiveness of NFC’s internal controls for the period October 1, 2005 through June 30, 2006. During FY 2006, 

DOL did not have policies and procedures in place to reconcile the payroll information it submitted to the NFC 

to that received and processed by the NFC. 

For each FY 2006 pay period, DOL submitted to the NFC payroll information that included all DOL employees 

for the period, along with their hours worked, leave used, and other payroll related information for the period. 

The NFC processed the payroll for DOL each period and made available for download a Detail Pay and Deduct 

Register report for each DOL Human Resources office. We noted that DOL did not utilize these reports to 

perform reviews or reconciliations of data processed by the NFC, and no other controls were in place during the 

year to ensure that what was submitted to NFC via Time and Attendance records were reconciled to what was 

shown as paid in the Detail Pay and Deduct Register. 

We recommended that management develop and implement policies and procedures to reconcile payroll 

information provided to the NFC to the payroll information processed by the NFC each pay period. These 

reconciliations should be documented, reviewed and approved by an appropriate supervisor, and maintained. 

During FY 2007, the NFC continued to process DOL’s payroll. The Fiscal Year 2007 – Office of the Chief 

Financial Officer/National Finance Center General Control Review dated September 27, 2007, and issued by the 

USDA’s Office of Inspector General (Report No. 11401-26-FM) reported a qualified opinion regarding the 

effectiveness of NFC’s internal controls for the period July 1, 2006 through June 30, 2007. 

As part of DOL’s corrective action plan for FY 2007, the OCFO’s PeoplePower Task Force created a Time and 

Attendance Reconciliation Report based on the NFC’s Detail Pay and Deduct Register to be used to reconcile 

information sent to NFC to that received and processed by NFC. In March 2007, the DOL OCFO issued policies 

and procedures that state that each DOL Human Resource office should review the Time and Attendance 

Reconciliation Reports each pay period and research and resolve differences identified. No offices that we tested 

complied with the new OCFO procedures, but two offices that we tested performed their own reconciliation 

procedures. The lack of reconciliation controls implemented department-wide around the NFC outputs, 

compounded by the control weaknesses identified at the NFC, increased the risk that payroll-related line items in 

the FY 2007 financial statements could be misstated because of errors in payroll processing by the NFC. 

Federal agencies that use external service providers, such as the NFC, should have controls in place to ensure the 

accuracy of processing outputs. As stated by the USDA OIG in its FY 2007 Report No. 11401-26-FM, “The 

accuracy and reliability of data processed by OCFO/NFC and the resultant reports rests with the customer agency 

and any compensating controls implemented by the agencies.” 
Financial Section 

180 United States Department of Labor 

OMB Circular No. 123, Management’s Responsibility for Internal Control, states, “Application control should be 

designed to ensure that transactions are properly authorized and processed accurately and that the data is valid 

and complete. Controls should be established at an application’s interfaces to verify inputs and outputs, such as 

edit checks.” Additionally, per the Government Accountability Office’s (GAO) Standards for Internal Control 

in the Federal Government, “Internal control should generally be designed to assure that ongoing monitoring 

occurs in the course of normal operations. It is performed continually and is ingrained in the agency’s 

operations. It includes regular management and supervisory activities, comparisons, reconciliations, and other 

actions people take in performing their duties.” 

Although the OCFO issued the policies and procedures discussed above, DOL did not implement these policies 

and procedures, and the OCFO did not monitor to ensure that the reconciliations were completed, documented, 

reviewed and approved by an appropriate supervisor, and maintained. As such, we consider the recommendation 

we made in FY 2006 as resolved and open. To close this recommendation in the future, the DOL OCFO should 

ensure (a) that Human Resource offices are reconciling payroll information provided to the NFC to the payroll 

information processed by the NFC each pay period in compliance with DOL’s current policies and procedures, 

and (b) that these reconciliations are documented, reviewed and approved by an appropriate supervisor, and 

maintained. 

Management’s Response: Management accepts that more uniform reconciliation procedures and monitoring 

would improve internal controls for payroll expenses. As such, OCFO issued a policy memorandum on October 

23, 2007, to agencies requiring monthly reconciliation of NFC payroll expenses to DOL payroll personnel data 

and maintenance of documentation of the work performed. OCFO will perform a monthly reconciliation audit 

on a sample basis. These audits will begin in FY 2008 and documentation of each audit will be maintained. 

3. Weakness Noted over Budgetary Accounting 

During FY 2006, we reported that the OCFO did not complete timely reconciliations related to the 

Apportionment and Reapportionment Schedules (SF-132) and the Report on Budget Execution and Budgetary 

Resources (SF-133). We recommended that management ensure that current policies and procedures over SF132 and SF-133 reconciliations are enhanced to require (a) quarterly reconciliations be prepared and 

documented, (b) the completion of documented supervisory reviews over the reconciliations, and (c) the 

completion of these procedures by a certain date (e.g., 15 days after each quarter-end). 

During our FY 2007 audit work, we requested quarterly reconciliations of the SF-132 to the SF-133. However, 

the first quarter reconciliation was not completed, and the second quarter reconciliation was not provided to us 

until June 2007. In addition, these reconciliations identified several necessary corrections to amounts posted in 

the general ledger, and various differences remained unresolved. We also requested the reconciliation of the FY 

2006 Statement of Budgetary Resources (SBR) to the FY 2006 President’s Budget of the United States; however, 

we noted the reconciliation was not reviewed timely. FY 2006 and 2007, the OCFO did not have adequate 

resources and did not adequately enforce policies to ensure the reconciliations were completed and any identified 

reconciling items resolved in a timely manner. The lack of timely and complete reconciliations increases the risk 

that material differences in external reports and in the general ledger may not be detected and corrected in a 

timely manner during the year or for year-end reporting. 

Additionally in FY 2006, we reported that 6 of the 10 requested budgetary to proprietary account relationship 

tests were not completed as of March 31, 2006, and explanations were not provided for variances identified in the 

four analyses that were completed. We recommended that management develop and implement policies and 

procedures that require (a) the preparation and documentation of quarterly budgetary to proprietary relationship 

analyses, (b) the completion of documented supervisory reviews over the analyses, and (c) the completion of 

these analyses by a certain date (e.g., 15 days after each quarter-end). 
Independent Auditors’ Report 

Significant Deficiencies 

Exhibit I 

FY 2007 Performance and Accountability Report 181 

During our FY 2007 procedures over budgetary to proprietary account relationship analyses, we noted that the 

OCFO is in the process of automating this analysis and is developing a review policy over the automated 

analysis. However, the automated analysis and review policy had not been completed and performed during the 

fiscal year. The lack of timely and complete budgetary to proprietary analyses increases the risk that material 

differences in external reports and in the general ledger may not be detected and corrected in a timely manner 

during the year or for year-end reporting. 

Furthermore, we identified certain errors during our FY 2007 Treasury warrant budgetary testwork that could 

have been detected by the analysis and reconciliation controls discussed above. Specifically, three budgetary and 

proprietary entries were not posted concurrently; requiring a net $22 million adjustment to increase budget 

authority, and one budgetary entry was miscoded to the incorrect budgetary account, requiring a $693 million 

reclassification entry. In FY 2007, we also identified the improper use of certain U.S. Standard General Ledger 

(USSGL) accounts related to obligation adjustments in certain situations. 

Per GAO’s Standards of Internal Control in the Federal Government, “Internal control should generally be 

designed to assure that ongoing monitoring occurs in the course of normal operations. It is performed 

continually and is ingrained in the agency’s operations. It includes regular management and supervisory 

activities, comparisons, reconciliations, and other actions people take in performing their duties.” In addition, it 

states, “Control activities occur at all levels and functions of the entity. They include a wide range of diverse 

activities such as approvals, authorizations, verifications, reconciliations, performance reviews, maintenance of 

security, and the creation and maintenance of related records which provide evidence of execution of these 

activities as well as appropriate documentation.” 

According to OMB’s Circular No. A-136 (June 2007), section II.4.6.11

, “...Information on the SBR should be 

reconcilable to the budget execution information reported on the SF 133 Report on Budget Execution and 

Budgetary Resources and with information reported in the Budget of the United States Government to ensure the 

integrity of the numbers presented. The SBR is an agency-wide report, which aggregates account-level 

information reported in the SF 133. Consistency between information presented in the financial statements and 

the Budget of the United States Government is critical to ensure the integrity of the numbers presented. The 

FACTS II helps to ensure the consistency of data. The FACTS II data submitted by agencies are USSGL-based 

trial balances, which are used to populate the SF 133 and the actual column of the Program and Financing 

Schedule of the Budget. The USSGL-based trial balance is also used to prepare the SBR.” 

Since the OCFO did not complete the budgetary and proprietary analysis during FY 2007 and did not complete 

the SF-132 to SF-133 reconciliations accurately and timely, the recommendations we made in FY 2006 remain 

resolved and open. 

We also recommend that management develop clearly defined transaction codes within DOLAR$ to ensure that 

adjustments to obligations are recorded in the proper USSGL account depending on the situation and strengthen 

manual controls related to the processing of obligation adjustments. This recommendation is resolved and open. 

Management’s Response: Management is confident that the design and effectiveness of its four layers of 

operating controls used for end-of-year financial reporting would detect improper balances in the relationships 

between budgetary and proprietary accounts. These controls ensure the reliability of data for end-of-year 

financial reporting. 

 

1Also cited in the July 2006 version of OMB Circular No. A-136, section II.4.6.1. 
Financial Section 

182 United States Department of Labor 

With the addition of some final policy documentation in FY 2008 and further strengthening of OCFO monitoring 

and oversight, management expects to improve the timeliness and effectiveness of the controls over budgetary 

accounting so that all elements of this finding will be resolved in FY 2008. 

Regarding the $693 million budgetary entry miscoding error, OCFO provided documentation demonstrating that 

the end-of-year reconciliations would have detected the misclassified budgetary entry had the auditor not 

detected it during the course of the audit. This reconciliation, along with other key analytics, confirmed the 

accuracy of budgetary and proprietary accounting as part of the annual financial statement preparation process. 

Beginning in December 2007, management will perform these analytical procedures monthly to further 

strengthen DOL’s financial processes. 

Management is developing new, and strengthening existing, manual and system controls relating to obligation 

adjustments. 

4. Lack of Segregation of Duties over Journal Entries 

During the FY 2006 audit, we noted that accounting staff from all DOL agencies were able to prepare and enter 

journal entries into the Department of Labor Accounting Related Systems (DOLAR$) without approval. By 

allowing individuals the authority to prepare and approve their own transactions in DOLAR$, there is an 

increased risk that a material error would not be prevented or detected and corrected in a timely manner. 

We recommended that management reconfigure DOLAR$ so that journal entries entered into the DOLAR$ 

general ledger system and its successor system are required to be approved electronically by an individual other 

than the preparer before posting. We also recommended that agencies implement manual compensating review 

controls until system controls have been implemented. 

During the FY 2007 audit, we found that management had not made the recommended changes to DOLAR$. 

During the second quarter of FY 2007, the OCFO had developed Department-wide manual policies and 

procedures designed to ensure the segregation of journal entry preparation and approval authority. However, our 

test of 21 sample journal entries from October 1, 2006 through June 30, 2007, noted that 16 of the journal entries 

did not have supporting documentation evidencing management review and approval. 

Since the Department did not make, or plan, changes to DOLAR$ to segregate journal entry preparation and 

approval authority in DOLAR$, and has changed its plans to implement a new general ledger system, we 

consider the system related recommendation we made in FY 2006 unresolved. To resolve the recommendation, 

management needs to provide a corrective action plan with timeframes to implement a new general ledger system 

that requires electronic approval by someone other than the preparer before journal entries are posted. 

Because management implemented new policies and procedures for part of FY 2007, we consider the manual 

control recommendation made in FY 2006 as resolved and open. To close this recommendation, management 

should formalize the Department-wide policies and procedures for documenting the preparation and review of 

journal entries; and enforce these policies and procedures. Management should ensure that all journal entries are 

properly supported and documented. Documentation should authenticate the posting of the entry and the users 

who recorded and authorized the transaction in DOLAR$. 

Management’s Response: In the second quarter of FY 2007, management developed and implemented a new 

policy that has produced positive results in improving management controls associated with DOLAR$ journal 

vouchers (JV). This new policy requires documentation be maintained with the JV entries to support transactions 

and requires that proper authorizations and approvals be shown on the documents. While the auditor noted that 

weak segregation of duties in the JV process increases the risk of potential misstatement, OCFO employs other 
Independent Auditors’ Report 

Significant Deficiencies 

Exhibit I 

FY 2007 Performance and Accountability Report 183 

compensating controls to mitigate this risk and these compensating controls provide reasonable assurance over 

the accuracy and reliability of JV entries. OCFO will further refine the existing JV policy to strengthen 

segregation of duties by January 2008. 

Having addressed the segregation of duties with manual controls in the JV process, OCFO does not intend to 

automate this control in the current operating environment as the DOLAR$ accounting system is at the end of its 

planned life-cycle, where extensive system changes are no longer cost effective. Management will ensure that 

the new system that replaces DOLAR$, planned for implementation by October 2009, dependent on the 

availability of funding, contains electronic controls over the JV process. 

Auditor Response. Based on management’s response, the unresolved recommendation to implement an 

electronic approval by someone other than the preparer in the new general ledger system is now resolved and 

open.
Independent Auditors’ Report 

Compliance Matters 

Exhibit II 

184 United States Department of Labor 

1. Anti-deficiency Act 

During FY 2007, DOL management concluded that two Anti-deficiency Act violations had occurred. The first 

violation totaled $130,569,041 and the second violation totaled $29,103. The DOL Secretary has reported the 

violations to the President of the United States, the President of the Senate, the Speaker of the House of 

Representatives, and the Comptroller General of the United States, as required by 31 U.S.C. section 1351. 

The first violation occurred in the Employment and Training Administration (ETA) Training and Employment 

Services (TES) account (160174) for Program Year 2005. This violation involved the obligation of budgetary 

resources in excess of a fiscal year 2006 apportionment, but did not involve obligations in excess of an 

appropriation. The second violation occurred in the Employment Standards Administration (ESA) Salaries and 

Expense account (160150) for fiscal years 2005, 2006, and 2007. The violation represents the compensation paid 

from March 20, 2005 through November 3, 2006 to an ESA employee who was a citizen of Mexico. This action 

violated a general provision in the fiscal year 2005 and fiscal year 2006 appropriations. 

No recommendation is considered necessary since management has completed required reporting related to these 

violations. 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

Annual Financial Statements 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Principal Financial Statements and Notes
Financial Section 

PRINCIPAL FINANCIAL STATEMENTS 

188 United States Department of Labor 

 

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 No. 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 was performed by KPMG LLP. The auditors’ report accompanies the principal statements. 

The Department’s principal financial statements for fiscal years (FY) 2007 and 2006 consisted of the 

following: 

• The Consolidated Balance Sheet, which presents as of September 30, 2007 and 2006 those resources 

owned or managed by DOL that 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 Statement of Net Cost, which presents the net cost of DOL operations for the years 

ended September 30, 2007 and 2006. 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 15 to the consolidated financial statements. 

• The Consolidated Statement of Changes in Net Position, which presents 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, 2007 and 2006. 

• The Combined Statement of Budgetary Resources, which presents the budgetary resources available to 

DOL during FY 2007 and 2006, the status of these resources at September 30, 2007 and 2006, the 

change in obligated balance during FY 2007 and 2006, and outlays of budgetary resources for the years 

ended September 30, 2007 and 2006. 

• The Consolidated Statement of Custodial Activity, which presents the sources and disposition of nonexchange revenues collected or accrued by DOL on behalf of other recipient entities for the years ended 

September 30, 2007 and 2006. 

 

• The Statement of Social Insurance, which presents the net present value of projected cash inflows and 

cash outflows of the Black Lung Disability Trust Fund as of September 30, 2007, 2006, 2005, 2004, and 

2003. 
Annual Financial Statements 

 

CONSOLIDATED BALANCE SHEET 

As of September 30, 2007 and 2006 

(Dollars in Thousands) 

 FY 2007 Performance and Accountability Report 189

2007 2006

ASSETS

Intra-governmental

Funds with U.S. Treasury (Notes 1-C and 2) 9,982,952 $ 9,717,149 $ 

Investments (Notes 1-D and 3) 75,131,134 66,455,052 

Interest receivable from investments (Note 23) 883,360 745,556 

Accounts receivable (Notes 1-E and 4) 4,068,703 4,046,188 

Advances (Notes 1-F, 5 and 23) 4 - 

Total intra-governmental 80,963,949 90,066,149 

Accounts receivable, net of allowance (Notes 1-E and 4) 1,060,223 1,055,156 

Advances (Notes 1-F, 5 and 23) 555,294 541,565 

Property, plant and equipment, net

 of accumulated depreciation (Notes 1-G and 6) 1,115,819 1,076,810 

Total assets $ 83,651,209 92,783,756 $ 

LIABILITIES AND NET POSITION

Liabilities (Note 1-I)

Intra-governmental

Accounts payable $ 22,459 21,761 $ 

Advances from U.S. Treasury (Notes 1-J and 8) 10,057,557 9,631,557 

Other liabilities (Note 11) 205,385 230,932 

Total intra-governmental 9,859,401 10,310,250 

Accounts payable 891,828 1,042,185 

Accrued leave (Notes 1-K and 23) 101,257 97,522 

Accrued benefits (Notes 1-L and 9) 1,448,772 1,199,648 

Future workers' compensation benefits (Notes 1-M, 10 and 23) 635,848 548,314 

Energy employees occupational illness

 compensation benefits (Note 1-N and 23) 7,501,838 6,942,442 

Other liabilities (Notes 11 and 23) 260,374 217,313 

Total liabilities 21,300,524 19,756,468 

Contingencies (Note 13)

Net position (Note 1-R)

Unexpended appropriations - other funds 8,207,904 8,193,767 

Cumulative results of operations

Earmarked funds (Note 21) 57,146,431 65,388,181 

Other funds (2,112,853) (1,445,457) 

Total net position 71,483,232 63,894,741 

Total liabilities and net position $ 83,651,209 92,783,756 $ 

The accompanying notes are an integral part of these statements. 
Financial Section 

 

CONSOLIDATED STATEMENT OF NET COST 

For the Years Ended September 30, 2007 and 2006 

(Dollars in Thousands) 

190 United States Department of Labor 

2007 2006

NET COST OF OPERATIONS (Notes 1-S and 15)

CROSSCUTTING PROGRAMS

Income maintenance

Gross cost $ 40,661,833 43,231,820 $ 

Less earned revenue (3,712,611) (3,265,223) 

Net program cost 39,966,597 36,949,222 

Employment and training

Gross cost 5,710,741 6,088,647 

Less earned revenue (22,568) (44,925) 

Net program cost 5,688,173 6,043,722 

Labor, employment and pension standards

Gross cost 729,053 716,808 

Less earned revenue (14,082) (11,024) 

Net program cost 714,971 705,784 

Worker safety and health

Gross cost 859,144 882,471 

Less earned revenue (2,405) (14,465) 

Net program cost 844,679 880,066 

OTHER PROGRAMS

Statistics

Gross cost 604,142 613,949 

Less earned revenue (6,083) (5,332) 

Net program cost 598,810 607,866 

COSTS NOT ASSIGNED TO PROGRAMS

Gross cost 85,782 93,009 

Less earned revenue not attributed to programs (6,325) (7,608) 

Net cost not assigned to programs 86,684 78,174 

Net cost of operations $ 44,874,029 48,290,719 $ 

The accompanying notes are an integral part of these statements. 
Annual Financial Statements 

CONSOLIDATED STATEMENT OF CHANGES IN NET POSITION 

For the Years Ended September 30, 2007 and 2006 

(Dollars in Thousands) 

 FY 2007 Performance and Accountability Report 191

Consolidated Consolidated Consolidated Consolidated

Earmarked All Other Consolidated Earmarked All Other Consolidated

Funds Funds Total Funds Funds Total

Cumulative results

 of operations, beginning $ (1,445,457) 57,146,431 $ 55,700,974 $ 45,353,214 $ (2,032,676) $ 43,320,538 $ 

Adjustments

Change in accounting principle

 (Note 1-B) 11,332 - 11,332 - - - 

Beginning balances, as adjusted (1,434,125) 57,146,431 55,712,306 45,353,214 (2,032,676) 43,320,538 

Budgetary financing sources

 (Note 1-T)

Appropriations used 10,482,552 - 10,482,552 9,925,600 - 9,925,600 

Nonexchange revenue

 (Note 16)

Employer taxes 39,910,946 39,910,946 - 42,014,032 42,014,032 - 

Interest 3,348,577 9,542 3,358,119 2,784,058 7,825 2,791,883 

Assessments 140,578 - 140,578 149,829 - 149,829 

Reimbursement of 

 unemployment benefits 1,632,863 1,632,863 - 1,855,188 1,855,188 - 

Total nonexchange revenue 44,892,386 150,120 45,042,506 46,653,278 157,654 46,810,932 

Transfers without 

 reimbursement (Note 17) (3,470,145) 3,666,500 196,355 (3,290,737) 3,684,560 393,823 

Other financing sources

 (Note 1-U)

Imputed financing from 

 costs absorbed by others 253 129,606 129,859 238 122,544 122,782 

Transfers without 

 reimbursement (Note 17) 2,469 - 2,469 1,328 - 1,328 

Total financing sources 41,422,494 14,431,247 55,853,741 43,362,779 13,891,686 57,254,465 

Net cost of operations (33,180,744) (15,109,975) (48,290,719) (31,569,562) (13,304,467) (44,874,029) 

Net change 8,241,750 (678,728) 7,563,022 11,793,217 587,219 12,380,436 

Cumulative results

 of operations, ending $ 65,388,181 (2,112,853) $ 63,275,328 $ 57,146,431 $ (1,445,457) $ 55,700,974 $ 

Unexpended appropriations,

 beginning $ 8,193,767 - $ 8,193,767 $ $ 8,115,461 - $ 8,115,461 $ 

Adjustments

Change in accounting principle

 (Note 1-B) 48,401 - 48,401 - - - 

Beginning balances, as adjusted 8,242,168 - 8,242,168 8,115,461 - 8,115,461 

Budgetary financing sources

 (Note 1-T)

Appropriations received

 (Note 18-F) 11,006,912 - 11,006,912 10,703,673 - 10,703,673 

Appropriations transferred (426,657) - (426,657) (600,895) - (600,895) 

Appropriations not available (131,967) - (131,967) (98,872) - (98,872) 

Appropriations used (10,482,552) - (10,482,552) (9,925,600) - (9,925,600) 

Subtotal (34,264) - (34,264) 78,306 - 78,306 

Unexpended appropriations

 ending 8,207,904 - 8,207,904 8,193,767 - 8,193,767 

Net position $ 65,388,181 6,095,051 $ 71,483,232 $ 57,146,431 $ 6,748,310 $ 63,894,741 $ 

2007 2006

The accompanying notes are an integral part of these statements.
Financial Section 

COMBINED STATEMENT OF BUDGETARY RESOURCES 

For the Years Ended September 30, 2007 and 2006 

(Dollars in Thousands)

192 United States Department of Labor 

2007 2006

BUDGETARY RESOURCES

Unobligated balance, brought forward, October 1 4,196,286 $ 3,872,075 $ 

Recoveries of prior year unpaid obligations 220,673 399,780 

Budget authority

Appropriations received (Note 18-F) 56,921,801 58,971,002 

Borrowing authority 445,000 426,000 

Spending authority from offsetting collections

Earned

Collected 3,106,611 2,787,587 

Change in receivables from Federal sources (5,294) (47,510) 

Change in unfilled customer orders

Advance received (1,816) (219) 

Without advance from Federal sources (825) - 

Expenditure transfers from trust funds 3,665,542 3,683,587 

Total budget authority 66,156,049 63,795,417 

Nonexpenditure transfers, net (522,731) (389,627) 

Temporarily not available pursuant to Public Law (8,474,004) (11,819,982) 

Permanently not available (449,404) (132,191) 

Total budgetary resources $ 57,635,787 59,216,554 $ 

STATUS OF BUDGETARY RESOURCES

Obligations incurred (Note 18-A)

Direct $ 50,344,367 52,020,071 $ 

Reimbursable 3,095,134 2,884,702 

Total obligations incurred 53,439,501 54,904,773 

Unobligated balances available

Apportioned 2,528,068 2,440,989 

Exempt from apportionment 212,629 178,948 

Total unobligated balances available 2,619,937 2,740,697 

Unobligated balances not available 1,691,844 1,455,589 

Total status of budgetary resources $ 57,635,787 59,216,554 $ 

CHANGE IN OBLIGATED BALANCE

Obligated balance, net 

Unpaid obligations, brought forward, October 1 9,020,444 $ 9,482,832 $ 

Less uncollected customer payments from Federal sources, 

 brought forward, October 1 (1,236,852) (1,473,680) 

Total unpaid obligated balance, net 7,783,592 8,009,152 

Obligations incurred, net 53,439,501 54,904,773 

Less gross outlays (53,502,109) (54,335,016) 

Less recoveries of prior year unpaid obligations, actual (220,673) (399,780) 

Change in uncollected customer payments from Federal sources (24,516) 236,828 

Obligated balance, net, end of period

Unpaid obligations 9,020,444 9,369,528 

Less uncollected customer payments from Federal sources (1,261,368) (1,236,852) 

Total unpaid obligated balance, net, end of period 8,108,160 $ 7,783,592 $ 

NET OUTLAYS

Gross outlays $ 53,502,109 54,335,016 $ 

Less offsetting collections (6,985,536) (6,420,360) 

Less distributed offsetting receipts (795,011) (855,746) 

Net outlays $ 45,660,827 47,119,645 $ 

The accompanying notes are an integral part of these statements. 
Annual Financial Statements 

CONSOLIDATED STATEMENT OF CUSTODIAL ACTIVITY 

For the Years Ended September 30, 2007 and 2006 

(Dollars in Thousands) 

 FY 2007 Performance and Accountability Report 193

2007 2006

CUSTODIAL REVENUE (Notes 1-V and 20)

Cash collection of fines, penalties, assessments

 and related interest $ 152,880 139,220 $ 

Less refunds (76) (235) 

Net cash collections 152,804 138,985 

Increase (decrease) in amounts to be collected 15,114 (12,767) 

Total custodial revenue 140,037 154,099 

DISPOSITION OF CUSTODIAL REVENUE (Note 1-V)

Net transfers to U.S. Treasury general fund 138,985 152,804 

Increase (decrease) in amounts to be transferred 15,114 (12,767) 

Total disposition of custodial revenue 140,037 154,099 

Net custodial activity $ - $ - 

The accompanying notes are an integral part of these statements.
Financial Section 

STATEMENT OF SOCIAL INSURANCE 

As of September 30, 2007, 2006, 2005, 2004, and 2003 

(Dollars in Thousands)

194 United States Department of Labor 

2007 2006 2005 2004 2003

BLACK LUNG DISABILITY 

 BENEFIT PROGRAM (NOTE 1-W)

Actuarial present value of future benefit

 payments during the projection

 period to disabled coal miners

 and dependent survivors 2,450,064 $ 2,722,801 $ 2,622,302 $ 2,880,559 $ 2,954,920 $ 

Actuarial present value of future

 administrative costs during 

 the projection period 831,439 848,218 845,158 759,282 695,421 

Actuarial present value of future benefit

 payments and administrative costs

 during the projection period 3,281,503 3,571,019 3,467,460 3,639,841 3,650,341 

Less the actuarial present value of future

 excise tax income during 

 the projection period 7,897,423 7,957,821 8,536,401 7,671,392 7,289,333 

Excess of actuarial present values of future

 excise tax income over the benefit 

 payments and administrative costs for

 the projection period 4,615,920 4,386,802 5,068,941 4,031,551 3,638,992 

Actuarial present value of future interest

 on U. S. Treasury advances during 

 the projection period 21,134,984 20,838,219 21,583,744 19,949,150 18,120,069 

 

Excess of actuarial present values of total

 future payments over the future excise

 tax income for the projection period (16,519,064) (16,451,417) (16,514,803) (15,917,599) (14,481,077) 

Trust fund net position deficit at start 

 of projection period (Note 21) (10,027,701) (9,604,743) (9,160,009) (8,711,444) (8,227,010)

Actuarial present value of total future

 payments and trust fund net position deficit

 over future excise tax income for 

 the projection period (26,546,765) $ $ (26,056,160) $ (25,674,812) $ (24,629,043) $ (22,708,087)

Projection Periods Ending September 30, 2040

Unaudited

The accompanying notes are an integral part of these statements. 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 195

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 

A. Reporting Entity 

The U.S. Department of Labor (DOL or the Department), 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 four major budget functions: education, training, 

employment, and social services; health (occupational health and safety); income security; and national 

defense. DOL’s major program agencies, major programs in which they operate, and the relationship of these 

programs to the Department’s 2007 Strategic Goals 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 – Strategic Goal 4 

• Employment and training – Strategic Goals 1 and 2 

• Labor, employment, and pension standards – Strategic Goal 3 

• Worker safety and health – Strategic Goal 3 

• Statistics – Strategic Goal 1 

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 for purposes of these consolidated financial statements. 
Financial Section 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

196 United States Department of Labor 

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 used in reporting to Treasury Financial Management Services 

and OMB. For financial statement purposes, funds are classified as earmarked funds and all other 

funds. 

 Earmarked funds are financed by specifically identified revenues often supplemented by other 

financing sources which remain available over time. These specifically identified revenues and other 

financing sources are required by statute to be used for designated activities, benefits, or purposes 

and must be accounted for separately from the Government’s general revenues. Earmarked funds 

and all other funds are identified as follows: 

Earmarked 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 Black Lung Disability Trust Fund, established under Part C of the Black Lung Benefits Revenue Act, 

provides compensation and medical benefits to coal miners who suffer disability due to 

pneumoconiosis, and compensation benefits to their dependent survivors for claims filed subsequent 

to June 30, 1973. Claims filed from the origination of the program until June 30, 1973 are paid by the 

general fund Special Benefits to Disabled Coal Miners. 

The Gifts and Bequests Fund uses miscellaneous funds received by gift or bequest to support various 

activities of the Secretary of Labor. 

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 Funds provide demonstration grants to regional and local entities to provide technical skills 

training to unemployed and incumbent workers. The funds are 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. 

 

 

 

 

 

 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 197

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

 

A. Reporting Entity - Continued 

 

3. Fund accounting structure – continued 

All other funds 

• 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. The Departments of 

Labor, Heath and Human Services, Education and Related Agencies Appropriations Act, 2006 

established an Office of Job Corps within the Office of the Secretary of Labor. This Act transferred 

management and administration of Job Corps activities from the Employment and Training 

Administration to an autonomous office under the Secretary during FY 2006. The administrative 

transfer of funds was accomplished under the allotment process. Since there was no actual budgetary 

transfer of funds, Job Corps costs continue to be reported under the Employment and Training 

Administration where funds were originally budgeted and appropriated. 

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. 

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 individuals 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 the 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. 
Financial Section 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

198 United States Department of Labor 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

 

A. Reporting Entity - Continued 

 

3. Fund accounting structure - continued 

All other funds - continued 

• General funds - continued 

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. 

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 DOL 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. 

• 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 

(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. 

 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 199

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

 

A. Reporting Entity - Continued 

 

3. Fund accounting structure – continued 

All other funds - continued 

• Trust funds 

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 Workmen’s Compensation Act Trust Fund, established under the authority 

District of Columbia Workmen’s 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. 

• 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. 

 

4. Inter-departmental relationships 

DOL and 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, and custodial activities of the U.S. Department of Labor, in accordance with 

U.S. generally accepted accounting principles and the form and content requirements of OMB Circular No. A136, “Financial Reporting Requirements.” Except as described in the following paragraphs, 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 No. A-136 requires that the Statement of Budgetary Resources be 

presented on a combined basis. 

Effective for FY 2007, OMB Circular A-136 has removed the Statement of Financing as a Principle Financial 

Statement. The purpose of this Statement was to explain how budgetary resources obligated during the 

period relate to the net cost of operations for a reporting entity. OMB decided that this reconciliation would be 

better placed and understood as a note rather than as a principle statement. This reconciliation is disclosed 

in Note 19, Reconciliation of Budgetary Resources Obligated to Net Cost of Operations. 
Financial Section 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

200 United States Department of Labor 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued

 

B. Basis of Accounting and Presentation - Continued 

DOL is a party to allocation transfers with other Federal agencies as both a transferring (parent) entity and a 

receiving (child) entity. Allocation transfers are legal delegations by one department of its authority to 

obligate budget authority and outlay funds to another department. A separate fund account (allocation 

account) is created in the U.S. Treasury as a subset of the parent fund account for tracking and reporting 

purposes. All allocation transfers of balances are credited to this account, and subsequent obligations and 

outlays incurred by the child entity are charged to this allocation account as they execute the delegated 

activity on behalf of the parent entity. 

For fiscal years prior to 2007, OMB Circular No. A-136 required 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 was material to the recipient’s financial statements. The activity relating to the allocation 

was reported in all of the recipient’s financial statements, except the Statement of Budgetary Resources, 

when the allocation transfer was material to the recipient’s financial statements. The transferor continued to 

report the appropriation and the related budgetary activity in its Statement of Budgetary Resources. Effective 

in FY 2007, OMB Circular No. A-136 requires the parent to report all budgetary and proprietary activity in its 

financial statements, whether material to the child, or not. 

DOL allocates appropriations to the Department of Agriculture and the Department of Interior to provide funds 

for youth training programs. These Departments considered this activity material to their respective financial 

statements; therefore, DOL reported this activity only in the Combined Statement of Budgetary Resources in 

FY 2006. All activity for these allocation accounts is included in the DOL financial statements for FY 2007 in 

accordance with the new requirements. The effect on beginning cumulative results of operations and 

unexpended appropriations is reflected as a change in accounting principle on the Consolidated Statement of 

Changes in Net Position. 

Appropriations have been allocated to DOL from the Environmental Protection Agency, the General Services 

Administration, and the Agency for International Development, which DOL considered to be immaterial in FY 

2006. These amounts have not been included in the DOL financial statements for FY 2007 or FY 2006. 

U.S. generally accepted accounting principles encompass both accrual and budgetary transactions. Under 

accrual accounting, revenues are recognized when earned, and expenses are recognized when liabilities are 

incurred. Budgetary accounting facilitates compliance with legal constraints on, and controls over, the use of 

federal funds. These consolidated financial statements are prepared by DOL pursuant to OMB directives and 

used to monitor DOL’s use of budgetary resources. 

 

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 DOL. (See Note 2) 

 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 201

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

 

D. Investments 

The Federal Government does not set aside assets to pay future benefits or other expenditures associated 

with DOL’s earmarked funds. The cash receipts collected from the public for earmarked funds are deposited 

in the U.S. Treasury, which uses the cash for general Government purposes. Interest earning Treasury 

securities are issued to DOL’s earmarked funds as evidence of the receipts. These Treasury securities are 

assets to DOL and liabilities to the U.S. Treasury. Because DOL and the U.S. Treasury are both parts of the 

Government, these assets and liabilities offset each other from the standpoint of the Government as a whole. 

For this reason, they do not represent an asset or a liability in the U.S. Government-wide financial statements. 

Treasury securities provide DOL with authority to draw upon the U.S. Treasury to make future benefit 

payments or other expenditures. When DOL requires redemption of these securities to make expenditures, 

the Government finances those expenditures out of accumulated cash balances, by raising taxes or other 

receipts, by borrowing from the public or repaying less debt, or by curtailing other expenditures. This is the 

same way that the Government finances all other expenditures. 

Balances held in the Unemployment Trust Fund are invested in non-marketable, special issue Treasury 

securities (certificates of indebtedness and bonds) 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 Panama Canal Commission Compensation Fund are invested in marketable 

Treasury securities. These investments are stated at amortized costs that equal 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. 

Other funds also have investments in Treasury securities. Balances held in the Longshore and Harbor 

Workers’ Compensation Act Trust Fund, the District of Columbia Workmen’s Compensation Act Trust Fund, 

and the Energy Employees Occupational Illness Compensation Fund are invested in non-marketable Treasury 

one day certificates. (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 (FECA) Special Benefit Fund provides 

workers’ compensation 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. 
Financial Section 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

202 United States Department of Labor 

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 due from the public 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. Intra-governmental accounts receivable are considered 

fully collectible. (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 Accumulated 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 Corps’ PP&E, as well as other general purpose 

PP&E used by the Department. Internal use software is considered general purpose PP&E. 

Effective October 1, 2002, 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. For fiscal years 1996 through 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. 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 203

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

 

G. Property, Plant and Equipment, Net of Accumulated Depreciation - Continued 

PP&E 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 lives. 

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 lives. 

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) 

 

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. 
Financial Section 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

204 United States Department of Labor 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

 

I. Liabilities - Continued 

Liabilities are classified as covered by budgetary resources if budgetary resources are available. Liabilities are 

also considered covered by budgetary resources if they are to be funded by permanent indefinite 

appropriations, which have been enacted and signed into law and are available for use as of the balance sheet 

date, provided that the resources may be apportioned by OMB without further action by the Congress and 

without a contingency having to be met first. Liabilities are classified as not covered by budgetary resources if 

budgetary resources are not available. 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 when 

fund resources are not adequate to meet fund obligations. Budget 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 rate 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 4.500% to 

13.875% at September 30, 2007 and 2006. 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. 

 

 

L. Accrued Benefits 

The financial statements include a liability for unemployment, workers’ compensation, and disability benefits 

due and 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. 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 205

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

 

L. Accrued Benefits – Continued 

1. Unemployment benefits payable - continued 

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. Emergency benefits were paid under the Temporary 

Extended Unemployment Compensation Act and the Emergency Unemployment Compensation Act. 

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 jobrelated 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, primarily for cases filed prior to 1961. The fund also provides 50% of 

the annual cost-of-living 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 DOL and 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. 

 

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 (RECA). DOL recognizes a liability for disability benefits to the extent of unpaid 

benefits applicable to the current period. 
Financial Section 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

206 United States Department of Labor 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

 

L. Accrued Benefits – Continued 

 

5. Longshore and harbor workers’ and District of Columbia disability benefits payable 

The Longshore and Harbor Workers’ Compensation Act Trust Fund and the District of Columbia 

Workmen’s Compensation Act Trust Fund provide compensation and medical benefits for workrelated 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 an actuarial 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 injury 

years to predict the ultimate payments. 

 

The actuarial 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 COLAs and 

CPIMs used in the projections for FY 2007 and FY 2006 were as follows: 

 COLA CPIM 

 FY 2007 2006 2007 2006

2007 N/A 3.50% N/A 4.00% 

2008 2.63% 3.13% 3.74% 4.01% 

2009 2.90% 2.40% 4.04% 4.01% 

2010 2.47% 2.40% 4.00% 4.03% 

2011 2.37% 2.43% 3.94% 4.09% 

2012+ 2.30% 2.43% 3.94% 4.09% 

Projected annual payments were discounted to present value based on OMB’s interest rate assumptions for 

ten year Treasury notes. For 2007, interest rate assumptions were 4.93% in year one and 5.08% in year two 

and thereafter. For 2006, interest rate assumptions were 5.17% in year one and 5.31% in year two and 

thereafter. (See Note 10) 

 

 

 

 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 207

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

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 DOE and its contractors, or to certain survivors of those employees and 

contractors, as well as benefits to certain beneficiaries of RECA. 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. Prior to October 2004, compensation of 

$50,000 and payment of medical expenses from the date a claim is filed are available to individuals eligible 

for compensation under RECA. As a result of the October 2004 changes, new RECA cases are paid the full 

$150,000 under EEOICPA. 

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 workers’ 

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 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 $7.5 billion and $6.9 billion actuarial liability for estimated future benefits payable by 

DOL at September 30, 2007 and 2006, respectively, to eligible individuals under the EEOICPA. At September 

30, 2007, the undiscounted liability is $11.1 billion discounted to a present value liability of $7.5 billion based 

on an interest rate of 5.078% projected over a 51 year period. At September 30, 2006, the undiscounted 

liability is $9.8 billion discounted to a present value liability of $6.9 billion based on an interest rate 5.313% 

projected over a 49 year period. 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. 

 

 

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 2007, DOL’s contributions to the FEHBP and 

FEGLIP were $77.9 and $2.0 million, respectively. During 2006, DOL’s contributions to the FEHBP and FEGLIP 

were $76.2 and $2.0 million, respectively. These contributions are recognized as current operating expenses. 

 
Financial Section 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

208 United States Department of Labor 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

 

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. Using cost factors supplied by OPM, DOL recorded ORB imputed costs and imputed 

financing sources of $86.5 million in 2007 and $80.6 million in 2006. 

 

 

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 makes an 11.2% 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 withholdings. DOL makes 

matching FICA contributions, recognized as operating expenses. DOL’s matching contributions were $68.6 

million in 2007 and $65.0 million in 2006. 

 

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 $15,500 of their gross pay to the 

TSP during calendar year 2007, but there is no departmental matching contribution. FERS participants may 

contribute up to $15,500 of their gross pay to the TSP during calendar year 2007. CSRS and FERS 

participants were limited to a $15,000 maximum during calendar year 2006. For employees covered under 

FERS, DOL contributes 1% of the employees’ gross pay to the TSP. DOL also matches employees’ 

contributions dollar-for-dollar on the first 3% of pay contributed each pay period and 50 cents on the dollar for 

the next 2% of pay contributed. DOL contributions to the TSP are recognized as current operating expenses. 

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. 

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 an 

imputed cost and 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 14) 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 209

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

 

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 those 

appropriations are closed, five years after the appropriations expire. Unexpired multi-year and no-year 

appropriations remain available to DOL for obligation in future periods. 

2. Cumulative results of operations 

Cumulative results of operations include 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. Intra-governmental costs are 

exchange transactions made between DOL and other entities within the Federal government. Intragovernmental costs relate to the source of goods and services purchased by DOL, and not to the 

classification of related revenue. With the public costs are exchange transactions made between DOL 

and a non-Federal entity. Full costs are reduced by exchange (earned) revenues to arrive at net 

program 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 sub-organization in Note 15 to the 

financial statements. 

 

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 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 to the 

Unemployment Trust Fund from Federal agencies for the cost of unemployment benefits provided to or 

accrued on behalf of their former employees. 

 

 
Financial Section 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

210 United States Department of Labor 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

 

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 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 16) 

• 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 DOL. 

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’ Compensation Act Trust Fund, District 

of Columbia Workmen’s Compensation Act 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 nonexchange revenue when earned. 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 211

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

 

T. Budgetary Financing Sources - Continued 

 

2. Non-exchange revenue - continued 

• Assessments 

The Longshore and Harbor Workers’ Compensation Act Trust Fund and District of Columbia Workmen’s 

Compensation Act Trust Fund receive non-exchange revenues from assessments levied on insurance 

companies and self-insured employers. Assessments are recognized as non-exchange revenues when 

earned. 

• 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 or accrued on behalf of 

their employees. These reimbursements are recognized as other non-exchange revenue when earned. 

3. Transfers without reimbursement 

Transfers recognized as budgetary financing sources by DOL include transfers from the Department of 

Homeland Security H-1B Nonimmigrant Petitioner Account to H-1B Funds in ETA and ESA. Also 

included are transfers from various DOL general fund unexpended appropriation accounts to the 

Working Capital Fund’s cumulative results of operations. (See Note 17) 

 

 

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 

Transfers recognized as other financing sources by DOL include the transfers of property from the 

General Services Administration. (See Note 17) 

 

 

 

 

 

 
Financial Section 

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

212 United States Department of Labor 

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

 

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 20) 

 

 

W. Significant Assumptions Used in the Statement of Social Insurance 

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 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. 

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. 

 

The significant assumptions used in the projections for the Statement of Social Insurance are the number of 

beneficiaries, life expectancy, coal excise tax revenue estimates, the tax rate structure, Federal civilian pay 

raises, medical cost inflation, and the interest rate on new repayable advances from Treasury. 

The Office of Tax Analysis of the Department of the Treasury provides estimates of future receipts of the black 

lung excise tax. Its estimates are based on projections of future coal production and sale prices prepared by 

the Energy Information Agency of the Department of Energy. The Department of Treasury’s Office of Tax 

Analysis provides the first eleven years of tax receipt estimates. The remaining years are estimated using a 

growth rate based on both historical tax receipts and the Department of Treasury’s estimated tax receipts. 

The coal excise tax rate structure is $1.10 per ton of underground-mined coal and $0.55 per ton of surfacemined coal sold, with a cap of 4.4 percent of sales price, through December 31, 2013. Starting in 2014, the 

tax rates revert to $0.50 per ton of underground-mined coal and $0.25 per ton surface-mine coal sold, and a 

limit of two percent of sales price. 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 213

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – Continued 

W. Significant Assumptions Used in the Statement of Social Insurance - Continued 

The beneficiary population data is updated from information supplied by the program. The beneficiary 

population is a nearly closed universe in which attrition by death exceeds new entrants by a ratio of more than 

ten to one. Projections for new participants are included in the overall projections and are considered 

immaterial. Social Security Administration life tables are used to project the life expectancies of the 

beneficiary population. The Office of Management and Budget supplies assumptions for future monthly 

benefit rate increases based on increases in the Federal pay scale and future medical cost inflation based on 

increases in the consumer price index-medical, which are used to calculate future benefit costs. During the 

current projection period, future benefit rate increases range from 2.5% to 4.2%, and medical cost increases 

range from 3.8% to 4.1%. Estimates for administrative costs for the first 11 years of the projection are 

supplied by DOL’s Budget Office, while later years are based on the number of projected beneficiaries. 

Estimates for future interest on advances are based on the interest rates on outstanding advances ranging 

from 4.500% to 13.875% and new borrowings ranging from 5.2% to 5.6%. 

The projection period ends September 30, 2040, because the primary purpose of the BLDTF, which was 

established in 1978, is to compensate the victims of coal mine dust exposures which occurred prior to 1970. 

By the end of FY 2040, not only the disabled miners and their widows in that class, but also virtually all of 

their eligible dependent disabled adult children will be deceased. All of the current year projections are 

discounted using an interest rate of 4.75%, which is the last actual rate on advances taken at the end of FY 

2007. 

 

X. Tax Exempt Status 

As an agency of the Federal government, the Department is exempt from all taxes imposed by any governing 

body whether it is a Federal, state, commonwealth, local, or foreign government. 

Y. 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. 
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

214 United States Department of Labor 

NOTE 2 - FUNDS WITH U.S. TREASURY 

 

Funds with U.S. Treasury at September 30, 2007 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 9,254 $ $ 37,715 - $ 46,969 $ $ 46,969 - $ 

Trust funds 172,261 (28,292) - 143,969 (115) 143,854 

General funds 2,415,351 1,604,964 5,692,427 9,712,742 9,712,742 - 

Other - - - - 79,387 79,387 

$ 1,604,964 2,596,866 $ 5,701,850 $ 9,903,680 $ 79,272 $ 9,982,952 $ 

Entity Assets

Funds with U.S. Treasury at September 30, 2006 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 3,946 $ $ 35,694 - $ 39,640 $ $ 39,640 - $ 

Trust funds 141,122 (41,062) - 100,060 (159) 99,901 

General funds 2,446,785 1,371,403 5,696,774 9,514,962 9,514,962 - 

Other - - - - 62,646 62,646 

$ 1,371,403 2,591,853 $ 5,691,406 $ 9,654,662 $ 62,487 $ 9,717,149 $ 

Entity Assets

The negative fund balances reported as of September 30, 2007 and 2006 relate to the Unemployment Trust 

Fund (UTF) and are the result of the timing of processing the investments and redemptions of UTF. The 

investments and redemptions relating to the last business day of the month are not processed until the first 

day of the next month. This could result in a negative cash position for the preceding business day if the 

disbursements are greater than the receipts to the fund. 

Unobligated Balance Available includes $361 million of funds apportioned for use in the subsequent year. 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 215

NOTE 3 - INVESTMENTS 

Investments at September 30, 2007 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

5.000% maturing June 30, 2008 8,208,313 8,208,313 - 8,208,313 

Special issue U.S. Treasury Bonds

4.625% maturing June 30, 2008 10,879,148 10,879,148 - 10,879,148 

4.875% maturing June 30, 2008 10,000,000 10,000,000 - 10,000,000 

4.875% maturing June 30, 2009 9,980,072 9,980,072 - 9,980,072 

5.000% maturing June 30, 2009 11,000,000 11,000,000 - 11,000,000 

5.000% maturing June 30, 2010 24,855,747 - 24,855,747 24,855,747 

 74,923,280 - 74,923,280 74,923,280 

Panama Canal Commission

 Compensation Fund

Marketable

U.S. Treasury Bill

Maturing November 15, 2007 7,170 (43) 7,127 7,138 

U.S. Treasury Notes

3.625% to 5.625% various maturities 43,152 (142) 43,010 43,418 

U.S. Treasury Bonds

10.375% to 11.750% various maturities 27,078 1,013 28,091 28,054 

 828 77,400 78,228 78,610 

Longshore and Harbor Workers' 

 Compensation Act Trust Fund

Non-marketable

One Day Certificate

3.99% maturing October 1, 2007 69,979 69,979 - 69,979 

District of Columbia Workmen's 

 Compensation Act Trust Fund

Non-marketable

One Day Certificate

3.99% maturing October 1, 2007 6,585 6,585 - 6,585 

Energy Employees Occupational Illness 

 Compensation Fund

Non-marketable

One Day Certificate

3.99% maturing October 1, 2007 53,062 - 53,062 53,062 

$ 75,130,306 828 $ 75,131,134 $ 75,131,516 $ 

Entity investments $ 828 75,022,470 $ 75,023,298 $ 75,023,680 $ 

Non-entity investments 107,836 - 107,836 107,836 

$ 75,130,306 828 $ 75,131,134 $ 75,131,516 $ 

 
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

216 United States Department of Labor 

NOTE 3 - INVESTMENTS - Continued 

Investments at September 30, 2006 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

4.875% maturing June 30, 2007 8,662,384 $ $ 8,662,384 - $ 8,662,384 $ 

5.000% maturing June 30, 2007 343,768 343,768 - 343,768 

Special issue U.S. Treasury Bonds

4.625% maturing June 30, 2007 17,927,258 17,927,258 - 17,927,258 

4.625% maturing June 30, 2008 19,299,158 19,299,158 - 19,299,158 

4.875% maturing June 30, 2008 10,000,000 10,000,000 - 10,000,000 

4.875% maturing June 30, 2009 9,980,072 9,980,072 - 9,980,072 

 66,212,640 66,212,640 - 66,212,640 

Panama Canal Commission

 Compensation Fund

Marketable

U.S. Treasury Bill

Maturing November 16, 2006 13,608 (85) 13,523 13,016 

U.S. Treasury Notes

3.625% to 6.625% various maturities 24,460 30 24,490 24,315 

U.S. Treasury Bonds

10.375% to 11.750% various maturities 39,738 2,597 42,335 42,233 

 2,542 77,806 80,348 79,564 

Longshore and Harbor Workers' 

 Compensation Act Trust Fund

Non-marketable

One Day Certificate

5.030% maturing October 2, 2006 73,146 73,146 - 73,146 

District of Columbia Workmen's 

 Compensation Act Trust Fund

Non-marketable

One Day Certificate

5.030% maturing October 2, 2006 5,611 5,611 - 5,611 

Energy Employees Occupational Illness 

 Compensation Fund

Non-marketable

One Day Certificate

5.030% maturing October 2, 2006 83,307 83,307 - 83,307 

$ 66,452,510 2,542 $ 66,455,052 $ 66,454,268 $ 

Entity investments $ 2,542 66,351,966 $ 66,354,508 $ 66,353,724 $ 

Non-entity investments 100,544 100,544 - 100,544 

$ 66,452,510 2,542 $ 66,455,052 $ 66,454,268 $ 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 217

NOTE 4 - ACCOUNTS RECEIVABLE, NET OF ALLOWANCE

 

Accounts receivable at September 30, 2007 consisted of the following: 

Gross Net

(Dollars in thousands) Receivables Allowance Receivables

Entity intra-governmental assets

Due for UCFE and UCX benefits 302,723 $ $ 302,723 - $ 

Due for workers' compensation benefits 3,754,382 3,754,382 - 

Other 11,598 11,598 - 

 4,068,703 4,068,703 - 

Entity assets

State unemployment taxes 922,643 (646,571) 276,072 

Due from reimbursable employers 489,269 (30,077) 459,192 

Benefit overpayments 1,907,770 (1,656,975) 250,795 

Other (1,727) 8,864 7,137 

 (2,335,350) 3,328,546 993,196 

Non-entity assets

Fines and penalties 92,805 (31,820) 60,985 

Backwages 10,839 (4,797) 6,042 

 103,644 (36,617) 67,027 

 (2,371,967) 3,432,190 1,060,223 

$ (2,371,967) 7,500,893 $ 5,128,926 $ 

 

 
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

218 United States Department of Labor 

NOTE 4 - ACCOUNTS RECEIVABLE, NET OF ALLOWANCE - Continued

 

Accounts receivable at September 30, 2006 consisted of the following: 

Gross Net

(Dollars in thousands) Receivables Allowance Receivables

Entity intra-governmental assets

Due for UCFE and UCX benefits 334,738 $ $ 334,738 - $ 

Due for workers' compensation benefits 3,696,581 3,696,581 - 

Other 14,869 14,869 - 

 4,046,188 4,046,188 - 

Entity assets

State unemployment taxes 932,626 (666,082) 266,544 

Due from reimbursable employers 544,016 (32,357) 511,659 

Benefit overpayments 1,949,362 (1,730,343) 219,019 

Other (2,443) 8,079 5,636 

 (2,431,225) 3,434,083 1,002,858 

Non-entity assets

Fines and penalties 81,309 (36,808) 44,501 

Backwages 23,966 (16,169) 7,797 

 105,275 (52,977) 52,298 

 (2,484,202) 3,539,358 1,055,156 

$ (2,484,202) 7,585,546 $ 5,101,344 $ 

 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 219

NOTE 5 - ADVANCES 

Advances at September 30, 2007 and 2006 consisted of the following: 

(Dollars in thousands) 2007 2006

Intra-governmental

Advances to the Department of Justice $ 4 - $ 

 4 - 

Advances to states for UI benefit payments 509,848 474,153 

Advances to grantees and contractors to finance future DOL program expenditures 29,504 78,537 

Other 2,604 2,213 

 541,565 555,294 

$ 555,298 541,565 $ 

 

 

NOTE 6 - PROPERTY, PLANT AND EQUIPMENT, NET OF ACCUMULATED DEPRECIATION 

Property, plant and equipment at September 30, 2007 consisted of the following: 

Accumulated

Depreciation/ Net Book

(Dollars in thousands) Cost Amortization Value

Structures, facilities and improvements

Structures and facilities 1,014,233 $ (409,570) $ 604,663 $ 

Improvements to leased facilities 427,769 (228,257) 199,512 

 (637,827) 1,442,002 804,175 

Furniture and equipment

Equipment held by contractors 168,049 (161,300) 6,749 

Furniture and equipment 54,067 (36,653) 17,414 

 222,116 (197,953) 24,163 

ADP software (74,433) 190,014 115,581 

Construction-in-progress 78,651 78,651 - 

Land 93,249 93,249 - 

$ (910,213) 2,026,032 $ 1,115,819 $ 

2007
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

220 United States Department of Labor 

NOTE 6 - PROPERTY, PLANT AND EQUIPMENT, NET OF ACCUMULATED DEPRECIATION - Continued 

Property, plant and equipment at September 30, 2006 consisted of the following: 

Accumulated

Depreciation/ Net Book

(Dollars in thousands) Cost Amortization Value

Structures, facilities and improvements

Structures and facilities 862,100 $ (378,086) $ 484,014 $ 

Improvements to leased facilities 409,521 (222,152) 187,369 

 (600,238) 1,271,621 671,383 

Furniture and equipment

Equipment held by contractors 159,771 (154,226) 5,545 

Furniture and equipment 62,740 (39,973) 22,767 

 222,511 (194,199) 28,312 

ADP software (68,640) 192,270 123,630 

Construction-in-progress 162,486 162,486 - 

Land 90,999 90,999 - 

$ (863,077) 1,939,887 $ 1,076,810 $ 

2006

 

NOTE 7 - NON-ENTITY ASSETS 

Non-entity assets consisted of the following at September 30, 2007 and 2006: 

(Dollars in thousands) 2007 2006

Intra-governmental

Funds with U.S. Treasury $ 62,487 79,272 $ 

Investments 100,544 107,836 

Interest receivable from investments 1,269 1,129 

 164,160 188,377 

Accounts receivable, net of allowance 67,027 52,298 

$ 216,458 255,404 $ 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 221

NOTE 8 - ADVANCES FROM U.S. TREASURY 

Advances from U.S. Treasury to the Black Lung Disability Trust Fund during 2007 consisted of the following: 

Balance at Balance at

September 30, Net September 30,

(Dollars in thousands) 2006 Borrowing 2007

Intra-governmental

Borrowing from the Treasury 9,631,557 $ 426,000 $ 10,057,557 $ 

Advances from U.S. Treasury to the Black Lung Disability Trust Fund during 2006 consisted of the following: 

Balance at Balance at

September 30, Net September 30,

(Dollars in thousands) 2005 Borrowing 2006

Intra-governmental

Borrowing from the Treasury 9,186,557 $ 445,000 $ 9,631,557 $ 

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 21) 

NOTE 9 – ACCRUED BENEFITS 

Accrued benefits at September 30, 2007 and 2006 consisted of the following: 

(Dollars in thousands) 2007 2006

State regular and extended unemployment benefits payable 1,053,055 $ 790,745 $ 

Federal extended unemployment benefits payable 35,945 36,615 

Federal temporary extended unemployment benefits 23,641 24,532 

Federal emergency unemployment benefits payable 44,950 42,649 

Federal employees' unemployment benefits payable 30,432 36,725 

Federal employees' unemployment benefits for existing

 claims due in the subsequent year 123,576 137,161 

Total unemployment benefits payable 1,311,599 1,068,427 

Black lung disability benefits payable 43,277 46,329 

Federal employees' disability and 10(h) benefits payable 65,937 59,735 

Energy employees occupational illness compensation benefits payable 24,006 21,492 

Longshore and harbor workers disability benefits payable 3,655 3,382 

District of Columbia disability benefits payable 298 283 

$ 1,448,772 $ 1,199,648
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

222 United States Department of Labor 

NOTE 10 - FUTURE WORKERS' COMPENSATION BENEFITS 

DOL’s liability for future workers’ compensation benefits at September 30, 2007 and 2006 consisted of the 

following: 

(Dollars in thousands) 2007 2006

Projected gross liability of the Federal government

 for future FECA benefits $ 26,306,065 25,851,505 $ 

Less liabilities attributed to other agencies:

U.S. Postal Service (8,662,714) (8,923,407) 

Department of Navy (2,698,683) (2,694,074) 

Department of Army (1,973,869) (1,977,872) 

Department of Veterans Affairs (1,826,564) (1,811,947) 

Department of Air Force (1,381,158) (1,369,905) 

Department of Transportation (949,465) (952,969) 

Department of Homeland Security (1,683,569) (1,519,329) 

Tennessee Valley Authority (538,096) (553,322) 

Department of Treasury (600,737) (573,038) 

Department of Agriculture (775,281) (807,652) 

Department of Justice (991,560) (1,046,480) 

Department of Interior (678,923) (659,333) 

Department of Defense, Other (777,041) (813,532) 

Department of Health and Human Services (275,776) (273,374) 

Social Security Administration (271,981) (274,763) 

General Services Administration (164,883) (165,051) 

Department of Commerce (164,416) (170,164) 

Department of Energy (96,386) (105,231) 

Department of State (62,669) (68,078) 

Department of Housing & Urban Development (81,779) (79,873) 

Department of Education (16,952) (16,186) 

National Aeronautics and Space Administration (64,060) (60,217) 

Environmental Protection Agency (39,786) (39,408) 

Small Business Administration (26,321) (27,045) 

Office of Personnel Management (21,020) (20,448) 

National Science Foundation (1,182) (1,287) 

Nuclear Regulatory Commission (6,833) (7,434) 

Agency for International Development (23,528) (23,438) 

Other (549,540) (533,779) 

 (25,670,217) (25,303,191) 

$ 548,314 635,848 $ 

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 346,299 $ 250,179 $ 

FECA benefits due to eligible workers of DOL and Job Corps enrollees 237,920 242,525 

FECA benefits due to eligible workers of the Panama Canal Commission 51,629 55,610 

$ 548,314 635,848 $ 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 223

NOTE 11 - OTHER LIABILITIES 

Other liabilities at September 30, 2007 and 2006 consisted of the following current liabilities: 

(Dollars in thousands) 2007 2006

Intra-governmental

Accrued benefits $ 10,070 10,385 $ 

Unearned FECA assessments 48,285 51,192 

Deposit and clearing accounts 2 - 

Non-entity receipts due to U.S. Treasury 59,615 44,501 

Amounts held for the Railroad Retirement Board 108,990 101,514 

Advances from other Federal agencies 750 1,013 

Total intra-governmental 230,932 205,385 

Accrued payroll and benefits 44,968 48,280 

Due to Backwage recipients 71,235 85,583 

Unearned assessment revenue 42,751 41,965 

Deposit and clearing accounts 1,216 - 

Readjustment allowances and other Job Corps liabilities 83,330 58,359 

 260,374 217,313 

$ 422,698 491,306 $ 

NOTE 12 - LIABILITIES NOT COVERED BY BUDGETARY RESOURCES 

Liabilities not covered by budgetary resources at September 30, 2007 and 2006 consisted of the following: 

(Dollars in thousands) 2007 2006

Intra-governmental

Advances from U.S. Treasury 10,057,557 $ 9,631,557 $ 

Future workers' compensation benefits 237,920 242,525 

Accrued annual leave 92,506 96,014 

Readjustment allowances and other Job Corps liabilities 83,330 58,359 

 417,264 393,390 

$ 10,474,821 10,024,947 $ 
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

224 United States Department of Labor 

NOTE 13 – CONTINGENCIES 

 

The Department is involved in various lawsuits incidental to its operations. Judgments resulting from litigation 

against the Department are paid by the Department of Justice. In the opinion of management, the ultimate 

resolution of pending litigation will not have a material effect on the Department’s financial position. 

NOTE 14 - PENSION EXPENSE 

Pension expense in 2007 consisted of the following: 

Total

Employer Costs Imputed Pension

(Dollars in thousands) Contributions by OPM Expense

Civil Service Retirement System 24,503 $ 39,287 $ 63,790 $ 

Federal Employees' Retirement System 94,390 94,390 - 

Thrift Savings Plan 36,092 36,092 - 

$ 154,985 $ 39,287 $ 194,272

Pension expense in 2006 consisted of the following: 

Total

Employer Costs Imputed Pension

(Dollars in thousands) Contributions by OPM Expense

Civil Service Retirement System 26,506 $ 42,476 $ 68,982 $ 

Federal Employees' Retirement System 86,876 86,876 - 

Thrift Savings Plan 33,003 33,003 - 

$ 146,385 $ 42,476 $ 188,861

 

 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 225

NOTE 15 - 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 2007. 
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

226 United States Department of Labor 

NOTE 15 - PROGRAM COST - Continued 

 

A. Consolidating Statement of Net Cost by Suborganization 

Net cost by suborganization for the year ended September 30, 2007 consisted of the following: 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Employment Employment Occupational Bureau of

and Training Standards Safety and Health Labor

(Dollars in thousands) Administration Administration Administration Statistics

CROSSCUTTING PROGRAMS

 Income maintenance

Intra-governmental 233,861 $ 916,551 $ $ - $ - 

With the public 36,917,255 5,148,596 - - 

 Gross cost 37,151,116 6,065,147 - - 

Intra-governmental earned revenue (732,135) (2,554,992) - - 

Public earned revenue (1,253) - - - 

 Less earned revenue (733,388) (2,554,992) - - 

Net program cost 36,417,728 3,510,155 - - 

 Employment and training

Intra-governmental 61,577 - - - 

With the public 5,816,989 - - - 

 Gross cost 5,878,566 - - - 

Intra-governmental earned revenue (44,553) - - - 

Public earned revenue (372) - - - 

 Less earned revenue (44,925) - - - 

Net program cost 5,833,641 - - - 

 Labor, employment and pension

 standards

Intra-governmental 120,834 - - - 

With the public - 249,898 - - 

 Gross cost - 370,732 - - 

Intra-governmental earned revenue - - - - 

Public earned revenue - - - - 

 Less earned revenue - - - - 

Net program cost - 370,732 - - 

 Worker safety and health

Intra-governmental - 123,047 - - 

With the public - - 406,101 - 

 Gross cost - - 529,148 - 

Intra-governmental earned revenue - - - - 

Public earned revenue - - (1,292) - 

 Less earned revenue - - (1,292) - 

Net program cost - - 527,856 - 

OTHER PROGRAMS

 Statistics

Intra-governmental - - 195,947 - 

With the public - - - 385,328 

 Gross cost - - - 581,275 

Intra-governmental earned revenue - - - - 

Public earned revenue - - - (6,083) 

 Less earned revenue - - - (6,083) 

Net program cost - - - 575,192 

COSTS NOT ASSIGNED TO PROGRAMS

 Gross cost - - - - 

 Less earned revenue not attributed to programs - - - - 

Net cost not assigned to programs - - - - 

Net cost of operations $ 3,880,887 42,251,369 $ 527,856 $ 575,192 $ 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 227

 

 

Mine Safety Employee Benefits Veterans' Other

and Health Security Employment Departmental

Administration Administration and Training Programs Eliminations Total

$ 11,324 - $ $ 2,007 - $ (54,911) $ 1,108,832 $ 

 - 22,246 - 3,137 31,754 42,122,988 

 - 33,570 - 5,144 (23,157) 43,231,820 

 - - - 23,157 - (3,263,970) 

 - - - - - (1,253) 

 - - - - 23,157 (3,265,223) 

 - 33,570 - 5,144 - 39,966,597 

 - 10,043 - 448 (20,803) 51,265 

 - - 198,798 792 20,803 6,037,382 

 - - 208,841 1,240 - 6,088,647 

 - - - - (44,553) - 

 - - - - - (372) 

 - - - - - (44,925) 

 - - 208,841 1,240 - 6,043,722 

 43,868 - 1,002 15,775 (50,701) 130,778 

 - 106,072 18,797 160,562 50,701 586,030 

 - 149,940 19,799 176,337 - 716,808 

 (10,982) - (25) - (11,007) - 

 - (17) - - - (17) 

 - (10,999) - (25) - (11,024) 

 - 138,941 19,799 176,312 - 705,784 

 108,334 - 4,321 - (53,979) 181,723 

 233,624 - - 7,044 53,979 700,748 

 341,958 - - 11,365 - 882,471 

 - - - - - - 

 (1,113) - - - - (2,405) 

 (1,113) - - - - (2,405) 

 340,845 - - 11,365 - 880,066 

 - - 12,422 - (23,272) 185,097 

 - - - 20,252 23,272 428,852 

 - - - 32,674 - 613,949 

 - - - - - - 

 - - - - - (6,083) 

 - - - - - (6,083) 

 - - - 32,674 - 607,866 

 - - 96,999 - (3,990) 93,009 

 - - - (10,315) 3,990 (6,325) 

 - - - 86,684 - 86,684 

$ 340,845 172,511 $ 228,640 $ 313,419 $ $ - 48,290,719 $ 
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

228 United States Department of Labor 

NOTE 15 - PROGRAM COST - Continued

 

B. Consolidating Statement of Net Cost - Employment and Training Administration 

Net cost of the Employment and Training Administration for the year ended September 30, 2007 consisted of 

the following: 

Training and

Employment Employment

(Dollars in thousands) Security Programs Job Corps Eliminations Total

CROSSCUTTING PROGRAMS

 Income maintenance

Benefits 32,334,443 $ 72 $ $ - $ 32,334,515 - $ 

Grants 4,258,410 - - 4,258,410 - 

Interest 3,772 - - 3,772 - 

Administrative and other 554,008 17,911 (17,500) - 554,419 

 Gross cost 37,150,633 17,983 (17,500) - 37,151,116 

Less earned revenue (750,888) - 17,500 - (733,388) 

Net program cost 36,399,745 17,983 - 36,417,728 - 

 Employment and training

Benefits 13,224 - 6,712 19,936 - 

Grants 4,080,988 - 160,323 4,241,311 - 

Administrative and other 314,076 - 1,303,243 1,617,319 - 

 Gross cost 4,408,288 - 1,470,278 5,878,566 - 

Less earned revenue (43,687) - (1,238) (44,925) - 

Net program cost 4,364,601 - 1,469,040 5,833,641 - 

Net cost of operations $ 36,399,745 $ 4,382,584 $ 1,469,040 $ - $ 42,251,369

 

 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 229

NOTE 15 - 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, 2007 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 4,924,372 $ $ - $ - $ (1,641) - $ 4,922,731 $ 

Interest 717,214 - - - 717,214 - 

Administrative and other 425,202 - - - 425,202 - 

 Gross cost 6,066,788 - - (1,641) - 6,065,147 

Less earned revenue (2,556,633) - - 1,641 - (2,554,992) 

Net program cost 3,510,155 - - - 3,510,155 - 

 Labor, employment and

 pension standards

Benefits 11,736 - 25,750 7,261 44,747 - 

Grants - - - - - - 

Administrative and other 86,448 - 190,435 49,102 325,985 - 

 Gross cost 98,184 - 216,185 56,363 370,732 - 

Less earned revenue - - - - - -

Net program cost 98,184 - 216,185 56,363 370,732 - 

Net cost of operations $ 3,510,155 $ 98,184 $ 216,185 $ 56,363 $ - $ 3,880,887

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 2006. 
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

230 United States Department of Labor 

NOTE 15 - PROGRAM COST - Continued 

D. Consolidating Statement of Net Cost by Suborganization 

Net cost by suborganization for the year ended September 30, 2006 consisted of the following: 

Employment Employment Occupational Bureau of

and Training Standards Safety and Health Labor

(Dollars in thousands) Administration Administration Administration Statistics

CROSSCUTTING PROGRAMS

 Income maintenance

Intra-governmental 216,300 $ 871,178 $ $ - $ - 

With the public 35,819,765 3,744,938 - - 

 Gross cost 36,036,065 4,616,116 - - 

Intra-governmental earned revenue (1,201,975) (2,528,201) - - 

Public earned revenue (7,955) - - - 

 Less earned revenue (1,209,930) (2,528,201) - - 

Net program cost 34,826,135 2,087,915 - - 

 Employment and training

Intra-governmental 51,551 - - - 

With the public 5,451,793 - - - 

 Gross cost 5,503,344 - - - 

Intra-governmental earned revenue (16,872) - - - 

Public earned revenue (5,696) - - - 

 Less earned revenue (22,568) - - - 

Net program cost 5,480,776 - - - 

 Labor, employment and pension

 standards

Intra-governmental 115,542 - - - 

With the public - 246,205 - - 

 Gross cost - 361,747 - - 

Intra-governmental earned revenue - - - - 

Public earned revenue - (2,800) - - 

 Less earned revenue - (2,800) - - 

Net program cost - 358,947 - - 

 Worker safety and health

Intra-governmental - 115,929 - - 

With the public - - 399,908 - 

 Gross cost - - 515,837 - 

Intra-governmental earned revenue - (12,466) - - 

Public earned revenue - - (946) - 

 Less earned revenue - - (13,412) - 

Net program cost - - 502,425 - 

OTHER PROGRAMS

 Statistics

Intra-governmental - - 204,572 - 

With the public - - - 369,207 

 Gross cost - - - 573,779 

Intra-governmental earned revenue - - (4,082) - 

Public earned revenue - - - (1,250) 

 Less earned revenue - - - (5,332) 

Net program cost - - - 568,447 

COSTS NOT ASSIGNED TO PROGRAMS

 Gross cost - - - - 

 Less earned revenue not attributed to programs - - - - 

Net cost not assigned to programs - - - - 

Net cost of operations $ 40,306,911 2,446,862 $ 502,425 $ 568,447 $ 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 231

Mine Safety Employee Benefits Veterans' Other

and Health Security Employment Departmental

Administration Administration and Training Programs Eliminations Total

$ 10,451 - $ $ 2,331 - $ (40,282) $ 1,059,978 $ 

 - 20,711 - 1,679 14,762 39,601,855 

 - 31,162 - 4,010 (25,520) 40,661,833 

 - - - 25,520 - (3,704,656) 

 - - - - - (7,955) 

 - - - - 25,520 (3,712,611) 

 - 31,162 - 4,010 - 36,949,222 

 - 10,693 - 412 (19,675) 42,981 

 - - 195,538 754 19,675 5,667,760 

 - - 206,231 1,166 - 5,710,741 

 - - - - (16,872) - 

 - - - - - (5,696) 

 - - - - - (22,568) 

 - - 206,231 1,166 - 5,688,173 

 42,270 - 1,063 18,139 (52,259) 124,755 

 - 113,093 18,570 174,171 52,259 604,298 

 - 155,363 19,633 192,310 - 729,053 

 (10,830) - - - (10,830) - 

 - (452) - - - (3,252) 

 - (11,282) - - - (14,082) 

 - 144,081 19,633 192,310 - 714,971 

 102,437 - 4,086 - (51,086) 171,366 

 230,309 - - 6,475 51,086 687,778 

 332,746 - - 10,561 - 859,144 

 (4) - - - (12,470) - 

 (1,049) - - - - (1,995) 

 (1,053) - - - - (14,465) 

 331,693 - - 10,561 - 844,679 

 - - 11,747 - (23,044) 193,275 

 - - - 18,616 23,044 410,867 

 - - - 30,363 - 604,142 

 - - - - (4,082) - 

 - - - - - (1,250) 

 - - - - - (5,332) 

 - - - 30,363 - 598,810 

 - - 94,814 - (9,032) 85,782 

 - - - (16,640) 9,032 (7,608) 

 - - - 78,174 - 78,174 

$ 175,243 331,693 $ 225,864 $ 316,584 $ $ - 44,874,029 $ 
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

232 United States Department of Labor 

NOTE 15 - 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, 2006 consisted of 

the following: 

 

Training and

Employment Employment

(Dollars in thousands) Security Programs Job Corps Eliminations Total

CROSSCUTTING PROGRAMS

 Income maintenance

Benefits 31,032,712 $ 56 $ $ - $ 31,032,768 - $ 

Grants 4,614,537 - - 4,614,537 - 

Interest 3,010 - - 3,010 - 

Administrative and other 387,879 371 (2,500) - 385,750 

 Gross cost 36,038,138 427 (2,500) - 36,036,065 

Less earned revenue (1,212,430) - 2,500 - (1,209,930) 

Net program cost 34,825,708 427 - 34,826,135 - 

 Employment and training

Benefits 14,631 - 2,593 17,224 - 

Grants 4,029,717 - 415,031 4,444,748 - 

Administrative and other 137,864 - 903,508 1,041,372 - 

 Gross cost 4,182,212 - 1,321,132 5,503,344 - 

Less earned revenue (17,188) - (5,380) (22,568) - 

Net program cost 4,165,024 - 1,315,752 5,480,776 - 

Net cost of operations $ 34,825,708 $ 4,165,451 $ 1,315,752 $ - $ 40,306,911
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 233

NOTE 15 - 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, 2006 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 3,571,671 $ $ - $ - $ (1,707) - $ 3,569,964 $ 

Interest 694,964 - - - 694,964 - 

Administrative and other 351,188 - - - - 351,188 

 Gross cost 4,617,823 - - (1,707) - 4,616,116 

Less earned revenue (2,529,908) - - - 1,707 (2,528,201) 

Net program cost 2,087,915 - - - - 2,087,915 

 Labor, employment and

 pension standards

Benefits 10,465 - 23,733 6,266 40,464 - 

Grants - - - - - - 

Administrative and other - 84,988 190,051 46,244 - 321,283 

 Gross cost 95,453 - 213,784 52,510 361,747 - 

Less earned revenue - - (2,800) - - (2,800) 

Net program cost - 95,453 210,984 52,510 - 358,947 

Net cost of operations $ 2,087,915 $ 95,453 $ 210,984 $ 52,510 $ - $ 2,446,862
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

234 United States Department of Labor 

NOTE 16 - NON-EXCHANGE REVENUE 

Non-exchange revenues reported on the Consolidated Statement of Changes in Net Position in 2007 and 

2006 consisted of the following: 

(Dollars in thousands) 2007 2006

Employer taxes

Unemployment Trust Fund

Federal unemployment taxes 7,238,283 $ 7,383,523 $ 

State unemployment taxes 34,023,122 32,033,466 

 41,406,645 39,271,749 

Black Lung Disability Trust Fund excise taxes 639,197 607,387

 42,014,032 39,910,946 

Interest

Unemployment Trust Fund 2,780,114 3,344,577 

Longshore and Harbor Workers' Compensation Act Trust Fund 2,077 2,016 

District of Columbia Workmen's Compensation Act Trust Fund 250 155 

Panama Canal Commission Compensation Fund 3,537 3,647 

Energy Employees Occupational Illness Compensation Fund 7,215 5,654 

Black Lung Disability Trust Fund 297 463 

 2,791,883 3,358,119 

Assessments

Longshore and Harbor Workers' Compensation Act Trust Fund 128,934 138,857 

District of Columbia Workmen's Compensation Act Trust Fund 11,264 10,789 

Other 183 380 

 140,578 149,829 

Reimbursement of unemployment benefits from state and

 local governments and non-profit organizations

 to the Unemployment Trust Fund 1,632,863 1,855,188 

$ 45,042,506 $ 46,810,932

 

NOTE 17 - TRANSFERS WITHOUT REIMBURSEMENT 

Transfers from (to) other Federal agencies in 2007 and 2006 consisted of the following: 

(Dollars in thousands) 2007 2006

Budgetary financing sources

From H-1B Nonimmigrant Petitioner Account, Department of Homeland Security 193,355 $ 390,823 $ 

From DOL general fund unexpended appropriation

 accounts to the DOL Working Capital Fund 3,000 3,000 

 196,355 393,823 

Other financing sources

From General Services Administration 2,469 1,537 

To General Services Administration (209) - 

 1,328 2,469 

$ 198,824 $ 395,151

The balance of $196,355 in budgetary financing sources reflects the elimination of intra-DOL transfers of 

$3,663,500.
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 235

NOTE 18 - STATUS OF BUDGETARY RESOURCES

 

A. Apportionment Categories of Obligations Incurred 

Obligations incurred reported on the Combined Statement of Budgetary Resources in 2007 and 2006 

consisted of the following: 

(Dollars in thousands) 2007 2006

Direct Obligations

Category A $ 4,063,611 4,121,138 $ 

Category B 9,247,270 9,068,443 

Exempt from apportionment 38,830,490 37,033,486

Total direct obligations 50,344,367 52,020,071 

Reimbursable Obligations

Category A 188,504 194,918 

Category B 2,689,784 2,906,630

Total reimbursable obligations 2,884,702 3,095,134 

$ 54,904,773 $ 53,439,501

B. Permanent Indefinite Appropriations 

 

DOL’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 Combined 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 Combined Statement of Budgetary Resources. 

Current year excess receipts are reported as temporarily not available pursuant to Public Law. 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 amounts 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, 2007 and 

2006 reclassified from unobligated balances to UTF unavailable collections is presented on the following 

page. 
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

236 United States Department of Labor 

NOTE 18 - STATUS OF BUDGETARY RESOURCES – Continued 

 

C. Legal Arrangements Affecting Use of Unobligated Balances - Continued 

(Dollars in millions) 2007 2006

Unemployment Trust Fund unavailable collections, beginning $ 63,995 52,213 $ 

Budget authority from current year appropriations 44,909 46,725 

Less obligations (36,456) (34,943) 

Excess of budget authority over obligations 8,453 11,782

Unemployment Trust Fund unavailable collections, ending $ 72,448 $ 63,995 

 

D. Explanation of Differences between the Combined 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, 2007 

has not been published as of the issue date of these financial statements. This document will be available in 

February 2008. In addition, the reconciliation of the SF133 and the Combined Statement of Budgetary 

Resources will be performed in Fiscal Year 2008 after the Department receives the final SF133 reports from 

Trust Funds and allocated accounts. 

 

A reconciliation of budgetary resources, obligations incurred and outlays, as presented in the Combined 

Statement of Budgetary Resources, to amounts included in the Budget of the United States Government for 

the year ended September 30, 2006 is shown below. 

Budgetary Obligations Gross

(Dollars in millions) Resources Incurred Outlays

Combined Statement of Budgetary Resources $ 53,440 57,636 $ 53,502 $ 

Pension Benefit Guaranty Corporation reported separately 19,405 4,438 4,444 

Accruals not reported in the budget (145) (145) - 

Amounts in the budget not included in the Combined

 Statement of Budgetary Resources 146 131 134 

Amounts in the Combined Statement of Budgetary Resources 

 not included in the budget - (24) - 

Expired accounts (1,310) (88) - 

Other 12 13 15 

Budget of the United States Government $ 75,744 57,789 $ 58,071 $ 

 

E. Undelivered Orders 

Undelivered orders at September 30, 2007 and 2006 were as follows. 

 

(Dollars in thousands) 2007 2006

Undelivered orders $ 5,773,816 5,678,989 $ 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 237

NOTE 18 - STATUS OF BUDGETARY RESOURCES – Continued 

F. Appropriations Received 

 

The Combined Statements of Budgetary Resources discloses appropriations received of $56,922 and 

$58,971 million for FY 2007 and 2006, respectively. Appropriations received on the Consolidated 

Statements of Changes in Net Position are $11,007 and $10,704 million for FY 2007 and 2006, respectively. 

The differences of $45,915 and $48,267 million represent certain dedicated and earmarked receipts 

recognized as exchange revenue or non-exchange revenue reported on the Consolidated Statements of Net 

Cost or the Consolidated Statements of Changes in Net Position. 

NOTE 19 - RECONCILIATION OF BUDGETARY RESOURCES OBLIGATED TO NET COST OF OPERATIONS 

(Dollars in thousands) 2007 2006

Resources used to finance activities

Budgetary resources obligated

Obligations incurred $ 53,439,501 54,904,773 $ 

Recoveries of prior year obligations (220,673) (399,780) 

Less spending authority from offsetting collections (6,447,616) (6,740,047)

Obligations, net of offsetting collections and recoveries 48,236,484 46,299,674 

Other resources

Imputed financing from costs absorbed by others 129,859 122,782 

Transfers, net 1,328 2,469 

Exchange revenue not in budget (784,278) (929,202)

Total resources used to finance activities 47,584,534 45,494,582

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 108,524 139,777 

Resources that finance the acquisition of assets (129,596) (116,035) 

Allocation transfers to other agencies (159,098) - 

Other resources that do not affect net cost of operations - 209

Total resources used to finance items not part of the net cost of operations (21,072) (135,147)

Total resources used to finance the net cost of operations 47,563,462 45,359,435

Components of the net cost of operations that will not require or generate

 resources in the current period

 Components requiring or generating resources in other periods

Increase in annual leave liability 3,735 2,670 

Increase (decrease) in employee benefits liabilities 633,248 (518,152) 

Other 24,250 (26,068)

Total 661,233 (541,550)

Components not requiring or generating resources

Depreciation and amortization 61,233 55,449 

Revaluation of assets and liabilities 461,967 612,558 

Benefit overpayments (457,176) (611,863)

Total 66,024 56,144

Total components of the net cost of operations that will not

 require or generate resources in the current period 727,257 (485,406)

Net cost of operations $ 48,290,719 $ 44,874,029
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

238 United States Department of Labor 

NOTE 20 – SOURCES OF CUSTODIAL REVENUE 

 

Custodial revenues in 2007 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 65,660 $ (233) $ 65,427 $ 1,161 $ 66,588 $ 

MSHA 30,357 30,357 - (1,330) 29,027 

EBSA 24,168 24,168 - 3,511 27,679 

ESA 11,689 - 11,689 395 12,084

 (233) 131,874 131,641 3,737 135,378 

ETA disallowed grant costs 4,670 4,670 - 11,377 16,047 

Other 2,676 (2) 2,674 - 2,674

$ 139,220 $ (235) $ 138,985 $ 15,114 $ 154,099

Custodial revenues in 2006 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 80,119 $ (8) $ 80,111 $ (12,396) $ 67,715 $ 

MSHA 24,411 24,411 - (565) 23,846 

EBSA 15,751 15,751 - (551) 15,200 

ESA 11,968 (59) 11,909 529 12,438

 (67) 132,249 132,182 (12,983) 119,199 

ETA disallowed grant costs 19,815 (2) 19,813 216 20,029 

Other 816 (7) 809 - 809

$ (76) 152,880 $ 152,804 $ (12,767) $ 140,037 $ 

 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 239

NOTE 21 – EARMARKED FUNDS 

DOL is responsible for the operation of certain earmarked funds. Other earmarked funds include Gifts and 

Bequests, Panama Canal Commission Compensation Fund, and H-1B Funds. The financial position of the 

earmarked funds as of September 30, 2007 is shown below. 

Black Lung

(Dollars in thousands) Unemployment Disability Other Total

Assets

Intra-governmental

Funds with U.S. Treasury 103,124 $ 40,359 $ 419,245 $ 562,728 $ 

Investments 74,923,280 78,228 - 75,001,508 

Interest receivable from investments 881,498 1,833 - 883,331 

Accounts receivable, net

Due from other Federal agencies

 for UCX and UCFE benefits 302,912 - 302,912 - 

Total intra-governmental 76,210,814 40,359 499,306 76,750,479 

Accounts receivable, net

State unemployment tax 276,072 - 276,072 - 

Due from reimbursable employers 459,192 - 459,192 - 

Benefit overpayments 209,807 10,056 219,863 - 

Other - 2 - 2 

Advances 509,848 379 - 510,227 

Other - 39 - 39 

Total assets $ 50,415 77,665,733 $ 499,726 $ 78,215,874 $ 

Liabilities

Intra-governmental

Accounts payable to DOL agencies 1,242,806 $ $ - $ 1,242,806 - $ 

Advances from U.S. Treasury 10,057,557 - 10,057,557 - 

Amounts held for the Railroad

 Retirement Board 108,990 - 108,990 - 

Other - 7,857 - 7,857 

Total intra-governmental 1,351,796 10,057,557 7,857 11,417,210 

Accounts payable - 26,041 - 26,041 

Accrued benefits 1,311,599 20,559 1,332,158 - 

Future workers' compensation benefits - 51,629 - 51,629 

Other - 655 - 655 

Total liabilities 10,078,116 2,663,395 86,182 12,827,693 

Net position

Cumulative results of operations 75,002,338 (10,027,701) 413,544 65,388,181 

Total liabilities and net position $ 50,415 77,665,733 $ 499,726 $ 78,215,874 $ 
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

240 United States Department of Labor 

NOTE 21 – EARMARKED FUNDS – Continued 

The net results of operations of the earmarked funds for the year ended September 30, 2007 is shown below. 

Black Lung

(Dollars in thousands) Unemployment Disability Other Total

Cost, net of earned revenues

Benefits (32,325,084) $ (285,632) $ (3,139) $ (32,613,855) $ 

Grants - (103,179) - (103,179) 

Interest (3,772) (717,214) (720,986) - 

Administrative (446,430) (593) (19,615) (466,638) 

 (1,003,439) (32,775,286) (125,933) (33,904,658) 

Earned revenue 723,914 - 723,914 - 

 (32,051,372) (1,003,439) (125,933) (33,180,744) 

Net financing sources

Taxes 39,271,749 639,197 39,910,946 - 

Interest 3,344,577 463 3,537 3,348,577 

Reimbursement of unemployment benefits 1,632,863 - 1,632,863 - 

Imputed financing - 253 - 253 

Transfers-in

Department of Homeland Security - 193,355 - 193,355 

Transfers-out

DOL entities (3,604,321) (59,179) (3,663,500) - 

 40,644,868 580,481 197,145 41,422,494 

Net results of operations 8,593,496 (422,958) 71,212 8,241,750 

Net position, beginning of period 66,408,842 (9,604,743) 342,332 57,146,431 

Net position, end of period $ (10,027,701) 75,002,338 $ 413,544 $ 65,388,181 $ 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 241

NOTE 21 – EARMARKED FUNDS - Continued 

The financial position of the earmarked funds as of September 30, 2006 is shown below. 

Black Lung

(Dollars in thousands) Unemployment Disability Other Total

Assets

Intra-governmental

Funds with U.S. Treasury 60,257 $ 39,251 $ 330,775 $ 430,283 $ 

Investments 66,212,640 80,348 - 66,292,988 

Interest receivable from investments 743,299 2,234 - 745,533 

Accounts receivable, net

Due from other Federal agencies

 for UCX and UCFE benefits 335,023 - 335,023 - 

Total intra-governmental 67,351,219 39,251 413,357 67,803,827 

Accounts receivable, net

State unemployment tax 266,544 - 266,544 - 

Due from reimbursable employers 511,659 - 511,659 - 

Benefit overpayments 183,437 8,800 192,237 - 

Other - 2 - 2 

Advances 474,153 3,525 - 477,678 

Other - 23 - 23 

Total assets $ 48,051 68,787,012 $ 416,907 $ 69,251,970 $ 

Liabilities

Intra-governmental

Accounts payable to DOL agencies 1,208,229 $ $ - $ 1,208,229 - $ 

Advances from U.S. Treasury 9,631,557 - 9,631,557 - 

Amounts held for the Railroad

 Retirement Board 101,514 - 101,514 - 

Other - 7,689 - 7,689 

Total intra-governmental 1,309,743 9,631,557 7,689 10,948,989 

Accounts payable - 10,654 - 10,654 

Accrued benefits 1,068,427 21,237 1,089,664 - 

Future workers' compensation benefits - 55,610 - 55,610 

Other - 622 - 622 

Total liabilities 9,652,794 2,378,170 74,575 12,105,539 

Net position

Cumulative results of operations 66,408,842 (9,604,743) 342,332 57,146,431 

Total liabilities and net position $ 48,051 68,787,012 $ 416,907 $ 69,251,970 $ 
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

242 United States Department of Labor 

NOTE 21 – EARMARKED FUNDS – Continued 

The net results of operations of the earmarked funds for the year ended September 30, 2006 is shown below. 

Black Lung

(Dollars in thousands) Unemployment Disability Other Total

Cost, net of earned revenues

Benefits (31,025,168) $ (299,479) $ (2,051) $ (31,326,698) $ 

Grants - (51,388) - (51,388) 

Interest (3,010) (694,964) (697,974) - 

Administrative (295,807) (342) (15,647) (311,796) 

 (994,785) (31,323,985) (69,086) (32,387,856) 

Earned revenue 818,294 - 818,294 - 

 (30,505,691) (994,785) (69,086) (31,569,562) 

Net financing sources

Taxes 41,406,645 607,387 42,014,032 - 

Interest 2,780,114 297 3,647 2,784,058 

Reimbursement of unemployment benefits 1,855,188 - 1,855,188 - 

Imputed financing - 238 - 238 

Transfers-in

Department of Homeland Security - 390,823 - 390,823 

Transfers-out

DOL entities (3,623,927) (57,633) (3,681,560) - 

 42,418,020 550,051 394,708 43,362,779 

Net results of operations 11,912,329 (444,734) 325,622 11,793,217 

Net position, beginning of period 54,496,513 (9,160,009) 16,710 45,353,214 

Net position, end of period $ (9,604,743) 66,408,842 $ 342,332 $ 57,146,431 $ 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 243

NOTE 22 – DEDICATED COLLECTIONS 

The Department administers four trust funds that receive dedicated collections. Statement of Federal 

Financial Accounting Standards 27, Identifying and Reporting Earmarked Funds, became effective in FY 

2006. This standard affected former standards dealing with dedicated collections, and as a result, the 

Unemployment Trust Fund and the Black Lung Disability Trust Fund were classified as earmarked funds. The 

financial position of the two remaining trust funds as of September 30, 2007 is shown below. 

Longshore District of

and Harbor Columbia

Workers' Workmen's

Compensation Compensation

(Dollars in thousands) Act Act

Assets

Intra-governmental

Funds with U.S. Treasury $ 75 154 $ 

Investments 6,585 69,979 

Interest receivable from investments 16 1 

Total intra-governmental 6,661 70,149 

Other accounts receivable, net 3,803 327 

Total assets $ 6,988 73,952 $ 

Liabilities

Accrued benefits $ 298 3,655 $ 

Other 39,408 2,557 

Total liabilities 43,063 2,855 

Net position

Cumulative results of operations 30,889 4,133 

Total liabilities and net position $ 6,988 73,952 $ 
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

244 United States Department of Labor 

NOTE 22 – DEDICATED COLLECTIONS - Continued 

The net results of operations of each trust fund for the year ended September 30, 2007 is shown below. 

Longshore District of

and Harbor Columbia

Workers' Workmen's

Compensation Compensation

(Dollars in thousands) Act Act

Cost, net of earned revenues

Benefits $ (9,819) (129,040) $ 

Net financing sources

Interest 250 2,077 

Assessments 11,264 128,934 

Transfers-out

DOL entities (2,042) - 

 11,514 128,969 

Net results of operations 1,695 (71) 

Net position, beginning of period 30,960 2,438 

Net position, end of period $ 4,133 30,889 $ 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 245

NOTE 22 – DEDICATED COLLECTIONS - Continued 

The financial position of each trust fund as of September 30, 2006 is shown below. 

Longshore District of

and Harbor Columbia

Workers' Workmen's

Compensation Compensation

(Dollars in thousands) Act Act

Assets

Intra-governmental

Funds with U.S. Treasury $ 76 154 $ 

Investments 5,611 73,146 

Interest receivable from investments 10 1 

Total intra-governmental 5,688 73,310 

Other accounts receivable, net 2,431 412 

Total assets $ 6,100 75,741 $ 

Liabilities

Intra-governmental

Accounts payable to DOL agencies 2,028 $ $ - 

Accrued benefits 283 3,382 

Other 39,371 3,379 

Total liabilities 44,781 3,662 

Net position

Cumulative results of operations 30,960 2,438 

Total liabilities and net position $ 6,100 75,741 $ 
Financial Section 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

246 United States Department of Labor 

NOTE 22 – DEDICATED COLLECTIONS – Continued 

 

The net results of operations of each trust fund for the year ended September 30, 2006 is shown below. 

Longshore District of

and Harbor Columbia

Workers' Workmen's

Compensation Compensation

(Dollars in thousands) Act Act

Cost, net of earned revenues

Benefits $ (10,112) (133,694) $ 

Net financing sources

Interest 155 2,016 

Assessments 10,789 138,857 

Transfers-out

DOL entities (2,028) - 

 10,944 138,845 

Net results of operations 832 5,151 

Net position, beginning of period 25,809 1,606 

Net position, end of period $ 2,438 30,960 $ 
Annual Financial Statements 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 

For the Years Ended September 30, 2007 and 2006 

FY 2007 Performance and Accountability Report 247

NOTE 23 – BALANCE SHEET CLASSIFICATIONS AGGREGATED TO CONFORM WITH OMB CIRCULAR 

 NO. A-136 CLASSIFICATIONS 

 

The Department’s consolidated balance sheet has different classifications of certain assets and liabilities 

from those suggested in OMB Circular No. A-136. The following aggregate Department of Labor 

classifications into OMB Circular No. A-136 classifications. 

(Dollars in thousands) 2007 2006

ASSETS

Intra-governmental

Other

Interest receivable from investments 883,360 $ 745,556 $ 

Advances 4 - 

Total other $ 745,560 883,360 $ 

Other

Advances $ 555,294 541,565 $ 

Total other $ 555,294 541,565 $ 

LIABILITIES 

Federal employee and veteran benefits

Future workers' compensation benefits 635,848 $ 548,314 $ 

Total Federal employee and veteran benefits 635,848 $ 548,314 $ 

Other

Energy employees occupational illness

 compensation benefits 7,501,838 $ 6,942,442 $ 

Accrued leave 97,522 101,257 

Other liabilities 217,313 260,374 

Total other $ 7,863,469 7,257,277 $ 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Required Supplementary Stewardship Information 
Annual Financial Statements 

 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

(Unaudited) 

FY 2007 Performance and Accountability Report 249 

STEWARDSHIP INVESTMENTS IN HUMAN CAPITAL 

Stewardship investments are made by DOL on behalf of the nation, providing long term benefits that can not 

be measured in traditional financial reports. DOL’s stewardship investments are in human capital, reported 

as employment and training program expenses in DOL’s net cost of operations. These investments are 

intended to maintain or increase national economic productive capacity as demonstrated by program outputs 

and outcomes. 

Within DOL, the Employment and Training Administration, the Office of Job Corps, and the Veterans’ 

Employment and Training Service administer training programs that invest in human capital. The Office of 

Job Corps was transferred from the Employment and Training Administration to the Office of the Secretary 

during FY 2006. However, Job Corps’ costs continue to be reported under the Employment and Training 

Administration and are considered to be a part of the Employment and Training Administration for this 

presentation. These training programs are discussed below. 

Employment and Training Administration 

The Employment and Training Administration (ETA) makes investments in human capital through job training 

programs authorized by the Workforce Investment Act of 1998, Title V of the Older Americans Act, the Trade 

Act of 1974, as amended by the Trade Adjustment Assistance Reform Act of 2002, and the National 

Apprenticeship Act of 1937. This investment is made for the general public, and the expenses incurred are 

intended to increase or maintain national economic productive capacity. In 2007, ETA invested over $5.8 

billion through these training programs, providing services to over 2.9 million participants. ETA’s investments 

in human capital specifically exclude expenditures for employment services, unemployment insurance 

administration and unemployment and other benefit payments, which comprise the majority of ETA’s services 

to the public. In 2007, ETA incurred total net costs of $42.3 billion, providing services to over 24.9 million 

people. ETA’s investments in human capital are discussed below: 

 

Program Activities 

 

Workforce Investment Act 

ETA and the Office of Job Corps (OJC) administer training programs authorized by the Workforce Investment 

Act (WIA). The OJC was transferred from ETA in 2006 and established under the Office of the Secretary 

(OSEC) to administer the Job Corp program. In 2006 and 2007, Job Corps funding was appropriated to ETA 

and transferred via allotment to OSEC. For the purposes of this presentation, Job Corps investments in human 

capital made under WIA are reported as part of ETA. The job training programs authorized by WIA are 

discussed below. 

 Adult employment and training programs – ETA awards financial assistance grants to States and 

territories to design and operate training and employment assistance programs for disadvantaged adults, 

including public assistance recipients. ETA’s 2007 investment in human capital through WIA adult 

programs was $893.8 million. 

 

 Dislocated worker employment and training programs – ETA awards grants to provide reemployment 

services and retraining assistance to individuals dislocated from their employment. ETA also awards 

competitive grants to build training capacity and to train workers through community and technical 

colleges from the national reserve account. ETA’s 2007 investment in human capital through WIA 

dislocated worker programs was $1,466.3 million. 

 

 
Financial Section 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

(Unaudited) 

250 United States Department of Labor 

 Youth programs – ETA awards grants to support program activities and services to prepare low-income 

youth for academic and employment success, including summer jobs, by linking academic and 

occupational learning with youth development activities. ETA’s 2007 investment in human capital 

through WIA youth programs was $950.7 million. 

 

 Job Corps – OJC awards contracts to support a system of primarily residential centers offering basic 

education, training, work experience and other support, typically to economically disadvantaged youth. 

Large and small corporations and non-profit organizations manage and operate 94 Job Corps centers 

under these contractual arrangements. The remaining 28 centers are operated through interagency 

agreements between DOL and the U.S. Departments of Agriculture and Interior. In addition, 20 operators 

are contracted to provide outreach and admissions (OA) and career transition services (CTS). OJC’s 2007 

investment in human capital through the WIA Job Corps program was $1,485.6 million. 

 

 Reintegration of Ex-Offenders – ETA supports programs to help individuals exiting prison make a 

successful transition to community life and long term employment through the provision of mentoring and 

job training programs to promote the successful return of adult and juvenile ex-offenders into mainstream 

society. ETA’s 2007 investment in human capital through WIA ex-offender programs was $76.4 million. 

 

 National Programs – ETA’s National programs provide financial assistance and support for WIA nationally 

administered activities for segments of the population that have special disadvantages in the labor 

market, including grants to Indian tribes and other Native American governments or non-profit 

organizations, and to Migrant and Seasonal Farmworker service organizations, to provide training, work 

experience and employment-related services. ETA’s 2007 investment in human capital through National 

programs was $219.7 million. 

 

Title V of the Older Americans Act, as Amended

ETA also invests in human capital through its older worker program, authorized under Title V of the Older 

Americans Act, to benefit low income workers, age 55 and over. The Older Americans Act Amendments of 

2006, reauthorized and provided important reforms to Title V’s Community Service Employment for Older 

Americans Program, including an increase in the percentage of program funds available for skills training and 

related services. 

 Community Service Employment for Older Americans Program (CSEOA) – An employment and training 

program that provides part-time training through work experience in community service activities for lowincome persons age 55 and older, who wish to remain in or re-enter the workforce, with the ultimate goal 

of moving the participants into unsubsidized employment. ETA’s 2007 investment in human capital 

through the CSEOA program was $450.4 million. 

 

Trade Act of 1974 as Amended 

 

ETA makes investments in human capital through training programs authorized by the Trade Act of 1974. 

The Trade Adjustment Assistance Reform Act of 2002 amended the Trade Act of 1974 to consolidate the 

previous Trade Adjustment Assistance (TAA) and the NAFTA Trade Adjustment Assistance programs into a 

single, enhanced TAA program. 

 

 Trade Adjustment Assistance Programs – TAA programs provide training, income support and related 

assistance to workers who have been adversely affected by foreign trade. Trade adjustment assistance 

benefit payments are classified as income maintenance program costs and are not included as 

investments in human capital. ETA’s 2007 investment in trade adjustment assistance training programs 

was $223.1 million. 
Annual Financial Statements 

 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

(Unaudited) 

FY 2007 Performance and Accountability Report 251 

The National Apprenticeship Act 

 

The National Apprenticeship Act of 1937 established the foundation for development of the nation’s skilled 

workforce through apprenticeship programs, which combine on the job learning with related technical 

instruction to teach workers the theoretical aspects of skilled occupations. Funding provides a national 

system for skilled and technical occupational training, which promotes apprentices, registers apprenticeship 

programs, certifies apprenticeship standards, and safeguards the welfare of apprentices. ETA’s 2007 

investment in apprenticeship programs was $21.4 million. 

Program Costs and Outputs 

The full cost of ETA programs is presented in the Statement of Net Costs. The cost of ETA’s investment in 

human capital, and the participants served, by program, are shown in the chart below. 

ETA Investments In Human Capital 

Program Costs (in Millions) and Participants Served (in Thousands) 

For The Five Year Period 2003 Through 2007 

 

 2007 2006 2005 2004 2003 

 

Program 

 

Costs 

Part. 

Served 

 

Costs 

Part. 

Served 

 

Costs 

Part. 

Served 

 

Costs 

Part. 

Served 

 

Costs 

Part. 

Served 

 

WIA 

 

 

 

 

Adult 

 

$ 893.8 

 

1,760.5 

 

$ 884.6 

 

1,052.6 

 

$ 953.9 

 

441.8 

 

$ 962.5 

 

444.3 

 

$1,069.6 

 

467.3 

Dislocated 

Worker (1) 

 

1,466.3 

 

413.1 

 

1,525.1 

 

398.2 

 

1,538.3 

 

361.4 

 

1,533.1 

 

364.4 

 

1,757.3 

 

397.6 

 

Youth 

 

950.7 

 

248.9 

 

1,006.2 

 

272.9 

 

1,146.5 

 

390.8 

 

1,379.9 

 

423.5 

 

1,450.4 

 

458.2 

 

Job Corps 

 

1,485.6 

 

64.8 

 

1,364.8 

 

61.0 

 

1,367.1 

 

61.9 

 

1,357.5 

 

64.3 

 

1,345.6 

 

64.0 

ExOffenders (2)  

76.4 

 

15.7 

 

52.1 

 

11.5 

 

23.7 

 

6.8 

 

29.4 

 

5.7 

 

11.8 

 

2.4 

National 

Programs (3) 

 

219.7 

 

44.0 

 

267.3 

 

42.1 

 

178.2 

 

54.7 

 

297.1 

 

57.6 

 

276.7 

 

63.7 

Title V 

 

 

SCSEP 

 

450.4 

 

86.4 

 

313.0 

 

93.5 

 

621.9 

 

92.1 

 

429.6 

 

101.4 

 

388.4 

 

110.1 

 

Trade Act 

 

 

TAA Training 

 

223.1 

 

79.2 

 

188.8 

 

84.2 

 

222.8 

 

95.8 

 

249.1 

 

105.1 

 

237.8 

 

84.5 

Apprenticeship 

Act 

 

Apprenticeship 

System 

 

21.4 

 

309.5 

 

22.4 

 

237.9 

 

21.5 

 

196.2 

 

21.4 

 

198.9 

 

21.1 

 

230.0 

 

Other 

 

91.2 

 

na 

 

99.1 

 

na 

 

37.4 

 

na 

 

93.7 

 

na 

 

155.1 

 

na 

 

TOTAL 

 

 

$5,878.5 

 

 

2,968.1 

 

 

$5,723.2 

 

 

2,253.9 

 

 

$6,111.3 

 

 

1,701.5 

 

 

$6,353.3 

 

 

1,765.2 

 

 

$6,713.8 

 

 

1,877.8 

 

(1) Dislocated Worker programs also include National Emergency Grant costs and participants. 

(2) Ex-Offender programs include the Prisoner Re-entry and Youthful Offender programs. 

(3) National Programs include the Native American and Migrant and Seasonal Farmworker programs. 

(4) Other includes training programs for high skilled occupations funded through H1-B fees, and costs for lapsed programs. 
Financial Section 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

(Unaudited) 

252 United States Department of Labor 

Program Outcomes 

The overall performance of ETA programs towards the achievement of DOL’s strategic goals is discussed in 

the Performance Section of this report. Outcomes for training programs comprising ETA’s investment in 

human capital are shown below, for the most current year measured. 

Strategic Goal 1 – A Prepared Workforce 

 Performance Goal 06.1B (Job Corps) – PY 2006 

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

graduates in employment and education. 

This goal was not achieved. OJC did not reach targets for two of three performance indicators. 

 

 Performance Goal 06.1C (WIA Youth) – PY 2006 

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

This goal was substantially achieved; ETA reached the target for one performance indicator and improved 

performance over PY 2005 results for the other performance indicator. 

 Performance Goal 07.1D (Apprenticeship) – FY 2007

Improve the registered apprenticeship system to meet the training needs of business and workers in the 

21st century. 

This goal was achieved; ETA reached targets for both performance indicators. 

Strategic Goal 2 – A Competitive Workforce

 Performance Goal 06.2A (WIA Adult) – PY 2006 

Increase the employment, retention and earnings of individuals under the WIA Adult program. 

This goal was not achieved; ETA did not reach targets for one of three performance indicators. 

 

 Performance Goal 06.2B (WIA Dislocated Workers) – PY 2006 

Increase the employment, retention and earnings of individuals under the WIA Dislocated Worker 

program. 

This goal was not achieved. ETA did not reach targets for two of three performance indicators. 

 Performance Goal 06.2F (SCSEP) – PY 2006 

Assist older workers to participate in a demand driven economy through the Senior Community Service 

Employment Program. 

This goal was achieved. ETA reached targets for both performance indicators. 

 Performance Goal 07.2G (TAA) – FY 2007 

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

because of trade and who receive trade adjustment assistance benefits. 

This goal was achieved. ETA reached targets for both performance indicators. 
Annual Financial Statements 

 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

(Unaudited) 

FY 2007 Performance and Accountability Report 253 

Veterans Employment and Training Service 

The mission of the 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. 

Program Activities 

 

Jobs for Veterans State Grants 

The Jobs for Veterans Act (JVA) of 2002, which allocates resources to the States through the Jobs for Veterans 

State grants program, supports the majority of VETS activities through three major VETS programs, as 

discussed below: 

 

 Disabled Veterans Outreach Program (DVOP) Specialist – The DVOP, codified at 38 U.S.C. 4103A, awards 

formula grants to State Workforce Agencies (SWAs) to support DVOP specialists providing intensive 

services to meet the employment needs of veterans, including counseling, assessment, lifelong learning 

skills and referral to training, particularly veterans with disabilities or those who recently separated from 

the military. 

 Local Veterans Employment Representative (LVER) – The LVER, codified at 38 U.S.C. 4104, provides 

grants to State Workforce Agencies (SWAs) for the appointment of LVER staff positions identified in Job 

Service local offices and One-Stop Career Centers, to enhance veterans’ services and help them into 

productive employment. 

 

 Transition Assistance Program (TAP) – TAP, authorized under 38 U.S.C. 4215 and 10 U.S.C. 1144, 

operates as a partnership between the Departments of Labor, Defense and Veterans Affairs. The program 

provides separating service members and their spouses or individuals retiring from military service with 

career counseling and training. TAP workshops are provided throughout the United States and overseas. 

 

Federal Management 

 

VETS Federal management activities provide programs and policies to meet the employment and training 

needs of veterans. The majority of resources are devoted to Uniformed Services Employment and 

Reemployment Rights and Veterans Preference Rights (USERRA) compliance and outreach. Activities, as 

discussed below: 

 Uniformed Services Employment and Reemployment Rights and Veterans Preference Rights – The 

Uniformed Services Employment and Reemployment Rights Act (USERRA) of 1994, codified at 38 U.S.C. 

Chapter 43, protects civilian job rights and benefits for veterans, members of the National Guard and 

Reserves. Veterans Preference for Federal Employment is codified in 5 U.S.C. 2108. VETS promotes a 

productive relationship between employer and employee by educating both on the employment rights of 

the individual veterans. 

 

Homeless Veterans and Veterans’ Workforce Investment Programs 

 Homeless Veterans Reintegration Project (HVRP) – The HVRP, codified at 38 U.S.C. 2021, provides 

employment assistance to homeless veterans through grants to States or other entities in both urban and 

rural areas to operate employment programs to reach out to homeless veterans and help them become 

employed. 
Financial Section 

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION 

(Unaudited) 

254 United States Department of Labor 

 Veterans Workforce Investment Program (VWIP) - The VWIP, codified at 38 U.S.C. 2913, provides 

competitive grants for the training and retraining of veterans to create employment opportunities in highskilled areas for targeted veterans. 

Program Costs and Outputs 

The full cost of VETS programs is presented in the Statement of Net Costs. The cost by major program is 

itemized below, to demonstrate the investment trend of VETS programs in human capital. Participants 

served, an output common to all VETS programs, is also presented by major program. 

VETS Investments In Human Capital 

Program Costs and Participants Served (in Thousands) 

For The Five Year Period 2003 Through 2007 

 

 2007 2006 2005 2004 2003 

 

Program 

 

Costs 

Part. 

Served 

 

Costs 

Part. 

Served 

 

Costs 

Part. 

Served 

 

Costs 

Part. 

Served 

 

Costs 

Part. 

Served 

 

DVOP 

 

$86,667 

 

363.4 

 

$86,153 

 

398.1 

 

$86,104 

 

342.8 

 

$85,151 

 

507.2 

 

$86,351 

 

na 

 

LVER 

 

80,000 

 

400.6 

 

79,526 

 

429.3 

 

79,481 

 

330.0 

 

78,601 

 

529.9 

 

79,709 

 

na 

 

TAP 

 

7,704 

 

151.3 

 

4,792 

 

139.5 

 

4,919 

 

134.3 

 

4,684 

 

130.0 

 

4,773 

 

110.1 

 

USERRA 

 

9,170 

 

70.8 

 

8,819 

 

109.9 

 

9,123 

 

126.9 

 

9,506 

 

80.5 

 

7,108 

 

79.0 

 

HVRP 

 

27,504 

 

12.8 

 

26,975 

 

13.8 

 

24,883 

 

13.8 

 

21,821 

 

12.5 

 

34,220 

 

13.1 

 

VWIP 

 

7,667 

 

3.6 

 

9,123 

 

3.8 

 

7,966 

 

4.3 

 

9,444 

 

3.5 

 

9,961 

 

3.7 

 

 TOTAL 

 

$218,712 

 

1,002.5 

 

$215,388 

 

1,094.4 

 

$212,476 

 

952.1 

 

$209,207 

 

1,263.6 

 

$222,122 

 

na 

Program Outcomes 

The performance of VETS programs towards the achievement of DOL’s strategic goals is discussed in the 

Performance Section of this report. Outcomes for 2007 are summarized below: 

Strategic Goal 1 – A Prepared Workforce 

 Performance Goal 06.1C (VETS) – PY 2006 

Improve employment outcomes for veterans who receive the One-Stop Career Center services and 

veterans program services. 

This goal was not achieved; VETS did not meet three targets among six performance indicators. 

Strategic Goal 3 – Safe and Secure Workplaces

 Performance Goal 07.3C (VETS) – FY 2007 

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

conflicting with their civilian employment. 

This goal was achieved. VETS exceeded the target for the performance indicator. 

 

 
 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Required Supplementary Information 
Financial Section 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

256 United States Department of Labor 

DEFERRED MAINTENANCE

The U.S. Department of Labor (DOL) maintains one hundred twenty-three (123) Job Corps centers located 

throughout the United States. Periodic maintenance is performed to keep these centers in acceptable 

condition, as determined by Job Corps management. Maintenance requirements are stratified by 

management into critical and non-critical projects. Critical maintenance involves life, safety, health, and 

environmental issues, as well as building code compliance deficiencies. Critical maintenance projects are 

funded and performed in the year they are identified. Non-critical maintenance projects are performed each 

year to the extent that funding constraints allow. Non-critical maintenance projects that cannot be funded 

when scheduled are deferred to a future period. 

Condition Assessment Surveys 

Condition assessment surveys are conducted every three years at each Job Corps center to determine the 

current condition of buildings and structures (constructed assets) and the estimated maintenance cost to 

correct noted deficiencies. Surveys conducted during years one and two of this three year cycle are updated 

annually to reflect maintenance performed, and rolled up with current assessments to provide a condition 

assessment for the entire Job Corps portfolio of constructed assets. 

Condition assessment surveys are based on methods and standards applied on a consistent basis, including: 

• condition descriptions of facilities, 

• recommended maintenance schedules, 

• estimated costs for maintenance actions, and 

• standardized condition codes. 

Asset Condition

Condition assessment surveys are used to estimate the current plant replacement value and deferred 

maintenance repair backlog for every constructed asset at each Job Corps center. Plant replacement value 

and repair backlog are used to calculate a Facilities Condition Index (FCI) for each building and structure. (FCI 

= Repair Backlog / Plant Replacement Value –1. An FCI closer to 100 % indicates better asset condition.) 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

FY 2007 Performance and Accountability Report 257 

The chart below ranks each asset within one of five categories of asset condition, based on the assets FCI 

score, for the previous five year period. 

Job Corps Center Constructed Assets 

Ranking of Individual Asset Condition Based on FCI Scores 

As of September 30, 2007 

 

 

 

 

2007 

 

2006* 

 

2005* 

 

2004* 

 

2003* 

Asset 

Condition 

 

FCI Score 

No. of 

Assets 

Asset 

% 

No. of 

Assets 

Asset 

% 

No. of 

Assets 

Asset 

% 

No. of 

Assets 

Asset 

% 

No. of 

Assets 

Asset 

% 

 

Excellent 90 to 100% 2,966 80.9 2,393 75.1 2,384 74.8 2,244 72.1 2,023 68.5 

Good 80 to 89% 338 9.2 389 12.2 392 12.3 286 9.2 242 8.2 

Fair 70 to 79% 126 3.4 131 4.1 143 4.5 137 4.4 307 10.4 

Poor 60 to 69% 98 2.7 121 3.8 118 3.7 146 4.7 180 6.1 

Very Poor < 60% 136 3.8 153 4.8 153 4.8 162 5.2 201 6.8 

 

3,664 100.0 3,548 100.0 3,351 100.0 3,112 100.0 2,954 100.0 

* Distribution of FCI for 2003 – 2006 was estimated, based on the trend in asset condition established in 

2007, when modifications to the calculation were newly implemented. 

 

Portfolio Condition 

These condition assessment estimates by building and structure are consolidated to calculate an FCI score for 

the entire portfolio of Job Corps center constructed assets, which is used to evaluate the overall asset 

condition of the portfolio. Job Corps has set the goal of achieving and maintaining an FCI of 90% or greater 

(the standard used by the National Association of College and University Business Offices) for its portfolio of 

Job Corps center constructed assets. During FY 2007, the Job Corps portfolio of constructed assets was 

comprised of 2,184 buildings and structures owned and 1,480 buildings and structures leased, for a total 

portfolio of 3,664 assets. The portfolio’s aggregate FCI score in FY 2007 was 90.8%. Deferred maintenance 

costs at the end of FY 2007 to return the portfolio to an acceptable condition were $87.4 million, as 

demonstrated in the table below. 

 

Portfolio Condition and Deferred Maintenance Costs 

Job Corps Center Constructed Assets – 2007 

As of September 30, 2007 

 

Constructed Asset 

Number of 

Assets

Portfolio Condition 

Based on 

Aggregate FCI Score

Deferred Maintenance Costs 

to Return Assets to an 

Acceptable Condition

Buildings and Structures - Owned 1,480 Excellent - 90.5% $61,127,338 

Buildings and Structures - Leased 2,184 Excellent - 91.2% $26,245,362 

TOTAL 3,664 Excellent - 90.8% $87,372,700 

 
Financial Section 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

258 United States Department of Labor 

Deferred Maintenance Cost Estimates Over the Previous Five Year Period 

The final chart graphically depicts the trend in deferred maintenance costs for Job Corps center buildings and 

structures, owned and leased, for the five year period 2003 through 2007. 

Job Corps Center Constructed Assets 

Deferred Maintenance Costs for Buildings and Structures 

As of September 30, 2007 

Deferred Maintenance Costs

$26.2 $30.8 $28.7 $30.0

$61.0

$72.0

$66.9

$70.1 $66.4

$28.4

$87.4

$100.1

$95.6

$102.8

$94.8

- 

20.0

40.0

60.0

80.0

100.0

120.0

2007 2006 2005 2004 2003

Fiscal Year

Dollars (in Millions)

Owned Leased Total
Annual Financial Statements 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

FY 2007 Performance and Accountability Report 259 

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% (0.6% starting January 1, 2008). Federal unemployment taxes are collected by the 

Internal Revenue Service. 
Financial Section 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

260 United States Department of Labor 

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. 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

FY 2007 Performance and Accountability Report 261 

The Federal Employees Compensation Account (FEC) 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. 
Financial Section 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

262 United States Department of Labor 

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 were last 

authorized in 2002 under the Temporary Extended Unemployment Compensation Act. Payments in 

excess of $23 billion were paid under the program which ended in January, 2005. Prior to that, 

emergency benefits were authorized in 1991 under the Emergency Unemployment Compensation Act. 

Emergency benefit payments in excess of $28 billion were paid over the three year period ended in 

1994. 

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, 2007, total assets within the UTF exceeded liabilities by $75.0 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, 2007 was $74.9 billion. These investments accrue interest, which is distributed to eligible 

State and Federal accounts within the UTF. Interest income from these investments during FY 2007 was $3.3 

billion. Federal and State UI tax and reimbursable revenues of $40.9 billion and regular, extended and 

emergency benefit payment expense of $32.3 billion were recognized for the year ended September 30, 

2007. 

As discussed in Note 1.L.1 to the consolidated financial statements, DOL recognized a liability for regular and 

extended unemployment benefits to the extent of unpaid benefits applicable to the current period and for 

benefits paid by States that have not been reimbursed by the UTF. Accrued unemployment benefits payable 

at September 30, 2007 were $1.3 billion. 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

FY 2007 Performance and Accountability Report 263 

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. 
Financial Section 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

264 United States Department of Labor 

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 4.65% during 

FY 2008, increasing to 4.80% in FY 2009 and thereafter. Total cash inflows exceed total cash 

outflows for all years projected. The net inflow decreases from $9.3 billion in FY 2008 to $5.6 billion 

in FY 2012, leveling off at the $6.0 billion to $7.0 billion range after that, indicating that most States 

have replenished their funds to desired levels. The net inflow is sustained by the excess of Federal tax 

collections over Federal expenditures. 

These projections, excluding interest earnings, indicate decreasing net cash inflows from FY 2008 to 

FY 2012, then approximately equal inflows and outflows through 2017. 

Chart I

Unemployment Trust Fund 

Cash Inflow and Outflow

35

40

45

50

55

60

65

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Excludes the Federal Employee Compensation Account

$ - Billions

Total Cash Inflows Cash Inflow Excluding Interest Total Cash Outflow

 

 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

FY 2007 Performance and Accountability Report 265 

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, 2017. 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 FY 2008. 

Starting at $84.2 billion in FY 2008, net UTF assets increase by 69.6% over the next nine years to 

$142.8 billion by the end of FY 2017. 

Chart II 

 

Unemployment Trust Fund 

Effect of Net Cash Flow on Net Assets

30

50

70

90

110

130

150

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Excludes the Federal Employee Compensation Account

$ - Billions

Total Cash Inflows Total Cash Outflows Net Assets

 
Financial Section 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

266 United States Department of Labor 

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, 2017, 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 2010, net cash 

outflows are projected in FY 2009 through FY 2011. Net cash inflows are reestablished in FY 2012 

and peak in FY 2016 with a drop in the unemployment rate to 4.80%. Net assets never fall below 

$45.0 billion and are within $20.7 billion of the balance under expected economic conditions by 2017. 

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

140

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Excludes the Federal Employee Compensation Account

$ - Billions

Total Cash Inflows Total Cash Outflows Net Assets
Annual Financial Statements 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

FY 2007 Performance and Accountability Report 267 

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 10.14% in FY 2011. Under this 

scenario, net cash outflows are projected in FY 2009 through FY 2012, with the fund in a deficit 

situation from 2011 to 2014. The net assets of the UTF decrease from $80.4 billion in FY 2008 to 

negative $28.4 billion in 2012, a decline of $108.8 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 2013, with a drop in the unemployment rate to 7.26%. By the 

end of FY 2017, this positive cash flow has replenished UTF account balances to $39.8 billion. 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 $103.0 billion less than under 

expected economic conditions. 

Chart IV 

Unemployment Trust Fund 

Effect of Net Cash Flow on Net Assets

(40)

(20)

0

20

40

60

80

100

120

2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Excludes the Federal Employee Compensation Account

$ - Billions

Total Cash Inflows Total Cash Outflows Net Assets
268 United States Department of Labor 

(Dollars in thousands) 2008 2009 2010 2011 2012 2013 2014 2015 Balance, start of year $ 74,843,649 84,154,730 $ 91,711,431 $ 98,553,909 $ 104,529,448 $ 110,093,855 $ 116,572,491 $ 123,382,794 $ 12

$ 

Cash inflow

State unemployment taxes 36,493,000 36,755,000 36,879,000 37,562,000 38,927,000 41,420,000 43,027,000 44,844,000 4

 

Federal unemployment taxes 6,277,000 5,850,000 5,996,000 6,249,000 6,506,000 6,503,000 6,724,000 6,997,000 

 

Interest on loans 3,000 5,000 7,000 10,000 15,000 23,000 47,000 72,000 

 

Deposits by the Railroad Retirement Board 95,400 105,800 111,600 113,400 118,800 125,000 127,400 130,000 

Total cash inflow excluding interest 42,868,400 42,715,800 42,993,600 43,934,400 45,566,800 48,071,000 49,925,400 52,043,000 5

 

Interest on Federal securities 3,790,042 4,333,837 4,796,439 5,184,672 5,465,165 5,746,137 6,087,682 6,395,417 

Total cash inflow 46,658,442 47,049,637 47,790,039 49,119,072 51,031,965 53,817,137 56,013,082 58,438,417 6

 

Cash outflow

State unemployment benefits 33,511,000 35,711,000 37,185,000 39,315,000 41,592,000 43,425,000 45,257,000 47,956,000 5

 

State administrative costs 3,519,499 3,461,000 3,435,000 3,491,000 3,532,000 3,564,000 3,591,000 3,619,000 

 

Federal administrative costs 214,725 213,109 214,711 219,344 222,010 225,710 228,444 230,213 

 

Interest on tax refunds 2,568 2,479 2,602 2,750 2,863 2,861 2,959 3,079 

 

Railroad Retirement Board withdrawals 99,569 105,348 110,248 115,439 118,685 120,930 123,376 125,622 

Total cash outflow 37,347,361 39,492,936 40,947,561 43,143,533 45,467,558 47,338,501 49,202,779 51,933,914 5

 

Excess of total cash inflow excluding interest over total cash outflow 5,521,039 3,222,864 2,046,039 790,867 99,242 732,499 722,621 109,086 

Excess of total cash inflow over total cash outflow 9,311,081 7,556,701 6,842,478 5,975,539 5,564,407 6,478,636 6,810,303 6,504,503 

Balance, end of year $ 84,154,730 91,711,431 $ 98,553,909 $ 104,529,448 $ 110,093,855 $ 116,572,491 $ 123,382,794 $ 129,887,297 $ 13

$ 

Total unemployment rate 4.65% 4.80% 4.80% 4.80% 4.80% 4.80% 4.80% 4.80% 

FOR THE TEN YEAR PERIOD ENDING SEPTEMBER 30, 2017

(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 2007 Performance and Accountability Report 269

(Dollars in thousands) 2008 2009 2010 2011 2012 2013 2014 2015 Balance, start of year $ 74,843,649 80,486,451 $ 72,462,252 $ 55,202,091 $ 45,019,332 $ 48,112,156 $ 59,209,657 $ 72,993,092 $ 8

$ 

Cash inflow

State unemployment taxes 36,593,000 38,290,000 41,551,000 46,615,000 50,805,000 53,278,000 54,342,000 54,405,000 5

 

Federal unemployment taxes 6,245,000 5,739,000 5,815,000 6,062,000 7,239,000 8,547,000 9,826,000 10,086,000 1

 

General revenue appropriation 44,000 - 99,000 68,000 2,000 - - - 

Interest on loans 3,000 18,000 251,000 869,000 1,216,000 1,228,000 1,083,000 934,000 

 

Deposits by the Railroad Retirement Board 95,400 105,800 111,600 113,400 118,800 125,000 127,400 130,000 

Total cash inflow excluding interest 42,936,400 44,196,800 47,827,600 53,727,400 59,380,800 63,178,000 65,378,400 65,555,000 6

 

Interest on Federal securities 3,734,700 3,802,840 3,141,172 2,538,741 2,657,204 2,990,102 3,350,028 4,036,882 

Total cash inflow 46,671,100 47,999,640 50,968,772 56,266,141 62,038,004 66,168,102 68,728,428 69,591,882 7

 

Cash outflow

State unemployment benefits 37,084,000 51,956,000 64,070,000 62,280,000 54,845,000 51,008,000 50,893,000 49,793,000 4

 

State administrative costs 3,627,449 3,746,950 3,831,450 3,831,450 3,756,300 3,712,200 3,695,850 3,661,900 

 

Federal administrative costs 214,725 213,109 214,711 219,344 222,010 225,710 228,444 230,213 

 

Interest on tax refunds 2,555 2,432 2,524 2,667 3,185 3,761 4,323 4,438 

 

Railroad Retirement Board withdrawals 99,569 105,348 110,248 115,439 118,685 120,930 123,376 125,622 

Total cash outflow 41,028,298 56,023,839 68,228,933 66,448,900 58,945,180 55,070,601 54,944,993 53,815,173 5

 

Excess of total cash inflow excluding interest over total cash outflow 1,908,102 (11,827,039) (20,401,333) (12,721,500) 435,620 8,107,399 10,433,407 11,739,827 1

 

Excess of total cash inflow over total cash outflow 5,642,802 (8,024,199) (17,260,161) (10,182,759) 3,092,824 11,097,501 13,783,435 15,776,709 1

 

Balance, end of year $ 80,486,451 72,462,252 $ 55,202,091 $ 45,019,332 $ 48,112,156 $ 59,209,657 $ 72,993,092 $ 88,769,801 $ 10

$ 

Total unemployment rate 5.05% 6.61% 7.43% 7.09% 6.35% 5.61% 5.47% 5.09% 

FOR THE TEN YEAR PERIOD ENDING SEPTEMBER 30, 2017

(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
270 United States Department of Labor 

(Dollars in thousands) 2008 2009 2010 2011 2012 2013 2014 2015 Balance, start of year $ 80,418,792 74,843,649 $ 68,360,578 $ 29,696,768 $ (17,398,550) $ (28,421,399) $ (23,000,905) $ (13,873,821) $ 

$ 

Cash inflow

State unemployment taxes 36,714,000 38,397,000 43,198,000 50,515,000 57,906,000 62,496,000 64,186,000 63,881,000 6

 

Federal unemployment taxes 6,239,000 5,697,000 5,679,000 5,874,000 7,229,000 9,387,000 11,506,000 13,092,000 1

 

General revenue appropriation 50,000 - 109,000 133,000 49,000 - - - 

Interest on loans 3,000 21,000 529,000 2,225,000 3,595,000 3,852,000 3,739,000 3,538,000 

 

Deposits by the Railroad Retirement Board 95,400 105,800 111,600 113,400 118,800 125,000 127,400 130,000 

Total cash inflow excluding interest 43,051,400 44,270,800 49,626,600 58,860,400 68,897,800 75,860,000 79,558,400 80,641,000 8

 

Interest on Federal securities 3,722,589 3,724,057 2,349,364 1,667,200 1,358,977 1,459,214 1,678,367 1,986,577 

Total cash inflow 46,773,989 47,994,857 51,975,964 60,527,600 70,256,777 77,319,214 81,236,767 82,627,577 8

 

Cash outflow

State unemployment benefits 37,252,000 55,893,000 86,089,000 102,122,000 75,055,000 65,472,000 65,991,000 62,950,000 5

 

State administrative costs 3,629,999 3,839,200 4,223,350 4,363,550 4,080,750 3,975,950 3,961,800 3,881,300 

 

Federal administrative costs 214,725 213,109 214,711 219,344 222,010 225,710 228,444 230,213 

 

Interest on tax refunds 2,553 2,414 2,465 2,585 3,181 4,130 5,063 5,761 

 

Interest on General Fund advances - - 800,000 - 1,800,000 2,100,000 1,800,000 1,400,000 

 

Railroad Retirement Board withdrawals 99,569 105,348 110,248 115,439 118,685 120,930 123,376 125,622 

Total cash outflow 41,198,846 60,053,071 90,639,774 107,622,918 81,279,626 71,898,720 72,109,683 68,592,896 6

 

Excess of total cash inflow excluding interest over total cash outflow 1,852,554 (15,782,271) (41,013,174) (48,762,518) (12,381,826) 3,961,280 7,448,717 12,048,104 1

 

Excess of total cash inflow over total cash outflow 5,575,143 (12,058,214) (38,663,810) (47,095,318) (11,022,849) 5,420,494 9,127,084 14,034,681 1

 

Balance, end of year $ 68,360,578 80,418,792 $ 29,696,768 $ (17,398,550) $ (28,421,399) $ (23,000,905) $ (13,873,821) $ 160,860 $ 1

$ 

Total unemployment rate 5.05% 6.93% 9.10% 10.14% 7.82% 7.26% 7.05% 6.43% 

FOR THE TEN YEAR PERIOD ENDING SEPTEMBER 30, 2017

(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
Annual Financial Statements 

 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

FY 2007 Performance and Accountability Report 271 

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. During periods of high-sustained 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, 2007 in descending order by 

ratio. As the table below illustrates, 25 state funds were below minimal solvency ratio at September 30, 

2007. 

Chart V 

 

Minimally Solvent Not Minimally Solvent 

State Ratio State Ratio

New Mexico 2.97 Virgin Islands 0.96

Mississippi 2.92 Virginia 0.95

Montana 2.42 Colorado 0.90

Oklahoma 2.41 Tennessee 0.80

Utah 2.40 Idaho 0.74

Wyoming 2.01 Illinois 0.68

Louisiana 1.95 Wisconsin 0.61

Nebraska 1.92 South Dakota 0.60

Hawaii 1.91 Connecticut 0.59

Washington 1.89 Indiana 0.58

Oregon 1.88 Minnesota 0.56

Maine 1.77 Texas 0.55

Iowa 1.69 Pennsylvania 0.54

Arizona 1.61 Massachusetts 0.53

Kansas 1.60 Arkansas 0.52

District of Columbia 1.49 South Carolina 0.49

Vermont 1.49 Kentucky 0.47

Nevada 1.47 Rhode Island 0.44

New Hampshire 1.44 California 0.40

North Dakota 1.42 North Carolina 0.36

Georgia 1.34 Ohio 0.33

Puerto Rico 1.26 New Jersey 0.27

Alaska 1.25 Missouri 0.17

Florida 1.18 New York 0.13

Delaware 1.16 Michigan 0.04

Maryland 1.09

West Virginia 1.01

Alabama 1.00
Financial Section 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

272 United States Department of Labor 

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, 2007, total liabilities of the Black Lung Disability Trust Fund exceeded assets by $10.0 

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, 2007 were $10.1 billion, bearing 

interest rates ranging from 4.500 to 13.875 percent. Excise tax revenues of $639.2 million, benefit payment 

expense of $285.6 million and interest expense of $717.2 million were recognized for the year ended 

September 30, 2007. 

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, 2007 were $20.6 

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 excise tax revenue estimates, number of beneficiaries, life expectancy, 

medical cost inflation, Federal civilian pay raises, 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-three 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 $15.0 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-three periods included in 

the projections. Net cash outflows after interest payments are projected to reach $56.1 billion by the end of 

the year 2040, increasing the BLDTF’s deficit to $51.2 billion at September 30, 2040. (See Chart I on 

following page) 

The net present value of future projected benefit payments and other cash inflow and outflow activities 

together with the fund’s deficit positions as of September 30, 2007, 2006, 2005, 2004, and 2003 are 

presented in the Statement of Social Insurance. 
Annual Financial Statements 

 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

FY 2007 Performance and Accountability Report 273 

Chart I 

BLACK LUNG DISABILITY TRUST FUND 

CASH INFLOW AND OUTFLOW

0

500

1,000

1,500

2,000

2,500

3,000

3,500

2008 2012 2016 2020 2024 2028 2032 2036 2040

$ - Millions

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-one 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 $11.7 billion by the year 2040. 

 

Yearly cash inflows and outflows are presented in the table on the following page. 
274 United States Department of Labor 

(Dollars in thousands) 2008 2009 2010 2011 2012 2013 - 2040 Balance, start of year $ (10,027,701) (10,467,581) $ (10,908,546) $ (11,343,114) $ (11,768,902) $ (12,190,91

$ 

Cash inflow

Excise taxes 628,000 638,000 657,000 676,000 690,000 11,703,70

 

Total cash inflow 628,000 638,000 657,000 676,000 690,000 11,703,70

 

Cash outflow

Disabled coal miners benefits 271,007 257,576 244,437 230,842 217,222 2,706,17

 

Administrative costs 58,237 59,967 62,206 62,206 62,206 1,137,02

 

Cash outflows before interest payments 329,244 317,543 306,643 293,048 279,428 3,843,19

 

Cash inflow over cash outflow  before interest payments 298,756 320,457 350,357 382,952 410,572 7,860,51

 

Interest on advances 738,636 761,422 784,925 808,740 832,583 46,839,45

 

Total cash outflow 1,067,880 1,078,965 1,091,568 1,101,788 1,112,011 50,682,64

 

Total cash outflow over total cash inflow (439,880) (440,965) (434,568) (425,788) (422,011) (38,978,94

 

Balance, end of year $ (10,467,581) (10,908,546) $ (11,343,114) $ (11,768,902) $ (12,190,913) $ (51,169,85

$ 

U.S. DEPARTMENT OF LABOR

SUPPLEMENTARY SOCIAL INSURANCE INFORMATION

CASH INFLOW AND OUTFLOW OF THE BLACK LUNG DISABILITY TRUST FUND

FOR THE THIRTY-THREE YEAR PERIOD ENDING SEPTEMBER 30, 2040
Annual Financial Statements 

 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

FY 2007 Performance and Accountability Report 275 

STATEMENT OF BUDGETARY RESOURCES

The principal Statement of Budgetary Resources combines the availability, status and outlay of DOL’s 

budgetary resources during FY 2007 and 2006. Presented on the following pages is the disaggregation of this 

combined information for each of the Department’s major budget accounts. 
Financial Section 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

276 United States Department of Labor 

COMBINING STATEMENT OF BUDGETARY RESOURCES 

For the Year Ended September 30, 2007 

 Employment Employment Occupational

and Training Standards Safety and Health

(Dollars in thousands) Administration Administration Administration

BUDGETARY RESOURCES

Unobligated balance, brought forward, October 1 2,387,191 $ 1,715,502 $ 21,835 $ 

Recoveries of prior year unpaid obligations 160,292 9,100 8,739 

Budget authority

Appropriations received 52,188,334 2,903,394 486,925 

Borrowing authority 426,000 - - 

Spending authority from offsetting collections

Earned

Collected 74,576 2,501,508 2,766 

Change in receivables from Federal sources (1) (2,564) (1,027) 

Change in unfilled customer orders

Advance received 2,907 - - 

Without advance from Federal sources - - - 

Expenditure transfers from trust funds 3,328,586 35,620 - 

Total budget authority 56,017,495 5,440,865 488,664 

Nonexpenditure transfers, net (822,728) 425,460 (1,589) 

Temporarily not available pursuant to Public Law (8,454,205) (19,799) - 

Permanently not available (105,951) (2,804) (7,243) 

Total budgetary resources $ 7,568,324 49,182,094 $ 510,406 $ 

STATUS OF BUDGETARY RESOURCES

Obligations incurred

Direct 46,722,026 $ 3,108,239 $ 492,669 $ 

Reimbursable 56,308 2,622,340 1,451 

Total obligations incurred 46,778,334 5,730,579 494,120 

Unobligated balances available

Apportioned 1,000,005 1,414,932 58 

Exempt from apportionment 178,811 - - 

Total unobligated balances available 1,000,005 1,593,743 58 

Unobligated balances not available 1,403,755 244,002 16,228 

Total status of budgetary resources $ 7,568,324 49,182,094 $ 510,406 $ 

CHANGE IN OBLIGATED BALANCE

Obligated balance, net 

Unpaid obligations, brought forward, October 1 8,004,128 $ 295,434 $ 85,115 $ 

Less uncollected customer payments from Federal sources, 

 brought forward, October 1 (1,208,324) (5,618) (9,126) 

Total unpaid obligated balance, net 6,795,804 289,816 75,989 

Obligations incurred, net 46,778,334 5,730,579 494,120 

Less gross outlays (46,251,217) (5,724,706) (474,804) 

Less recoveries of prior year unpaid obligations, actual (160,292) (9,100) (8,739) 

Change in uncollected customer payments from Federal sources (34,576) 4,591 1,027 

Obligated balance, net, end of period

Unpaid obligations 8,370,953 292,207 95,692 

Less uncollected customer payments from Federal sources (1,242,900) (1,027) (8,099) 

Total unpaid obligated balance, net, end of period 7,128,053 $ 291,180 $ 87,593 $ 

NET OUTLAYS

Gross outlays 46,251,217 $ 5,724,706 $ 474,804 $ 

Less offsetting collections (3,368,584) (2,542,063) (2,766) 

Less distributed offsetting receipts (761,562) (6,388) (170) 

Net outlays 42,121,071 $ 3,176,255 $ 471,868 $ 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

 

FY 2007 Performance and Accountability Report 277 

 

Bureau of Mine Safety Employee Benefits Veterans' Other

Labor and Health Security Employment Departmental

Statistics Administration Administration and Training Programs Total

$ 22,740 9,057 $ 2,077 $ 2,848 $ 35,036 $ 4,196,286 $ 

 2,971 7,130 2,798 4,428 25,215 220,673 

 301,570 471,056 141,573 29,244 399,705 56,921,801 

 - - - - 426,000 - 

 1,322 6,636 11,142 65 189,572 2,787,587 

 (15) - - (1,687) - (5,294) 

 - - - (3,126) - (219) 

 - - - - - -

 75,930 - 193,945 - 31,461 3,665,542 

 302,877 553,622 152,715 223,254 615,925 63,795,417 

 (147) (244) 6,849 2,772 - (389,627) 

 - - - - (8,474,004) - 

 (2,505) (628) (1,163) (1,334) (10,563) (132,191) 

$ 327,813 567,060 $ 163,276 $ 229,196 $ 668,385 $ 59,216,554 $ 

$ 325,427 551,634 $ 135,303 $ 223,675 $ 461,098 $ 52,020,071 $ 

 1,115 6,366 10,997 186,125 - 2,884,702 

 326,542 558,000 146,300 223,675 647,223 54,904,773 

 170 305 14,098 677 10,744 2,440,989 

 - - - 137 - 178,948 

 170 305 14,098 677 10,881 2,619,937 

 1,101 8,755 2,878 4,844 10,281 1,691,844 

$ 327,813 567,060 $ 163,276 $ 229,196 $ 668,385 $ 59,216,554 $ 

$ 24,067 74,100 $ 43,819 $ 60,111 $ 433,670 $ 9,020,444 $ 

 (15) - - (13,769) - (1,236,852) 

 24,052 74,100 43,819 60,111 419,901 7,783,592 

 326,542 558,000 146,300 223,675 647,223 54,904,773 

 (299,028) (549,681) (147,149) (223,258) (665,173) (54,335,016) 

 (2,971) (7,130) (2,798) (4,428) (25,215) (220,673) 

 15 - - 4,427 - (24,516) 

 48,610 75,289 40,172 56,100 390,505 9,369,528 

 - - - (9,342) - (1,261,368) 

$ 48,610 75,289 $ 40,172 $ 56,100 $ 381,163 $ 8,108,160 $ 

$ 299,028 549,681 $ 147,149 $ 223,258 $ 665,173 $ 54,335,016 $ 

 (1,322) (82,566) (11,142) (194,010) (217,907) (6,420,360) 

 (49) (12) (24,168) (2,662) - (795,011) 

$ 297,657 467,103 $ 111,839 $ 29,248 $ 444,604 $ 47,119,645 $ 
Financial Section 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

278 United States Department of Labor 

COMBINING STATEMENT OF BUDGETARY RESOURCES 

For the Year Ended September 30, 2006 

Employment Employment Occupational

and Training Standards Safety and Health

(Dollars in thousands) Administration Administration Administration

BUDGETARY RESOURCES

Unobligated balance, brought forward, October 1 2,337,790 $ 1,457,962 $ 26,227 $ 

Recoveries of prior year unpaid obligations 360,070 3,252 5,910 

Budget authority

Appropriations received 54,309,862 2,848,124 477,199 

Borrowing authority 445,000 - - 

Spending authority from offsetting collections

Earned

Collected 420,424 2,482,312 6,285 

Change in receivables from Federal sources (336) (54,713) 8,261 

Change in unfilled customer orders

Advance received (7,500) 3,937 - 

Without advance from Federal sources - - - 

Expenditure transfers from trust funds 3,348,647 35,078 - 

Total budget authority 58,071,097 5,759,738 491,745 

Nonexpenditure transfers, net (550,309) (399) (684) 

Temporarily not available pursuant to Public Law (11,818,837) (1,145) - 

Permanently not available (404,686) (6,399) (11,029) 

Total budgetary resources $ 7,213,009 47,995,125 $ 512,169 $ 

STATUS OF BUDGETARY RESOURCES

Obligations incurred

Direct 45,195,012 $ 3,029,425 $ 476,928 $ 

Reimbursable 412,922 2,468,082 13,406 

Total obligations incurred 45,607,934 5,497,507 490,334 

Unobligated balances available

Apportioned 1,200,743 1,301,054 27 

Exempt from apportionment 212,482 - - 

Total unobligated balances available 1,200,743 1,513,536 27 

Unobligated balances not available 1,186,448 201,966 21,808 

Total status of budgetary resources $ 7,213,009 47,995,125 $ 512,169 $ 

CHANGE IN OBLIGATED BALANCE

Obligated balance, net 

Unpaid obligations, brought forward, October 1 8,350,330 $ 358,151 $ 73,694 $ 

Less uncollected customer payments from Federal sources, 

 brought forward, October 1 (1,407,365) (58,780) (865) 

Total unpaid obligated balance, net 6,942,965 299,371 72,829 

Obligations incurred, net 45,607,933 5,497,508 490,334 

Less gross outlays (45,594,065) (5,556,973) (473,003) 

Less recoveries of prior year unpaid obligations, actual (360,070) (3,252) (5,910) 

Change in uncollected customer payments from Federal sources 199,041 53,162 (8,261) 

Obligated balance, net, end of period

Unpaid obligations 8,004,128 295,434 85,115 

Less uncollected customer payments from Federal sources (1,208,324) (5,618) (9,126) 

Total unpaid obligated balance, net, end of period 6,795,804 $ 289,816 $ 75,989 $ 

NET OUTLAYS

Gross outlays 45,594,065 $ 5,556,973 $ 473,003 $ 

Less offsetting collections (3,960,279) (2,519,775) (6,285) 

Less distributed offsetting receipts (847,937) (7,809) - 

Net outlays 40,785,849 $ 3,029,389 $ 466,718 $ 
Annual Financial Statements 

REQUIRED SUPPLEMENTARY INFORMATION 

(Unaudited) 

 

FY 2007 Performance and Accountability Report 279 

Bureau of Mine Safety Employee Benefits Veterans' Other

Labor and Health Security Employment Departmental

Statistics Administration Administration and Training Programs Total

$ 3,762 11,171 $ 2,167 $ 3,938 $ 29,058 $ 3,872,075 $ 

 2,754 4,868 3,789 1,499 17,638 399,780 

 306,090 464,678 134,900 29,499 400,650 58,971,002 

 - - - - 445,000 - 

 1,292 6,103 11,544 40 178,611 3,106,611 

 (20) - - (702) - (47,510) 

 - - - 1,747 - (1,816) 

 - - - (825) - (825) 

 76,533 - 192,886 - 30,443 3,683,587 

 307,362 547,314 146,444 222,425 609,924 66,156,049 

 (355) (598) (121) 29,735 - (522,731) 

 - - - - (11,819,982) - 

 (4,369) (8,629) (2,353) (1,228) (10,711) (449,404) 

$ 309,154 554,126 $ 149,926 $ 226,634 $ 675,644 $ 57,635,787 $ 

$ 285,352 539,715 $ 136,567 $ 223,786 $ 457,582 $ 50,344,367 $ 

 1,062 5,354 11,282 183,026 - 3,095,134 

 286,414 545,069 147,849 223,786 640,608 53,439,501 

 3,851 414 31 196 21,752 2,528,068 

 - - - 147 - 212,629 

 3,851 414 31 196 21,899 2,740,697 

 18,889 8,643 2,046 2,652 13,137 1,455,589 

$ 309,154 554,126 $ 149,926 $ 226,634 $ 675,644 $ 57,635,787 $ 

$ 30,160 67,729 $ 48,663 $ 59,980 $ 494,125 $ 9,482,832 $ 

 (35) - - (6,635) - (1,473,680) 

 30,125 67,729 48,663 59,980 487,490 8,009,152 

 286,413 545,069 147,849 223,786 640,609 53,439,501 

 (289,752) (533,830) (148,904) (222,156) (683,426) (53,502,109) 

 (2,754) (4,868) (3,789) (1,499) (17,638) (399,780) 

 20 - - (7,134) - 236,828 

 24,067 74,100 43,819 60,111 433,670 9,020,444 

 (15) - - (13,769) - (1,236,852) 

$ 24,052 74,100 $ 43,819 $ 60,111 $ 419,901 $ 7,783,592 $ 

$ 289,752 533,830 $ 148,904 $ 222,156 $ 683,426 $ 53,502,109 $ 

 (1,292) (82,637) (11,544) (192,925) (210,799) (6,985,536) 

 - - - - (855,746) - 

$ 288,460 451,193 $ 137,360 $ 29,231 $ 472,627 $ 45,660,827 $ 

281 United States Department of Labor 

Appendices 
Appendices 

282 United States Department of Labor 

1. Improper Payments Information Act Reporting Details 

I. Risk Assessment

The Department's risk assessment for FY 2007 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 and grant programs and other outlays because of the 

differences in their administration and the availability of data. 

Benefit Programs

The Department performed the risk assessment for 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 high risk of improper payments. 

2. Programs with outlays greater than $200 million

The Department sampled FY 2007 data in order to determine improper payment rates. 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 programs. The Department applied the 

improper payment rate for these programs determined through sampling to the program outlays for FY 2007 

in order to determine whether the amount of potential improper payments for these programs exceeded the 

threshold. UI was the only benefit program deemed to be susceptible to high risk as a result of this approach. 

Per the Office of Management and Budget's (OMB) guidelines, the Department is also reporting FECA's 

improper payment rate, even though its improper payment rate is well below the 2.5% threshold. 

Grant Programs 

The Department used a separate methodology to assess the risk of improper payments in grant programs 

because these are administered differently than benefit programs. Unlike the benefit programs, data are not 

readily available to allow the Department to directly sample grant payments to develop a statistically valid 

estimate of improper payments. This is because the grant programs’ funding stream makes it very difficult to 

assess the improper payment rate on payments to final recipients. 

The Department provides grants to states, cities, counties, private non-profits, and other organizations to 

operate programs, and relies significantly on Single Audit Act Reports (as required by the Single Audit Act of 

19962) to monitor funding to all grant recipients. Therefore, these Single Audit Act Reports were utilized to 

determine the improper payment rate for the grant programs -- the WIA program, the State Unemployment 

 

1 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.
Improper Payments Information Act Reporting Details 

FY 2007 Performance and Accountability Report 283 

Insurance and Employment Service Operations (SUIESO) program, and all other grants as a group. The 

sampling details, including sampling methodology and sampling selection, are provided in the next section. 

The Department reviewed FY 2005 Single Audit Act Reports with Department of Labor-related findings from 

the Federal Audit Clearinghouse and identified all questioned costs included in such reports. FY 2005 reports 

were the most recent 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, the Department determined that questioned 

costs can be used as a proxy for improper payments. 

To determine an approximate rate of improper payments for the grant programs, the Department divided the 

amount of questioned costs by the direct program outlays from the FY 2005 Single Audit Act Reports. The 

resulting improper payment rates (assumed to be representative of the FY 2007 rates) were applied to the 

program outlays for FY 2007 to determine the estimated improper payment amounts for FY 2007. 

No grant programs were determined to be susceptible to high risk as a result of this approach. However, like 

FECA, the Department is also reporting on WIA's improper payment rate as required by OMB guidelines, even 

though its improper payment rate is well below the 2.5 percent threshold. 

Other Outlays

The Department sampled FY 2007 payments in order to determine improper payment rates for DOL payroll 

costs and for non-payroll costs for the operation and administration of programs and headquarters' activities. 

The sampling details, including sampling methodology and sampling selection, are provided in the next 

section. 

Results

Based on the risk assessment methods as described above, only one program, UI, was determined to be high 

risk. Two other programs, FECA and WIA, were classified as high risk in former Section 57 of OMB’s Circular 

A-11, although their risk assessments do not support such a high risk designation. The Department plans to 

continue to identify corrective actions to reduce improper payments in these programs and has 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; Designated High Risk 

Program by former Section 57 

Benefit 

Federal Employees Compensation 

Act (FECA) High Designated High Risk Program by former Section 57 Benefit 

Workforce Investment Act (WIA) High Designated High Risk Program by former Section 57 Grant 

The Department also sampled the programs in Table 3 below in FY 2007 despite their low risk status in prior 

years. 
Appendices 

284 United States Department of Labor 

Table 3: Additional programs that were sampled

 

DOL Program/Activity 

Type of 

Program Risk

Black Lung Disability Trust Fund Benefit Low 

Energy Employees Occupational Illness Compensation Program (EEOICP) Benefit Low 

State Unemployment Insurance and Employment Service Operations (SUIESO) program Grant Low 

Other grants as a group Grant Low 

DOL Payroll Costs Other Low 

DOL Non Payroll Costs Other Low 

II. Statistical Sampling

The Department's risk assessment identified only the UI program as being risk susceptible based on the OMB 

guidance threshold. However, as noted, two additional programs, WIA and FECA, were added to this list as 

required by OMB guidelines. In addition, the Department sampled several other programs that did not qualify 

as risk-susceptible programs. 

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 ExService 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 returned 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. By 

2008, all BAM investigations will incorporate a crossmatch with New Hire data to improve the ability to detect 

overpayments due to beneficiaries who claim benefits after returning to work, the largest single cause of UI 

overpayments. 

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. 
Improper Payments Information Act Reporting Details 

FY 2007 Performance and Accountability Report 285 

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 2007 shown in the Improper Payment Reduction 

Outlook Table are for the period July 1, 2006, to June 30, 2007. Data are shown for this period rather than 

the Fiscal Year because they are more complete and thus more precise. Based on historical data, those BAM 

cases requiring the most time to complete are more likely to have payment errors. The BAM program 

standard is to complete 95% of the cases within 90 days. Over 99.9% of the BAM cases for the period shown 

are complete. The paid claim accuracy completed sample consisted of 24,565 payments. For Denied Claims 

Accuracy (DCA), states sampled 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 48,600 items were selected 

and investigated for the BAM samples for the period July 1, 2006, to June 30, 2007. 

Grants Programs 

Sampling Methodology: The Department selected and reviewed 100 percent of FY 2005 Single Audit Act 

Reports in which DOL grants programs were classified as having questioned costs (according to the Census 

Bureau’s Clearinghouse database, which is the national repository of Single Audit Act Reports). Because the 

Department did a 100 percent review of these reports, a statistical projection of the total amount of 

questioned costs was not necessary. 

 

As additional evidence that no other audit reports included questioned costs for the DOL grants programs, the 

Department selected and reviewed random samples of audit reports classified in the Clearinghouse database 

as not having any questioned costs. 

Sample Selection: The universe consisted of all FY 2005 Single Audit Act Reports covering DOL’s grants from 

the Federal Audit Clearinghouse. The Department stratified this universe of audit reports into four strata or 

categories based on criteria contained in the database. The four strata were: 

• Stratum #1: Audit reports in which the grants programs were audited as major programs and the 

report identified questioned costs for one or more Federal programs (not necessarily the DOL grant 

program). 

• Stratum #2: Audit reports in which the grants programs were audited as major program and the 

report identified a reportable condition but no questioned costs for one or more Federal programs (not 

necessarily the DOL grant program). 

• Stratum #3: Audit reports in which the grants programs were audited as major program and the 

report identified no questioned costs or reportable conditions for any Federal program, including the 

DOL grant program. 

• Stratum #4: Audit reports in which the grants programs were audited as a non-major program. 

For strata #1 and #2, the Department obtained copies of 100 percent of the audit reports from the 

Clearinghouse database and reviewed them to determine whether the DOL grants programs were among 

those reported to have questioned costs. For strata #3 and #4, the Department reviewed random samples of 

the audit reports from the Clearinghouse database. 

Federal Employees' Compensation Act (FECA)

Sampling Methodology: A Monetary Unit Sampling approach was applied to estimate improper payments for 

both medical bill payments and compensation payments. For medical payments, sampling was designed to 

test payment issues such as duplicate payments, appropriate receipts, consistency with regional allowances, 

payments made for appropriate procedures, and eligibility at date of service. The compensation payment 

sampling was designed to test payment issues such as consistency with identified injury, current medical 
Appendices 

286 United States Department of Labor 

evidence supporting continued compensation payments, eligibility requirements, and calculations of 

compensation amounts. 

Sample Selection: The population of the FECA compensation and medical payments from which the sample 

was selected included payments made during the period July 1, 2006 through June 30, 2007. The population 

was stratified for compensation payments and medical payments. Samples of 103 items from compensation 

payments and of 149 items from medical payments were selected and tested. 

Black Lung Disability Trust Fund

Sampling Methodology: A Monetary Unit Sampling approach was applied to estimate improper payments for 

both medical bill 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 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 population of the medical and benefit payments from which the sample was selected, 

included payments made during the period July 1, 2006 through June 30, 2007. Samples of 81 benefit 

payments and 80 medical bill payments were selected and tested. 

Energy Employees Occupational Illness Compensation Program

Sampling Methodology: The sampling approach for Energy's compensation and medical bill payments 

consisted of Monetary Unit Sampling to estimate improper payments. The 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. 

Sample Selection: The population of the compensation payments and medical bill payments from which the 

sample was selected, included payments made during the period July 1, 2006 through June 30, 2007. 

Samples of 86 compensation payments and 90 medical bill payments were selected and tested. 

Department of Labor Payroll Costs

Sampling Methodology: 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 population of the Department’s payroll costs from which the sample was selected, 

included payments made during the period July 1, 2006 through June 30, 2007. The sample was stratified by 

pay period. A sample of 78 items from the Department's payroll transactions was selected and tested. 

Department of Labor Non Payroll Costs

Sampling Methodology: DOL non payroll costs consist of department expenses related to the operation and 

administration of programs' and headquarters' activities. These transactions were separated into property, 

plant and equipment transactions and other transactions. The sampling approach for both types of 

transactions consisted of Monetary Unit Sampling (MUS) to estimate improper payments. The sample for 

property, plant and equipment transactions also included a stratified random sample in order to select one 

invoice per transaction from the sample previously selected using MUS. 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. 
Improper Payments Information Act Reporting Details 

FY 2007 Performance and Accountability Report 287 

Sample Selection: The population from which the sample was selected included payments made during the 

period July 1, 2006 through June 30, 2007. A sample of 140 items were selected and tested. 

III. Corrective Actions

Unemployment Insurance

The Department's analytical studies indicate that earlier detection of recoverable overpayments is the most 

cost-effective way to address improper payments. Early detection allows agencies to stop payments for a 

claimant who has returned to work and to recover these overpayments more readily. The Department 

estimates that the forty-five states that crossmatch UI beneficiaries with the State Directory of New Hires 

(SNDH) or the National Directory of New Hires (NDNH) instead of UI wage records prevented approximately 

$75 million of overpayments in each of the past two fiscal years. A pilot study showed that a cross-match 

using the NDNH is more effective than the SDNH in identifying individuals no longer eligible to receive UI 

benefits, by including benefit year earnings for out-of-state employers, Federal agencies, and multi-state 

employers that report all of their new hires to a single state. The Department provided states with funds to 

implement these NDNH cross-matches; as of September 30, 2007, thirty-five states have implemented the 

NDNH crossmatch, and seven others have signed the computer-matching agreement with HHS that is the 

prelude to connecting with the NDNH. The remaining states are in the planning process. All States are 

required to use NDNH crossmatches as part of their BAM programs by January 1, 2008. 

In FY 2005, the Department began providing States funds to conduct Reemployment and Eligibility 

Assessment (REAs) with UI beneficiaries to reduce improper payments both by speeding claimants' return to 

work and by detecting and preventing eligibility violations. Twenty states received funds to continue REAs 

during FY 2006, and the Department has sought $40 million to expand the number to about forty in FY 2008. 

A solicitation of grant applications has been sent to all States. The REAs in the twenty states are estimated to 

return about $66 million to the UI trust fund. An impact evaluation of nine states' REA programs will be 

released in fall 2007. 

To address the second largest cause of overpayments - errors in handling separation issues- the department 

has two efforts underway. First, funding has been provided to states to support the training of approximately 

400 adjudicators to address improper payments that result from nonmonetary determination errors. 

Secondly, the department is facilitating the design and implementation of an automated system - 

Unemployment Insurance Separation Information Data Exchange System (UI SIDES). UI SIDES is expected to 

provide more timely and complete separation information from large multi-state employers or Third Party 

Agencies (TPAs) to make more accurate benefit eligibility decisions. 

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' 
Appendices 

288 United States Department of Labor 

Compensation Programs (OWCP)3 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 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 

Receivable Aging Schedule and Performance reports. Regular matching of death records is done to reduce 

improper payments. 

• Case management techniques are used 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 continue in documentation quality and 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 multistep 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 

through desk reviews, onsite reviews or other sources of information. Second, ETA Federal Project Officers 

(FPOs) conduct quarterly desk reviews of the financial and program performance of each grant. The results of 

these activities are contained in the Grants e-Management Solution (GEMS), an electronic tracking and grant 

management system. This serves as an early warning system to detect potential financial management 

and/or programmatic performance issues and allows ETA to target technical assistance more effectively. 

Finally, ETA staff (FPOs, financial management and others) conduct periodic onsite reviews of grantees. ETA 

attempts to conduct an onsite review of each grantee at least once every three 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 Monitoring Guide as well as program specific and technical guide supplements designed to 

provide a more detailed review of program requirements and financial activities. Results of the onsite 

monitoring activities are also cataloged in the GEMS system. For grantees with large numbers of subrecipients (e.g., WIA formula grantees), the onsite review conducted using the formula program supplement to 

the Core Guide includes an assessment of the grantee's sub-recipient monitoring activities. In addition, ETA 

 

2 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.
Improper Payments Information Act Reporting Details 

FY 2007 Performance and Accountability Report 289 

conducts onsite review of local areas as part of its review of the state grantee. The results of the onsite 

monitoring are also catalogued in the GEMS system. ETA now has the capability to review trends or issues 

that arise in a more comprehensive and consistent manner. Whenever deficiencies or problems are identified 

as a result of a desk review, onsite review, or an independent audit, ETA immediately begins working with the 

grantee to obtain appropriate corrective actions. Corrective actions undertaken by the grantee are tracked by 

ETA and follow-up technical assistance and reviews are scheduled as needed. 
290 United States Department of Labor IV. Improper Payment Reduction Outlook FY 2006– FY 2010 ($ in millions)

 

Program FY 2006 FY 2007 FY 2008 FY 2009 

 Outlays % $ Outlays % $ Est 

Outlays 

% $ Est 

Outlays 

% $ 

Unemployment Insurance 

$30,976 $31,530 $32,020 $34,900 

Operational Rate 5.63% $1,744 5.95% $1,876 6.8% $2,177 6.8% $2,373 Annual Report Rate 

Over- payment 10.00% $3,168 9.71% $3,062 10.9% $3,490 10.9% $3,804 

 Underpayment 0.67% $208 0.59% $186 0.64% $205 0.64% $223 Federal Employees Compensation Act 

$2,555 0.03% $0.722 $2,654 0.1% $2.6 $2,701 0.24% $6.5 $2,863 0.24% $6.9 

Workforce Investment Act 

$3,763 0.17% $6.4 $3,606 0.08% $2.9 $3,292 0.19% $6.3 $2,918 0.19% $5.5 

Note: The rates were determined as described in the preceding pages and applied to the outlays for the fiscal year.
Improper Payments Information Act Reporting Details 

FY 2007 Performance and Accountability Report 291 

V. Recovery Auditing 

Recovery auditing is a control technique to identify improper contractor payments and initiate recovery 

actions where appropriate. Recovery auditing involves data analysis and detailed reviews of the 

documentation supporting contract payments, including purchase orders, invoices, vendor 

statements/correspondence, procurement records, contracts, contract modifications, payment transaction 

records, vendor master files, paid history files, etc. 

The Department’s sampling and testing of non-payroll costs consisting of department expenses, including 

contract payments, related to the operation and administration of programs' and headquarters' activities for 

the current and prior fiscal years found no improper payments among the contract payments. Based on these 

results, the Department decided that a recovery auditing program was not warranted in FY 2007. 

In FY 2008, DOL plans to implement a recovery auditing program for contract payments. The Department will 

report the recovery audit actions, costs, and amounts recovered on an annual basis. 

 

VI. Management Accountability 

Existing control processes and the implementation of the revised OMB Circular A-123 requirements 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 Departmentwide effort will support the Secretary of Labor's annual certification of internal controls in the PAR. The OCFO 

continues with the 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 

thirty-five are using the NDNH. Seven others have signed the computer-matching agreement with HHS that is 

the prelude to connecting with the NDNH, and the others are in the planning stage for NDNH. By January 1, 

2008, all states must use the NDNH as part of the BAM process. 

Federal Employees' Compensation Act

The Office of Worker's Compensation Programs (OWCP) has deployed an integrated FECA management 

information and compensation benefit system that will enhance both compensation payment accuracy and 

medical bill processing accuracy. Resources are included in the FY 2008 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 EBSS (Enterprise Business Support System), with its GEMS (Grants eManagement Solution). EBSS is the Enterprise Business Support System, a web-based solution used to track 

and manage grants. A component of the EBSS is the automated grant cost reporting system that captures 

grant costs and obligations, which improves fiscal integrity. The combination of the two is part of the cradle-
Appendices 

292 United States Department of Labor 

to-grave E-grants solution for the entire Department. The GEMS system, mentioned also in Section III of this 

appendix is an online grants management tool meant to provide web accessible, customizable, role based 

context access to grant related information from multiple sources. The utilization of the GEMS system by the 

Federal Project Officers and program management and financial staff allows ETA a more coordinated and 

comprehensive repository of grant specific information. A GEMS technology project has recently been 

undertaken to provide for a report writing module and the cataloging of the Core Monitoring Guide and 

supplements. This will allow ETA staff to customize and target their oversight efforts. 

 

VIII. Statutory or Regulatory Barriers

Unemployment Insurance

The UI program has several statutory barriers to reducing improper payments. First, States administer the UI 

program and set operational priorities. The Department has limited authority to ensure they pursue improper 

payment reduction activities. Second, the "immediate deposit" requirement (Sec. 3304(a)(3), Federal 

Unemployment Tax Act (FUTA) and Sec 303(a)(4), Social Security Act (SSA)) and the "withdrawal standard" 

(Sec. 3304(a)(4), FUTA and Sec 303(a)(5), SSA) preclude the use of recovery auditing techniques and affect 

recovery efforts. 

The "immediate deposit" requirement dictates that all employer contributions (unemployment taxes) must be 

paid immediately into the trust fund and the "withdrawal standard" says that money in the trust fund can only 

be used for UI benefits. There are certain exceptions to the "immediate deposit" requirement, but they do not 

apply to recouped benefit overpayments. These requirements preclude State UI agencies from using funds 

recovered from overpayments to be used for administrative or operational efforts to improve prevention, 

detection, and recovery efforts. In addition, Title IV-D of the SSA, which established the state and national 

directories of new hires for the purposes of locating individuals who were delinquent in paying child support, 

does not require employers to report the date of hire. Having this date greatly increases the efficiency of 

using crossmatches with the SDNH or NDNH to detect UI beneficiaries who continue to claim benefits despite 

having returned to work. 

Elements of the Unemployment Compensation Integrity Act, transmitted to Congress as part of the 

President’s 2008 budget request, would relax the barriers posed by the "immediate deposit" requirement and 

the "withdrawal standard" to provide additional funding for recovery and other integrity activities. It would 

permit states (a) to use up to 5% of all recovered overpayments to augment Benefit Payment Control (BPC) 

activities (b) to use up to 25% of fraud overpayments recovered or delinquent contributions collected by a 

collection agency to be retained by that agency, and (c) to use up to 5% of certain tax collections to 

implement provisions of the law relating to employer fraud or tax evasion, such as the SUTA Dumping 

Prevention Act of 2004. It would also amend the SSA to require states to impose a penalty of at least 15% on 

fraudulent overpayments, and use the penalties to fund BPC activities. The Integrity Act would also prohibit 

states from non-charging employer accounts if the agency determined the employer's "fault" — e.g., a late or 

missing response — caused an overpayment, and would allow the recovery of benefit overpayments, 

delinquent taxes, and unpaid penalties and interest by intercept of Federal income tax refunds. Finally, it 

would mandate that states require all employers to report the date of first earnings or "start work" date to the 

SDNH, and that the state transmit this information to the NDNH. 

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. 
Improper Payments Information Act Reporting Details 

FY 2007 Performance and Accountability Report 293 

IX. Additional Comments

The Department continues to consider the most appropriate ways to define reportable UI overpayments. The 

Operational Overpayment rate, in use since 2002, was defined to measure recoverable overpayments readily 

detected by normal agency operations for establishment and recovery. Although the total or "Annual Report" 

rate used in this report has the virtue of measuring the value of all payments that exceed what State law and 

policy prescribe, it may be excessively broad. It includes many "technical" overpayments (e.g., that may not 

involve any conscious act or omission on the part of claimants or employers), or whose causes may have a 

weak, if any, relationship to achievement of other goals of the UI program such as swift return to suitable 

work. Overpayments due to failure to register with the Employment Service (approximately 0.8 percent of UI 

payments and 8 percent of all overpayments in CY 2006) are a good example. About one-fourth of all UI 

overpayments are also not subject to recovery, a typical criterion in other public programs. Two other integrity 

rates that the Department regularly monitors are total fraud and nonfraud recoverable overpayments (7.81% 

of UI benefits paid in CY 2006), and the fraud rate (2.73% of UI benefits paid in CY 2006).
Appendices 

294 United States Department of Labor 

2. Acronyms 

ACSI American Customer Satisfaction Index 

 

BLS Bureau of Labor Statistics 

 

CAM Cost Analysis Manager 

CATARS Capital Asset Tracking and Reporting 

System 

CFO Chief Financial Officer 

CY Calendar Year 

 

DBA Davis-Bacon Act 

DOD U.S. Department of Defense 

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 

ERISA Employee Retirement Income Security 

Act 

ESA Employment Standards Administration 

ETA Employment and Training 

Administration 

 

FASAB Federal Accounting Standards Advisory 

Board 

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 

HVRP Homeless Veterans’ Reintegration 

Program 

 

ILAB Bureau of International Labor Affairs 

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 

 

OASAM Office of the Assistant Secretary for 

Administration and Management 

OASP Office of the Assistant Secretary for 

Policy 

OCFO Office of the Chief Financial Officer 

OCIA Office of Congressional and 

Intergovernmental Affairs 

ODEP Office of Disability Employment Policy 

OFCCP Office of Federal Contract Compliance 

Programs 

OIG Office of Inspector General 

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 

PY Program Year 

 

SOL Office of the Solicitor 

SSA Social Security Administration 

SWA State Workforce Agencies 

 

TAA Trade Adjustment Assistance 

TAP Transition Assistance Program 

 

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 

 

WB Women’s Bureau 

WHD Wage and Hour Division 

WIA Workforce Investment Act
Internet Links 

FY 2007 Performance and Accountability Report 295 

3. Internet Links 

Employment Information (For Workers and Employers) 

America’s Career InfoNet http://www.acinet.org/acinet/ 

Occupational Outlook Handbook http://www.bls.gov/oco/ 

Job Corps http://jobcorps.doleta.gov/ 

DOL Jobs http://www.dol.gov/dol/jobs.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 & Recruiting Network (EARN) http://www.earnworks.com 

Women’s Bureau GEM-Nursing Project http://www.gem-nursing.org

Workplace Laws and Related Information 

DOL Compliance Assistance http://www.dol.gov/compliance

Employment Laws Assistance for Workers and Small Businesses http://www.dol.gov/elaws/ 

State Labor Laws and Offices http://www.dol.gov/esa/programs/whd/state/state.htm 

Minimum Wage Q&A 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/oasam/programs/history/main.htm 

Annals of the Dept of Labor http://www.dol.gov/oasam/programs/history/webannalspage.htm 

 

Labor Agencies 

Bureau of International Labor Affairs http://www.dol.gov/ILAB/

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