1     United States Department of Labor
 

 

 

 

 

 

 

 

 

 

 

U.S. Department of Labor

FY 2009 Performance and Accountability Report
3     United States Department of Labor

FY 2009 Performance and Accountability Report

FY 2009 Performance and Accountability Report     3

Table of Contents

Secretary’s Message.................................................................................................................................7

Management’s Discussion and Analysis .................................................................................................13

Program Performance Overview ............................................................................................................................ 15

Financial Performance Overview............................................................................................................................ 21

Management Assurances ....................................................................................................................................... 25

Performance Section..............................................................................................................................27

Introduction............................................................................................................................................................ 29

Strategic Goal 1:  A Prepared Workforce................................................................................................................ 33

Strategic Goal 2:  A Competitive Workforce ........................................................................................................... 57

Strategic Goal 3:  Safe and Secure Workplaces ...................................................................................................... 91

Strategic Goal 4:  Strengthened Economic Protections ........................................................................................ 113

Financial Section .................................................................................................................................. 147

Message from the Chief Financial Officer ............................................................................................................ 149

Independent Auditors’ Report.............................................................................................................................. 151

Annual Financial Statements ................................................................................................................................ 167

Principal Financial Statements and Notes...................................................................................................... 169

Required Supplementary Stewardship Information ...................................................................................... 229

Required Supplementary Information ........................................................................................................... 237

Other Accompanying Information........................................................................................................ 263

Top Management Challenges............................................................................................................................... 265

Management’s Response to the 2009 Top Management Challenges.................................................................. 279

Summary of Financial Statement Audit and Management Assurances ............................................................... 296

Improper Payments Information Act Reporting Details....................................................................................... 297

Acronyms .............................................................................................................................................................. 305

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

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 non‐governmental 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 this report:

Accounting services − Martin and Yarbrough, Joint Venture

Graphic design – Jill Tanenbaum Graphic Design & Advertising Inc.
4 United States Department of Labor

The seal of the Department of Labor was approved by President

Woodrow Wilson on June 21, 1913.  It features an eagle with

outspread wings above a gold shield divided horizontally by a red

band.  Gold denotes integrity and red is for courage and endurance.

At the top of the shield is an anvil and at the bottom is a plough; both

represent industry.  On the red band are a pulley, a lever, and an

inclined plane.  They represent the three fundamental principles of

mechanics and humanity’s efforts to understand and harness the

forces of nature for productive ends.

Report Outline

This report is divided into five 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 and includes management’s assurances

regarding compliance with relevant financial management legislation.

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

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

 The Financial Section demonstrates our commitment to effective stewardship over Federal funds.  It

includes a letter from the Acting Chief Financial Officer, the Independent Auditors’ Report (an independent

opinion on the Consolidated Financial Statements) and the Annual Financial Statements.

 Other Accompanying Information includes top management challenges identified by the Office of Inspector

General (OIG) and management’s response, including progress on those items and related management

challenges.  This section also includes a summary of financial statement audit and management assurances;

details on improper payments reduction activities and results; a list of acronyms; and links to Web sites

featuring labor programs and issues.

Mission

The Department of Labor fosters and promotes the welfare of job seekers, wage earners, and retirees of the U.S. by

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

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

tracking changes in employment, prices and other national economic measures.
FY 2009 Performance and Accountability Report     5

Organization and Program Activities

The Department accomplishes its mission through component agencies and offices that administer various statutes

and programs.  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)1

, 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)2

, and Bureau of Labor Statistics (BLS).  The

following organization chart and table describes major activities and offices.

 

1 Since the end of FY 2009, the umbrella organization known as ESA was formally dissolved in order to establish its four

components as stand alone divisions/offices (Office of Federal Contract Compliance Programs, Office of Labor‐Management

Standards, Office of Workers’ Compensation Programs, and Wage & Hour Division).  References to ESA are retained

throughout this report because all applicable appropriations, activities, and results occurred under the previous structure. 2 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.

Benefits Review Board

Bureau of

International Labor

Affairs

Office of the Deputy

Secretary of Labor

Office of the Secretary of Labor

Office of the Assistant

Secretary for Policy

Occupational Safety and

Health Administration

Office of Administrative

Law Judges

Office of Disability

Employment Policy

Administrative Review

Board

Employees' Compensation

Appeals Board

Bureau of Labor Statistics

Office of Public Affairs

Office of Congressional and

Intergovernmental Affairs

Office of Inspector

General

Employment

Standards

Administration

Mine Safety and

Health Administration Women's Bureau

Employment and

Training

Administration

Office of the Chief

Financial Officer

Office of the Assistant

Secretary for Administration

and Management

Employee Benefits Security

Administration

Office of Job Corps

Office of the

Solicitor

Veterans'

Employment and

Training Service

Executive Secretariat

Center for Faith Based and

Community Initiatives

Office of the Ombudsman for

the Energy Employees

Occupational Illness Program

Office of Small Business

Programs
6 United States Department of Labor

Employment and Training

Employment and Training

Administration

Provides job training and education, employment, labor market information,

and income maintenance services.

Veterans’ Employment and

Training Service

Helps veterans, reservists, and National Guard members to secure and to

maintain employment and reemployment rights.  

Office of Job Corps

Provides job training and education to disadvantaged youth ages 16 through

24.

Women’s Bureau

Promotes profitable employment opportunities for women.   

Office of Disability Employment

Policy

Increases employment opportunities for people with disabilities.  

Unemployment Insurance

Unemployment Insurance

ETA administers programs that provide temporary income support to eligible

workers.  

Workers’ Compensation

Office of Workers’

Compensation Program

Provides wage replacement and other benefits to Federal and certain

other workers injured at work or who acquire an occupational disease.

Workplace Safety and Health

Occupational Safety and Health

Administration

Promotes safe and healthful working conditions for America’s

workers by enforcing compliance with the Occupational Safety and

Health Act.  

Mine Safety and Health

Administration

Promotes the safety and health of the Nation’s 400,000 miners by

enforcing compliance with Federal mine safety and health laws.  

Employment Standards

Administration

Advances and protects the welfare and rights of, and generates equal

employment opportunity for, American workers.

Health Plan and Retirement Benefit Protections

Employee Benefits Security

Administration

Protects the integrity of pensions, health, and other

employee benefit plans for more than 150 million Americans.   

Pension Benefit Guaranty

Corporation

Insures retirement plan participants’ pension benefits and supports a

healthy retirement plan system.  

Labor Statistics

Bureau of Labor Statistics

Provides economic and employment statistics, including data on

employment, wages, inflation, productivity, and many other relevant topics.

International Policy

Bureau of International Labor

Affairs

Develops policy and programs relating to international labor activities.  
FY 2009 Performance and Accountability Report     7

Secretary’s Message

November 16, 2009

I am pleased to submit my first Performance and Accountability Report to

Congress and the American people on behalf of the Department of Labor

(Department or DOL) – and the Department’s eleventh annual report under the

Government Performance and Results Act of 1993 (GPRA).  This message presents

an overview of the Department’s mission, goals, and performance in the

presidential transition year of Fiscal Year (FY) 2009.  It is important to note that

the strategic goals, performance goals and indicators in this report were

established by the previous Administration.  Soon after my arrival, we embarked

on the development of DOL’s FY 2010 – 2016 strategic plan, which will be

published in September 2010.  The updated plan will reflect the future direction

of the Department – and it will support my bold vision of good jobs for everyone.  

Program performance in the recently completed year must be understood in the

context of the worst economic crisis in decades.  The unemployment numbers tell

the story.  The unemployment rate rose to 9.8 percent by September 2009 –

almost double the rate when the recession started in December 2007 (5.0).  For Latinos, African Americans, and

youth, unemployment rates are much higher.  And – from December 2007 through September 2009 – non‐farm

payroll employment has decreased each month and job losses have totaled 7.2 million.  These numbers merely hint

at the difficulties faced by millions of America’s workers and families.  However, they very clearly indicate that the

Department has much work to do on their behalf – which is why my vision of good jobs for everyone is so

important.

It was my honor and privilege to have been nominated to serve as Secretary of Labor by President Obama – and

immediately after my February 24, 2009, Senate confirmation as Secretary, I went to work to strengthen the

Department’s mission to “foster and promote the welfare of job seekers, wage earners, and retirees of the U.S. by

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

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

tracking changes in employment, prices and other national economic measures.”  Since that time, I have

communicated my vision of good jobs for everyone – and, working with the talented staff in each of the

Department’s agencies – I have identified 13 outcome goals that directly support my vision.  The following summary

of our FY 2009 performance is organized around those goals:

1. Increasing workers’ incomes and narrowing wage and income inequality.

 Six‐month average earnings for Workforce Investment Act (WIA) Adult program participants increased

from $13,575 in July 2007‐June 2008 to $14,695 in July 2008‐June 2009.  Over the same period, WIA

Dislocated Worker participants’ earnings rose from $15,188 to $16,304; Senior Community Service

Employment Program (SCSEP) participants’ earnings rose from $6,713 to $6,782; and Employment

Service participants’ earnings dropped from $12,763 to $11,074.  Trade Adjustment Assistance (TAA)

participants’ earnings dropped from $14,281 in FY 2008 to $13,967 in FY 2009.

2. Securing safe and healthy workplaces, particularly in high‐risk industries.

 In mines, the fatality rate and the all‐injury and illness rate both decreased to seven‐year lows.  The

fatality rate was 0.0200 per 200,000 hours worked in FY 2007, 0.0152 in FY 2008, and an estimated

0.0141 in FY 2009.
Secretary’s Message

8 United States Department of Labor

3. Securing wages and overtime.

 Wage and Hour law enforcement and compliance results improved by all five performance measures

for its associated performance goal – in several cases reversing a two year slump.  For instance, the

overall level of compliance among prior violators increased by 10 percentage points from 56 percent in

FY 2008 to 66 percent in FY 2009.

4. Assuring skills and knowledge that prepare workers to succeed in a knowledge‐based economy, including in

high‐growth and emerging industry sectors like “green” jobs.

 WIA Youth program participants’ placement in employment, post‐secondary education or advanced

occupational training improved by five percentage points, and literacy/numeracy gains improved by

almost nine percentage points.

5. Breaking down barriers to fair and diverse work places so that every worker’s contribution is respected.

 Claims under the Uniformed Services Employment and Reemployment Rights Act (USERRA) increased,

but investigation timeliness improved.  USERRA claims increased by eight percent in FY 2009 compared

to FY 2008 due in part to continued use of the National Guard and Reserve in America's ongoing wars

overseas, and average investigation time decreased by 17 percent.   

6. Improving health benefits and retirement security for all workers.

 Employee Retirement Income Security Act (ERISA) fiduciary violations were corrected in 72 percent of

the civil cases closed during FY 2009 – an improvement upon the 70 percent performance in FY 2008.    

7. Providing workplace flexibility for family and personal care‐giving.

 In 2009, the Department issued a final rule implementing the statutory expansion of the Family and

Medical Leave Act (FMLA) for military families, including National Guard and Reserve personnel.  The

rule expands FMLA protections for family members caring for a covered service member with a serious

injury or illness incurred in the line of duty while on active duty.

8. Facilitating return to work for workers experiencing workplace injuries or illnesses who are able to work

and sufficient income and medical care for those who are unable to work.

 Federal non‐postal employees lost just 35 days of work per 100 employees, continuing a steady

downward trend that began at 62 days in FY 2004.

 Dramatic improvements were achieved in processing nuclear industry workers’ initial benefit claims.  

Energy program Part B claims took, on average, 113 days vs. 164 just last year; Part E claims took 159

days vs. last year’s 284.

9. Income support when work is impossible or unavailable.

 The recession increased average unemployment from 5.3 percent in FY 2008 to 8.6 percent in 2009.   In

the American Recovery and Reinvestment Act of 2009 (Recovery Act), Congress provided relief by

funding additional benefits through several temporary programs.  New Unemployment Insurance (UI)

benefit claims rose 70 percent, and payments rose 181 percent to $119.22 billion.  Workloads increased

accordingly, and despite Federal funding for administration of the new programs and benefits, results

declined for all four performance indicators (first payment timeliness, reduce overpayments,

reemployment, and new tax liability determination).

10. Helping workers who are in low‐wage jobs or out of the labor market find a path into middle class jobs.

 Entered employment and employment retention rates for all veterans served by One‐Stop Career

Centers both fell slightly but remained above 60 and 80 percent, respectively.  

 Entered employment rates rose for TAA participants but fell for those served by the WIA Adult and

Dislocated Worker programs, the Employment Service, and SCSEP.
Secretary’s Message

FY 2009 Performance and Accountability Report     9

11. Voice in the workplace.

 Office of Labor‐Management Standards (OLMS) reduced the number of days taken to resolve

complaints of violations of the Labor Management Reporting and Disclosure Act (LMRDA) in union

officer elections to 70 days, compared to the FY 2008 baseline of 92 days.

 Office of Federal Contract Compliance Programs (OFCCP), with the assistance of the Office of the

Solicitor, determined and resolved 77 systemic discrimination cases, benefiting more than 21,820

workers through compliance evaluations of scheduled Federal contractors.

12. Assuring that global markets are governed by fair market rules that protect vulnerable people, including

women and children, and provide workers a fair share of their productivity and voice in their work lives.

 DOL‐supported projects withdrew or prevented 144,890 children from exploitive labor by providing

education and/or training opportunities.   

13. Helping middle‐class families remain in the middle class.

 Retention in employment fell for participants in TAA, WIA Adult and Dislocated Worker, the

Employment Service, and SCSEP – largely due to the economic recession.

Despite the extraordinary economic challenges, DOL achieved nearly half its goals in FY 2009.  Building upon this

effort, the Department has developed a three‐part framework for achieving the 13 outcome goals that support

good jobs for everyone.  They are:  Innovation, Evaluation/Data Driven Strategies, and Improved Implementation.  

This three‐part strategy reflects a Department‐wide commitment to continuous improvement in all of our

programs.  Our management strategies include:

 Engaging in a rigorous process of program evaluations and research to assure that the Department’s

initiatives serve their intended goals and Departmental vision;  

 Producing accurate, timely statistics and statistical analyses reflecting the condition of workers in labor

markets and the economy as a whole; and

 Assuring that the Department’s customers receive excellent service consistent with the law and responsible

practice.

Recovery Act

President Obama signed the historic Recovery Act on February 17, 2009.  The Department moved aggressively to

implement the Recovery Act’s provisions that protect workers who have lost their jobs, provide new training

opportunities for workers looking to upgrade their job skills, and create new job opportunities in emerging sectors

such as clean energy and health information technology.   

 More than $33 billion in Recovery Act funds has been made available to the States to maintain critical

support to unemployed workers via Unemployment Insurance (UI) programs.

 The Department allocated $3.5 billion in worker training funds to state worker training programs.

 DOL made $500 million available in competitive grants for training for green jobs in fields such renewable

energy production, energy‐efficiency home retrofitting, biofuel development, and advanced drive

train/vehicle development and manufacturing.

 Through our summer youth employment program, nearly 290,000 young people gained valuable work

experience.

 The Recovery Act included the Trade and Globalization Adjustment Assistance Act (TGAAA) of 2009, which

expanded eligibility for benefits to Service Workers, Public Employees, and workers who produce

component parts of the finished products; raised the annual funding cap for training services from $220

million to $575 million; and added 26 weeks of income support to eligible workers who exhausted their

entitlement to Unemployment Compensation benefits.

More information on the Recovery Act – and our accomplishments – is contained in this report.  You can also find

up‐to‐date Recovery Act resources and accomplishments at www.dol.gov/recovery.  
Secretary’s Message

10 United States Department of Labor

Our Strategy

Moving forward, we know that the Department will continue to face challenges as we work to serve and protect

America’s workers.  But we have strategies for success:

Rebuilding the Economy

We are investing nearly $1 billion in grants to prepare workers for green jobs and high‐growth emerging industries.  

Green jobs provide an opportunity to rebuild our communities in an equitable manner.  In order to realize this

opportunity, the Department included features to prioritize access and inclusion in green job training programs for

low‐income workers, unemployed youth and adults, high school dropouts and other underserved sectors of the

workforce in areas of high poverty.  These represent some of the communities hardest hit by this recession, and

they too will have an opportunity to benefit from green jobs in our economic recovery.

In order to forge a government‐wide approach to the development and expansion of green industries, DOL is

designing its green job training grants to work in concert with other Federal funding that creates jobs.  For example,

we are coordinating with the Department of Energy (DOE) to prepare technical assistance for the workforce system

and green job grantees to understand Federal energy investments so they can better advise, train, and refer job

seekers to opportunities connected to DOE funding.   

Rebuilding the Middle Class

Everyone must benefit from what we are doing.  We are making sure that communities of color, youth, veterans,

workers with disabilities, and women participate in these new opportunities.  And here's why:

 Women earn 80 cents for every dollar a man earns. We need to get more women into the highest paying

professions.

 Our soldiers pledge to leave no one behind on the battlefield.  We pledge to leave no veteran behind when

they come home and want to find work.  

 And shockingly, 77 percent of individuals with disabilities do not participate in our labor force.  We are

making sure that we utilize this untapped, highly motivated and highly educated workforce.

Protecting Workers

Both the Recovery Act and the President’s policies call for a significant realignment of the Department's priorities,

including shifting resources to agencies charged with enforcing workplace safety and health laws and the Fair Labor

Standards Act.  The Department has developed an aggressive, comprehensive hiring plan for its worker protection

agencies.  Our plan places a special emphasis on hiring multilingual inspectors and investigators so that our worker

protection team matches the languages used in the workplace.

The Department moved quickly to reverse regulatory actions that had the effect of lowering wages, that created

unnecessary bureaucratic obligations to unions filing documents with the Department, and that otherwise

disadvantaged workers.  DOL has initiated rulemaking on regulations concerning foreign labor certification for

agricultural workers, union reporting requirements, and workplace safety issues.

Program Data and Financial Systems

Department managers routinely use the performance and financial information summarized in this report to

improve the quality and cost‐effectiveness of services they provide to the public.  For management and

accountability purposes, it is crucial to have confidence in the quality of this information.  DOL conducts annual

performance data quality assessments to achieve these goals and to comply with the pertinent requirements of

OMB Circular No. A‐11, Preparation, Submission and Execution of the Budget.  These assessments promote

continuous improvement in performance goal data by applying criteria such as accuracy, validity, and timeliness.  

Based on such criteria, the Department's data quality is rated Very Good or Excellent for over three‐fourths of its

performance goals.  More information on program performance data quality is in the introduction to the

Performance Section.   
Secretary’s Message

FY 2009 Performance and Accountability Report     11

Management assurances regarding the results of the 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 included in the Management's Discussion and

Analysis section of this report.

Conclusion

Again, it is my pleasure to submit my first Performance and Accountability Report to Congress and the American

people.  This report outlines the Department’s performance and accomplishments in FY 2009 and describes how

DOL is creating new opportunities for hard‐working families while protecting each and every worker, each and

every day.

Through my vision of good jobs for everyone and the supporting outcome goals, we continue to make strategic

investments in opportunities for Americans to help them through these difficult times.  But we can’t do it alone.  

So, I invite you to do a little more:  mentor a young person, volunteer at a veterans’ center, or just help a friend

who needs a little care and support.  If each of us makes a personal commitment to make a contribution to the

recovery of our economy and our nation, our efforts will make a difference.   

And now, let’s all do the work that will get America working.

Hilda L. Solis

Secretary of Labor

FY 2009 Performance and Accountability Report     13

Management’s Discussion and Analysis

FY 2009 Performance and Accountability Report     15

Program Performance Overview

Fiscal Year (FY) 2009 marks the 11th year that the Department has reported program results under the Government

Performance and Results Act (GPRA).  Most DOL program level goals and indicators for this reporting period are

included in the FY 2010 Performance Plan3

; they provide the basis for assessments of DOL’s effectiveness.  The

Department’s goal structure as outlined in the FY 2006‐2011 Strategic Plan4 has three levels:   

 Strategic Goals

In FY 2009, four goals focused DOL’s various activities on outcomes associated with a common mission:

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.

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.

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.

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.

 Performance Goals

Each strategic goal is supported by several performance goals that are aligned with DOL’s organization and

appropriations to provide clarity of purpose and accountability at the program level.  This report includes

23 performance goals.   

 Performance Indicators

Performance goal achievement is determined by aggregating results for one or more quantitative indicators

(measures) using a strict, transparent rule.5

  This report includes 82 performance indicators.

DOL Program Performance and Net Costs

The following table indicates FY 2009 program performance goal achievement by strategic goal.  Seven of the 23

performance goals are for forward‐funded Workforce Investment Act (WIA) programs whose spending and

performance are reported for a Program Year (PY) that lags the Federal fiscal year by nine months.  Hence, these

programs are reporting on a different period (PY 2008 – July 1, 2008 to June 30, 2009).

A tally of goals achieved indicates whether DOL is on schedule with its plan; our performance this year was mixed.  

However, there is no single explanation for successes or failures.  To understand what was achieved in terms of

benefits to the public, it is necessary to look at how activities impact outcomes and consider significant trends in

 

3 See http://www.dol.gov/dol/budget/. 4 See http://www.dol.gov/_sec/stratplan/main.htm.  In FY 2010, the structure has changed.  Thirteen outcome goals are

supported by numerous programs and performance indicators and shared by different groups of agencies.  These goals,

which were introduced in the Secretary’s Message, are linked to existing programs in the Analysis and Future Plans sections

of each performance goal narrative in the Performance Section. 5 Achieved means all indicator targets were reached.  Substantially Achieved means targets are reached or results improved

over the prior year for all indicators if there are four or fewer and for 80 percent if there are five or more.
Management’s Discussion and Analysis

16 United States Department of Labor

the data and their implications.  Narratives in the Performance Section, which are organized by strategic and

performance goal, discuss these matters.

FY 2009/PY 2008 Performance Goal Achievement Summary

Strategic Goals Goals

Achieved

Substantially

Achieved

Not

Achieved

Total

Goal 1 – A Prepared Workforce 2 0 3 5

Goal 2 – A Competitive Workforce 4 0 4 8

Goal 3 – Safe and Secure Workplaces 3 0 2 5

Goal 4 – Strengthened Economic Protections 1 0 4 5

Total 10 0 13 23

Total Net Cost6 of DOL activities for FY 2009 was $138.367 billion.  An allocation based on the Department’s goal

structure indicates that Goal 4 is dominant – accounting for $128.655 billion, or 93 percent of the total (see first

chart below).  Most of these costs are mandatory – unemployment benefit payments to individuals who are laid off

or out of work and seeking employment ($120.300 billion of the $123.541 billion associated with Goal 09‐4A) plus

disability benefit payments to individuals who suffered injury or illness on the job ($4.458 billion of the $4.878

billion associated with Goal 09‐4B).  The second chart illustrates allocation of an adjusted net cost of $13.609 billion

that excludes these Income Maintenance expenditures.  On this basis, Goal 4 accounts for 28 percent of the total.   

Goal 1 required $3.682 billion (three percent and 27 percent of unadjusted and adjusted totals) for employment‐

related services.  Goal 2 accounted for $4.725 billion, three percent and 35 percent, respectively, which went

toward job training programs and other services focused on maintaining America’s position in a global market for

labor.  Approximately $1.304 billion (one percent and ten percent of the totals) went toward Goal 3 to fund direct

services (such as salaries of Federal employees) aimed at improving safety, health, and security in the workplace.

The next table provides comprehensive net cost information.  It is important to note that while all net cost

information in this report is derived from the same financial accounting system, Department of Labor Accounting

and Related Systems (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 (i.e., those operating on

a Program Year).  Most DOL programs also report costs at the performance indicator level; this information is

provided in the Performance Section.  For many performance goals, charts display five years of net cost data.

 

6 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 DOL and by other Federal agencies.

Percent of Net Cost

3% 3% 1%

93%

1 ‐ Prepared

2 ‐ Competitive

3 ‐ Safe and Secure

4 ‐ Economic

Protections

Percent of Net Cost Excluding Income

Maintenance

10%

28% 27%

35%

1 ‐ Prepared

2 ‐ Competitive

3 ‐ Safe and Secure

4 ‐ Economic

Protections
Program Performance Overview

FY 2009 Performance and Accountability Report     17

Net Costs in $millions7

Goal FY 2007

PY 2006

FY 2008

PY 2007

FY 2009

PY 2008

Strategic Goal 1:  A Prepared Workforce $3,267 $3,464 $3,687

Performance Goal 09‐1A (BLS) 574 574 589

Performance Goal 08‐1B (Job Corps) 1,485 1,589 1,640

Performance Goal 08‐1C (WIA Youth) 866 966 1,125

Performance Goal 09‐1D (Apprenticeship) 24 25 25

Performance Goal 08‐1E (VETS Employment Services) 8 181 190 219

Other (Youth Offender Reintegration, Indian and Native American Youth Programs,

Homeless Veterans’ Reintegration Program, etc.)

136 120 88

Strategic Goal 2:  A Competitive Workforce $5,060 $4,829 $4,725

Performance Goal 08‐2A (WIA Adult) 896 844 878

Performance Goal 08‐2B (WIA Dislocated Worker) 1,409 1,307 1,440

Performance Goal 08‐2C (Employment Service) 749 732 699

Performance Goal 08‐2D (Senior Community Service Employment Program) 444 479 543

Performance Goal 09‐2E (Trade Adjustment Assistance) 805 755 481

Performance Goal 09‐2F (Foreign Labor Certification) 63 40 54

Performance Goal 09‐2G (ODEP) 34 27 29

Performance Goal 09‐2H (ILAB) 101 79 69

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, National Electronic Tools and other ILAB programs)

560 566 531

Strategic Goal 3:  Safe and Secure Workplaces $1,237 $1,281 $1,304

Performance Goals 09‐3A (OSHA) 547 554 556

Performance Goal 09‐3B (MSHA) 356 388 403

Performance Goal 09‐3C (Wage and Hour) 221 227 232

Performance Goal 09‐3D (Federal Contractor Compliance) 103 102 102

Performance Goal 09‐3E (USERRA) 10 10 10

Strategic Goal 4:  Strengthened Economic Protections $38,445 $48,957 $128,640

Performance Goal 09‐4A (Unemployment Insurance) 34,647 45,035 123,541

Performance Goal 09‐4B (Workers’ Compensation) 3,554 3,693 4,878

Performance Goal 09‐4C (Labor‐Management Standards) 68 58 56

Performance Goal 09‐4D (EBSA) 176 170 165

Performance Goal 09‐4E (PBGC)9 – – –

 

7 Sums may not equal higher level totals due to rounding. 8 Approximately $30 million in costs were shifted from VETS (Goal 1E) to Goal 1 Other for PY 2006 and PY 2007 in this

statement because performance indicators for the Homeless Veterans’ Reintegration Program were dropped in PY 2008. 9 Costs for Performance Goal 09‐4E (PBGC) are not referenced because PBGC’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/doc/2009AMR.pdf.
Management’s Discussion and Analysis

18 United States Department of Labor

Costs Not Assigned to Goals $10 $10 $11

Total10 $48,019 $58,540 $138,367

Reconciliation to the Consolidated Statements of Net Cost:

Less costs for programs included above on a program year basis (July 1 to June 30) $6,433 $6,490 $6,858

Plus costs for these same programs on a fiscal year basis (October 1 to September 30) $6,704 $6,257 $7,931

Less Job Corps PY 2008 invoices posted in PY 2009 – – $180

Less variance between DOLAR$/GPRA and Net Cost of Operations per Consolidated

Statements of Net Costs

– – $141

Net Cost of Operations per Consolidated Statements of Net Cost $48,291 $58,307 $139,118

Recovery Act

The American Recovery and Reinvestment Act of 2009 (Recovery Act) aims to create or save over 3.5 million jobs

over two years and to jumpstart and transform our economy in the process.  Since our nation’s greatest resource is

its workers, the Recovery Act targets investments to key areas that will create and preserve good jobs.  DOL has

two key roles in this recovery effort: providing worker training for these jobs; and easing the burden of the

recession on workers and employers by providing extended and expanded unemployment benefits and assisting

and educating them regarding expanded access to continued health benefits.

DOL has 23 Recovery Plans, each of which describes what the Recovery Act has authorized, and how the

Department is implementing its provisions and measuring the results of those activities.  The first one listed is for

administrative support activities performed by the Office of the Chief Financial Officer (OCFO) and the Office of

Acquisition Management Services and Human Resources Center within the Office of the Assistant Secretary for

Administration and Management (OASAM).  The next three plans are named after the responsible DOL agencies or

offices.  All remaining plans are at the program level; they are listed under their respective DOL agencies, and brief

descriptions are provided for some of them.  All plans associated with a performance goal are discussed in their

Performance Section narratives.  Results for all 23 recovery programs will be posted on the Web each quarter at

www.recovery.gov and www.dol.gov/recovery.

 Financial Oversight and Reporting,

Hiring, and Procurement

 Occupational Safety and Health

Administration.  OSHA was allocated 36

Full Time Equivalent employees (FTEs) in

FY 2009 to protect worker safety and

health through targeted enforcement,

particularly in the construction industry.

The agency established Local Emphasis

Programs for its Recovery Act work and

has already surpassed its FY 2009 federal

inspection goal by conducting 665

inspections through the third quarter of

FY 2009.

 

10 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.

President Obama signs the American Recovery and Reinvestment

Act (February 17, 2009).  Photo Credit:  Pete Souza, the White House
Program Performance Overview

FY 2009 Performance and Accountability Report     19

 Job Corps.  Approximately 85 percent or $211.6 million of the $250 million in Recovery Act funding will be

invested in construction, rehabilitation and acquisition of Job Corps centers; $10 million of the funds will be

used to incorporate green technologies and training into Job Corps’ career technical training programs.

 Office of the Solicitor

Employee Benefits Security Administration

 COBRA Premium Assistance.  The Consolidated Omnibus Budget Reconciliation Act (COBRA) premium

assistance provisions expand COBRA eligibility and provide eligible individuals with a 65 percent reduction

of their COBRA health plan premiums for up to nine months.  If eligible, these individuals pay only 35

percent of their COBRA premiums to the plan and the remaining 65 percent is paid by the government

through a payroll tax credit to the employer.

Employment Standards Administration

 Federal Contract Compliance Programs

 Mass Transit Employee Protection Program

 Davis‐Bacon and Related Act Wage Determination and Government Contract Labor Standards Enforcement

Employment and Training Administration

 Wagner‐Peyser Act Employment Service.  The Recovery Act made an additional $150 million available for

Employment Service Operations, plus $250 million for targeted reemployment services to unemployment

insurance claimants.  States are using these funds to provide more people access, through the network of

One‐Stop Career Centers, to employment and workforce information, and to provide a greater variety of

core and intensive employment services.

 Unemployment Insurance – Extension of the Emergency Unemployment Compensation, 2008 (EUC08)

and Federal Additional Compensation Program (FAC).  In June 2008, EUC08 was enacted to provide

additional 100 percent federally‐funded benefit payments to individuals who exhaust their eligibility for

regular unemployment compensation and have no other rights to extended benefits.  Through May 2009,

the Recovery Act funded $1.1 billion of the benefits paid for EUC08 claims.

 Unemployment Insurance – Modernization ($7 Billion Incentive Fund)

 Unemployment Insurance – Special Transfer for Administration ($500 Million)

 Training Grants for Green Jobs and Emerging Industry Sectors

 Senior Community Service Employment Program

 Trade Adjustment Assistance

 National Emergency Grants for Health Coverage Assistance

 Work Opportunity Tax Credit (WOTC) Program

 Workforce Investment Act Adult Program

 Workforce Investment Act Dislocated Worker Program.  An additional $1.25 billion was made available to

the program for expanding services, as authorized by WIA, using the same State and local allocation
Management’s Discussion and Analysis

20 United States Department of Labor

formula.  The Recovery Act calls for greater quantity and quality training services; States are expected to

improve assessments and career counseling to place workers in high growth sectors with long term

opportunities.  States have the authority to enter into contracts with institutions of higher education, such

as community colleges, or other eligible training providers to facilitate training multiple individuals for high‐

demand occupations as long as the contract does not limit customer choice.

 Dislocated Worker National Emergency Grants

 Workforce Investment Act Youth.  The Recovery Act also made an additional $1.2 billion available for WIA

Youth activities, using the same formula as the regular appropriation.  The grantees, using these funds,

provide additional authorized WIA Youth activities with a specific focus on creating summer employment

opportunities for youth.  The Recovery Act also extended the youth eligibility age from 21 to 24 and

encouraged local areas to expose participating youth to opportunities in green jobs in the construction,

energy efficiency, renewable energy, and other related industries.

 Workforce Investment Act Section 166 Native American Program, Supplemental Youth Services Program

 YouthBuild  
FY 2009 Performance and Accountability Report     21

Financial Performance Overview

Sound financial management is an integral part of the Department’s efforts to deliver services and administer

programs.  With the Department’s emphasis on internal controls, accurate financial information delivery to key

decision makers, and transparent and accountable reporting, the Department’s stakeholders can be confident that

resources are used efficiently and effectively.

DOL's internal control program and centralized processes for reporting financial data help to ensure the relevance

and reliability of financial performance data.  DOL's comprehensive internal control program has the objective of

providing, on a continuing basis, reasonable assurance that all financial, non‐financial, performance, statistical

records, and related reports are reliable.  DOL's internal control program helps ensure that appropriate internal

controls are in place for financial performance management and that Agencies institute sound, effective internal

control policies and procedures for financial performance measurement and regular evaluation of their processes.  

Financial performance is evaluated during comprehensive ongoing financial management reviews and corrective

actions are implemented as required to resolve audit findings and increase efficiency.  On quarterly and annual

bases, certification of the effectiveness of internal controls over financial reporting is obtained from all DOL Agency

Heads.  These business processes help to ensure that reported financial performance information is relevant and

reliable.

In FY 2009, DOL used managerial cost accounting (activity‐based costing) for costing programs and performance

indicator results.  Activity‐based costing is a U.S. generally accepted accounting principle promulgated by the

Federal Accounting Standards Advisory Board (FASAB) in the Statement of Federal Financial Accounting Standards

(SFFAS) No. 4, Managerial Cost Accounting Standards and Concepts for the Federal Government, as amended by

SFFAS No. 30, Inter‐Entity Cost Implementation.  The statement outlines the standards for Federal entities to

provide “reliable and timely information on the full cost of federal programs, their activities, and outputs.”  This

information can be used to allocate resources and evaluate program performance.  Activity‐based costing directly

supports the sections of the PAR that address Program Net Costs and the Statement of Net Costs.  Total Net Costs

of DOL activities for FY 2009 were $139.1 billion.

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

agency for collection of debts owed the Federal Government.   Debt management accounts for a relatively small

part of DOL’s financial management activities; the majority of debts managed by DOL relate to the assessment of

fines and penalties as a result of its enforcement programs.  Through the third quarter of FY 2009, DOL referred

debt in the amount of $119,173,512 to the Treasury for collection.  DOL continues to monitor and aggressively

pursue delinquent debt and will continue to refer eligible debt to Treasury for collection.

The Department continues to make improvements in its efforts to meet requirements of 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 2009, approximately $1.4 billion in gross

payments were made, including approximately $258,000 in interest penalty fees.  Also during FY 2009, there were

over 112,000 payments made to vendors and travelers.  Of this amount, 3,168 invoices were paid late, resulting in 3

percent of the total payments incurring interest penalties.   

The Department also works 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 2009 remained at 99

percent, the same as in FY 2008.  Although the Employment Standards Administration is continuing to promote EFT

payments for their benefit and medical programs, its percentage rate continues to remain below Treasury’s goal of

98 percent.
Management’s Discussion and Analysis

22 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, and provide information on budgetary resources and refinancing for FY 2009 and FY 2008.  

Highlights of the financial information presented in the principal financial statements are shown below.  

Financial Position  

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

liabilities, and net position.  The Department's total assets decreased from $89.9 billion in FY 2008 to $44.2 billion in

FY 2009.  The decrease in total assets primarily was accounted for in the Department's investments.  Balances held

in the Unemployment Trust Fund are invested in non‐marketable, special issue Treasury securities.  A portion of

these investments was liquidated to pay unemployment benefits.  Liabilities increased from $22.6 billion at the end

of FY 2008 to $29.7 billion in FY 2009.  This increase was due primarily to increases in liabilities for current and

future benefits and intra‐governmental debt.  Liabilities for current benefits increased due to the increase in

program expenses for unemployment benefits.  Intra‐governmental debt increased because the Unemployment

Trust Fund borrowed from the General Fund of the Treasury to meet program requirements.

Net Cost of Operations  

The Department's total net cost of operations in FY 2009 was $139.1 billion, an increase of $80.8 billion from the

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

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 Accounts

Receivable

Advances Property, Plant

and Equipment

FY2009 FY2008

Crosscutting Programs

(in millions)

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

Income

Maintenance

Employment and

Training

Standards Safety and Health Statistics

FY 2009 FY 2008
Financial Performance Overview

FY 2009 Performance and Accountability Report     23

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 $79.3 billion from FY 2008 to FY 2009.  The primary reasons for this increase were the

increase in regular unemployment benefits paid and the additional weeks of emergency unemployment

compensation (EUC) provided by the enactment of the EUC program in June 2008, its expansion in November 2008,

and its extension by the Recovery Act in February 2009.

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

individuals deal with the loss of a job, identify new occupational 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

2009 and FY 2008 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 $174.7 billion in FY 2009, an increase of

$112.3 billion from FY 2008.  

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.  

Financial Management Systems and Strategy

DOL continues to pursue its financial management system strategy to improve reporting, accountability, and

decision making, while furthering implementation of key Government‐wide initiatives, 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.  

In FY 2009, DOL’s financial management functions, processes, and activities were distributed across multiple

information systems and financial applications, all centered on the Department of Labor Accounting and Related

Systems (DOLAR$) mainframe accounting system.  DOLAR$ was implemented in 1989, prior to all of the modern

day laws and regulations that drive Federal accounting, financial management systems, financial management

reporting, and security, such as the Chief Financial Officers Act of 1990, the Government Performance and Results

Act of 1993, the Federal Financial Management Improvement Act of 1996, the Reports Consolidation Act of 2000,

and the Federal Information Security Management Act (FISMA) of 2002.  DOLAR$ has been both enhanced and

extended numerous times to meet Departmental and external requirements resulting from new laws and

regulations; however, the system’s antiquated technology does not allow DOL to efficiently and effectively meet its

current and future needs.

On January 15, 2008, DOL released a Request for Proposal (RFP) on Federal Business Opportunities (FBO) for the

purpose of obtaining the services of a Financial Management Line of Business (FMLoB) Shared Service Provider

(SSP) to modernize DOL’s core financial functions from DOLAR$ to the New Core Financial Management System

(NCFMS).   

DOL sought the services of a federal or commercial FMLoB SSP in the following areas:
Management’s Discussion and Analysis

24 United States Department of Labor

 Technology Hosting and Administration Services – involves providing the IT infrastructure

(facilities and infrastructure software) that serves as the foundation for running business software

applications and the services to maintain that infrastructure.   

 Application Management Services – involves providing the software and services for running and

managing access to business software applications, in this case, financial management software

and the feeder systems that provide data to the financial management software.   

 System Implementation Services – includes services to help an agency through a migration of their

current financial management operations to the FMLoB SSP environment.  

After detailed evaluation of the responses received, DOL selected and issued an award to Global Computer

Enterprises (GCE) on June 26, 2008.  GCE is a small business located in Reston, Virginia that has partnered with

several other firms, including Grant Thornton, Qwest, and several other firms to provide the complete FMLoB SSP

services.  GCE began work on July 1, 2008, to have the system fully implemented and operational in FY 2010.

Reducing Improper Payments

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.

In accordance with the Improper Payments Information Act (IPIA) of 2002, as implemented by the OMB Circular A‐

123, Appendix C, Requirements for Effective Measurement and Remediation of Improper Payments, the Department

reviews its programs and activities annually, identifies programs that may be susceptible to significant improper

payments, performs testing of programs considered high risk, establishes improper payment reduction targets in

accordance with OMB guidance and develops and implements corrective actions for high risk programs.   

The Department has two programs that are classified to be at risk of significant improper payments in accordance

with OMB criteria or classification – the Unemployment Insurance (UI) benefit program and the Workforce

Investment Act (WIA) grant program.  The UI improper payments reduction target error rate for FY 2009 was 10.0

percent, whereas the estimated error rate is 10.3 percent.  This difference is primarily due to an increase in

overpayments to UI claimants who were not actively registered, as required, for job referral and reemployment

services, as States struggled to keep pace with the large increase in workload due to the adverse labor market

conditions.  The higher rate for WIA in FY 2009 is primarily due to including the results of DOL Office of Inspector

General audits and other monitoring activities in the measurement methodology.  The table below shows the

estimated improper payments error rates for the programs classified as at‐risk:

  

DOL Program FY 2008 FY 2009 FY 2010

Target Actual Target Actual Target

Unemployment Insurance 11.5% 10.0% 10.0% 10.3% 9.9%

Workforce Investment Act 0.19% 0.07% 0.07% 0.2% 0.07%

The Department has implemented various corrective actions to address the causes and reduce improper payments

in each of these programs.  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 economic

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 administration and

management of these programs' activities.

See the “Other Accompanying Information” section of this report for additional information on improper payments.
FY 2009 Performance and Accountability Report     25

Management Assurances

Federal Managers’ Financial Integrity Act of 1982 (FMFIA)

FMFIA requires that agencies establish internal controls and financial systems that provide reasonable assurance

that the integrity of Federal programs and operations is protected. It requires that the head of the agency provide

an annual assurance statement whether the agency has met this requirement.

Appendix A of OMB Circular A‐123 provides specific requirements for conducting management’s assessment of

internal control over financial reporting, and also requires the agency head to provide an assurance statement on

the effectiveness of internal controls over financial reporting.

Federal Financial Management Improvement Act of 1996 (FFMIA)

FFMIA requires that agencies implement and maintain financial management systems that comply substantially

with the Federal financial management system requirements, applicable Federal accounting standards, and the

United States Government Standard General Ledger at the transaction level. The agency head is to make an annual

determination whether the financial systems substantially comply with FFMIA.

       November 15, 2009

      
Management’s Discussion and Analysis

26 United States Department of Labor
oduction

FY 2009 Performance and Accountability Report     27

Performance Section

FY 2009 Performance and Accountability Report     29

Introduction

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 Performance Budget Overview which

accompanies the Department’s annual Congressional Budget Justification.

All performance targets in this report were finalized in DOL’s FY 2010 budget.  By the time DOL’s FY 2010 budget

was sent to Congress, the recession had already taken its toll on employment.  Accordingly, PY 2008 and FY 2009

targets for most employment and training programs were adjusted (downward in each instance) from preliminary

targets in DOL’s FY 2009 budget using a statistical model that accounts for external factors, such as the increasing

unemployment rate, lack of new jobs, and changes in individual demographics; all of which have larger implications

for program outcomes during the recession.11

Each strategic goal section is introduced by performance highlights and a summary table of net costs.  Complete

results at the performance goal level are presented in separate narratives, each of which includes the following:

 Performance Goal statements appear at the top of the page, followed by unique identifiers that help

organize reporting on results and net costs.  The first two digits correspond to the funding (budget) period;

e.g., “09” indicates goals reporting on a fiscal year and “08” those reporting on a program year.  The single

digit following the hyphen identifies the strategic goal and the letter distinguishes the performance goal

from others in the same group (e.g., 09‐1A).  The agency acronym (e.g., BLS) is in parentheses.12

 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 do not apply 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.13

 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, how it measures success, and external factors

that influence performance.  Photos and vignettes communicate programs’ impact at the personal level.

 Analysis and Future Plans tables identify what worked and what didn’t work to improve results 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.

   

 

11 This model was developed for ETA by an independent contractor using administrative data.  Job Corps and VETS considered

using the model.  Job Corps did not adopt this model and is studying other options to adjust its targets in FY 2010.  VETS did

not adopt the model, either, for PY 2008 but made adjustments to its PY 2009 targets (reflected in the DOL FY 2010 budget)

using additional factors that account for differences in historical outcomes for its veteran populations. 12 FY 2009 covers October 1, 2008 to September 30, 2009; PY 2008 covers July 1, 2008 to June 30, 2009. 13 Net cost for all strategic and performance goals for the last three years are provided in the DOL Program Performance and

Net Costs section of the Program Performance Overview (Management’s Discussion and Analysis).
Performance Section

30 United States Department of Labor

 Program Assessments, Evaluations and Audits sections summarize Program Assessments and provide

updated information on improvement plans.  For relevant audits and evaluations completed during the

fiscal year, tables summarize relevance, findings and recommendations, and actions.  

 Data Quality and Top 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.  

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 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 independent 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 2011 President’s Budget and the FY 2010

Performance and Accountability Report.

As required by OMB Circular No. A‐11, Preparation, Submission, and Execution of the Budget, the Secretary’s

Message includes a statement on program performance data quality.  Significant limitations, which are noted if

applicable to any given report, are defined in this context as data that are insufficient to permit determination of

goal achievement.  This is an uncommon occurrence, as most DOL performance goals have sufficient indicators and

historical data to allow reasonable estimation of results.   

The Department’s Data Quality Assessments systematically evaluate data systems using widely accepted criteria to

improve the quality of performance information reported to the public.  Designed to encompass more than the

mechanics of data collection, the assessments also question the value of information collected and the extent to

which it provides evidence of goal achievement.  Increasing the transparency of data quality provides benchmarks

for monitoring progress and stimulating change.  Agency heads are held accountable by a requirement that they

sign attestations to the data quality assessment for each of their agency’s performance goals in this report.  One of

the most important outcomes of this process, aside from increasing the transparency of performance information

reported in the PAR, is encouraging the development of plans to either maintain or improve data quality.

In 2006, DOL conducted baseline assessments of data for all performance goals.  For each of the following years,

agencies have updated these assessments based on changes to their data quality systems or procedures, new

information from independent studies released during the fiscal year, or changes to their performance indicators.  

Agencies seeking an upgrade must provide evidence demonstrating how a data quality criterion was satisfied.  By

contrast, agencies must also defend their rating if evidence has emerged suggesting a criterion is not being met.

The rating system includes seven criteria, of which two – accuracy and relevance – are weighted twice as much as

others (see box on the following page).  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.
Introduction

FY 2009 Performance and Accountability Report     31

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
Performance Section

32 United States Department of Labor

After four years, DOL data quality continues to improve,

but significant challenges remain.  Data for 78 percent of

performance goals are rated Very Good or Excellent.  

Thirteen percent of the goals fell into the middle category

(Good).  No performance goals were rated

Unsatisfactory, nor were any rated Data Quality Not

Determined (DQND) due to fundamental problems with

accuracy and relevance.  Three performance goals

improved their rating; in each case, the upgrade

demonstrates concentration on specific issues within

their data systems.  Two goals moved from Good to Very

Good.  Building upon momentum from FY 2008, ETA’s

Senior Community Service Employment Program (SCSEP) successfully addressed issues related to the reliability of

data from year‐to‐year by implementing enhanced data checks, including careful monitoring of deviations in data

over time.  ESA’s Office of Labor‐Management Standards (OLMS) took advantage of a change in performance

indicators to address timeliness and reliability issues.  Data for the new performance measures is generated by the

agency database which provides routine reports for agency management.  Finally, Job Corps demonstrated that all

criteria were met, earning an upgrade to Excellent.  Job Corps targeted issues related to the verifiability of their

data by implementing various quality control procedures throughout the data collection process.   

At the Departmental level, certain criteria are met more frequently than others.  All

DOL performance goals now satisfy the threshold criteria of accurate and relevant.  

Over three‐quarters of performance goals are supported by data that are valid, timely,

reliable, and complete.  As indicated in the adjacent table, the clear challenge for

many performance goals is the ability to verify the data.  Less than half of all

performance goals have data quality controls in place that routinely monitor data and

are fully integrated into the data collection system.  Verifiability is a predominate issue

largely as a result of ETA’s numerous grant programs and its challenges monitoring and

enforcing standards among grantees’ diverse data systems.  The percent of

performance goals with reliable data increased from last year due to the upgrade for

SCSEP.  Though still met by 17 of 23 goals, valid replaced reliable in FY 2009 as the

second greatest opportunity for improvement.  Goals not meeting this criterion are

supported by one or more performance indicators that are not considered the most representative measure of

whether the agency is achieving its desired results.  As DOL embarks on a comprehensive revision of its strategic

plan in FY 2010, agencies will consider data quality issues as they reexamine goals and indicators.

In FY 2009, in addition to the agencies’ self‐assessments, the Department underwent an independent evaluation of

its data quality assessment process, including a review of data quality for two selected performance goals.  The

evaluation found the data assessment process has established a solid foundation for assessing and improving DOL

performance data quality.  Because criteria and definitions for performance data quality vary across the Federal

government, it was difficult to determine the accuracy of CPPR ratings, overall.  However, the study did analyze the

individual criteria via comparisons to those of other data quality systems.  It also examined data systems for the

Workforce Investment Act Adult and Job Corps programs, which validated various findings of the broader

assessment process.  For example, in each case, the study found that systematically mapping data sources

promotes comparisons to other programs and clarifies the relevance of data quality findings in external reports.  

Recommendations aimed to strengthen the assessment process so that the PAR will continue to promote strategic,

transparent improvements to data quality.  DOL will continue to examine data quality issues through a second year

continuation of the study.  DOL will also use the strategic planning process, which is underway in FY 2010, as an

opportunity to implement recommendations along with development of new performance goals and indicators.

Data

Quality

Criteria Met

Percent of

Performance

Goals

Verifiable 43%

Valid 74%

Reliable 83%

Timely 83%

Complete 83%

Accurate 100%

Relevant 100%

FY 2009 DOL Performance Goal

Data Quality Scores

Fair 9% Good 13% Excellent 22%

Very Good

56%
FY 2009 Performance and Accountability Report     33

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 greatest resource is its skilled workforce.  A steady stream of workers who possess skills required by

today's employers is essential to fuel the Nation’s economy.  To expand the size and capabilities of the labor pool,

DOL provides comprehensive training programs that focus on specific occupational skills while taking into account

job seekers’ circumstances.  The Department also produces labor statistics that individuals and businesses can use

to better understand the job market and the economy.  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), and

 Women’s Bureau

A prepared workforce has the skills and education that employers demand.  Education – from literacy to vocational

training – plays a fundamental role in preparing workers for life‐long employment.  DOL programs tailor training to

the unique needs of individuals who face exceptional barriers to successful employment, such as low‐income youth

and homeless veterans.  Here are a few highlights of program outcomes for FY 2009:

For Youth

 Job Corps students’ credentials

attainment rate and literacy/numeracy

gains improved by two percent and five

percent, respectively, over the past year.

 Workforce Investment Act (WIA) Youth

program participants’ placement in

employment, post‐secondary education

or advanced occupational training

improved by five percentage points, and

literacy/numeracy gains improved by

almost nine percentage points,

compared to the previous year.

For Workers in the Trades

 Eighty‐seven percent of workers

completing apprenticeship programs

remained employed for at least six

months, and their average wages

continued to rise.  

For Veterans

 Entered employment and employment

retention rates for all veterans served by

One‐Stop Career Centers fell by 3.8 and

1.2 percentage points, respectively.  

For more specific information, see the

Performance Goal narratives.  

  

When Mercedes enrolled at the Wolf Creek Job Corps Center a few

years ago, she was working two entry‐level, low‐paying jobs and had

no immediate plans for the future.  She graduated from Wolf Creek

after completing her career technical training in construction craft

labor and earning her GED.  Her goal of employment as a

Construction Craft Laborer for the Laborers’ International Union of

North America was clearly within reach.  Shortly after graduating,

Mercedes started work as a laborer and pre‐apprentice on a bridge

rehabilitation project in Winchester, Oregon earning $15.50 an hour.

She assists with preparing and stabilizing the bridge using a thirty‐

five pound concrete drill.  Her daily commute to the job site includes

climbing eight flights of scaffolding and walking across metal beams

suspended by cables attached to the main bridge.  She loves her job

and the crew she works with.  Without the Job Corps program,

Mercedes does not believe she would have had the skills needed to

succeed.  Photo credit: Tracy Placido
Performance Section

34 United States Department of Labor

Job Corps and the WIA Youth program both

utilize the Federal job training program common

measures for youth.14  These measures reflect

shared outcome goals and facilitate comparison

for management purposes.  The adjacent chart

provides placement and credentials attainment

results to date for both programs.  Although both

programs target out‐of‐school and at‐risk youth,

results may continue to differ because one is

primarily a longer‐term residential program,

while the other provides services to youth in their

communities.  Also, they have followed different

common measures implementation trajectories.  

For more detailed discussion, see each program’s

performance goal narrative in the pages that

follow.

The table below provides net costs for all

performance goals and indicators associated with

this strategic goal.15  Those with labels that begin

with “08” operate on a Program Year (PY) basis,

and are reporting on the period from July 1, 2008 to June 30, 2009 due to the forward funding authorized in the

Workforce Investment Act of 1998.

Net Costs ($Millions) 16

Goal or Indicator FY 2007

PY 2006

FY 2008

PY 2007

FY 2009

PY 2008

Strategic Goal 1:  A Prepared Workforce $3,267 $3,464 $3,687

Performance Goal 09‐1A (BLS)

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

price and productivity changes.

574 574 589

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

achieved for labor force statistics

268 276 278

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

achieved for prices and living conditions

198 192 198

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

achieved for compensation and working conditions

95 92 96

 

14 The three measures, also referred to as placement, credential attainment and literacy/numeracy, are: 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; and Percent of students who will achieve literacy or numeracy gains of one Adult Basic Education (ABE) level

(approximately equivalent to two grade levels).    15 Rows labeled “Dollars not associated with indicators” indicate costs that cannot be associated with the current set of

performance indicators.  For some goals, indicator costs 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). 16 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 DOL and by other Federal agencies.  Sums may not equal higher level totals due

to rounding.

Placement and Credentials Attainment ‐ Job Corps and WIA

Youth

30%

40%

50%

60%

70%

80%

90%

2004 2005 2006 2007 2008

Program Year

Job Corps Placement WIA Youth Placement

Job Corps Credentials WIA Youth Credentials
Strategic Goal 1

FY 2009 Performance and Accountability Report     35

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

achieved for productivity and technology

12 13 13

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

Customer Satisfaction Index)

0 0 3

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

Performance Goal 08‐1B (Job Corps)

Improve educational achievements of Job Corps students and increase participation

of Job Corps graduates in employment and education.

1,485 1,589 1,640

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

1,485 1,589 1,640

Performance Goal 08‐1C (WIA Youth)

Increase placements and educational attainments for youth served through the WIA

youth program.

866 966 1,125

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

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

Education (ABE) level

866 966 1,125

Performance Goal 09‐1D (Apprenticeship)

Improve the registered apprenticeship system to meet the training needs of business

and workers in the 21st Century.

24 25 25

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

24 25

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 (six months’

earnings)

– –

25

Performance Goal 08‐1E (VETS Employment Services)

Improve the employment outcomes for veterans who receive One‐Stop Career

Center services

181 190 219

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

90 93 109

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

90 95 109

Dollars not associated with indicators 2 2 2

Other (Youth Offender Reintegration, Indian and Native American Youth Programs,

Homeless Veterans’ Reintegration Program, etc.)

136 120 88

  
Performance Section

36 United States Department of Labor

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

and productivity changes.

   

    Performance Goal 09‐1A (BLS)

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not  reached (N)

FY 2006

Goal Not

Achieved

FY 2007

Goal

Achieved

FY 2008

Goal Not

Achieved

FY 2009

Goal

Achieved

Target 85% 80% 92% 88%

Result 79% 92% 86% 92%

* N Y N Y

Percent of output, timeliness, accuracy, and long‐term improvement

targets achieved for labor force statistics

Cost — $268 $276 $278

Target 85% 90% 90% 92%

Result 94% 90% 92% 92%

* Y Y Y Y

Percent of output, timeliness, accuracy, and long‐term improvement

targets achieved for prices and living conditions

Cost — $198 $192 $198

Target 85% 86% 96% 96%

Result 77% 96% 96% 100%

* N Y Y Y

Percent of output, timeliness, accuracy, and long‐term improvement

targets achieved for compensation and working conditions

Cost — $95 $92 $96

Target 85% 86% 100% 86%

Result 100% 100% 71% 100%

* Y Y N Y

Percent of output, timeliness, accuracy, and long‐term improvement

targets achieved for productivity and technology

Cost — $12 $13 $13

Target 75% 79% 79% 82%

Result 79% 79% 82% 82%

* Y Y Y Y

Customer satisfaction with BLS products and services per the

American Customer Satisfaction Index

Cost — $0 $0 $3

Target $2.58 $1.79 $1.11 $0.74

Result $1.82 $1.12 $0.76 $0.56

* Y Y Y Y

Cost per transaction of the Internet Data Collection Facility

Cost — $1 $1 $1

Goal Net Cost (millions) $573 $574 $574 $589

Source(s): Budget submissions and internal BLS management meeting structure documents and American Customer Satisfaction Index

Annual Report on Federal government scores.

Note:  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 DOL and by other Federal agencies.

Program Perspective and Logic

The Bureau of Labor Statistics (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 releases 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.
Strategic Goal 1

FY 2009 Performance and Accountability Report     37

BLS reports performance for this goal by aggregating

underlying measures of output, timeliness, accuracy, and

long‐term improvement for its statistical programs into four

comprehensive performance indicators associated with

Labor Force Statistics, Prices and Living Conditions,

Compensation and Working Conditions, and Productivity

and Technology.  Over 100 performance and workload

measurements make up these four performance indicators.  

Information on the underlying performance and workload

measures is available on the BLS website at

http://www.bls.gov/bls/dwpt2010.pdf.

The underlying performance measures encompass

enhancements to BLS products.  Examples include

publication, for the first time, of employment information on

people with disabilities (Labor Force Statistics indicator);

publication of a new group of indexes that track price

changes for specific services, regardless of the services’

industry of origin (Prices and Living Conditions indicator);

production of national estimates of workplace injuries and

illness incurred by State and local government workers

(Compensation and Working Conditions indicator); and  

expansion of industries covered by labor productivity

measures (Productivity and Technology indicator).

BLS measures customer satisfaction with its Occupational

Outlook Handbook (OOH) Web page (www.bls.gov/OCO/), a

nationally recognized source of career information.  BLS also

reports on the efficiency of its Internet Data Collection

Facility (IDCF), a single, secure architecture that BLS surveys use to collect information from respondents online.  

IDCF offers a wider range of reporting options to respondents and a more economical means of data collection.

Analysis and Future Plans

BLS reached the targets for all six of its performance indicators, achieving its performance goal and equaling or

exceeding the 2008 results for all of its indicators.  BLS reached 92 percent of the underlying targets for its labor

force statistics indicator, compared to 86 percent in FY 2008.  For its prices and living conditions indicator, BLS

reached 92 percent of its underlying targets – unchanged from FY 2008.   BLS reached 100 percent of its underlying

targets for both the compensation and working conditions and productivity and technology indicators, compared to

the performance of 96 percent and 71 percent respectively in FY 2008.  BLS received a customer satisfaction score

of 82 percent, which is the same score received in FY 2008.

Indicator * What worked What didn’t work

Labor force statistics Y

Prices and living conditions Y

Compensation and working

conditions Y

 In late 2008, identified 2009

projects that were critical to the

BLS mission.  Prepared detailed

documentation and workplans to

help keep projects on schedule,

which helped ensure that targets

were met.

 Held regular meetings between

 Labor force statistics:  Missed an output target

in the Current Employment Statistics program

due to a decline in several industry sectors. BLS

eliminated series that no longer could be

released due to confidentiality issues.

 Labor force statistics:  Missed a workload target

in the Quarterly Census of Employment and

Wages due to slower than projected business

Duncan is a director of an $8 billion chemical company

with operations in more than 40 countries.  His

company supplies products for generating power,

manufacturing commercial and industrial products, and

conducting scientific research.  Duncan incorporates

automatic price adjustment clauses in his contracts that

use inflation data from the BLS Consumer Price Index

(CPI) and Producer Price Index (PPI).  This provides a fair

and objective means of setting prices; gives suppliers an

incentive to become more efficient, since the price they

receive for their goods or services is preset; allows for

better cost planning by reducing the uncertainty

associated with day‐to‐day market fluctuations; and

reduces the administrative costs associated with having

to frequently renegotiate contracts.  Photo credit:  DOL/BLS
Performance Section

38 United States Department of Labor

Productivity and

technology Y

senior management and

statistical program offices to

monitor progress on mission‐

critical projects and other goals.  

Ensured potential concerns were

brought to the attention of

senior management before they

developed into significant

problems.

growth.

 Prices and living conditions:  Missed a workload

target in the Consumer Expenditure surveys due

to below average response rates.  Although the

target was not reached, in later months, BLS

increased the response rates by improving the

sampling process.

 Prices and living conditions:  Missed a workload

target in the International Price Program (IPP).  

Also missed an accuracy target in IPP due to the

volatility of petroleum data.

Customer satisfaction Y  Completed a comprehensive

website redesign in late 2008.

IDCF efficiency Y  Expanded usage of IDCF, which

decreased cost per transaction.

Program Performance Improvement Plan

 BLS will continue to improve its statistical products by analyzing and evaluating new economic survey methods, new

technologies, and new survey design and collection approaches.

 BLS will better inform the public by increasing customer awareness of data products, and using feedback from data users

to determine how the data or data dissemination methods could be changed to better serve the American public.

 Further expand use of the IDCF to further improve the data collection process and enhance the quality of data produced.

*Target reached (Y), improved (I), or not reached (N)

Net costs for BLS activities rose three percent from FY 2008‐2009 due to

budgeted increases in personnel compensation and benefits costs.

In 2010, BLS’ activities will provide statistical data needed by

policymakers in support of the following outcome goals in the

Department’s Strategic Vision of Good Jobs for Everyone:

 Increasing workers’ incomes and narrowing wage and income

inequality;

 Securing safe and healthy workplaces, particularly in high‐risk

industries;

 Securing wages and overtime;

 Assuring skills and knowledge that prepare workers to succeed

in a knowledge‐based economy, including in high‐growth and

emerging industry sectors like “green” jobs;   

 Improving health benefits and retirement security for all

workers;

 Providing workplace flexibility for family and personal care‐giving; and

 Voice in the workplace.

Program Assessments, Evaluations and Audits

Findings and recommendations from an assessment

of the Bureau of Labor Statistics prompted specific

actions to improve performance.  Here is a summary

of progress in 2009:

 Conducting an independent evaluation on

how the agency is improving its effectiveness

in meeting the needs of its data users.  The

scope of the evaluation will be the National

Q&A  Q:  Is the count of unemployed persons limited to

just those people receiving unemployment insurance

benefits?

A:  No; the estimate of unemployment is based on a monthly

sample survey of households.  All persons without jobs who

are actively seeking and available to work are included among

the unemployed.  There is no requirement or question

relating to unemployment insurance benefits in the monthly

survey.

Q&A  Q:  Who does BLS count as

unemployed?

A:  Persons are classified as unemployed

if they do not have a job, have actively

looked for work in the prior four weeks,

and are currently available for work.  

Workers expecting to be recalled from

layoff are counted as unemployed,

whether or not they have engaged in a

specific jobseeking activity.  In all other

cases, the individual must have been

engaged in at least one active job search

activity in the four weeks preceding the

interview and be available for work

(except for temporary illness).
Strategic Goal 1

FY 2009 Performance and Accountability Report     39

Longitudinal Surveys program.  BLS will be working with the Committee on National Statistics, an

independent agency with a reputation for credibility and professionalism, to prepare for the evaluation.

 Developing additional efficiency and cost‐effectiveness measures to demonstrate ongoing program

improvement.  BLS continues to report on its cost per transaction of the IDCF.  In 2010, BLS will update the

efficiency measure to reduce the cost per housing unit initiated in the Consumer Price Index (CPI) as part of

an initiative to implement a more representative and current sample of geographic areas, as well as a

continuously updated housing sample, in the CPI.  Also, BLS is reporting on an efficiency measure to

produce more American Time Use Survey estimates without commensurate increases in cost.   

 Establishing more ambitious targets for its long term and annual performance measures to drive continued

improvement.  In 2008 and again in 2009, BLS raised the targets for several of its performance indicators.

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10000326.2003.html.

Independent evaluations and audits completed in FY 2009 are summarized below.

“Strengthening Formal Written Procedures May Decrease the Possibility of Inconsistencies Occurring in Survey of

Occupational Injuries and Illnesses Data Releases,” March 2009 (Office of Inspector General)

Relevance:  The Office of Inspector General (OIG) conducted this performance audit to determine if the BLS Survey of

Occupational Injuries and Illnesses (SOII) complied with Federal standards for development and data collection.

Findings and Recommendations:

 While BLS implemented OMB’s 2006 Standards and Guidelines

for Statistical Surveys related to its SOII development and data

collection, its formal written policies and procedures did not

fully incorporate all of the OMB requirements.  

Next Steps:  

 The SOII program will enhance formal documentation

and develop a centralized source of information that

identifies how SOII design and/or procedures meet

each of the OMB statistical standards.

Additional Information:  The report is available at http://www.oig.dol.gov/public/reports/oa/2009/02‐09‐201‐11‐001.pdf.

“Customer Satisfaction with the BLS Occupational Outlook Handbook (OOH) Website,” September 2009                      

(Federal Consulting Group)

Relevance:  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.  Improvements to the OOH portion of the BLS Web site in areas

such as search or navigation can increase the usefulness of the Web site to BLS customers.

Findings and Recommendations:

 BLS received a customer

satisfaction score of 82 percent

for 2009.   

Next Steps:  

 Information from the OOH customer satisfaction survey, as well as other customer

feedback is being used to develop a new and improved online OOH by enhancing its

content and presentation.  The goal is to release the new online product in 2012.

Additional Information:  Please contact BLS Quality Management Staff at 202‐691‐7755.

Data Quality and Top Management Challenges

Data quality for this performance goal is rated Excellent.

17  BLS has instituted rigorous, systematic, and

comprehensive controls to ensure that the data quality retains its Excellent rating.  The BLS executive team meets

with program management throughout the year to discuss progress on mission‐critical projects, long‐term

planning, and other significant issues.  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.

 

17 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.

Q&A  Q:  Does the official unemployment rate exclude

people who have stopped looking for work?

A:  Yes; however, there are separate estimates of persons outside

the labor force who want a job, including those who have stopped

looking because they believe no jobs are available (discouraged

workers).  In addition, alternative measures of labor

underutilization (discouraged workers and other groups not

officially counted as unemployed) are published each month in the

Employment Situation news release.
Performance Section

40 United States Department of Labor

Improve educational achievements of Job Corps students and increase participation of

Job Corps graduates in employment and education.

Performance Goal 08‐1B (OJC)

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not  reached (N)

PY 2004

Goal Not

Achieved

PY 2005

Goal Not

Achieved

PY 2006

Goal Not

Achieved

PY 2007

Goal Not

Achieved

PY 2008

Goal Not

Achieved

Target 85% 85% 87% 82% 74%

Result 84% 80% 74% 73% 66%

Percent of participants entering employment or enrolling

in post‐secondary education or advanced

training/occupational skills training in the first quarter

after exit * N N N N N

Target 64% 64% 65% 64% 54%

Result 64% 60% 57% 53% 55%

Percent of students who attain a GED, high school

diploma or certificate by the end of the third quarter

after exit * Y N N N Y

Target 45% 45% 58% 58% 54%

Result 47% 58% 58% 53% 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 N Y

Goal Net Cost (millions) $1,309 $1,402 $1,485 $1,589 $1,640

Source(s): Job Corps Management Information System.  

Legacy Data: Some indicators not shown for PY 2004.  Complete indicators, targets and results for PY 2004 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:  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 DOL and by other Federal agencies.  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.  “Participants”

in the first measure above includes graduates and former enrollees, but not “uncommitted” – which are those students in the program

for less than 60 days or who exit because of the zero tolerance policy.

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 122 centers nationwide.  

Job Corps centers, ranging in size from 200 to 2,000 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.   

In recent years, an increasingly knowledge‐based labor market has challenged Job Corps to revise its training

strategies.  In response, Job Corps developed and implemented a training strategy that focuses on applied

knowledge by increasing the rigor and relevance of academic and career technical training; incorporating industry‐

based standards and certifications; reinforcing a standards‐based curriculum approach; and providing a more

comprehensive system of on‐center and post‐center support services.  Industry‐based standards, as used in this

report, refer to worker performance specifications that have been developed or are being developed by business

and industry‐based organizations in partnership with Job Corps.  These standards define a facet of student

performance that is measurable and built on the skills learned as students' progress through the educational

system and into the workplace.  Job Corps then works to develop curricula based on these standards.  This strategy

is providing students with valuable credentials and competitive skills they need to pursue promising careers –

especially in a period of rising national youth unemployment rates.  Performance of the Job Corps program is
Strategic Goal 1

FY 2009 Performance and Accountability Report     41

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.

Recovery Act

The Recovery Act provided Job Corps with $250 million; close to 85 percent or $211.6 million of this funding will be

invested in construction, rehabilitation and acquisition of Job Corps centers.  To date, Job Corps has awarded over

50 percent (totaling approximately $118 million) of its construction contracts; as a result of these awards

construction work will be performed in 29 states and Puerto Rico.  Approximately $10 million of the funds will be

used to incorporate green technologies and training into Job Corps’ career technical training programs.  For more

information, see http://www.recovery.gov/?q=content/program‐plan&program_id=7714.  

Analysis and Future Plans

Job Corps did not achieve its performance goal for PY 2008.  Placement of Job Corps graduates and former

enrollees in employment, the military or post‐secondary education continued to mirror the national employment

picture; the placement result was eight points below the 74 percent target.  Certificate attainment outcomes,

however, reversed a three‐year decline and literacy/numeracy gains rose five points.  It appears that the strategic

focus on academics had a positive impact.

Indicator * What worked What didn’t work

Placement in

employment or

education

N

 Placement of Job Corps students into post‐

secondary education or advanced skill

training rose from 11 percent in PY 2007 to

14 percent in PY 2008.

 In many areas of the country, the local

economic situation made placement in the

workforce more difficult.  Although the

overall placement rate fell from 73 percent

to 66 percent in PY 2007‐2008, initial wages

increased slightly.  

Attainment of a

degree or certificate Y

 Utilization of quality on‐line High School

Diploma programs and well‐ established

local partnerships contributed to the

increase in credential attainment rates.  

 Increases in career technical training

completions were limited due to the

introduction of comprehensive curriculum

revisions over the past two years.  

Literacy or numeracy

gains Y

 The results show that special programs such

as STARS (Speakers, Tutors, Achievement,

Retention and Success) and after‐hours

tutoring programs had a positive impact on

student literacy and numeracy.

 Initial impact from online administration of

the Test of Adult Basic Education (TABE)

seems to have leveled out.

Program Performance Improvement Plan

 To improve employment and earning outcomes, Job Corps is aligning career technical training with industry‐based

standards and standards‐based instruction (organized around industry clusters).  Each Region will measure the

effectiveness of these program enhancements; final evaluations are expected by September 2010.

 To better serve the Hispanic community, all Job Corps centers have implemented the English Language Learner’s (ELL)

Program for students with Limited English Proficiency to ensure meaningful access to and participation in the program.  

Job Corps is evaluating various English Language Assessment tools and related curricula to ensure ELL students are

identified correctly and placed into appropriate ELL courses.  Job Corps’ current policies regarding ELL students will be

revised by June 2010.

 In PY 2009, Job Corps is working closely with the Departments of Education, Health and Human Services, and Agriculture,

to provide training and career pathways in high‐growth and emerging industry sectors.  Linkages will also be expanded

with community colleges, registered apprenticeship programs and workforce investment boards.  

*Target reached (Y), improved (I), or not reached (N)
Performance Section

42 United States Department of Labor

Job Corps net cost increased by 3 percent from PY

2007‐2008 due to higher administrative expenses,

such as salaries and benefits, and due to a general

inflation increase to center, outreach, admission, and

career tranisition services operating contracts.    

   

In 2010, Job Corps’ activities will contribute to the following outcome goals in support of the Department’s

Strategic Vision of Good Jobs for Everyone:

 Increasing workers’ incomes and narrowing wage and income inequality;

 Assuring skills and knowledge that prepare workers to succeed in a knowledge‐based economy, including in

high‐growth and emerging industry sectors like “green” jobs; and

 Helping workers who are in low‐wage jobs or out of the labor market find a path into middle‐class jobs.

    

Program Assessments, Evaluations and Audits

Findings and recommendations from a Job Corps program assessment completed in 2007 prompted specific actions

to improve performance.  Here is a summary of progress in FY 2009:

 Exploring opportunities to improve cost effectiveness and performance outcomes at the 28 non‐DOL owned

properties which are operated for Job Corps by the Departments of Agriculture and Interior.  In June 2008,

Job Corps contracted with an outside accounting firm to audit internal agency procedures for the

management of Job Corps funds; the final report was received in March 2009 and Job Corps is addressing

the report recommendations.  Job Corps continues to reconcile discrepancies in agency material accrual

methods; as a result, the Department of Interior (DOI) is fully compliant with reporting and Job Corps is

compliant with oversight requirements.  Job Corps has requested additional information from the

Department of Agriculture (USDA) to facilitate final reconciliation.  

 Adopting efficiency measures that are linked to performance outcomes, account for all costs, and facilitate

comparisons across Department of Labor training and employment programs.  Job Corps will continue to

examine additional alternatives for reporting efficiency measures that are linked to performance outcomes

and account for all costs.

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10002372.2007.html.

Independent evaluations and audits completed in FY 2009 are summarized below.

“Job Corps’ Reported Performance Measures Did Not Comply With All Legislative Reporting Requirements,” March 2009

(Office of Inspector General)

Relevance:  The Office of Inspector General (OIG) conducted this performance audit to determine if Job Corps’ reported

performance measures comply with all legislative reporting requirements.

Findings and Recommendations:

 Job Corps did not fully comply with Workforce

Investment Act reporting requirements.  Although Job

Corps collected the necessary data, OIG found that

the agency did not submit to Congress the WIA‐

required annual reports that include performance

results for each Job Corps center.  

 OIG found that Job Corps did not fully comply with the

Office of Management and Budget’s reporting

Actions:  

 Job Corps will comply with the WIA requirement to submit an

annual report to Congress.

 Job Corps will work with OMB to ensure that participant

placement reporting complies with OMB common measure

requirements.

Performance Goal 08‐1B

Net Costs ($ Millions)

1,640 1,589 1,402 1,309 1,485

0

500

1,000

1,500

2,000

2004 2005 2006 2007 2008

Program Year
Strategic Goal 1

FY 2009 Performance and Accountability Report     43

requirements of job placement outcomes for all

students who left the program.  Job Corps only

reports placement outcomes for graduates and

former enrollees.  

Additional Information:  The report is available at http://www.oig.dol.gov/public/reports/oa/2009/04‐09‐003‐01‐370.pdf.

“Better Targeted Career Training and Improved Pre‐Enrollment Information Could Enhance Female Residential Student

Recruitment and Retention,” June 2009 (GAO)

Relevance:  The Government Accountability Office (GAO) conducted this audit to review the extent to which Job Corps

centers are operating at or near capacity for residential students, particularly female residential students.  

Findings and Recommendations:

 Because much of the program’s costs are fixed, GAO

concluded that program efficiency is compromised

when Job Corps centers operate under capacity – and

represents a missed opportunity to train students

who might benefit from the program.  While the

program nearly achieves its planned enrollment for

males, it is struggling to meet female enrollment

targets.

 Officials at all levels of Job Corps affirmed the need

for students to have, prior to enrolling in the

program, a clear understanding of what it would be

like to live and train at a center.  GAO believes that

absent additional steps, Job Corps will likely continue

to face difficulty in recruiting and retaining students,

particularly female students.

Actions:  

 Job Corps acknowledged the need to offer career training

programs to increase female enrollment.  However, Job Corps

noted that in selecting new offerings, it routinely looks

beyond occupations traditionally dominated by females as

they seek to maximize opportunities that may result in long‐

term self‐sufficiency.  GAO concurs but continues to

recommend a more systematic assessment of career training

curricula, particularly at centers with low female enrollment.

 To increase recruitment and retention of students, Job Corps

is producing a number of resources that provide an overview

of the program and highlight information about individual

centers.  Also, Job Corps has established new Outreach and

Admission performance‐based service contracting

procedures, created new recruitment materials, and launched

a new recruitment Web site.

Additional Information:  The report is available at http://www.gao.gov/new.items/d09470.pdf.  

Data Quality and Top Management Challenges

Data quality for this performance goal is rated Excellent.

18  When the OIG cited insufficient management controls

over performance data in 2004, DOL designed and implemented new data integrity procedures that require

regional offices to utilize targeted samples (highlighting where error or manipulation may have occurred) for audit

reviews conducted in conjunction with on‐site assessments.  When Regional Offices find that Center operators have

not complied with contractual obligations, liquidated damages are identified and assessed.  Since 2004, $731,904 in

liquidated damages has been recovered.  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.

To address Ensuring the Effectiveness of the Job Corps Program (see the Top Management Challenges in the Other

Accompanying Information section), Job Corps’ Regional Offices have improved the way they monitor the

performance of outreach and admissions, center and career transition providers.  Regional Offices provide

oversight, perform desk reviews and conduct formal assessments, including rigorous data integrity audits, of each

contract at least once every 24 months.  To improve student health and safety, Job Corps uses a comprehensive

communication network of safety advisories and conducts multiple annual safety inspections and reviews.  This

past fiscal year, the program achieved 100 percent timely filing of safety injury claims.  Also, to improve student

safety, centers continue to separate students who violated the program’s strict Zero Tolerance policy (for drugs and

violence).

 

18 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.
Performance Section

44 United States Department of Labor

Increase placements and educational attainments for youth served through the WIA

Youth program.

Performance Goal 08‐1C (ETA)

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not  reached (N)

**Estimated

PY 2005

Goal

Achieved

PY 2006

Goal

Achieved

PY 2007

Goal

Achieved

PY 2008

Goal

Achieved

Target baseline 60% 61% 59.4%

Result 57.8% 60% 62% 66.7%**

Percent of participants entering employment or enrolling in post‐

secondary education or advanced training/occupational skills training

in the first quarter after exit * Y Y Y Y

Target baseline 40% 45% 50.9%

Result 36% 44% 57% 58.2%** Percent of students who attain a GED, high school diploma or

certificate by the end of the third quarter after exit

* Y Y Y Y

Target — baseline baseline 23.2%

Result — —    30% 38.6%**

Percent of students who achieve literacy or numeracy gains of one

Adult Basic Education (ABE) level (approximately equivalent to two

grade levels) * — — — Y

Goal Net Cost (millions) $1,017 $866 $966 $1,125

Source(s): Annual State WIA performance reports (ETA‐9091) and quarterly reports (ETA‐9090).  

Note:  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 DOL and by other Federal agencies.  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.  This goal was

reported Substantially Achieved in the FY 2007 PAR based on estimated data.

Program Perspective and Logic

The Workforce Investment Act 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.  Youth

participants are prepared for employment and post‐secondary education by stressing linkages between academic

and occupational learning.  Services available to youth include tutoring, alternative secondary school offerings,

summer employment, occupational skill training, paid and unpaid work experience, leadership development

opportunities, mentoring, comprehensive guidance and counseling, supportive services such as assistance with

child care and housing, and follow‐up services such as on‐going career counseling after a youth exits the program.

DOL collects data for three performance indicators, the Federal job training program common performance

measures for youth, that enable the program to describe and compare the outcomes of its core purposes to other

education, employment and job training programs focusing on youth.  The first measure, percent of youth

participants who are in employment or enrolled in post‐secondary education or training, indicates whether DOL is

transitioning youth into the workforce or post‐secondary education — a key to successful careers.  The second,

percent of participants who attain a diploma, GED, or certificate, is a proxy for the effectiveness of the program in

preparing youth participants for high‐demand occupations.  The third indicator measures literacy/numeracy gains

by out‐of‐school youth participants who are deficient in basic skills.

Recovery Act

The Recovery Act made an additional $1.2 billion available for WIA Youth activities, using the same formula as the

regular appropriation.  Formula funds were distributed to States and local workforce investment boards based on

the three factors required for WIA – the number of unemployment for Areas of Substantial Unemployment (ASUs),
Strategic Goal 1

FY 2009 Performance and Accountability Report     45

the higher number of either excess unemployment individuals or ASU

excess, and the number of economically disadvantaged youth.  The

grantees, using these funds, provided additional authorized WIA Youth

activities with a specific focus on creating summer employment

opportunities for youth.  The Recovery Act also extended the youth

eligibility age from 21 to 24 and encourages local areas to expose

participating youth to opportunities in green jobs in the construction,

energy efficiency, renewable energy, and other related industries.   

Three measures will be used to assess the effectiveness of WIA Youth

Recovery Act funds at providing summer employment opportunities for

youth: the work readiness indicator, the number of participants placed in

summer employment, and the summer youth completion rate.  DOL will

utilize the three youth common performance measures to assess long‐

term outcomes for youth who receive other services funded by the

Recovery Act.  ETA is also conducting a process evaluation of youth

activities funded by the Recovery Act, with a focus on summer

employment.  The evaluation will incorporate both qualitative and

quantitative analysis of the infusion of Recovery Act funds into programs

for youth.  The study is based on a selected sample of local workforce

investment areas.  For more information, see

http://www.recovery.gov/?q=content/program‐plan&program_id=7666.

Analysis and Future Plans

The WIA Youth program achieved its performance goal for PY 2008.  The

program exceeded its placement in employment or education target by

7.3 percentage points, surpassed the degree or certificate attainment

target by 7.3 percentage points, and exceeded the literacy or numeracy

gains target by 15.4 percentage points.  In PY 2008, DOL continued its

Shared Youth Vision (SYV) collaborative efforts to assist States in

coordinating resources and program delivery strategies to achieve

positive outcomes for the youth most in need.  The SYV Federal

Partnership includes the Departments of Health and Human Services,

Education, Justice, Housing and Urban Development, Transporation,

Agriculture, plus the Social Security Administration and the Corporation

for National and Community Service.  DOL and the SYV Federal

Partnership have continued to support 32 Shared Youth Vision cross‐

agency state teams in their collaborative efforts to better serve the youth

most in need through monthly community of practice calls, a Federal

Partners’ Solutions Desk, and peer to peer forums.

Indicator * What worked What didn’t work

Placement in employment or

education Y

Attainment of a degree or

certificate Y

Literacy or numeracy gains Y

 Collaborative efforts with partners

that included providing States a self‐

assessment tool to facilitate state‐

level coordination.

 Adopted a statistical model to

establish targets that account for

external factors that impact

program performance.

 As stated in the GAO report 08‐013

(discussed in more detail below),

many local workforce areas are

utilizing performance‐based

contracts that result in disincentives

to serve the most at‐risk youth and

still achieve performance targets.

Andrea is proud of her progress and

grateful for Virginia’s Middle College

program, which allows individuals lacking

a high school degree to pursue a high

school credential, community college

education and workforce certification in a

college environment.  At first, she was

nervous.  She had dropped out of high

school just two credits shy of graduating

to take care of her child.  Andrea soon

realized that her opportunities were

limited without an education, so she

explored the options at a local community

college.  After two months of preparation

classes, Andrea earned her high school

credential.  She quickly found full‐time

employment and continues her studies at

the community college.  “I couldn’t have

got a job without a high school credential.  

Earning great scores made me feel proud

and confident.  When I went in to sign up

for my college classes, I wasn’t afraid or

intimidated.  I belong in college.”  Photo

Credit: Randy Holmes
Performance Section

46 United States Department of Labor

Program Performance Improvement Plan

 DOL will assist States and local areas, through the issuance of guidance, on how to structure service provider contracts to

allow WIA Youth programs to successfully serve youth most at‐risk.

*Target reached (Y), improved (I), or not reached (N)

Costs associated with this performance goal rose by

seventeen percent from PY 2007 to PY 2008,

reflecting fluctuations in the timing of expenditures

and the number of participants served.  In addition,

increased costs in PY 2008 reflect expenditures in the

last quarter that can be attributed to the expansion

of summer employment opportunities under the

Recovery Act.  

In 2010, WIA Youth Program’s activities will contribute to the following outcome goals in support of the

Department’s Strategic Vision of Good Jobs for Everyone:

 Increasing workers’ incomes and narrowing wage and income inequality;

 Assuring skills and knowledge that prepare workers to succeed in a knowledge‐based economy, including in

high‐growth and emerging industry sectors like “green” jobs; and

 Helping workers who are in low‐wage jobs or out of the labor market find a path into middle‐class jobs.

Program Assessments, Program Evaluations and Audits

Findings and recommendations from a WIA Youth Program assessment completed in 2008 prompted specific

actions to improve performance.  Here is a summary of progress in FY 2009:

 Conducting an evaluation to determine WIA services' impact on employment and earnings outcomes for

participants.  ETA convened a Peer Review Board of independent researchers and stakeholders to review

and provide comments on the design of the Workforce Investment Act Gold Standard Evaluation (WGSE).  

The review provided useful input on the contractor’s evaluation design.  ETA is continuing to refine the

design and hopes to begin implementation of the evaluation in FY 2010.  Also, as discussed above, ETA is

conducting a process evaluation of youth activities funded by the Recovery Act, with a focus on summer

employment.

 Implementing efficiency measures that are linked to performance outcomes, account for all costs, and

facilitate comparisons across Department of Labor training and employment program.  An independent

study completed in PY 2008 recommended outcome‐based efficiency measures for which the Department

is collecting baseline data.  These data will inform the selection of appropriate measures for each program.  

Additional research on setting performance standards and targets will be completed by December 2009.

 Strengthening the quality of youth performance data, specifically supplemental data and administrative

records, through data validation.  In May 2009, DOL issued revised guidance and an update to the Data

Reporting and Validation Software.  These updates will allow all States to submit timely and accurate youth

performance data.  Regional Office staff will continue to monitor the States’ validation of youth

performance data during periodic state monitoring reviews.

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10000342.2008.html.

Independent evaluations and audits completed in FY 2009 are summarized below.

Performance Goal 08‐1C

Net Costs ($ Millions)

966 1,125 947 1,017

866

0

500

1,000

1,500

2004 2005 2006 2007 2008

Program Year
Strategic Goal 1

FY 2009 Performance and Accountability Report     47

“Disconnected Youth: Federal Action Could Address Some of the Challenges Faced by Local Programs that Reconnect

Youth to Education and Employment,” February 2008 (GAO)

Relevance:  GAO examined 39 local youth programs (15 of which are WIA‐funded) to learn how Federal agencies are helping

them address the challenges they face in serving youth who have been disconnected from education and employment.

Findings and Recommendations:

 GAO found that Workforce Investment Board (WIB)

contracts with local service providers often require that

providers achieve performance goals for participants in

one‐year time frames.  This is very challenging for

programs serving the most at‐risk youth, who may need

more time to obtain skills.  Funding in subsequent years is

often contingent on meeting performance goals, making

the contract structure a disincentive to serving these

youth.

 GAO recommended that DOL work with States and WIBs

to better ensure they have the information and guidance

needed to develop and implement more effective

contracts to allow local programs to serve youth most in

need of assistance while still achieving performance goals.

Actions:  

 In 2008, DOL convened WIA State, local, and youth

service providers to get a better understanding of

contracting issues and gather local examples of contracts

that have the components and the flexibility to

successfully serve the youth most in need.

 Using input from that discussion, DOL will issue guidance

to the workforce system in the fall of 2009 including

specific examples of ways to develop contracts with local

service providers that allow them to successfully serve

youth at varying skill levels.

Additional Information:  The report is available at http://www.gao.gov/new.items/d08313.pdf.  

“GAO Recovery Act: Funds Continue to Provide Fiscal Relief to States and Localities, while Accountability and Reporting

Challenges Need to Be Fully Addressed,” September 2009 (GAO)

Relevance:  Reviews were conducted in ten states to understand the effect of the implementation of the Recovery Act funds

specifically targeted for the Workforce Investment Act Youth program and summer youth employment activities.

Findings and Recommendations:

 States and localities reported difficulties in responding to

the Recovery Act’s focus on green industries without a

clear standard of what constitutes a green job.  DOL must

provide additional guidance about the nature of these

jobs and strategies that could be used to prepare youth

for careers in green industries, to better support state and

local efforts with employment and training in green jobs.

 Flexibilities given to States and local areas on measuring

work readiness—the sole indicator of summer activities—

lacks comparability and provides little understanding

about actual individual outcomes and program

achievement.  DOL must provide additional guidance on

how to measure the work readiness of youth, with a goal

of improving the comparability and rigor of the measure.

Next Steps:  

 The Department plans to leverage the results of the

Recovery‐Act funded competitive grants for green job

training to provide insights on delivering services to

youth, and others, along green career pathways.

 The Bureau of Labor Statistics is developing a definition

for green sectors and green jobs that will inform state and

local workforce development efforts to identify and

target green jobs and their training needs.

 Technical assistance forums will be held in late 2009 to

focus on strategies to prepare out‐of‐school youth for

careers in green sectors and industries; and for

implementing services with remaining Recovery Act

funds.

 An evaluation of the WIA Youth Program was initiated to

better understand issues and challenges; and to gather

lessons learned related to measuring work readiness.

 Methodologies, used this summer, to measure work

readiness are being assessed and further refinement of

the work readiness indicator is planned.  Should

significant summer activities be continued in the future,

then further guidance that provides for more consistent

and meaningful data and reporting will be issued.

Additional Information:  The report is available at http://www.gao.gov/new.items/d091016.pdf
Performance Section

48 United States Department of Labor

Data Quality and Top Management Challenges

The data quality rating for this performance goal also applies to Performance Goals 2A and 2B.  These goals rely on

the same data collection system to determine employment outcomes for WIA program participants.  Data quality

for these performance goals are rated Very Good.

19  There are challenges with data validation of the WIA outcomes,

including maintenance and updating of the data validation software, providing State staff with needed technical

assistance – especially given high turnover of staff at the Federal and State levels – and monitoring reviews by ETA

regional office staff of State implementation of the data validation initiative.  However, ETA made progress in

expanding use of its data validation system for monitoring data quality at both the national and regional levels (see

also Improving Performance Accountability of Grants, which is one of the Top Management Challenges in the Other

Accompanying Information section).  All States comply with ETA’s requirement to validate the outcome data they

submit annually in the WIA Annual Reports, and the majority use ETA’s data validation software to verify the

outcome data they submit annually.  States are required to provide report validation results by October 1 and data

element validation results by February 1 following each program year.  DOL also includes data report validation

results as one of the criteria for determining eligibility for WIA incentive awards and those States subject to

sanctions for poor performance.  

 

19 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.
Strategic Goal 1

FY 2009 Performance and Accountability Report     49

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

workers in the 21st Century.

Performance Goal 09‐1D (ETA)

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not  reached (N)

**Estimated

FY 2005

Goal

Achieved

FY 2006

Goal

Achieved

FY 2007

Goal

Achieved

FY 2008

Goal Not

Achieved

FY 2009

Goal Not

Achieved

Target baseline 78% 79% 84% 81.6%

Result 78% 82% 83% 84% 76.8%** Percent of those employed nine months after registration

as an apprentice

* Y Y Y Y N

Target baseline $1.26 $1.33 $1.51 $0.61

Result $1.26 $1.32 $1.50 $0.61 $0.17**

Average hourly wage gain for tracked entrants employed

in the first quarter after registration and still employed

nine months later * Y Y Y N N

Target – – – – baseline

Result – – – – 73.9%** Percent of participants employed in the first quarter after

exit

* – – – – –

Target – – – – baseline

Result – – – – 87.2%**

Percent of participants employed in the first quarter after

exit still employed in the second and third quarters after

exit * – – – – –

Target – – – – baseline

Result – – – – $18,967** Average earnings in the second and third quarters after

exit (six months’ earnings)

* – – – – –

Goal Net Cost (millions) $23 $25 $24 $25 $25

Source: Registered Apprenticeship Partners Information Data System (RAPIDS).

Legacy Data:  One indicator for FY 2005 was dropped; it is not included in this table.  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 06‐1.1A.

Note:  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 DOL and by other Federal agencies.  “Tracked entrants” is defined as the cohort of apprentices registered and

entered into RAPIDS during a given reporting period.  The 25 States that have Federally‐registered apprenticeship programs enter data on

individuals into the system.  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 the other.

Program Perspective and Logic

Established in 1937, 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 provides opportunities for jobseekers to secure jobs with career paths, earn

competitive wages, and obtain nationally‐recognized industry credentials.  The apprenticeship training 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 United States.  Apprenticeship programs use a combination of classroom training and on‐the‐job learning,

under close supervision of a skilled worker, to teach apprentices the practical and theoretical requirements of a

highly skilled occupation.  Most of the training costs are borne by apprenticeship program sponsors.

The Department promotes the Registered Apprenticeship System to potential sponsors and participants and

registers and monitors these partners’ apprenticeship programs, in some cases via State Apprenticeship Agencies

(SAAs), which are recognized by the Secretary of Labor.  SAAs certify that standards are met for quality, fairness,
Performance Section

50 United States Department of Labor

and equal opportunity, and that

apprenticeship programs incorporate

appropriately supervised on‐the‐job

learning and occupation‐related

technical instruction.

As a system based on voluntary industry

and employer participation,

apprenticeship program performance is

directly impacted by external factors

such as the wage rates determined by

local apprenticeship sponsors and by the

demand for skilled and technical labor in

local markets.  Two performance

indicators, apprentices employed nine

months after registration and average

hourly wage gain for tracked entrants,

are used to indicate progress towards

program completion and the value of

skills obtained.  In FY 2009, the Office of

Apprenticeship (OA) is collecting baseline

data for transition to the Federal job

training program common measures.  

Common measures (entered

employment rate, employment retention

rate, and average earnings) enable

comparisons to be made to education,

employment, and job training programs

that share similar purposes.

Analysis and Future Plans

The National Registered Apprenticeship System did not achieve its performance goal for FY 2009.  The retention

result of 76.8 percent was almost five points below target and the 17‐cent average hourly wage gain was 44 cents

below target.   Apprenticeships are tied to employment and therefore have declined in number with the nation’s

widespread job losses over the past year – especially since a large majority of apprentices are in the construction

and manufacturing industries, both of which have been severely affected by the recession.  However, based on

preliminary Common Results Information System (CRIS) data, wages for apprentice exiters are more than 26

percent above other selected ETA programs’ exiters (WIA Adults and Dislocated Workers, and Trade Adjustment

Assistance).

For FY 2010, the program will establish performance targets for the new common measures.  Over the next year,

OA staff will work with SAAs to ensure compliance with the revised Federal regulations published in October 2008.  

The revised regulations will advance the National Registered Apprenticeship System by providing new options and

increased flexibility, promoting Registered Apprenticeship as a workforce development strategy for today’s regional

economies, strengthening consistency and continuity across the system, and establishing a consistent framework to

promote improved performance outcomes and quality.

Rob, an exceptional employee of the City of San Diego’s Communications

Division, is participating in a four‐year Apprentice Program that produces

highly qualified journey‐level Communications Technicians.  The

Communications Division is responsible for design, installation and

maintenance of all wireless communications systems and services for the

city.  Their primary customers include the Police and Fire‐Rescue

Departments.  Rob has maintained a perfect grade point average and

mentored several other apprentices using design software called Circuit

Wizard.  He has also designed, built, and integrated with the existing system

real time sensors for remote mountain top sites.  The apprenticeship has

provided a good opportunity for Rob to use his existing skills and to gain

knowledge of wireless communication concepts and systems.  He has also

enhanced his value to the city’s workforce.  Photo credit:  DOL/ETA
Strategic Goal 1

FY 2009 Performance and Accountability Report     51

Indicator * What worked What didn’t work

Retention in apprenticeship N

 Linkages with the workforce investment system to

provide apprentices with supportive services and

other services to help reduce non‐completion.  

 Activities to integrate apprenticeship on the state

level through three Regional Action Clinics held in

Regions 4, 5, and 6 proved successful.

 Lack of work projects,

employment cutbacks, and

wage freezes negatively

impacted results.  

Average hourly wage gain N  Employers hiring new apprentices offered higher

than expected starting wages.

 See Retention indicator

above.

Program Performance Improvement Plan

 Continue the technical assistance strategy to better align and integrate Registered Apprenticeship with the workforce

investment and education systems.

 Support collaboration and partnerships as well as prepare and refer One‐Stop job seekers to Registered Apprenticeship.

 Play a key role in bringing about collaboration and change among the systems creating opportunities to support

apprentices and outreach to new businesses.

 Hold additional Regional Action Clinics on the East Coast in early FY 1010.  Action Clinics promote further collaboration

and partnerships between the education, workforce and Registered Apprenticeship systems; and leverage Registered

Apprenticeship as a key workforce development strategy in the public workforce system.

*Target reached (Y), improved (I), or not reached (N)

Net costs for Apprenticeship activities were virtually unchanged from FY 2008‐2009.

In 2010, the Office of Apprenticeship’s activities will contribute to the following outcome goals in support of the

Department’s Strategic Vision of Good Jobs for Everyone:

 Increasing workers’ incomes and narrowing wage and income inequality; and

 Helping workers who are in low‐wage jobs or out of the labor market find a path into middle‐class jobs.

Program Assessments, Evaluations and Audits

Findings and recommendations from a Job Training Apprenticeship program assessment completed in 2005

prompted specific actions to improve performance.  Here is a summary of progress in FY 2009:

 Implementing the common measures for earnings and retention and establishing an Internet‐based

apprenticeship registration system to efficiently obtain comprehensive performance data.  The Registered

Apprenticeship Partners Information Data System (RAPIDS) debuted in November 2007.  Phase 2 of RAPIDS

is scheduled for completion in FY 2009 and will allow SAAs and sponsors to upload data electronically.    

 Evaluating and reporting participants' employment and earnings after they leave the program to compare

apprenticeship program outcomes with those of other training models.  During the FY 2009 transition

period, OA reported on the common measure results for apprenticeship completers extracted from RAPIDS

and tracked through the Common Results Information System.

 Addressing underrepresentation of women in apprenticeship programs through a reinvigorated Equal

Employment Opportunity review process and tracking and reporting performance.   The economic downturn

and its impact on the construction industry have led to less than favorable results from the six Women in

Apprenticeship and Non‐Traditional Occupations (WANTO) grants awarded in FY 2006 and 2007.  The lack

of hiring in the construction industry affected the grantees’ ability to place participants in jobs.  However,

the six grantees have established the capacity to prepare women participants to enter construction careers,

and they are ideally positioned to leverage additional resources as the Recovery Act investments begin to

generate more employment opportunities for women in nontraditional occupations.  Also, in FY 2010, the

Department will be funding an evaluation to gain insight on the impediments impacting and strategies to

increase the recruitment, enrollment, and retention of women in Registered Apprenticeship programs.

 Implementing efficiency measures that are linked to performance outcomes, account for all costs, and

facilitate comparisons across Department of Labor training and employment programs.  An independent
Performance Section

52 United States Department of Labor

study completed in PY 2008 recommended outcome‐based efficiency measures for which the Department

is collecting baseline data.  These data will inform the selection of appropriate measures for each program.  

Additional research on setting performance standards and targets will be completed by December 2009.

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10003901.2005.html.

Independent evaluations and audits completed in FY 2009 are summarized below.

“The Benefits and Challenges of Registered Apprenticeship: The Sponsors Perspective,”

March 2009 (Urban Institute and American University)

Relevance:  Sponsors of registered apprenticeships were surveyed to determine the effectiveness of apprenticeships and

identify program operation improvements for the Registered Apprenticeship System.

Findings and Recommendations:

 Strong support from current Registered Apprenticeship

sponsors exists; and sponsors are likely to be helpful in efforts

to promote Registered Apprenticeship.

 Sponsors’ interactions with the workforce investment system

were limited.  One‐Stop Career Centers and unions were the

least frequently identified sources for recruitment.

 Sponsors want help recruiting and screening applicants,

finding related instruction, and designing competency‐based

programs.

 SAAs are “good” or “excellent” in promoting and publicizing

registered apprenticeship.

Actions:  

 OA will continue to expand efforts to engage the

workforce investment system to provide registered

apprentices with support services available through

the One‐Stop Career Centers.

 OA will encourage program sponsors to partner with

the workforce investment system to access resources

available to assist in screening applicants and

identifying sources of related instruction.

 OA will continue outreach and technical assistance

efforts to promote advantages of competency‐based

programs.

Additional Information: The final report can be found at http://wdr.doleta.gov/research/.           

“Registered Apprenticeship: Findings from Site Visits to Five States,”

November 2008 (Planmatics, Inc.)

Relevance:   Site visits were conducted in five states with registered apprenticeship sponsors, apprentices, SAA staff, One‐

Stop Career Center managers, and related instruction providers to better understand current issues in Registered

Apprenticeship.   

Findings and Recommendations:

 Registered apprenticeship enjoyed strong support from the

sponsors and apprentices interviewed and most sponsors

stated that they would strongly recommend registered

apprenticeship to other employers.   

 Sponsors noted some difficulty in finding high‐quality related

instruction.   

 Coordination and linkage between registered apprenticeship

and the One‐Stop Career Center System appeared to be

limited.

 Recommendations suggested by program sponsors included

increased promotion of Registered Apprenticeship, reduced

paperwork, more support from other programs in the

workforce investment system, and increased monitoring of

program quality.  

Actions:  

 In 2007 – 2009, ETA issued policy guidance and hosted

three regional Action Clinics to promote further

collaboration and partnerships between the

education, workforce and Registered Apprenticeship

systems.  OA will continue these efforts to link

program sponsors with resources available through

One‐Stop Career Centers.

 Completion of RAPIDS design and upgrades will

streamline paperwork required of program sponsors.  

 Implementation of revised regulatory framework,

which includes a new section on performance

standards, will support increased program quality and

enhanced accountability.

Additional Information: The final report can be found at http://wdr.doleta.gov/research/.  See ETAOP 2009‐02.           

Data Quality and Top Management Challenges

Data quality for the Apprenticeship program is rated Fair.

20  All Federally‐administered programs (in 25 States) are

using RAPIDS, which automated data entry and established greater quality controls for data entered into the

 

20 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.
Strategic Goal 1

FY 2009 Performance and Accountability Report     53

system by program sponsors.  System modifications to implement common measures for earnings and retention

data have been completed, and an internet‐based format has been successfully implemented to capture

performance data.  Unemployment insurance wage records are matched with the information collected in RAPIDS.  

This process allows OA to routinely monitor the data and conduct automatic data error checks.  Quality

assessments and Equal Employment Opportunity compliance reviews have been completed on 90 percent of

programs with five or more apprentices within a five‐year cycle established in FY 2005.  However, apprentices’

employment and wage data provided by employers cannot be verified.

RAPIDS implementation also addresses an ongoing Departmental commitment to improve data quality by

developing a cost‐effective strategy for collection of data from programs in 25 States and three territories that are

not administered by the Department.  RAPIDS has undergone system application verification testing that found

RAPIDS provides real‐time data through ad‐hoc and quarterly reports, and that the system is effective in identifying

data errors.  Results are used to provide evidence that the system logic is functioning correctly and supports

rationale for current or future system changes.  Further enhancements are scheduled in FY 2009 that will enable

sponsors and the 25 SAAs to participate directly in RAPIDS or provide the option to electronically upload

apprenticeship data into RAPIDS.
Performance Section

54 United States Department of Labor

Improve employment outcomes for veterans who receive One‐Stop Career Center

services.

Performance Goal 08‐1E (VETS)

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not  reached (N)

PY 2004

Goal

Achieved

PY 2005

Goal

Achieved

PY 2006

Goal Not

Achieved

PY 2007

Goal

Achieved

PY 2008

Goal Not

Achieved

Target 58% 59% 60% 61% 62.5%

Result 60% 62% 60% 62.5% 58.7%

Percent of Veteran participants employed in the first

quarter after exit

* Y Y Y Y N

Target 80% 81% 81% 80% 82.0%

Result 81% 81% 79% 81.8% 80.6%

* Y Y N 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 $93 $109

Target 54% 55% 55% 56% 58.5%

Result 56% 57% 55% 58.4% 55.8%

Percent of Disabled Veteran participants employed in

the first quarter after exit

* Y Y Y Y N

Target 78% 79% 79% 79% 81.0%

Result 79% 80% 78% 81.1% 79.7%

* Y Y N 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 $95 $109

Goal Net Cost (millions) — $182 $181 $190 $219

Source(s): Quarterly Labor Exchange Reporting System reports included in the Enterprise Business Support System and Unemployment

Insurance records.

Legacy Data:  Some indicators not shown for PY 2004‐07.  Complete indicators, targets and results for PY 2004‐07 are available in the FY 2008

report at http://www.dol.gov/_sec/media/reports/annual2008/SG1.htm.  See Performance Goal 07‐1D.

Note:  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 DOL and by other Federal agencies.  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 distinct target populations.  Costs for each group (all veterans and disabled 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 approximately 2,000

disabled veterans’ outreach specialists and local veterans’ employment representatives stationed at the nationwide

network of nearly 3,000 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.   

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.  DOL applies the Federal job training

program 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.  During
Strategic Goal 1

FY 2009 Performance and Accountability Report     55

PY 2008, VETS is collecting baseline data on average earnings; in PY 2009, those two indicators (one for all veterans

and another for disabled veterans) are being added to the four employment and retention performance indicators.  

Analysis and Future Plans

VETS did not achieve this performance goal for PY

2008.  That shortfall and the decline in measured

outcomes between PY 2007 and PY 2008 are

attributable to increases in the national

unemployment rates, which were already rising at

the outset of PY 2008 and accelerated in the second

quarter.  For PY 2009, VETS has revised its

performance targets to reflect the Administration’s

economic assumption of continued high

unemployment during PY 2009.

In response to the impact of deteriorating economic

conditions on veteran participants’ outcomes, VETS

implemented two initiatives during PY 2008 (see the

Improvement Plan in the table below).

Net costs for activities under VETS’ State Grants program increased by 15 percent from PY 2007‐2008.  The

appropriations for this program annually include a provision that permits State grantees to expend during the first

quarter of a fiscal year any residual funding obligated by the Department during the prior fiscal year.  As the current

economic recession began to take hold, some States’ cost containment efforts led to delays in filling funded

positions that had become vacant through normal staff turnover – pushing expenditure of funds obligated by DOL

in the prior year into this reporting period.  

Indicator * What worked What didn’t work

Entered employment rate for all

veterans

N

 Ongoing delivery of services to

veterans prevented even steeper

declines in measured performance.

 Employment services referring

veterans to available job openings

were less effective due to the

shortage of openings.

Employment retention rate for all

veterans

N

 The relatively modest decline in the

retention rate suggests that, once

employed, veterans had significant

success maintaining that status.

 Involuntary terminations dictated

by economic conditions inevitably

resulted in the failure of some

veterans to retain employment.

Entered employment rate for

disabled veterans

N

 Disabled veterans experienced a

less drastic decline in entry to

employment than all veterans.

 Economic conditions added a

further barrier to disabled veterans

seeking employment.

Employment retention rate for

disabled veterans

N

 Disabled veterans experienced a

decline in retention that was only

slightly higher than for all veterans.

 Economic conditions likely

contributed to the consistent

decline in retention.

Program Performance Improvement Plan

 Consistent with new regulations regarding priority of service for veterans (effective January 2009),  DOL is encouraging

program operators in the public workforce system to use a significant share of the additional Recovery Act funds to more

aggressively deliver the full range of workforce services to veterans.

 The Recovery Act provided new authority to provide incentives for employers to hire veterans under the Work

Opportunity Tax Credit (WOTC).  ETA intends to delegate to the state workforce professionals funded by VETS the

authority to certify job applicants’ veteran status – thus qualifying employers who hire them to receive the tax credit.   

*Target reached (Y), improved (I), or not reached (N)

Entered Employment Rate (EER), Employment

Retention Rate (ERR), and Net Cost ‐ All Veterans

$109

$89 $91 $93

55%

60%

65%

70%

75%

80%

85%

2003 2004 2005 2006 2007 2008

Program Year

$0

$20

$40

$60

$80

$100

$120

$140

EER Target EER Result

ERR Target ERR Result

Net Cost (Millions)
Performance Section

56 United States Department of Labor

In 2010, VETS’ activities will contribute to the following outcome goals in support of the Department’s Strategic

Vision of Good Jobs for Everyone:

 Increasing workers’ incomes and narrowing wage and income inequality;

 Assuring skills and knowledge that prepare workers to succeed in a knowledge‐based economy, including in

high‐growth and emerging industry sectors like “green” jobs;

 Breaking down barriers to fair and diverse workplaces so that every worker’s contribution is respected;

 Providing workplace flexibility for family and personal care‐giving;

 Facilitating return to work for workers experiencing workplace injuries or illnesses who are able to work and

sufficient income and medical care for those who are unable to work;

 Helping workers who are in low‐wage jobs or out of the labor market find a path into middle‐class jobs; and

 Helping middle‐class families remain in the middle‐class.

Program Assessments, Program Evaluations and Audits

Findings and recommendations from a Veterans' Employment and Training State Grants assessment completed in

2005 prompted specific actions to improve performance.  Here is a summary of progress in FY 2009:

 Implementing recommendations from follow‐up evaluation to assess veteran outcomes.  The study is now

scheduled for completion in December 2009.  VETS will review the study’s findings and begin

implementation of recommendations in the second and third quarters of FY 2010.

 Improving the integration of services between the Jobs for Veterans State Grants and Veterans'

Administration's (VA) Vocational Rehabilitation and Employment (VR&E) program.  Interagency work

groups are coordinating service delivery and reporting procedures.  The comprehensive reporting

envisioned is dependent on implementation of a “next generation” individual record based system.

 Streamlining and upgrading grants management and reporting for the Jobs for Veterans State Grants.  The

forms required to implement the streamlined procedures have been submitted for review and approval by

the Office of Management and Budget.  The current schedule calls for implementation to occur during the

second half of PY 2009.

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10003907.2005.html.

Data Quality and Top Management Challenges

Data for this performance goal, rated Very Good by the Department’s criteria,21 are tracked using the reporting

system for One‐Stop Career Centers (Performance Goal 08‐2C).  Therefore, the data quality assessment for that

goal also applies to VETS’ indicators.  VETS has no DOL top management challenges.

 

21 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.
FY 2009 Performance and Accountability Report     57

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.

America’s success in the global economy depends largely on a workforce that

responds to employers’ demand for 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 increases

accessibility and quality of information to help match workers with employers.

DOL agencies and offices supporting this goal are:   

 Employment and Training Administration (ETA),  

 Office of Disability Employment Policy (ODEP), and  

 Bureau of International Labor Affairs (ILAB).  

Fostering a competitive workforce means helping American workers acquire

valuable skills and adapt to rapidly evolving markets.  Customized training and

assistance to workers – including those with unique needs such as dislocated

workers, individuals with disabilities, and veterans – improve their chances to

obtain better paying jobs, to keep those jobs and to advance their careers.

DOL also educates workers about jobs with promising career paths and helps

employers access the services of the State and local workforce investment

system.  To complement these services, the Foreign Labor Certification program

assists employers whose needs cannot be supplied by U.S. workers.

In today’s 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 projects 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.

Here are a few highlights of FY 2009 performance:

For Workers22

 Entered employment rates rose for Trade Adjustment Assistance (TAA)

participants but fell for those served by the Workforce Investment Act

(WIA) Adult and Dislocated Worker programs, the Employment Service,

and the Senior Community Service Employment Program (SCSEP).

 Retention in employment fell for participants in all five of the

aforementioned programs – largely due to the economic recession.

 Participants’ average earnings fared much better.  Increases were

reported for WIA Adult, WIA Dislocated Worker, and SCSEP.  Results for

Employment Service and TAA participants dropped slightly from FY 2008.

 

22 Employment and retention results (first two bullets) are displayed in charts on the next page.   

Erin did not envision working as

a composites technician when

she enrolled at Davis Applied

Technology College in Kaysville,

Utah.  However, in 2008, she

learned about the  Composites

Program – funded in part by

DOL’s Community Based Job

Training Grants – and became

interested because the work was

hands‐on, varied, and the

program would qualify her for

numerous employment

opportunities.  She saw great

opportunity for women in this

field.  Erin completed the

training program in six months

and was immediately hired by

ITT Technical Institute.  Though

she is one of very few women

working on the floor, she is

enjoying a very good work

experience.  Erin says, “This has

been very positive for me.  There

are so many opportunities for

growth within the composites

industry and so much potential

in the United States as well as

around the world.  It was a great

decision.”  Photo Credit: DOL/ETA
Performance Section

58 United States Department of Labor

For Employers

 100 percent of H‐1B foreign labor certification applications (highly skilled professionals or specialty

workers) were processed within the statutory, seven‐day time frame.

For the International Community

 DOL‐supported projects withdrew or prevented 144,890 children from exploitive labor by providing

education and/or training opportunities.   

 Through technical support and outreach from DOL‐funded projects, 36 countries increased their capacity to

eliminate the worst forms of child labor.

For more information, please see the Performance Goal narratives.

Five of the eight performance goals in Strategic Goal 2 are for employment and training programs.  The charts

below indicate these programs’ historical results for entered employment rate (percent of participants who obtain

jobs subsequent to receipt of services) and employment retention rate (percent of those who obtained jobs who

are still employed six months later) – two of three Federal job training program common measures.23  Significant

differences in results between programs are generally explained by differences in types of services offered and

populations served.

The following table provides net costs for all performance goals and indicators associated with this strategic goal.24  

Those with labels that begin with “08” operate on a Program Year (PY) basis; they report on the period from July 1,

2008 to June 30, 2009 due to the forward‐funding authorized in the Workforce Investment Act of 1998 (WIA).

 

23 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.   24 Rows labeled “Dollars not associated with indicators” indicate costs that cannot be associated with the current set of

performance indicators.  For some goals, indicator costs 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).

Retention in Employment

60%

65%

70%

75%

80%

85%

90%

95%

2004 2005 2006 2007 2008 2009

Reporting Year

Adult Dislocated Worker

One‐Stop services Older Workers

Trade Adjustment Apprenticeship

Entry to Employment

30%

40%

50%

60%

70%

80%

90%

2004 2005 2006 2007 2008 2009

Reporting Year

Adult Dislocated Worker

One‐Stop services Older Workers

Trade Adjustment Apprenticeship
Strategic Goal 2

FY 2009 Performance and Accountability Report     59

Net Costs ($Millions)25

Goal or Indicator FY 2007

PY 2006

FY 2008

PY 2007

FY 2009

PY 2008

Strategic Goal 2:  A Competitive Workforce $5,060 $4,829 $4,725

Performance Goal 08‐2A (WIA Adult)

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

Workforce Investment Act (WIA) Adult program.

896 844 878

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

896 844 878

Performance Goal 08‐2B (WIA Dislocated Worker)

Increase the employment, retention, and earnings replacement of individuals

registered under the WIA Dislocated Worker program.

1,409 1,307 1,440

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

1,409 1,307 1,440

Performance Goal 08‐2C (One‐Stop Employment and Workforce Information

Services)

Improve outcomes for job seekers and employers who receive One‐Stop

employment and workforce information services.

749 732 699

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

749 732 699

Performance Goal 08‐2D (Senior Community Service Employment Program)

Assist older workers to participate in growth industries through the Senior

Community Service Employment Program.

444 479 543

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

444 479 543

Performance Goal 09‐2E (Trade Adjustment Assistance)

Assist workers impacted by international trade to better compete in the global

economy through the Trade Adjustment Assistance Program.

805 755 481

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

805 755 481

 

25 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 DOL and by other Federal agencies.  Sums may not equal higher level totals due

to rounding.
Performance Section

60 United States Department of Labor

Performance Goal 09‐2F (Foreign Labor Certification)

Address worker shortages through the Foreign Labor Certification Program.

63 40 54

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 63 40 54

Performance Goal 09‐2G (ODEP)

Build knowledge and advance disability employment policy that affects and

promotes systems change.

34 27 29

Number of policy‐related documents

Number of formal agreements

Number of effective practices

34 27 29

Performance Goal 09‐2H (ILAB)

Contribute to the elimination of the worst forms of child labor internationally.

101 79 69

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

101 79 69

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, National Electronic Tools and other ILAB programs)

560 566 531
Strategic Goal 2

FY 2009 Performance and Accountability Report     61

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

Workforce Investment Act Adult Program.

Performance Goal 08‐2A (ETA)

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

PY 2007

Goal Not

Achieved

PY 2008

Goal

Achieved

Target 71% 75% 76% 76% 71% 66.2%

Result 74% 77% 77% 70% 70% 68.1%** Percent of participants employed in the first

quarter after exit

* Y Y Y N N Y

Target 82% 85% 81% 82% 83% 81.7%

Result 85% 86% 82% 82% 84% 83.3%**

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 $12,045 $12,862

Result — — — $11,870 $13,575 $14,695** Average earnings in the second and third

quarters after exit (six months’ earnings)

* — — — Y Y Y

Goal Net Cost (millions) — $906 $912 $896 $844 $878

Source(s):  Annual State WIA performance reports (ETA‐9091) and quarterly reports (ETA‐9090).

Legacy Data:  Some indicators not shown for PY 2003‐05.  Complete indicators, targets and results for PY 2003‐05 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:  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 DOL and by other Federal agencies.  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 WIA Adult Program provides adult workers (unemployed and employed) with the high quality services intended

to lead to good jobs.  Funds are distributed by formula to States, which operate networks of One‐Stop Career

Centers that provide comprehensive services to workers and employers.  Services may include assessments of skills

needs, individual career planning, occupational skills training, on‐the‐job training, skills upgrading, entrepreneurial

training, and adult basic education and literacy activities.  States also use the WIA Adult Program to leverage

additional Federal and non‐Federal resources to increase the quality and variety of assistance.  In PY 2009, the

program is focusing on expanding workforce development areas that hold promise – such as career pathways that

more fully integrate basic skills and technical/occupational education.   

DOL measures the success of this program with the Federal job training program common measures.  The common

measures enable comparisons to be made to government‐wide education, employment and job training programs

that share similar core purposes.  The common measures are entered employment, employment retention, and

average earnings.  A high entered employment rate indicates success in placing individuals in jobs.  A high retention

rate indicates employment stability.  Increased average earnings indicate that participants are getting better jobs at

higher wages.

Recovery Act

Since workers may need to upgrade skills or attain alternative skills to compete for limited career opportunities,

training is a particularly vital service during the economic recovery.  Consequently, overall training enrollments are

expected to increase.  The Recovery Act made an additional $500 million available for the WIA Adult program to

provide the necessary services to substantially increased numbers of adults seeking entry or reentry into the job
Performance Section

62 United States Department of Labor

market.  The Department is working with the States to promote

integration of participant assessments and data‐driven career

counseling into their service strategies – so that adults are

enrolled in successful training and job search activities that align

with areas of anticipated economic and job growth.  Recovery

Act funds can be used on all activities specified under the WIA

Adult Program.  To leverage these funds, DOL is encouraging

One‐Stop Career Centers to help eligible customers take

advantage of the significant increase in Pell Grant funds also

included in the Recovery Act.  For more information, see

http://www.recovery.gov/?q=content/program‐

plan&program_id=7627.

Analysis and Future Plans

The performance goal for the WIA Adult Program was achieved.  

The program reached all three of its performance indicator

targets.  The entered employment result of 68.1 percent was 1.9

percentage points above the target.  Retention increased to 83.3

percent, 1.6 percentage points above the target.  The six‐month

average earnings – $14,695 – exceeded the target by $1,833.   

Costs associated with this performance goal rose

four percent from PY 2007 to PY 2008, reflecting

fluctuations in the timing of expenditures and the

number of participants served.

In PY 2009, DOL will focus on assisting participants with entry to career pathways that lead to middle‐class jobs and

strengthening strategic partnerships with businesses and the education community.  Workforce solutions will be

developed within the context of state and regional economies.  DOL will continue to target placement of workers in

high‐demand sectors and occupations, and to emphasize occupational training and adult education – especially in

green and health care occupations.

Indicator * What worked What didn’t work

Entered

employment rate

Y

 Increased resources and staff capacity provided by

Recovery Act funding enabled more individuals to

receive intensive and training services.  While the

rate has dipped below 70 percent, the number of

Entered Employment Rate (EER), Employment

Retention Rate (ERR), and Net Cost ‐ WIA Adult

$906 $878

$844

$912 $896

60%

65%

70%

75%

80%

85%

90%

95%

2003 2004 2005 2006 2007 2008

Program Year

$0

$200

$400

$600

$800

$1,000

EER Target EER Result

ERR Target ERR Result

Net Cost (Millions)

Due to chronic illness, Blake dropped out of high

school just two weeks before graduation.  He was

working part‐time at a pizza parlor for $5.50 an

hour when he sought assistance from the

Watertown Career Learning Center??(CLC) in

obtaining his General Equivalency Diploma (GED).  

Blake didn’t just pass the GED examination – he

received the highest score in South Dakota!  CLC

staff referred Blake to the South Dakota

Department of Labor, where he received

assistance identifying career aptitude, interests

and goals, and determined that the

Engineering/Drafting program at Lake Area

Technical Institute offered a promising curriculum.  

Blake did not let his illness keep him from

completing his assignments; he graduated with a

3.96 grade point average.  Just 10 days after

graduation, Blake began a new career as a drafter.  

With assistance made possible by WIA funding,

Blake applied his determination and hard work to

climb from a low‐skilled job with no career path to

a technical job with opportunities for upward

mobility.  Photo Credit: DOL/ETA
Strategic Goal 2

FY 2009 Performance and Accountability Report     63

individuals entering employment grew in PY 2008.

 Analysis of the impacts of unemployment rates on

workforce outcomes provided a basis for targets

based on economic conditions.

Employment

retention rate

Y

 Worker re‐training, layoff aversion efforts, and

follow‐up services have helped many individuals

retain employment despite the challenging job

market.  Results show that individuals who are

placed in employment appear to have a strong

likelihood of keeping their jobs.

Average earnings Y

 Increases over the last three years indicate that

participants are accessing quality jobs.  

 While DOL has emphasized placing

individuals in high demand

occupations, it must increase efforts to

place them in emerging fields such as

renewable energy.

Program Performance Improvement Plan

 Collaborate with the Department of Education to help leverage Adult Basic Education (ABE) and post‐secondary

education programs delivered through community colleges and other community organizations that provide such

services.  The workforce system will also help direct individuals to other available training funds, such as Federal Pell

grants.  These need‐based grants to low‐income undergraduate and certain post‐baccalaureate students promote access

to postsecondary education and can be a critical resource to help individuals attain the educational foundation necessary

to secure future employment.  

 Leverage workforce development strategies such as career pathway approaches that more fully integrate basic skills

(including English proficiency) and technical/occupational education to help individuals secure the skills necessary to

escape poverty and succeed in emerging middle‐class jobs.  

 Training services may also include: new contextual learning models that address learning deficiencies while providing

occupational skills training and credential attainment; earn and learn strategies such as transitional jobs and on‐the‐job

training; and bridge models that help workers connect to post‐secondary education to achieve industry‐recognized and

transferable credentials and/or degrees.  In addition, a host of supportive services including needs‐related payments will

be offered to make WIA Adult training more family‐friendly.

*Target reached (Y), improved (I), or not reached (N)

In 2010, WIA Adult Program’s activities will contribute to the following outcome goals in support of the

Department’s Strategic Vision of Good Jobs for Everyone:

 Increasing workers’ incomes and narrowing wage and income inequality; and

 Helping workers who are in low‐wage jobs or out of the labor market find a path into middle‐class jobs.

Program Assessments, Evaluations and Audits

Findings and recommendations from an assessment of the WIA Adult Program completed in 2005 prompted

specific actions to improve performance.  Here is a summary of progress in FY 2009:

 Conducting an evaluation to determine WIA services' impact on employment and earnings outcomes for

participants.  An evaluation of the WIA programs using administrative data was completed in December

2008.  A summary of the findings, recommendations, and actions is provided below.  ETA also convened a

Peer Review Board of independent researchers and stakeholders to review and provide comments on the

design of the Workforce Investment Act Gold Standard Evaluation (WGSE).  The review provided useful

input on the contractor’s evaluation design.  ETA is continuing to refine the design and hopes to begin

implementation of the evaluation in FY 2010.  Additionally, in FY 2010, the Department is funding a study

that will examine and compare existing participant outcome data by services (core, intensive, and training)

provided through reports from the WIA Adult and Dislocated Worker programs, Wagner‐Peyser Act

Employment Service grants to states, and the Trade Adjustment Assistance program.

 Adopting efficiency measures that are linked to performance outcomes, account for all costs, and facilitate

comparisons across Department of Labor training and employment programs.  An independent study
Performance Section

64 United States Department of Labor

completed in PY 2008 recommended outcome‐based efficiency measures for which the Department is

collecting baseline data.  These data will inform the selection of appropriate measures for each program.  

Additional research on setting performance standards and targets will be completed by December 2009.

 Improving reporting efficiency, program management and accountability through the collection of new

information with WISPR, a common reporting system for WIA, Trade Adjustment Assistance, and Wagner‐

Peyser Act Programs.  The Workforce Investment Streamlined Performance Reporting (WISPR) system was

designed to streamline performance reporting.  ETA remains committed to improving reporting efficiency

and accountability; however, the agency will be reassessing its performance reporting approach in light of

the impending reauthorization of WIA.   

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10003900.2005.html.

Independent evaluations and audits completed in FY 2009 are summarized below.

“Workforce Investment Act Non‐Experimental Net Impact Evaluation,” March 2009 (IMPAQ International, LLC)

Relevance:  This evaluation compares entered employment and average earnings outcomes of individuals in the Adult and

Dislocated Worker programs to those of a non‐participant comparison group.

Findings and Recommendations:  

 This evaluation showed that the WIA Adult program helped participants

(regardless of services received), on average, increase their quarterly

earnings by several hundred dollars.

 Adult Program participants who obtain training services have lower initial

earnings than those who do not receive training services.  However, they

catch up within 10 quarters, ultimately registering larger total earnings

gains per quarter.

 The marginal benefits of training may exceed $400 in earnings each quarter

for the average WIA Adult Program participant.

Actions:  

 The report has been shared with

stakeholders through the Department’s

Website.

 The results of the report were shared

with workforce system practitioners

and the workforce research community

at the Recovery and Reemployment

Research Conference on September 15‐

16, 2009.

Additional Information:  The report is available at http://wdr.doleta.gov/research/.   

Data Quality and Top Management Challenges

Data quality for this performance goal is rated Very Good.

26   Refer to the Data Quality and Top Management

Challenges section in Performance Goal 1C, which shares the same data collection system, for a discussion of

improvement efforts.  

Refer to the Data Quality and Top Management Challenges section in Performance Goal 1C for a discussion of the

Department’s efforts to address Recovery Act implementation challenges.

 

26 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.
Strategic Goal 2

FY 2009 Performance and Accountability Report     65

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

Workforce Investment Act (WIA) Dislocated Worker Program.

Performance Goal 08‐2B (ETA)

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not  

reached (N)

**Estimated

PY 2003

Goal Not

Achieved

PY 2004

Goal Not

Achieved

PY 2005

Goal Not

Achieved

PY 2006

Goal Not

Achieved

PY 2007

Goal Not

Achieved

PY 2008

Goal Not

Achieved

Target 78% 82% 83% 84% 79% 71.0%

Result 82% 84% 83% 78% 73% 67.7%** Percent of participants employed in the

first quarter after exit

* Y Y Y N N N

Target 88% 91% 89% 90% 89% 84.7%

Result 90% 91% 88% 88% 87% 85.9%**

Percent of participants employed in the

first quarter after exit still employed in

the second and third quarters after exit * Y Y N N N Y

Target — — — $13,800 $14,410 $14,888

Result — — — $14,265 $15,188 $16,304** Average earnings in the second and third

quarters after exit (six months’ earnings)

* — — — Y Y Y

Goal Net Cost (millions) — $1,472 $1,543 $1,409 $1,307 $1,441

Source(s): Annual State WIA performance reports (ETA‐9091) and quarterly reports (ETA‐9090).

Legacy Data: Some indicators not shown for PY 2003‐05.  Complete indicators, targets and results for PY 2003‐05 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:  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 DOL and by other Federal agencies.  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 Dislocated Worker Program offers employment and training services to individuals who have lost their jobs due

to plant closings or mass layoffs.  These workers are unlikely to return to employment in their previous industries

and may include formerly self‐employed individuals, and displaced homemakers dependent on the income that is

no longer available from another family member.  Eighty percent of funds are allocated by formula to the states.  

The Secretary of Labor may use the remaining 20 percent for discretionary activities, as specified under WIA, such

as assistance (through the National Emergency Grants) to localities that experience plant closures, natural disasters,

military base realignment and other major economic events that result in mass layoff of workers and job losses.  

This program has assumed a critical role in developing locally and regionally‐driven reemployment and training

solutions at a time when mass layoffs are common.  It offers a menu of services that include: job search assistance;

career counseling; occupational skills training; on‐the‐job training; programs that combine workplace training and

related instruction, including registered apprenticeship; skill upgrading and retraining; entrepreneurship training;

job readiness training; adult education and literacy training; and customized training.  All services seek to reemploy

participants in high growth sectors offering the best opportunity for long‐term job stability.

This program uses the Federal job training program common measures, which enable comparisons to be made to

education, employment and job training programs that share similar core purposes.  The Entered Employment Rate

measures the success of participants in finding jobs, the Retention Rate demonstrates if a participant has

employment stability, and the Average Earnings measure reflects job quality.
Performance Section

66 United States Department of Labor

Recovery Act

Workforce Investment Act Dislocated Worker.  The Recovery Act made an

additional $1.25 billion available to the WIA Dislocated Worker program for

expanding services, as authorized by WIA, and using the same funding

allocation formula.  The Recovery Act calls for greater quantity and quality

training services; States are expected to improve assessments and career

counseling to place workers in high growth sectors with long term

opportunities.  States have the authority to enter into contracts with

institutions of higher education, such as community colleges, or other eligible

training providers to facilitate training multiple individuals for high‐demand

occupations as long as the contract does not limit customer choice.  For more

information, see http://www.recovery.gov/?q=content/program‐

plan&program_id=7556.

Dislocated Worker National Emergency Grants.  The Recovery Act provides an

additional $200 million for National Emergency Grants to aid in the recovery

and reemployment of dislocated workers.  DOL authorized two new types of

NEGs that provide States and local areas with additional flexibility to use funds

in a manner that is appropriate to their specific economic situation and labor

markets.  For more information, see

http://www.recovery.gov/?q=content/program‐plan&program_id=7568.

National Emergency Grants for Health Coverage Assistance.  The Recovery Act

also appropriated $150 million for NEGs to States funding 80 percent of the

cost of qualifying health insurance coverage for workers who are certified for

the Trade Adjustment Assistance (TAA) program.  These funds provide

temporary coverage until participants can be enrolled in the Health Coverage

Tax Credit program.  For more information, see

http://www.recovery.gov/?q=content/program‐plan&program_id=7568.

Analysis and Future Plans

The performance goal was not achieved.  The entered employment rate was

3.3 percentage points below target, while the employment retention rate was

1.2 percentage points above target.  Six‐month average earnings increased

from the PY 2007 level and the result was well above the target.    

Costs associated

with this

performance goal

increased by ten

percent from PY

2007 to PY 2008.

Expenditures

increased

commensurate with

the demand for

Dislocated Worker

services due to rising

unemployment and the increase in corporate layoffs

nationwide.   Access to Recovery Act funding allowed for

these additional investments.

Entered Employment Rate (EER), Employment

Retention Rate (ERR), and Net Cost ‐ 

WIA Dislocated Worker

$1,440 $1,472 $1,307

$1,409

$1,543

65%

70%

75%

80%

85%

90%

95%

100%

2003 2004 2005 2006 2007 2008

Program Year

$0

$200

$400

$600

$800

$1,000

$1,200

$1,400

$1,600

EER Target EER Result

ERR Target ERR Result

Net Cost (Millions)

Milton was laid off in 2006 after 20

years as a computer programmer for

a large Illinois insurance company.  

For the next year, he worked

periodically as a consultant and day

trader but felt pressure to find a

stable position with benefits,

particularly after his wife received

notice that her company was

planning layoffs.  Milton had a

Bachelor’s degree in Computer

Science, but since it was awarded in

1985, he believed he needed to

update his skills in emerging

programming and information

technology methods.  Through the

Workforce Investment Act

Dislocated Worker program, the

Lake County Workforce

Development Board provided Milton

with training in Project Management

and Computer Information Systems.  

After his training, he registered with

Illinois Skills Match (job matching

system) and was notified about a

Computer Technology Specialist

position with the local county

government (Nineteenth Judicial

Circuit).  He was hired full‐time for

that position in March 2008.  Milton

thinks his new training made him

stand out in the interview.  He likes

his new job because it is challenging

and affords opportunities to apply

his new skills. Photo Credit: DOL/ETA
Strategic Goal 2

FY 2009 Performance and Accountability Report     67

Training and other services funded by the Recovery Act advance employment opportunities for laid‐off workers.  

DOL encourages States and local service providers to coordinate services to dislocated workers and to focus on

education and skills training for high growth occupations.  New projects include assistance to unemployed workers

in starting small businesses, raising workers’ education and skill levels, and occupational training.

Indicator * What worked What didn’t work

Entered

employment rate

N

 The Recovery Act has provided increased resources

and staff capacity to One‐Stop Career Centers.  

More individuals are now able to receive intensive

and training services which tend to yield better

outcomes than basic self‐services.  While the rate

has remained below 70 percent, more individuals

have entered employment.

 Labor marker economic conditions

reduced the number of job options

available to program participants.

Employment

retention rate

Y

 Worker re‐training in the midst of substantial

layoffs nationwide appears to have helped many

individuals gain employment and, subsequently,

retain employment.  More individuals are receiving

intensive and training services compared to

previous years.  And although the rate has dropped,

retention remains at high levels.

Average earnings Y

 Wage increases suggest that individuals who left

the program accessed higher quality jobs.

 While DOL has emphasized placing

individuals in high demand

occupations, it must increase efforts to

place them in emerging fields such as

renewable energy.

Program Performance Improvement Plan

 Continue to implement a more proactive model of pre‐ and post‐layoff services to impacted workers.  Comprehensive

skills assessments, improved workforce information and career guidance, and improved access to post‐secondary

education will all be incorporated.  The goal of this model is to provide opportunities for individuals to acquire the skills

and knowledge needed to become employable in middle‐class jobs and enable regions to respond proactively to

economic events and changing workforce development needs.

 Encourage States to assess the skills, abilities, and career goals of all eligible dislocated workers.  This assessment should

help the workforce system better map the skills of dislocated workers against current and anticipated high growth

sectors, including green industry sectors.  This approach will be particularly important as local industries reposition for

growth in the aftermath of permanent layoffs and plant closures.

*Target reached (Y), improved (I), or not reached (N)

In 2010, WIA Dislocated Worker Program’s activities will contribute to the following outcome goals in support of

the Department’s Strategic Vision of Good Jobs for Everyone:

 Increasing workers’ incomes and narrowing wage and income inequality;

 Helping workers who are in low‐wage jobs or out of the labor market find a path into middle‐class jobs; and

 Helping middle‐class families remain in the middle‐class.

Program Assessments, Evaluations and Audits

Findings and recommendations from a Workforce Investment Act Dislocated Worker Assistance assessment

completed in 2003 prompted specific actions to improve performance.  Here is a summary of progress in FY 2009:

 Conducting an evaluation to determine WIA services' impact on employment and earnings outcomes for

participants.  An evaluation of the WIA programs using administrative data was completed in December

2008.  A summary of the findings, recommendations, and actions is provided in the WIA Adult goal

narrative.   ETA also convened a Peer Review Board of independent researchers and stakeholders to review

and provide comments on the design of the Workforce Investment Act Gold Standard Evaluation (WGSE).  
Performance Section

68 United States Department of Labor

The review provided useful input on the contractor’s evaluation design.  ETA is continuing to refine the

design and hopes to begin implementation of the evaluation in FY 2010.  Additionally, in FY 2010, the

Department is funding a study that will examine and compare existing participant outcome data for

different services (core, intensive, and training) provided by the WIA Adult and Dislocated Worker

programs, the Wagner‐Peyser Act Employment Service, and the Trade Adjustment Assistance program.

 Adopting efficiency measures that are linked to performance outcomes, account for all costs, and facilitate

comparisons across Department of Labor training and employment programs.  An independent study

completed in PY 2008 recommended outcome‐based efficiency measures for which the Department is

collecting baseline data.  These data will inform the selection of appropriate measures for each program.  

Additional research on setting performance standards and targets will be completed by December 2009.   

 Improving reporting efficiency, program management and accountability through the collection of new

information with WISPR, a common reporting system for WIA, Trade Adjustment Assistance, and Wagner‐

Peyser Act Programs.  The Workforce Investment Streamlined Performance Reporting (WISPR) system,

designed to streamline performance reporting for the WIA Title I programs, Wagner‐Peyser Act funded

services, and the Trade Adjustment Assistance program, was scheduled for implementation on July 1,

2009.  However, WISPR was not implemented.  ETA will be reassessing its performance reporting approach

in light of the impending reauthorization of WIA.  

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10000330.2003.html.

In 2007, the Dislocated Worker National Emergency Grants program was assessed.  FY 2009 progress on the

resulting improvement plan is summarized below.

 Developing a formalized prioritization system to process the most important grants more quickly.  ETA has

drafted a standard operating procedure (SOP) for processing NEG applications reflecting a policy of first‐in,

first‐out, with the exception of disaster NEGs, which are given priority.  The next draft will incorporate

disaster NEG priority and add a process flow diagram.      

 Initiating an evaluation of sufficient scope and quality to evaluate overall program effectiveness.  Funding to

support an independent evaluation was not available in PY 2007 and PY 2008, as a result of limited

discretionary resources for the Agency as a whole.  The Department will continue to explore the possibility

of funding an evaluation.

 Adopting efficiency measures that are linked to performance outcomes, account for all costs, and facilitate

comparisons across Department of Labor training and employment programs.  See the identical item for the

2003 assessment of the Dislocated Worker program above.

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10009003.2007.html.

Independent evaluations and audits completed in FY 2009 are summarized below.

 

“Workforce Investment Act Non‐Experimental Net Impact Evaluation,” March 2009 (IMPAQ International, LLC)

Relevance:  This evaluation compares entered employment and average earnings outcomes of individuals in the Adult and

Dislocated Worker programs to those of a non‐participant comparison group.

Findings and Recommendations:  

 The evaluation showed that dislocated workers are likely to face serious

difficulties in obtaining reemployment, and the kind of services WIA offers

may require time to produce impacts.

 The estimates imply that program participants’ earnings do not reach the

level of earnings of comparable non‐participants until more than two years

after participation.  Overall, it appears possible that ultimate gains from

participation are small or nonexistent.  Insofar as there are impacts, females

are more likely to benefit than are males.

 When evaluating employment, estimates of WIA Dislocated Worker

program impacts are more supportive.

Actions:  

 The report has been shared with

stakeholders through the Department’s

Website.

 The results of the report were shared

with workforce system practitioners

and the workforce research community

at the Recovery and Reemployment

Research Conference on September 15‐

16, 2009.

Additional Information:  The report is available at http://wdr.doleta.gov/research/.   
Strategic Goal 2

FY 2009 Performance and Accountability Report     69

Data Quality and Top Management Challenges

Data quality for this performance goal is rated Very Good.

27  Refer to the Data Quality and Top Management

Challenges section in Performance Goal 1C, which shares the same data collection system, for a discussion of

improvement efforts.   

Refer to the Data Quality and Top Management Challenges section in Performance Goal 1C for a discussion of the

Department’s efforts to address Recovery Act implementation challenges.

 

27 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the Introduction to the

Performance Section.
Performance Section

70 United States Department of Labor

Improve outcomes for job seekers who receive Employment Services through the One‐

Stop Career Centers and virtual workforce resources.

Performance Goal 08‐2C (ETA)

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or

not  reached (N)

**Estimated

PY 2003

Goal

Achieved

PY 2004

Goal Not

Achieved

PY 2005

Goal

Achieved

PY 2006

Goal Not

Achieved

PY 2007

Goal

Achieved

PY 2008

Goal Not

Achieved

Target 58% 58% 61% 64% 61% 60.3%

Result 61% 64% 63% 60% 64% 59.8%** Percent of participants employed in

the first quarter after exit

* Y Y Y N Y N

Target 72% 72% 78% 81% 78% 78.6%

Result 80% 81% 80% 77% 81% 79.7%**

Percent of participants employed in

the first quarter after exit still

employed in the second and third

quarters after exit * Y Y Y N Y Y

Target — — — $10,500 $11,870 $10,708

Result — — — $11,576 $12,763 $11,074**

Average earnings in the second and

third quarters after exit (six months’

earnings) * — — — Y Y Y

Goal Net Cost (millions) — $831 $884 $749 $732 $699

Source(s):  Quarterly Labor Exchange Reporting System reports included in the Enterprise Business Support System and Unemployment

Insurance records.

Legacy Data:  Some indicators not shown for PY 2003‐06.  Complete indicators, targets and results for PY 2003‐06 are available in the FY 2007

report at http://www.dol.gov/_sec/media/reports/annual2007/SG2.htm.  See Performance Goal 06‐2C.

Note:  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 DOL and by other Federal agencies.  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 Employment Service’s delivery of core

employment and workforce information services to businesses and job seekers.  Principally funded through the

Wagner‐Peyser Act, as amended by the Workforce Investment Act of 1998, these services are designed to help both

employed and unemployed workers obtain jobs in high‐demand occupations.  The Employment Service does not

provide training; it provides universal access to workforce and labor market information, job search assistance, job

matching and referrals, and career guidance.  These services are provided in collaboration with a wide array of

workforce investment partner programs that provide training, child care, transportation, and customized services

to clients with unique needs such as unemployment insurance claimants, veterans, and migrant and seasonal farm

workers.  In the year ending June 30, 2009, the Employment Service assisted 18 million participants, approximately

two million more than the previous year.   

The Department strongly encourages States and local areas to provide job seekers with comprehensive workforce

and labor market information and career guidance that will help them make informed employment, education and

training decisions that consider growth opportunities in addition to immediate needs.  These services support the

Department’s goal of assisting workers in low‐wage jobs and those who may be out of the labor market find a path

to middle class jobs.  One‐Stop Career Center services also facilitate employment connections that enable middle

class workers to remain in high‐quality jobs matching their skill level.  

The Department uses the common measures for Federal employment and job training programs to evaluate the

effectiveness of its core employment and workforce information services.  Common measures, including the
Strategic Goal 2

FY 2009 Performance and Accountability Report     71

entered employment rate, the employment retention rate and average

earnings, enable comparisons to be made  for employment and job training

programs that share similar purposes.  Collectively, these measures help

gauge the workforce system’s ability to match individuals who are seeking

employment with employers who need their skills.

Recovery Act

The Recovery Act made an additional $150 million available for Employment

Service Operations, plus $250 million for targeted reemployment services to

unemployment insurance claimants.  States are using these funds to provide

more people access, through the network of One‐Stop Career Centers, to

employment and workforce information, and to provide a greater variety of

core and intensive services.  The Recovery Act also supports information

technology enhancements that allow for better communication between

Unemployment Insurance (UI) claimants and One‐Stop Career Centers.  One

promising technology allows UI staff to better match a claimant’s skill set to

related job openings.  Other enhancements may improve State job banks,

and provide more robust workforce information that informs customers

about industry‐specific market conditions and occupations in high‐growth

industries, as well as green jobs.  For more information, see

http://www.recovery.gov/?q=content/program‐plan&program_id=7681.

Analysis and Future Plans

The performance goal was not achieved.  Targets for employment retention

and average earnings were reached with results 1.1 percentage points and

$366 above their respective targets.  The entered employment rate result

was only 0.5 percentage points below the target.

To encourage

effective workforce

system responses

to the current

economic

challenges, DOL

held several

regional reemployment conferences for the workforce

investment community during the summer of 2009.  The

conferences help the Employment Service implement

strategies intended to enhance program performance by,

for example, improving the reemployment function,

customer understanding and use of local labor market

information, and assessments of customers’ knowledge

or technical skills gaps.  Job retention rates and overall

employment stability should increase as the economy

recovers and as additional permanent jobs are created.

Costs associated with this performance goal decreased by four percent from PY 2007 to PY 2008.  The decrease in

expenditures reflects the fluctuation of normal spending and participants served from year to year.

  

Entered Employment Rate (EER), Employment

Retention Rate (ERR), and Net Cost ‐ 

One‐Stop services

$699

$831

$749 $732

$884

55%

60%

65%

70%

75%

80%

85%

2003 2004 2005 2006 2007 2008

Program Year

$0

$200

$400

$600

$800

$1,000

$1,200

EER Target EER Result

ERR Target ERR Result

Net Cost (Millions)

Mark, a retired U.S. Navy veteran,

was seeking an education and career

pathway that would lead to financial

security.  After graduating from the

South Dakota School of Mines and

Technology with a Bachelor’s Degree

in December 2008, he utilized the

One Stop to better understand career

options and to enhance his job

placement opportunities.  Staff

members were so impressed with his

computer and technical skills that

they offered him a part‐time position.  

Based on his performance in that job,

Mark was hired by the South Dakota

Department of Labor for a full‐time

position on the Veterans’

Employment Team in April 2009.  

Way to go, Mark! Photo Credit: South

Dakota Department of Labor
Performance Section

72 United States Department of Labor

Indicator * What worked What didn’t work

Entered

employment rate

N

 Labor market information improvements continued to

be critical to helping maintain entered employment

outcomes despite the recession and lack of job

openings.  Jobseekers found employment at somewhat

similar rates over the past five years.    

 Increased layoffs and general

employment instability accounted

for part of the decline.

Employment

retention rate

Y

 The result exceeded the PY 2008 target by a little over

one percentage point.  ETA considers this to be a

positive result given the current economic climate.

Average earnings Y

 Participants who received labor market information on

jobs in demand likely increased their knowledge about

quality, middle‐class jobs.  Despite the current

economic slowdown, participants’ six months’ average

earnings exceeded the target by almost $400.

 While DOL has emphasized placing

individuals in high demand

occupations, it must increase

efforts to place them in green jobs

funded by the Recovery Act.

Program Performance Improvement Plan

 Support jobseekers connecting to middle class jobs.  The Department has proposed targeted technical assistance for

pathways out of poverty.  This technical assistance will be aimed at One‐Stop Career Center staff and provide them the

tools to help them move more at‐risk, low‐income customers into higher quality job opportunities.

 Help job seekers understand the local labor market – which jobs are in demand and which jobs are emerging due to new

infrastructure spending such as green jobs.

 Continue to offer job search assistance such as resume writing and interviewing skill development and assessments and

testing to identify skill matches and gaps.   

 Provide employers labor market information, One‐Stop resources such as job fairs and interviewing space, workforce

professionals to help recruit and screen qualified workers, and services for workers being displaced when an employer is

faced with downsizing or closure of their business.

*Target reached (Y), improved (I), or not reached (N)

In 2010, Employment Service system’s activities will contribute to the following outcome goals in support of the

Department’s Strategic Vision of Good Jobs for Everyone:

 Increasing workers’ incomes and narrowing wage and income inequality; and

 Helping workers who are in low‐wage jobs or out of the labor market find a path into middle‐class jobs.

Program Assessments, Evaluations and Audits

Findings and recommendations from an Employment Service assessment completed in 2004 prompted specific

actions to improve performance.  Here is a summary of progress in FY 2009:

 Tracking the levels of self‐service participants versus staff assisted participants to improve workforce system

integration.  DOL provided technical assistance to States on Wagner Peyser Act reporting and included self‐

service reporting among topics for quarterly meetings with stakeholders.  Also, Recovery Act performance

reporting for Reemployment Services includes detailed data by service type (self‐service or staff‐assisted).

 Improving reporting efficiency, program management and accountability through the collection of new

information with WISPR, an integrated, streamlined reporting system for WIA, Trade Adjustment Assistance,

and Wagner‐Peyser Act and Jobs for Veterans Act state grants.  The Workforce Investment Streamlined

Performance Reporting (WISPR) system, designed to streamline performance reporting for the WIA Title I

programs, Wagner‐Peyser Act funded services, and the Trade Adjustment Assistance program, was

scheduled for implementation on July 1, 2009.  However, WISPR was not implemented.  ETA will be

reassessing its performance reporting approach in light of the impending reauthorization of WIA.

 Implementing efficiency measures that are linked to performance outcomes, account for all costs, and

facilitate comparisons across Department of Labor training and employment programs.  An independent

study completed in PY 2008 recommended outcome‐based efficiency measures for which the Department

is collecting baseline data.  These data will inform the selection of appropriate measures for each program.  

Additional research on setting performance standards and targets will be completed by December 2009.
Strategic Goal 2

FY 2009 Performance and Accountability Report     73

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10002376.2004.html.

“Evaluation of Labor Exchange Services in a One‐Stop Delivery System Environment,” December 2008 (WESTAT)

Relevance:  This study of the computerized job‐matching system and management styles employed at One‐Stop Career

Centers offers steps that can be taken to improve the quality of services and data.

Findings and Recommendations:  

 Public labor exchanges provide valuable job‐matching services by

referring job seekers to job openings.

 High‐quality services and integration were found in States with and

without traditional funding silos.  

 Effective One‐Stop integration was achieved by authorizing one

manager to unify operations by selecting staff from different agencies

to coordinate services as a team, and to evaluate their performance.

 Devolving control to local areas greatly diminished use of statewide

computerized systems, and increased job development geared to the

needs of WIA target groups vs. the general population of job seekers

and employers.

Actions:  

 ETA has disseminated the findings to States

and local areas via the DOLETA.gov

Website, as most of the recommendations

are applicable at the States and local

levels.

 The recommendation that ETA create a

reporting system that improves the

coverage and accuracy of the delivery of

core services will be considered during

review of the performance measures in

preparation for WIA reauthorization.  

Additional Information:  The full report is available at   

http://wdr.doleta.gov/research/FullText_Documents/Evaluation%20of%20Labor%20Exchange%20in%20One‐

Stop%20Delivery%20System%20‐%20Final%20Report.pdf.

“Evaluation of Strengthening the Connections between Unemployment Insurance and the One‐Stop Delivery Systems

Project in Wisconsin,” January 2009 (Berkeley Policy Associates)

Relevance:  Research of reemployment methods in a demonstration project yielded useful lessons and strategies to improve

the coordination of services to Unemployment Insurance (UI) claimants.

Findings and Recommendations:  

 The demonstration project succeeded in increasing collaboration

between the State’s UI and Job Service divisions through both its data

sharing component and its implementation of expanded

reemployment services and eligibility reviews of UI claimants.   

 Demonstration participants drew UI benefits for a shorter period of

time and had higher average quarterly earnings than did comparison

group members.

 The use of specific services such as assessments, job referrals, one‐on‐

one services, and client follow‐up improved participants’ likelihood of

entering employment, decreasing claims of UI benefits, and increasing

quarterly earnings.

Actions:  

 ETA has disseminated the findings to State

and local areas via the DOLETA.gov Web

site, as most of the recommendations are

applicable at the State and local levels.

 TEGL 14‐08 encourages States to “develop

close partnering relationships between UI

and One‐Stops.”

 These recommendations will inform the

Administration’s WIA re‐authorization

guidelines.

Additional Information:  http://wdr.doleta.gov/research/keyword.cfm?fuseaction=dsp_resultDetails&pub_id=2396&mp=y.

Data Quality and Top Management Challenges

Data quality for this performance goal is rated Very Good.

28  While verification remains an area for improvement,

extensive efforts have been directed toward improving data quality through the use of ETA’s data validation system

and monitoring at both the national and regional levels (see the Top Management Challenges in the Other

Accompanying Information section).  The validation initiative for the Employment Service is based on a sample

approach that provides the most logical, administratively feasible, and cost effective means of validation due to the

large number of participants, roughly 18 million, who receive core services.  All States completed requirements for

data element validation and submitted summaries and analytical reports to ETA.  Those files that were randomly

selected as part of the sample were reviewed to ensure that the data collected were complete, accurate and

verifiable.  Refer to the Data Quality and Top Management Challenges section in Performance Goal 1C for a

discussion of the Department’s efforts to address Recovery Act implementation challenges.

 

28 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.
Performance Section

74 United States Department of Labor

Assist older workers to participate in growth industries through the

Senior Community Service Employment Program

Performance Goal 08‐2D (ETA)

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

PY 2007

Goal Sub‐

stantially

Achieved

PY 2008

Goal Not

Achieved

Target 55% 38% 33%   49.2%

Percent of participants employed in the first quarter after exit Result 33% 32% 52% 47.9%**

* N N Y N

Target 65% 48% 67% 69.1%

Result 73% 66% 71% 70.6%** Percent of participants employed in the first quarter after exit still

employed in the second and third quarters after exit  

* Y Y Y Y

Target baseline baseline $6,775 $6,360

Result — $6,704 $6,713 $6,782** Average earnings in the second and third quarters after exit (six

months’ earnings)

* N — I Y

Goal Net Cost (millions) $432 $444 $479 $543

Source(s): Quarterly reports from the SCSEP Performance and Results Quarterly (SPARQ) performance reporting system.

Note:  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 DOL and by other Federal agencies.  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 challenges and opportunities to SCSEP.  This program taps

unemployed, low‐income older workers for community service while also promoting self‐sufficiency by providing

participants with part‐time work‐based training that may lead to placements into unsubsidized jobs.  Program

participants work an average of 20 hours a week at non‐profit and public facilities such as day‐care centers, senior

centers, schools and hospitals, and are paid the highest of Federal, State or local minimum wage, or the prevailing

wage.  These community service experiences can serve as a bridge to employment positions that are not supported

with Federal funds.  SCSEP formula grants to States and competitively awarded grants to public and private non‐

profit organizations fund positions for about 90,000 low‐income workers age 55 and older.  Grantees coordinate

activities in partnership with nearly 3,000 comprehensive and affiliate One‐Stop Career Centers nationwide.   

DOL measures SCSEP success using the Federal job training program common measures (entered employment rate,

employment retention rate and average earnings) to enable

comparisons with education, employment and job training programs

Kathy, a resident of Moundsville, WV, sought part‐time employment to

support her community and supplement her income.  She found a program

for older workers sponsored by the National Council on Aging and funded by

the Senior Community Service Employment Program.  Upon enrollment, she

was assigned to a childcare center in Glen Dale, WV.  She then discovered

that she was eligible for the State Childcare Worker Certification.  Training at

the center afforded Kathy the opportunity to pursue licensure as part of her

professional development.  The center was so pleased with her work that

they hired her for a full‐time, unsubsidized position three months later.  

Kathy has proven to be an invaluable asset to the center, continues to build

her resume, and “loves every minute of it!” Photo Credit: DOL/ETA
Strategic Goal 2

FY 2009 Performance and Accountability Report     75

that share similar purposes.  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.

Recovery Act

The Recovery Act provided an additional $120 million to current grantees, allocated in proportion to their regular

SCSEP allotments in Program Year 2008.  Grantees will have until June 30, 2010, to recruit new SCSEP participants,

place them in community service employment assignments, and find jobs for as many of them as possible.  For

more information, see http://www.recovery.gov/?q=content/program‐plan&program_id=7569.

Analysis and Future Plans

The SCSEP performance goal was not achieved.  The entered employment rate fell 1.3 percentage points below the

target.  However, the employment retention rate and six‐

month average earnings were 1.5 percentage points and

$422 above their targets, respectively.  DOL is currently

focused on ensuring that SCSEP grantees manage their

Recovery Act grants adequately in order to expend all

funds and provide an economic stimulus to communities

where SCSEP participants reside.  Further performance

improvements will partially hinge on finalizing testing and

gaining access to UI wage records.  Preliminary test runs

matching participant records to UI wage records have

yielded higher results for all three measures.

Costs associated with this performance goal increased by

13 percent from PY 2007 to PY 2008.  The increase was

primarily due to federal and state minimum wage

increases which took effect at the beginning of July 2008.  

Indicator * What worked What didn’t work

Entered

employment rate

N

Employment

retention rate

Y

Average earnings Y

Communication with, and technical assistance to,

grantees has improved greatly for several reasons:

 Improved monitoring by the regional FPOs has

helped grantees to do a better job documenting

their performance.

 The Older Worker Team conducts monthly

teleconferences with the SCSEP FPOs regarding

grantee performance and policy issues.

 The Team also conducts monthly all‐grantee calls

with an emphasis on fielding policy and

performance questions from grantee

representatives.

 We have established a SPARQ Users Group of

grantee representatives who serve as a source of

advice to DOL staff persons and contractors

maintaining and improving the SCSEP data

collection system.

 Older worker participants’ entered

employment rate is hindered by the

continued recession and associated

high levels of unemployment.

 Improving territorial grantees’

record‐keeping and performance

continues to be a major obstacle –

even after on‐site technical

assistance is provided.

 Program managers have been

focused on Recovery Act grants and

rapid expenditure of stimulus funds.  

Grantees have likewise been focused

on enrolling and assisting thousands

of additional participants.  As a

result, some resources have likely

been diverted from job placement.

Program Performance Improvement Plan

 Continue to work on reconciling SCSEP records with the Wage Record Interchange System (WRIS) and to gain access to

more unemployment insurance wage records for PY 2010, to yield more accurate and complete data.

Entered Employment Rate (EER), Employment

Retention Rate (ERR), and Net Cost ‐ SCSEP

$432 $444

$543 $479

30%

40%

50%

60%

70%

80%

90%

2005 2006 2007 2008

Program Year

$0

$100

$200

$300

$400

$500

$600

EER Target EER Result

ERR Target ERR Result

Net Cost (Millions)
Performance Section

76 United States Department of Labor

 Continue to build on our excellent communication with grantees.

 Develop webinars as a tool for technical assistance and outreach.

*Target reached (Y), improved (I), or not reached (N)

In 2010, SCSEP’s activities will contribute to the following outcome goals in support of the Department’s Strategic

Vision of Good Jobs for Everyone:

 Increasing workers’ incomes and narrowing wage and income inequality;

 Assuring skills and knowledge that prepare workers to succeed in a knowledge‐based economy, including in

high growth and emerging industry sectors like “green” jobs; and

 Helping workers who are in low‐wage jobs or out of the labor market find a path into middle‐class jobs.

Program Assessments, Evaluations and Audits

Findings and recommendations from a Senior Community Service Employment Program assessment completed in

2003 prompted specific actions to improve performance.  Here is a summary of progress in FY 2009:

 Implementing efficiency measures that are linked to performance outcomes, account for all costs, and

facilitate comparisons across Department of Labor training and employment programs.  An independent

study completed in PY 2008 recommended outcome‐based efficiency measures for which the Department

is collecting baseline data.  These data will inform the selection of appropriate measures for each program.  

Additional research on setting performance standards and targets will be completed by December 2009.

 Publishing a final rule to implement the 2006 Older Americans Act amendments. In 2008, DOL published

the proposed rule.  Publication of the final rule is expected in May 2010.   

More information is at http://www.whitehouse.gov/omb/expectmore/summary/10000328.2003.html.

Independent evaluations and audits completed in FY 2009 are summarized below.

“Senior Community Service Employment Program Antideficiency Act Violation,” November 2008 (OIG)

Relevance:  OIG found that an Antideficiency Act (ADA) violation occurred when the Department carried over SCSEP funds

from one year to the two succeeding years, in violation of appropriations law restricting the use of program funds to the

current fiscal year.  The amount of the ADA violation was $37,446,115.

Findings and Recommendations:  

 SCSEP was using recaptured funds to pay for contractor‐provided

technical assistance.  Legal alternatives are the 1.5 percent set‐aside

of formula funds authorized by the 2006 Amendments to the Older

Americans Act and ETA’s Program Administration account.

Actions:  

 OIG worked with ETA officials to reconcile

the amounts of SCSEP funds that were

recaptured, re‐obligated, and expended.

Additional Information:  The report (No. 25‐09‐001‐03‐360) is available at http://www.oig.dol.gov/.

Data Quality and Top Management Challenges

The data quality for this performance goal is rated Very Good.

29  Grantees will be held accountable for validating

reported data beginning in PY 2009.  DOL has implemented edit and logic checks, a data quality report, and various

management reports to ensure data submitted by the grantees into the SCSEP Performance and Results Quarterly

(SPARQ) Project Report System are verifiable.  Finally, the Department is pursuing access to unemployment

insurance wage records to improve data accuracy and process efficiency.   

Refer to the Data Quality and Top Management Challenges section in Performance Goal 1C for a discussion of the

Department’s efforts to address Recovery Act implementation challenges.

 

29 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.
Strategic Goal 2

FY 2009 Performance and Accountability Report     77

Assist workers impacted by international trade to better compete in the global economy

through the Trade Adjustment Assistance Program.

Performance Goal 09‐2E (ETA)

  

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or

not  reached (N)

**Estimated

FY 2004

Goal Not

Achieved

FY 2005

Goal Not

Achieved

FY 2006

Goal

Achieved

FY 2007

Goal

Achieved

FY 2008

Goal Not

Achieved

FY 2009

Goal

Achieved

Target 70% 70% 70% 70% 73% 65.2%

Result 63% 70% 72% 70% 69% 70.0%** Percent of participants employed in

the first quarter after exit

* N Y Y Y N Y

Target 88% 89% 85% 85% 91% 87.5%

Result 89% 91% 90% 88% 90% 89.0%**

Percent of participants employed in

the first quarter after exit still

employed in the second and third

quarters after exit * Y Y Y Y I Y

Target — — — Baseline $14,050 $13,386

Result — — — $13,914 $14,281 $13,967**

Average earnings in the second and

third quarters after exit (six months’

earnings) * — — — — Y Y

Goal Net Cost (millions) — $846 $700 $805 $755 $481

Source(s): Trade Act Participant Report (TAPR) included in the Enterprise Business Support System (EBSS), Quarterly Determinations,

Allowance Activities and Employability Services, and Unemployment Insurance wage records.

Legacy Data: Some indicators not shown for FY 2004‐06.  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 06‐4.1B.

Note:  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 DOL and by other Federal agencies.  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.  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

The 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.  The program’s

primary goal is to return workers to suitable employment.  The TAA Program is one component of integrated

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 out‐of‐area 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 is measured by the extent to which it helps individuals regain economic self‐sufficiency

by quickly securing and maintaining employment.  Economic factors, such as the compatibility of skills in the

available labor force with needs of new businesses, contribute importantly to reemployment.  Therefore, TAA

continues to pursue a regional workforce investment strategy designed to create more employment opportunities

that reach more workers and improve access to training.  DOL measures the performance of this program with the

Federal job training program common measures which enable the comparison of the TAA Program’s results to

those of similar education, employment and job training programs.  Also, use of common measures removes a

barrier to service integration among programs by ensuring that similar definitions and methodologies are used for

measuring performance.  The common measures are entered employment, employment retention, and average

earnings.
Performance Section

78 United States Department of Labor

Recovery Act

Division B of the Recovery Act included the Trade and Globalization

Adjustment Assistance Act (TGAAA) of 2009, which expanded eligibility for

benefits to Service Workers, Public Employees, and workers who produce

component parts of the finished products.  The annual funding cap for

training services was raised from $220 million to $575 million.  In addition, for

petitions filed on or after May 18, 2009, TGAAA added 26 weeks of additional

Trade Readjustment Allowances – income support to eligible workers who

have exhausted their entitlement to Unemployment Compensation benefits.    

Analysis and Future Plans

TAA achieved its performance goal.  The entered employmment rate was

almost five percentage points above the target of 65.2 percent, the retention

rate was 1.5 points above the target of 87.5 percent, and six‐month average

earnings were $581 above the target of $13,386.    

Net costs of TAA activities decreased by 36 percent from FY 2008 to FY 2009

due to decreased utilization of the TAA income support component.  Trade

affected workers are also eligible for Unemployment Insurance (UI) benefits,

which are provided in lieu of TAA income support and were significantly

expanded and extended in FY 2009.

DOL plans further

implementation of

the extensive

changes contained

in the 2009

Amendments – for

example, guidance

and training for

State staff who

deliver services to

trade affected

workers.  Another

priority is

developing the

capability to process

the significantly

increased flow of

petitions.  Although the Department hired and trained new staff for the surge in workload, they have been unable

to keep up with the accelerating volume of petitions filed under the new provisions that became effective on May

18, 2009.  Consequently, TAA enters FY 2010 with a significant backlog.    

Indicator * What worked What didn’t work

Entered employment rate Y

Employment retention rate Y

Average earnings Y

 Monthly conference calls with all six

Regions.

 Reporting focus at Regional Roundtables for

State Workforce Agency staff.

 The economic downturn and higher

unemployment rate had a negative

impact.

Entered Employment Rate (EER), Employment

Retention Rate (ERR), and Net Cost ‐ TAA

$482

$846

$755 $805

$700

55%

65%

75%

85%

95%

2004 2005 2006 2007 2008 2009

Fiscal Year

$0

$200

$400

$600

$800

$1,000

$1,200

EER Target EER Result

ERR Target ERR Result

Net Cost (Millions)

José’s story is a prime example of

how TAA helps determined

American workers compete.  After

working for seven years at a large

lumber mill, José was laid off when

his employer ceased operations.  

After his company was certified for

TAA, José enrolled in an

instrumentation mechanic training

program.  TAA provided tuition,

funding for tools, books and fees,

and income support during training

so he could concentrate on his

studies.  Over the next two years,

José’s hard work and dedication

earned him a cumulative grade point

average of 3.50.  Six weeks before

graduation in June 2009, he was

offered employment as an

instrumentation mechanic with a

large petroleum refinery.   He now

earns twice the hourly wage he was

making just two years ago as a

lumber mill forklift operator.  José

credits TAA for assisting him in his

time of need and helping him turn

adversity into success.  For that, José

says “Thank You!” Photo Credit: DOL/ETA
Strategic Goal 2

FY 2009 Performance and Accountability Report     79

Program Performance Improvement Plan

 Continue to focus on obtaining timely and accurate data.  The 2009 Amendments required an extensive revision to the

data collection component of State reporting.  Implementing those changes and the transparency and accountability they

foster, should result in a greater focus on meeting performance goals by State Workforce Agency staff.

*Target reached (Y), improved (I), or not reached (N).

In 2010, TAA’s activities will contribute to the following outcome goals in support of the Department’s Strategic

Vision of Good Jobs for Everyone:

 Increasing workers’ incomes and narrowing wage and income inequality; and

 Helping workers who are in low‐wage jobs or out of the labor market find a path into middle‐class jobs; and

 Helping middle‐class families remain in the middle‐class.

Program Assessments, Evaluations and Audits

Findings and recommendations from a Trade Adjustment Assistance assessment completed in 2007 prompted

specific actions to improve performance.  Here is a summary of progress in FY 2009:

 Adjusting the formula for allocating training funds to the States to better reflect the current need for

training.  TGAAA modified the funding formula under which States receive allocations for training services

for trade affected workers to apply four factors:  (1) the number of workers covered by certifications of

eligibility during the most recent four consecutive calendar quarters;  (2) the number of workers

participating in training during the most recent four consecutive calendar quarters; (3) the number of

workers estimated to be participating in training during the fiscal year; and (4) the amount of funding

estimated to be necessary to provide approved training during the fiscal year. In addition, the 85 percent

hold harmless factor – a guarantee of funding based on the amount received in the prior year – was

reduced to 25 percent to better reflect current need, rather than historical usage.

 Developing an internal review process to verify the accuracy of trade petition certifications and denials.  

Options for developing a trade petition quality review component are being considered.  However, due to

the extensive implementation needs presented by program reauthorization, which included changes in the

certification and denial criteria, the Department has deferred developing this process until the parameters

of the new certification process are in place and fully operational.

 Adopting  efficiency measures that are linked to performance outcomes, account for all costs, and facilitate

comparisons across Department of Labor training and employment programs.  An independent study

completed in PY 2008 recommended outcome‐based efficiency measures for which the Department is

collecting baseline data.  These data will inform the selection of appropriate measures for each program.  

Additional research on setting performance standards and targets will be completed by December 2009.

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10000340.2007.html.

No independent evaluations or audits were completed in FY 2009.   

Data Quality and Top Management Challenges

Data quality for this performance goal is rated Fair.

30  TAA data meet the threshold criteria of accuracy and

relevance but do not yet satisfy the other criteria (timely, complete, valid, reliable, and verifiable).  Based upon new

requirements for data collection and reporting contained in the TGAAA, DOL has developed a new performance

reporting system to provide more timely and accurate data.  States will begin reporting under the new system

during FY 2010.  DOL will continue to require data validation by States, to monitor the data elements reported, and

to take action on inconsistent responses requesting explanation or correction.  Under the 2009 Amendments,

States’ reported data will be published on the ETA Web site and those States with missing data will be identified as

delinquent – which provides an incentive for States to report accurately.

 

30 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.
Performance Section

80 United States Department of Labor

Address worker shortages through Foreign Labor Certification Programs.

Performance Goal 09‐2F (ETA)

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not  reached (N)

**Estimated

FY 2005

Goal Not

Achieved

FY 2006

Goal Not

Achieved

FY 2007

Goal Not

Achieved

FY 2008

Goal Sub‐

stantially

Achieved

FY 2009

Goal Not

Achieved

Target 100% 100% 100% 100% 100%

Result 100% 100% 98% 100% 100%**

* Y Y N Y Y

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% 75% 92%

Result 57% 86% 74% 92% 19%**

* Y Y Y Y N

Percent of employer applications for permanent labor

certification under the streamlined system that are

resolved within six months of filing

Cost — — — ― ―

Target — 95% 95% 60% 61%

Result — 53% 55% 56% 46%**

* — N N I 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% 64% 71%

Result 85% 82% 62% 71% 33%**

* N N N Y N

Percent of the H‐2B applications processed within 60

days of receipt

Cost — — — ― ―

Goal Net Cost (millions) $60 $46 $63 $40 $54

Source(s): Automated processing systems and fax/mail processing system.

Legacy Data:  Some indicators not shown for FY 2005.  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:  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 DOL and by other Federal agencies.

Program Perspective and Logic 

Before a foreign worker may obtain employment in the United States under certain visa programs, the Immigration

and Nationality Act requires that the Secretary of Labor certify to the Secretaries of Homeland Security and State

that the employment of the foreign worker will not adversely affect the wages and working conditions of U.S.

workers similarly employed.  Employers who wish to hire a foreign worker on a permanent basis, and many

employers seeking to hire foreign workers for temporary jobs, must first test the labor market for available U.S.

workers.  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 (such as H‐2A and H‐

2B) or under permanent, employment‐based visas which may lead to lawful permanent residency.   

Performance indicators are tied to statutory, regulatory, or internal processing requirements for Foreign Labor

Certification programs.  For example, the indicator for the permanent labor certification program measures the

percent of employer applications for labor certification resolved within six months of filing.  The other three

performance indicators measure responsiveness to employers’ time‐sensitive demand for permission to hire
Strategic Goal 2

FY 2009 Performance and Accountability Report     81

temporary workers by tracking applications processed with ranges of seven to sixty days.  Targets are based on

performance information, data analysis, and anticipated application caseloads.

Analysis and Future Plans

The goal was not achieved.  Only the H‐1B Specialty Occupations Program reached its target for processing all

applications within the statutory seven‐day time frame.  Results for the other three programs were well below their

targets; processing times significantly increased due to new procedures designed to strengthen program integrity.  

Only 19 percent of permanent labor certification program applications were processed within six months.  

Processing times for the permanent program were significantly impacted in FY 2009 by implementation of

Permanent Electronic Review Management (PERM) integrity actions related to the 2007 Fraud Rule, which included

new requirements and prohibitions for petitioners.  The Department took aggressive action to ensure the integrity

of the online application process – including filters to identify applications for audit; supervising recruitment for

employers, when appropriate; and referring matters to the Office of Inspector General.

Performance of both the H‐2A Temporary Agricultural Program and the H‐2B Temporary Program for Non‐

Agricultural Seasonal Workers declined from FY 2008.  The result for H‐2A was 15 percentage points below target

while the result for the H‐2B performance measure was 38 percentage points below target.  For both programs,

regulations that became effective in January 2009 required revisions to application processing that had a significant

negative impact on timeliness in FY 2009.  However, economies of scale at the central processing facility in Chicago

and increasing familiarity with the new process present opportunities for incremental improvement in FY 2010.

Indicator * What worked What didn’t work

H‐1B process timeliness Y

PERM process timeliness N  Processing times increased significantly after

implementation of additional integrity activities.

H‐2A process timeliness N  Processing negatively impacted by implementing the

new regulations.

H‐2B process timeliness N

 Pilots of integrity activities

led to implementation of

enhanced supervised

recruitment and increased

audit processes.

 Processing times increased after implementation of

additional integrity activities and new regulations.

Program Performance Improvement Plan

 Complete the development of the ICERT system, which is a one‐stop portal to improve access to employment‐based visa

application services and USDOL immigration news and information.

*Target reached (Y), improved (I), or not reached (N)

   

Net costs of Foreign Labor Certification activities

increased by 36 percent from FY 2008‐2009 due, in

part, to a 27 percent increase in congressional

appropriations, which funded new authorities and

program areas previously constrained by limited

resources.  For example, in FY 2009, DOL let a

contract to staff a new supervised recruitment

function with 30 individuals in the Atlanta National

Processing Center.  This action implemented

authority to apply additional scrutiny to certain

employer applications and require employer

applicants in select cases to conduct recruitment

under DOL supervision.  The Department also awarded contracts to support new program activities, including the

opening of a new Prevailing Wage Determination Center and National Helpdesk offsite in Washington, DC, with

associated staffing contract, space acquisition, and additional costs to outfit the new center.  Space acquisition

Performance Goal 09‐2F

Net Costs ($ Millions)

54 40

63

46

60

0

20

40

60

80

2005 2006 2007 2008 2009

Fiscal Year
Performance Section

82 United States Department of Labor

related to this center, a move to a new site in Chicago, and additional space to house the new supervised

recruitment unit in Atlanta, all contributed to cost increases in FY 2009.  In addition, in FY 2009 DOL awarded

another large contract to stabilize and consolidate software development and system enhancements for its large,

integrated case management system, and to further automate case processing in the temporary labor certification

programs, which to date remains largely paper‐based.

  

Program Assessments, Evaluations and Audits

Findings and recommendations from an H‐1B Work Visa for Specialty Occupations Labor Condition Application

Program assessment completed in 2004 prompted specific actions to improve performance.  Here is a summary of

progress in FY 2009:

 Collaborating with the Department of Homeland Security and Department of State in a multi‐agency data

sharing effort to identify, address, and deter H‐1B and other visa fraud.  DOL established a multi‐agency

workgroup in July 2008 with membership from U.S. Customs and Immigration Service Fraud Detection and

Policy Offices, Department of State, Department of Justice, and DOL Wage and Hour Division. The

workgroup meets quarterly to share information on fraud‐related activities with an emphasis on H‐1B.

More information is at http://www.whitehouse.gov/omb/expectmore/summary/10002378.2004.html.

The Permanent Labor Certification Program was also assessed in 2004.  In FY 2009, DOL made progress on the

improvement plan as follows:

 Developing appropriate performance measures for the new program, and establish ambitious long‐term

and annual targets.  In 2009, DOL developed two performance measures that are scheduled for

implementation on October 1, 2010.   One measure provides a more accurate definition of case processing

time based on actual data while the second measure displays the level of compliance with the program and

reflects PERM integrity actions.

 Revising the application for Permanent Labor Certification (ETA Form 9089) to promote clarity and ease of

use by employers, address implementation of the Fraud Rule, and promote efficient processing.  DOL is

working to revise the current electronic filing system to incorporate the changes to the application form.  

The completion of programming and testing is scheduled for spring of 2010 with implementation in July

2010.

 Revising the PERM electronic system to reflect changes to the application for Permanent Labor Certification

(ETA 9089) and providing system enhancements to promote program integrity.  DOL is revising the current

electronic filing system to incorporate the changes to the application form.  The completion of

programming and testing is now scheduled for spring of 2010.

For more information, see http://www.whitehouse.gov/omb/expectmore/summary/10002380.2004.html.

Independent evaluations and audits completed in FY 2009 are summarized below.  

“Immigration of Foreign Workers: Labor Market Tests and Protections,” March 2009 (Congressional Research Service)

Relevance:  The Congressional Research Service (CRS) conducted an analysis of the labor market test and worker protection

responsibilities of the Department under the Immigration and Naturalization Act (INA).

Findings and Recommendations:  

 CRS concluded that there are common critiques underlying the

recruitment of foreign workers with specialized expertise as well as

low‐skilled workers.  For example, CRS found that many argue that the

labor market tests in the INA in their current forms are insufficiently

flexible, entail burdensome regulations, and may pose potential

litigation expenses for employers.  Proponents of these views support

streamlining the process – particularly moving from labor certification

based upon documented actions (i.e., evidence of recruitment

advertisements) to a streamlined attestation of intent.  Others

maintain that the attestation process may be adequate for employers

Actions:  

 On September 4, 2009, the Department

issued a proposed rule to amend the

regulations governing the employment of

aliens under the H‐2A program.  Key

provisions of the proposed rule include the

enhancement of the recruitment process

and the elimination of the existing

attestation‐based applications.  The

proposed rule is accessible at

http://www.dol.gov/federalregister/.
Strategic Goal 2

FY 2009 Performance and Accountability Report     83

hiring H‐1B workers because those foreign workers also must meet

rigorous educational and work experience requirements, but that an

attestation process would be an insufficient labor market test for jobs

that do not require a baccalaureate education and skilled work

experience.

 CRS also concluded that legislation to reform the INA may provide an

opportunity to revise and update the labor market tests; on the other

hand, a consensus on the labor market tests may also be a hurdle to

enacting immigration reform.

Additional Information:  This report is available at http://fpc.state.gov/documents/organization/122467.pdf.

Data Quality and Top Management Challenges

Data quality for this performance goal is rated Very Good.

31  In FY 2009, DOL launched an electronic portal that

improves accuracy of reported wages and Employer Identification Numbers by implementing mandatory

registration and several data validation checks.  Mandatory registration and data validation checks ensured greater

precision and accuracy of the data, leading to greater integrity.  DOL also regularly assesses data quality, collection

methods, and the Web‐based case management systems.  These assessments ensure that data are reliable,

appropriate, and useful to management.   

Improving integrity of the foreign labor certification program, while continuing to process applications in a timely

manner, remains among DOL’s top management challenges (see Maintaining the Integrity of the Foreign Labor

Certification Program, which is one of the Top Management Challenges in the Other Accompanying Information

section).  As discussed in the preceding paragraph, in FY 2009 DOL implemented a new data collection system for

the H‐1B program to improve data quality and reduce the potential for fraud.  In FY 2010, electronic programs for

the PERM system will be implemented; they are expected to improve data quality and efficiency.

 

31 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.
Performance Section

84 United States Department of Labor

Build knowledge and advance disability employment policy that affects and promotes

systems change.

Performance Goal 09‐2G (ODEP)

    

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not  reached (N)

FY 2006

Goal

Achieved

FY 2007

Goal

Achieved

FY 2008

Goal

Achieved

FY 2009

Goal

Achieved

Target baseline 20 34 18

Number of policy‐related documents Result 20 34 44 38

* Y Y Y Y

Target baseline 20 23 13

Number of formal agreements Result 20 23 36 16

* Y Y Y Y

Target 21 20 24 15

Number of effective practices   Result 26 24 27 15

* Y Y Y Y

Goal Net Cost (millions) $50 $34 $27 $29

Source(s): ODEP and independent evaluator.

Note:  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 DOL and by other Federal agencies.  Costs are not allocated to indicators 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) coordinates the development and promotes the

implementation of policies and strategies to increase employment of people with disabilities.  Increasing workforce

participation of people with disabilities requires the removal of physical, programmatic, and attitudinal barriers to

employment that exist in workforce systems, workplaces and corporate cultures, and employment supports

programs and services.  ODEP conducts research and analysis that validates and identifies innovative disability‐

employment practices and provides technical assistance to implement programs and systems that are universally

usable.  

ODEP is guided by its understanding that the traditional, stove‐piped response to low employment rates among

people with disabilities has not worked.  ODEP’s approach is coordinated, comprehensive, and collaborative.  

Success requires active involvement and cooperation of Federal, State, and local agencies; non‐governmental

organizations; and private and public sector employers.  Collaboration with these stakeholders results in: policy

development and its implementation that expands access to systems (such as employment and training, education,

and vocational rehabilitation); improves business recruitment, hiring, and advancement of people with disabilities;

and increases availability and accessibility of employment‐related supports (such as health care, transportation and

technology).  The results of ODEP’s efforts – policy‐related documents, formal agreements, and effective practices –

are reflected in the current indicators and targets.

Analysis and Future Plans

ODEP achieved its goal by reaching the target for each of its three output measures.  ODEP identified 15 effective

practices in FY 2009.  Targets for the two newer indicators (18 policy‐related documents and 13 formal agreements)

were reached, as well, with results of 38 and 16, respectively.
Strategic Goal 2

FY 2009 Performance and Accountability Report     85

In FY 2009, ODEP continued to develop policy and policy strategies for the

workforce system, employers and workplaces, and employment supports

programs and service providers that improve the labor force participation of

people with disabilities.  ODEP’s annual performance measure outputs are the foundation upon which ODEP bases

its policy and with which ODEP conducts outreach and provides technical assistance to ensure that programs,

business, and service providers adopt and implement innovative and effective policy.   

Indicator * What worked What didn’t work

Policy‐related

documents Y

 Effective collaboration between ODEP’s staff of

experts, cooperative agreements with grantees,

and contractors in generating policy documents.

Formal

agreements

Y

 Formal agreements with public system owners and

private stakeholders enforce standards of adoption,

usability, implementation and relevance of its

policy strategies.

Effective

practices Y

 ODEP uses technical experts to identify, document

and evaluate practices to ensure that they are

effective and replicable.

 Tracking agency performance data

outside a centralized data system.

Program Performance Improvement Plan

 Develop a program planning approach based on a number of policy research areas such as: Customized employment,

Assistive Technology, Employment trends, Health and wellness and Employment Supports Policy research.   

 Undertaking efforts to develop a system to collect and monitor its performance data.  This will allow the agency to use

data to enhance decision making and improve program performance.

*Target reached (Y), improved (I), or not reached (N)

ODEP net costs increased by eight percent from FY

2008‐2009.  This modest rise followed two years of

significant decreases in funding levels.

Dustin S. attended five schools in as many years.  Following a hospitalization,

community service providers recommended his mother seek placement for him in a

residential treatment center.  Fortunately, she found the ODEP‐sponsored Maryland

High School/High Tech program’s University of Maryland Young Scholars Program,

which enabled him to return home and go back to school – and his life changed

dramatically.  Dustin excelled in his school work, earning an “A” in a college course and

three credits toward higher education.  He also completed a summer internship at

NASA’s Goddard Space Flight Center, where he learned to operate a robotic arm

designed to repair the Hubble Space Telescope and developed a user’s manual.  Dustin

has been invited back to the Goddard Center to continue his work during the school

year.  He now aspires toward a career in computer engineering.  Photo Credit: DOL/ODEP

Performance Goal 09‐2G

Net Costs ($ Millions)

29 27

34

50

52

0

20

40

60

80

2005 2006 2007 2008 2009

Fiscal Year
Performance Section

86 United States Department of Labor

In FY 2010, ODEP’s activities will contribute to the following outcome goals in support of the Department’s Strategic

Vision of Good Jobs for Everyone:  

 Increasing workers’ incomes and narrowing wage and income inequality;

 Assuring skills and knowledge that prepare workers to succeed in a knowledge‐based economy,

including in high‐growth and emerging industry sectors like “green” jobs;   

 Breaking down barriers to fair and diverse work places so that every worker’s contribution is

respected;

 Improving health benefits and retirement security for all workers;

 Providing workplace flexibility for family and personal care‐giving;

 Facilitating return to work for workers experiencing workplace injuries or illnesses who are able to

work and sufficient income and medical care for those who are unable to work;

 Helping workers who are in low‐wage jobs or out of the labor market find a path into middle‐class

jobs;

 Assuring that global markets are governed by fair market rules that protect vulnerable people,

including women and children, and provide workers a fair share of their productivity and voice in

their work lives; and

 Helping middle‐class families remain in the middle‐class.  

Program Assessments, Evaluations and Audits

Findings and recommendations from an Office of Disability Employment Policy assessment completed in 2006

prompted specific actions to improve performance.  Here is a summary of progress in FY 2009:

 Maintaining 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.  The program

evaluation work on the review of the agency’s existing annual performance output measures and the pilot

testing of proposed intermediate outcome measures has been completed.  ODEP will be assessing the

viability of the proposed recommendations related to the intermediate outcome measures and data

tracking system.

 Conducting a rigorous evaluation to assess the impact and effectiveness of the program's policy and

coordination functions.  ODEP and the contractor developed a set of intermediate outcome measures and

pilot tested the use of a performance measurement system that generates valid and reliable data and

evidence to assess the impact and effectiveness of the agency's annual and intermediate‐term efforts.  

ODEP plans to build on its annual output and intermediate outcome measures to develop long‐term

outcome measures that will accurately measure ODEP’s success in developing policies and assisting

programs and systems in implementing those policies to improve labor force participation of people with

disabilities.  

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10003911.2006.html.

There were no independent evaluations and audits completed in FY 2009.

Data Quality and Top Management Challenges

Data quality for this goal is rated Good.

32  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 will be improved to ensure uniform guidelines for collecting and

reporting data, as well as increasing their validity in measuring program performance.

 

32 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.
Strategic Goal 2

FY 2009 Performance and Accountability Report     87

Contribute to the elimination of the worst forms of child labor internationally.

Performance Goal 09‐2H (ILAB)

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not  reached (N)

FY 2006

Goal

Achieved

FY 2007

Goal

Achieved

FY 2008

Goal

Achieved

FY 2009

Goal

Achieved

Target 178,000 139,000 127,400 115,100

Result 236,541 205,297 167,335 144,890

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

Target 39 31 33 24

Result 53 48 45 36

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) $95 $101 $79 $69

Source(s): Grantee technical progress reports and project monitoring.

Note:  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 DOL and by other Federal agencies.  Costs are not allocated to indicators because program activities are not

separable into categories associated with one or the other.

Program Perspective and Logic

The Bureau of International Labor Affairs (ILAB) contributes to the elimination of the worst forms of child labor

internationally through its Congressionally‐mandated research on child labor, efforts to increase public awareness

of the issue, and support of projects to eliminate exploitive child labor by expanding access to quality basic

education and training around the world.  DOL‐funded international child labor projects provide educational and

other services to child laborers, at‐risk children, and their families; assist in strengthening national and local

capacity to eliminate exploitive child labor; and undertake research initiatives to better understand the issue and

inform ongoing and future efforts to address it.  ILAB is currently funding some 55 projects implemented by 45

organizations in over 50 countries worldwide.   

ILAB measures its success in achieving this performance goal by two indicators.  The first measures the number of

children who, as a result of DOL‐funded interventions, have been either withdrawn or prevented from exploitive

labor.  Children withdrawn refers to those removed from exploitive labor and

enrolled in educational programs;  children prevented are at‐risk children who

have been provided education services to keep them from entering exploitive

labor.  The second indicator captures ILAB’s efforts to influence national policy,

such as legislation aimed at eliminating exploitive child labor and integration of

child labor concerns in anti‐poverty and economic development programs.   

ILAB establishes annual targets for these indicators through analysis of project

data and external factors, many of which are inherent to implementing programs

This Nepalese girl formerly worked in a carpet factory spinning yarn.  When she was in

the second grade, her parents went into debt and could no longer afford her school fees.  

She dropped out of school and began working full time at the factory.  In 2006, with the

support of a Department of Labor‐funded project implemented by World Education, she

enrolled in a nine‐month class that helped her catch up on the years of education she

had missed.  Subsequently, she was able to enroll in third grade in a government school.  

Now in sixth grade, she no longer works at the factory and looks forward to continuing

her studies.  Photo Credit: World Education/David DuChemin
Performance Section

88 United States Department of Labor

in developing countries.  Civil unrest, natural disasters, economic shocks, exchange rate fluctuations, frequent

changes in governments, and poor infrastructure can impact the progress of project implementation.  ILAB’s FY

2009 target for the withdrawal and prevention indicator is lower than its FY 2008 result due to lower funding levels

in recent years, the dollar’s devaluation, and, in some cases, a focus on difficult‐to‐reach children needing more

costly interventions, such as child victims of trafficking.   

Analysis and Future Plans

This goal was achieved, with targets exceeded for both indicators.  During FY 2009, 144,890 children were

withdrawn or prevented from exploitive labor as a result of their participation in DOL‐funded projects.  This

included 28,665 children in Latin America and the Caribbean, 58,361 in sub‐Saharan Africa, and 57,864 in Asia,

Europe, the Middle East, and North Africa.  In addition, 36 countries increased their capacity to address the issue of

child labor as a result of DOL‐funded projects’ work in areas such as legal and policy reform, advocacy and

awareness‐raising, and training.

  

Indicator * What worked What didn’t work

Children prevented

or withdrawn from

exploitive labor

Y

 After‐school programs offering educational

support, life‐skills training, and

recreational activities are keeping children

from returning to hazardous work in the

afternoons and are garnering support from

governments and the private sector in

several countries.  

 ILAB’s projects have provided skills training to

parents to address the poverty that often

leads to child labor, but this strategy had

limited impact without the addition of other

income generating activities.

Countries with

increased capacity

to address child

labor

Y

 When DOL‐funded projects in a given

country work collaboratively, capitalizing

on their respective strengths, they have

had greater success in increasing country

capacity to address child labor.  

 Three to four years (duration of grants) is

insufficient to sustain changes in national

child labor policies, particularly in countries

where there is widespread acceptance of the

practice.

Program Performance Improvement Plan

 ILAB will augment its focus on interventions that help alleviate the chronic poverty that is often the root cause of child

labor by encouraging its grantees to adopt or link with interventions that foster entrepreneurship and sustainable

livelihoods.

*Target reached (Y), improved (I), or not reached (N)

Net costs of ILAB activities decreased by 12 percent

from FY 2008‐2009.  Historically, net costs reflect

significant changes in appropriations for international

child labor elimination projects and typical lags of up

to three years between funding and expenditures.  

Annual appropriations for ILAB peaked in FY 2002‐

2004 before declining by over 25 percent over the

next two years and remaining at that reduced level

through 2009.  The chart follows this trend, indicating

a peak in FY 2007 and subsequent steep decline.   

In 2010, ILAB’s activities will contribute to the outcome goal assuring that global markets are governed by fair

market rules that protect vulnerable people, including women and children, and provide workers a fair share of their

productivity and voice in their work lives in support of the Department’s Strategic Vision of Good Jobs for Everyone.

Performance Goal 09‐2H

Net Costs ($ Millions)

69

79

101

95

74

60

80

100

120

2005 2006 2007 2008 2009

Fiscal Year
Strategic Goal 2

FY 2009 Performance and Accountability Report     89

Program Assessments, Evaluations and Audits

Findings and recommendations from an ILAB assessment completed in 2004 prompted specific actions to improve

performance.  Here is a summary of progress in FY 2009:

 Conducting a comprehensive evaluation of the program's technical assistance activities to assess the

programs' overall impact and effectiveness, including program sustainability.  A third‐party evaluation of

the impact and effectiveness of ILAB’s child labor technical cooperation program is ongoing.  It employs a

mixed methodology of surveys, interviews and field visits.  Due to administrative delays, the evaluation will

likely be finalized in the second quarter of FY 2011.

 Reconsidering the agency’s role in government‐wide international assistance efforts.  ILAB anticipates

that the results of the ongoing third‐party evaluation will inform policymakers in their review of the

agency's future role and responsibilities.

 Implementing a cost‐efficiency performance measure to reflect ILAB's policy functions.  ILAB is working to

identify relevant and valid cost‐efficiency measures for its programs.

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10002384.2004.html.

Independent evaluations and audits completed in FY 2009 are summarized below.

“ILAB Could Further Improve Oversight of Attestation Engagements,” March 2009 (OIG)

Relevance:  The OIG found that ILAB did not incorporate requirements needed to meet its quality assurance policies and

procedures in the Independent Public Accountant’s (IPA’s) contract; systematically conduct and document reviews of IPA

attest documentation; or require the IPA to submit external peer review reports.  

Findings and Recommendations:  

 ILAB should incorporate

requirements needed to meet its

quality assurance policies and

procedures in the Independent

Public Account firm’s (IPA) contract.   

 ILAB should expand and document

its reviews of IPA attest

documentation.   

 ILAB should require the IPA to

submit external peer review

reports.  

Actions:  

 ILAB incorporated in the FY 2009 solicitation for grant applications and contract

terms a summary of key policies and procedures related to its monitoring of

the IPA’s work, such as requiring applicants to submit a description of their

quality control procedures and to provide access to the IPA’s working papers

for review by ILAB and the Grant Officer following contract award.

 In FY 2009, ILAB’s Office of Child Labor, Forced Labor, and Human Trafficking

revised its Operations Manual to define more precisely the extent of ILAB

reviews of the IPA’s working papers and the circumstances that warrant such

reviews.  

 ILAB included a requirement for the most recent external peer review report

and related letter of comment, if any, to be submitted as part of the application

package for the FY 2009 solicitation.

Additional Information: The report is available at http://www.oig.dol.gov/public/reports/oa/2009/05‐09‐004‐01‐070.pdf.

All DOL‐funded child labor elimination projects undergo mid‐term and final evaluations, and selected projects

undergo project‐level performance and financial attestation engagements.  During FY 2009, independent evaluators

conducted over 25 project evaluations and six attestation engagements.  ILAB is posting finalized evaluation and

attestation engagement reports on the DOL Web site as they become available at

http://www.dol.gov/ilab/programs/ocft/oversight.htm.
Performance Section

90 United States Department of Labor

Data Quality and Top Management

Challenges

Data quality for this performance goal is

rated Excellent.

33  ILAB, which does not

have an overseas presence, has

developed a multi‐pronged strategy for

monitoring data quality and project

performance.  This includes semi‐annual

project‐level financial and technical

progress reports, performance

monitoring plans, and mid‐term and final

project evaluations.  In addition, financial

and performance‐related attestation

engagements are being conducted by a

private certified public accounting firm

on many DOL‐funded child labor

projects.  These attestation engagements

review data to ensure that grantees are

reporting results 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.   

To strengthen project oversight, ILAB introduced a new internal monitoring tool in FY 2008 through pilot

accountability reviews.  These reviews include assessments of reliability and validity of performance data as well as

compliance with OMB circulars, DOL policies, ILAB Management Procedures and Guidelines, and the terms of

grantees’ Cooperative Agreements.  The first pilot review of a Child Labor Education Initiative project in the

Philippines identified the need for a more systematic approach to the project’s monitoring of the working status of

beneficiaries.  The grantee has incorporated the review’s recommendations in the design of its grant for a second

project in the Philippines that should not only improve the reliability of the performance data reported to ILAB but,

more importantly, enhance protections against exploitive child labor for the project’s beneficiaries.   

 

33 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.

This teenager in Uganda, who used to work 10‐hour shifts gathering

firewood in the forest, now attends school and aspires to become a teacher,

thanks to LEAP (Livelihoods, Education, and Protection to End Child Labor) –

a project funded by the Department of Labor and implemented by the

International Rescue Committee.  LEAP covers the cost of school fees and

provides books, uniforms, and school supplies so that child laborers and at‐

risk children can afford to attend school.  LEAP also trains teachers in new

teaching methodologies and renovates classrooms in run‐down schools so

that schooling is a safer and relevant alternative to work.  Photo Credit:

International Rescue Committee/LEAP
FY 2009 Performance and Accountability Report     91

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 and secure workplaces – and

several DOL agencies are dedicated to achieving this goal.  These

agencies provide a critical service to the American worker by

ensuring that employers comply with major employment laws

that promote practices that minimize safety and health hazards,

protect employees’ wages, provide equal employment

opportunity to workers, and support veterans returning to the

civilian workplace:

 Occupational Safety and Health Administration (OSHA),

 Mine Safety and Health Administration (MSHA),

 Employment Standards Administration (ESA), and

 Veterans’ Employment and Training Service (VETS).   

DOL employs a broad range of expertise – from front‐line

investigators to strategic decision makers – to administer these

laws and to educate employers and the public.  Performance

goals and targets focus on the effectiveness of these

enforcement efforts and compliance programs.  Here are a few

highlights of FY 2009 results:

For Workers

 Workplace fatality and injury/illness rates continued a

steady downward trend.

 In mines, the fatality rate and the all‐injury and illness

rate both decreased to seven‐year lows.

 Wage and Hour law enforcement and compliance results

improved by all five performance measures for the

associated performance goal – in several cases reversing

a 2‐year slump.

For Employees of Federal Contractors

 The discrimination rate and compliance rates among

audited contractors remained stable.  However, more

systemic cases are being identified and resolved.

For Returning Veterans

 Claims and violations under the Uniformed Services

Employment and Reemployment Rights Act increased,

but compliance and claims processing results improved.  

For more specific information, see the Performance Goal

narratives.

Several Southeast Texas counties were declared

national disaster areas when Hurricane Ike made

landfall on September 13, 2008.  In the immediate

aftermath, the WHD Houston district office

mobilized staff in the affected communities to

provide outreach and assistance to victims of the

storm.  The first phase of recovery involved

installation of blue tarps on damaged roofs to

prevent further property damage.  More than

27,000 roofs were covered in seven weeks using

about 42 million square feet of plastic.  WHD staff

worked with the U.S. Army Corps of Engineers to

ensure that the thousands of laborers who

converged on the area to install these blue tarps

were paid the required legal wages, and WHD

leadership temporarily reassigned an experienced

manager from the agency’s Northeast Region to

Houston to oversee enforcement activities related

to the rebuilding initiative.  Twenty‐three

investigators from WHD offices across the country

were assigned to the area on temporary details to

assist.  Through these efforts, the Houston district

office conducted over 140 investigations and

found over $1.5 million in back wages due to

approximately 2,500 employees.  Other workers in

industries such as trucking, healthcare,

construction trades, school districts, and security

companies, were also affected by the storm and by

recovery efforts – so the Houston office and the

corps of volunteers from WHD offices nationwide

continue to maintain a strong enforcement

presence in the affected area.  Photo Credit: DOL/ESA
Performance Section

92 United States Department of Labor

The following table provides net costs for all performance goals and indicators associated with this strategic goal.34   

Net Costs ($Millions)35

Goal or Indicator FY 2007

PY 2006

FY 2008

PY 2007

FY 2009

PY 2008

Strategic Goal 3:  Safe and Secure Workplaces $1,237 $1,281 $1,304

Performance Goals 09‐3A (OSHA)

Improve workplace safety and health through compliance assistance and

enforcement of occupational safety and health regulations and standards.

547 554 556

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

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

547 554 556

Performance Goal 09‐3B (MSHA)

Reduce work‐related fatalities, injuries, and illnesses in mines.

356 388 403

Mine industry fatalities per 200,000 hours worked 121 132 165

Mine industry injuries per 200,000 hours worked 107 116 149

Percent of respirable coal dust samples exceeding the applicable standards for

designated occupations

50 58 60

Percent of noise exposures above the citation level in coal mines 25 31 28

Percent of successful interventions of hazards that require annual sampling

(metal and non‐metal mines)

−  − −

Percent of hazards that require periodic sampling for which there are successful

interventions (metal and non‐metal mines)

−  − −

Performance Goal 09‐3C (Wage and Hour)

Ensure workers receive the wages due them.

221 227 232

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

remedy per 1,000 enforcement hours in complaint cases

123 123 126

Percent of prior violators who achieved and maintained FLSA compliance

following a full FLSA investigation

30 30 31

Number of workers in low‐wage industries for whom there is an agreement to

pay or an agreement to remedy per 1,000 case hours

45 38 39

Number of wage determination data submission forms processed per 1000 hours 23 35 36

Average age (in months) of Davis‐Bacon wage rates −  − −

Performance Goal 09‐3D (Federal Contractor Compliance)

Federal contractors achieve equal opportunity workplaces.

103 102 102

Discrimination rate for audited Federal contractors 72 71 72

Compliance rate for all other EEO requirements 31 31 31

Performance Goal 09‐3E (USERRA)

Reduce employer‐employee employment issues originating from service members’

military obligations conflicting with their civilian employment.

10 10 10

USERRA Progress Index (measures compliance and assistance performance) 10 10 10

 

34 Rows labeled “Dollars not associated with indicators” indicate costs that cannot be associated with the current set of

performance indicators.  For some goals, indicator costs 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). 35 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 DOL and by other Federal agencies.  Sums may not equal higher level totals due

to rounding.
Strategic Goal 3

FY 2009 Performance and Accountability Report     93

Improve workplace safety and health through compliance assistance and enforcement of

occupational safety and health regulations and standards.

Performance Goal 09‐3A (OSHA)

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not  reached (N)

**Estimated

FY 2007

Goal

Achieved

FY 2008

Goal

Achieved

FY 2009

Goal

Achieved

Target 2.3 2.3 2.2

Result 2.1 2.0** 1.9** Days away from work, job restriction and job transfer (DART) per 100

workers

* Y Y Y

Target 1.73 1.58 1.57

Result 1.58 1.51 1.27** Workplace fatalities per 100,000 workers (for sectors covered by the

Occupational Safety and Health Act)

* Y Y Y

Goal Net Cost (millions) $547 $554 $556

Source(s): Bureau of Labor Statistics (BLS) Annual Survey of Occupational Injuries and Illnesses (ASOII), OSHA Integrated Management

Information System, and BLS Current Employment Statistics.

Note:  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 DOL and by other Federal agencies.  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 safe working environments.  A strong, fair, and effective enforcement program

underpins OSHA’s efforts to protect the safety and health of the nation’s workers.  Outreach, education and

compliance assistance complement enforcement efforts to enable OSHA to play a vital role in preventing on‐the‐job

injuries, illnesses and fatalities.  

The majority of working Americans fall under the jurisdiction of Federal OSHA plans or Federally‐approved job

safety and health programs operated by the States (with the exception of miners, transportation workers, domestic

workers, some public employees, and the self‐employed).  OSHA helps to reduce on‐the‐job injuries, illnesses and

deaths by intervening – through enforcement strategies and compliance

assistance – at workplaces where occupational safety and health hazards are

more likely to be present and by responding to reports about serious workplace

hazards.   

OSHA tracks injury/illness and fatality rates to develop targeted national and

local programs and to measure performance.  OSHA creates fiscal year estimates

from the published BLS Annual Survey of Occupational Injuries and Illnesses

OSHA conducts local special emphasis programs to reduce employee exposures to

hazards at construction projects, including those funded by the Recovery Act.  Specific

interventions, including inspections, cover many employers at once and leverage

OSHA’s outreach and enforcement efforts.  “The hazards associated with the

construction industry are well recognized, especially on large projects involving

highways, bridges, new building construction, and existing building renovation and

demolition operations,” said Charles E. Adkins, OSHA’s regional administrator in Kansas

City, MO.  Photo credit:  DOL/OSHA
Performance Section

94 United States Department of Labor

(calendar year) for rates of injuries and illnesses involving days away from work, job restriction, or job transfer

(DART).  OSHA’s own Integrated Management Information System is used to track fatalities and other data for

management purposes.  Other factors that affect achievement of this performance goal include national economic

indicators such as employment, changes in technologies, and workforce characteristics.   

Recovery Act

With funds from the Recovery Act, OSHA was allocated 36 Full Time Equivalents in 2009 to protect worker

safety and health through targeted enforcement activity.  The agency established a target for 2009 of 525

additional federal inspections (above those funded through normal appropriations for enforcement activities).  

OSHA established Local Emphasis Programs for its Recovery Act work and, through the third quarter of 2009,

had already surpassed its 2009 federal inspection goal by conducting 665 additional inspections.

  

OSHA is working with State partners to enhance their enforcement efforts.  OSHA established a target of

500 inspections in 2009 for States receiving Recovery Act funds, and obligated $1,525,489 for those activities.  

OSHA also obligated $600,000 for construction data collection to enhance targeting of federal enforcement

resources to construction sites with the highest injury and illness rates.  For more information, see

http://www.recovery.gov/?q=content%2Fprogram‐plan&program_id=7636.

Analysis and Future Plans

OSHA reached both indicator targets and achieved its goal.  This year, the rate of injuries and illnesses involving

days away from work, job restriction, or job transfer declined to 1.9 cases per 100 workers from last year’s rate of

2.0, and the fatality rate for sectors covered by the Occupational Safety and Health Act declined to 1.27 fatalities

per 100,000 workers from the FY 2008 rate of 1.51.

Indicator * What worked What didn’t work

Injury/Illness rate Y

 Increased use of National and Local

Emphasis Programs in high‐hazard areas

reduced the injury and illness rate.

 OSHA's ability to rapidly deploy new program

or regulatory initiatives is limited due to an

extensive review and concurrence process.

Fatality rate Y

 Increased use of National and Local

Emphasis Programs in high‐hazard areas

reduced the fatality rate.

 Educating hard‐to‐reach and non‐English

speaking workers about occupational safety

and health is challenging.

Program Performance Improvement Plan

 In FY 2010, OSHA is hiring enforcement personnel that will help the agency adapt to changes in worker demographics.

 OSHA is developing better mechanisms to reduce fatalities in hard‐to‐reach and non‐English speaking workers.

 Starting in 2011, OSHA will analyze data from the new OSHA Information System database to better understand where

injuries and illnesses are occurring and to direct its resources to these areas.   

*Target reached (Y), improved (I), or not reached (N)

Net costs of OSHA activities were virtually unchanged from FY 2008‐2009.

In 2010, OSHA’s activities will contribute to the following outcome goals in support of the Department’s Strategic

Vision of Good Jobs for Everyone:

 Securing safe and healthy workplaces, particularly in high‐risk industries; and

 Voice in the workplace.

For 2010, OSHA is targeting reduction in the number of fatalities caused by the four leading types of workplace

death – falls, electrocutions, being caught in or between an object, and being struck by an object.
Strategic Goal 3

FY 2009 Performance and Accountability Report     95

Program Assessments, Evaluations and Audits

Findings and recommendations from an Occupational Safety and Health Administration assessment completed in

2007 prompted specific actions to improve performance.  Here is a summary of progress in 2009:

 Completing regulatory reforms identified in the 2005 Report to Congress on the Costs and Benefits of

Federal Regulation.  OSHA completed eight of the ten reforms; two reforms are still in progress. The

Flammable Liquids reform, part of the Standards Improvement Project, will require additional public

comment on recommendations to replace several National Fire Protection Association consensus

standards.  The Hazard Communication Training guide was delayed by work on the Hazard

Communication/Globally Harmonized System rulemaking that was published for public comment in

September 2009.  OSHA anticipates both reforms to be completed by September 2010.

 Developing the OSHA Information System to improve data collection.  In 2009, the OSHA Information

System Team addressed issues identified by the 2008 pilot.  These areas include addressing reporting

requirements, design fixes, wireframe development, data mapping, and some data cleansing.  The system,

which will enhance data collection, data access, and information dissemination for the entire agency, is

scheduled for full deployment by September 30, 2010.

 Conducting rigorous independent evaluations to examine the relative effectiveness and efficiency of

programmatic approaches.  OSHA will pursue alternative approaches to establish a methodology for

conducting studies of its various programmatic approaches.  The agency has directed in‐house staff

resources to work on a Methylene Chloride Lookback Review and on a planned Bloodborne Pathogens

Lookback Review.  

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10000336.2007.html.

Independent evaluations and audits completed in 2009 are summarized below.

“Employers With Reported Fatalities Were Not Always Properly Identified and Inspected Under OSHA's Enhanced

Enforcement Program,”  March 2009 (OIG)

Relevance:  The OIG audit of OSHA’s Enhanced Enforcement Program (EEP) found that OSHA did not always properly identify

employers for enhanced enforcement.  When it did, OSHA did not always take proper action nor place the appropriate

management emphasis on compliance, committing the necessary resources, and providing clear policy guidance. 

Findings and Recommendations:  

 The OIG recommended that OSHA form an EEP task force to improve

program efficiency and effectiveness, revise the EEP directive, provide

formal training on EEP requirements and application, incorporate

enhanced settlement provisions, establish controls for reconciliation of

the EEP log, and improve citation coding.

Actions:  

 An EEP task force was created in April 2009.

 A revised directive was completed.

 Formal training on EEP requirements is

expected in FY 2010.

Additional Information:  The report (OIG 02‐09‐203‐10‐105) is available at

http://www.oig.dol.gov/public/reports/oa/2009/02‐09‐203‐10‐105.pdf.

“OSHA's Voluntary Protection Programs: Improved Oversight and Controls Would Better Ensure Program Quality,”

May 2009 (GAO)

Relevance:  GAO examined the Voluntary Protection Programs (VPP) and concluded that OSHA’s internal controls are not

sufficient to ensure that only qualified worksites participate in the VPP.  GAO also reported that the agency has not

developed goals or measures to assess the performance of the program.

Findings and Recommendations:  

 GAO recommended OSHA develop a documentation policy for

information on actions taken by OSHA’s regions in response to fatalities

and serious injuries at VPP sites, establish internal controls to ensure

consistent compliance by its regions with VPP policies, and develop

goals and performance measures for VPP.

Actions:  

 OSHA issued instructions for documenting

OSHA actions following a fatality at a VPP

site.

 The agency issued new procedures for VPP

onsite teams to review and verify injury and

illness rates submitted with the

participants’ annual self‐evaluations.

Additional Information:  The report (GAO‐09‐395) is available at http://www.gao.gov/new.items/d09395.pdf.
Performance Section

96 United States Department of Labor

Data Quality and Top Management Challenges

Data quality for this performance goal is rated Good.

36  For

the fatality goal, the agency relies on its Integrated

Management Information System (IMIS) for fatality data and

Bureau of Labor Statistics (BLS) Current Employment

Statistics for employment data.  IMIS data provide 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.   

Improving program effectiveness and efficiency of the Enhanced Enforcement Program (EEP) and developing

documentation policy, internal controls and goals and performance measures for the Voluntary Protection

Programs (VPP) remain as challenges for the Department (see Ensuring the Safety and Health of Workers, which is

one of the Top Management Challenges in the Other Accompanying Information section).  One recent audit of

OSHA’s EEP found that OSHA did not always properly identify employers for enhanced enforcement, and when it

did, it did not always take proper action nor place the appropriate management emphasis on compliance –

committing the necessary resources, and providing clear policy guidance.  In response, OSHA formed an EEP task

force, is revising the EEP directive and will provide training on program requirements.  In response to the GAO’s

recommendation that OSHA improve oversight and controls to better ensure program quality of the VPP, the

agency developed a statement of executive action to establish actions and dates for challenges to be resolved.

 

36 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.

In 2008, as the result of an enforcement action

initiated by the Office of the Solicitor, the Department

achieved a significant OSHA settlement with Bath Iron

Works, the Navy’s shipbuilder and largest employer in

Maine.  This employer has been a recurrent subject of

OSHA’s site‐specific targeting due to its high rate of

musculoskeletal injuries.  In the settlement agreement,

Bath was issued numerous safety and health citations

and paid a $275,000 penalty.  The settlement paved

the way for resolution of an ergonomics citation

asserting that shipbuilding employees who repeatedly

perform grinding operations have been exposed to

serious upper body musculoskeletal disorders.  By

ensuring that Bath addresses its chronic ergonomic

issues, SOL is helping to ensure that the Department is

achieving a safe and secure workplace for every

American worker.
Strategic Goal 3

FY 2009 Performance and Accountability Report     97

Reduce work‐related fatalities, injuries, and illnesses in mines.

Performance Goal 09‐3B (MSHA)

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not  reached (N)

**Estimated

FY 2007

Goal Sub‐

stantially

Achieved

FY 2008

Goal Sub‐

stantially

Achieved

FY 2009

Goal

Achieved

Target .0201 .0191 .0147

Result .0200 .0152 .0141**

* Y Y Y

Mine industry fatalities per 200,000 hours worked

Cost $121 $132 $165

Target 2.82 3.41 3.09

Result 3.50 3.27 2.97**

* I Y Y

Mine industry injuries per 200,000 hours worked

Cost $107 $116 $149

Target 9.0% 11.5% 9.55%

Result 12.20% 9.74% 7.75%**

* N Y Y

Percent of respirable coal dust samples exceeding the applicable standards for

designated occupations

Cost $50 $58 $60

Target 4.8% 3.59% 4.45%

Result 3.66% 4.54% 4.01%**

* Y N Y

Percent of noise exposures above the citation level in coal mines

Cost $25 $31   $28

Target — — baseline

Result — — 11.63

* — — —

Percent of successful interventions of hazards that require annual sampling

(metal and non‐metal mines)

Cost — — —

Target — — baseline

Result — — 2.67

* — — —

Percent of hazards that require periodic sampling for which there are

successful interventions (metal and non‐metal mines)

Cost — — —

Goal Net Cost (millions) $356 $388 $403

Source(s):  Mine operators’ and non‐exempt contractors’ Mine Accident, Injury, and Employment reports and MSHA Standardized

Information System.

Legacy Data:  Some indicators not shown for FY 2004‐08. 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 Goals 06‐3.1A and 06‐3.1B.  In FY 2004‐06,

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.  Complete data for FY 2007‐08 are in the FY 2008 report at

http://www.dol.gov/_sec/media/reports/annual2008/SG3.htm.  See Performance Goal 08‐3A.

Note:  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 DOL and by other Federal agencies.   
Performance Section

98 United States Department of Labor

Program Perspective and Logic

The Mine Safety and Health

Administration (MSHA) enforces

compliance with mandatory safety and

health standards to reduce fatal accidents,

nonfatal accidents, and health hazards

and promotes improved safety and health

conditions in the nation's mines.  MSHA is

divided into two major programs, coal

mine safety and health and metal‐

nonmetal safety and health.  MSHA

protects the safety and health of the

nation’s miners under the provisions of

the Federal Mine Safety and Health Act of

1977 (Mine Act), as amended by the Mine

Improvement and New Emergency

Response Act of 2006 (MINER Act).   

The Mine Act requires that MSHA inspect

each surface mine at least two times a year

and each underground mine at least four

times a year (seasonal or intermittent

operations are inspected less frequently)

to determine whether there is compliance

with health and safety standards and

whether an imminent danger exists.  If

violations of safety or health standards are

found, inspectors will issue citations to the

mine operators.  MSHA also performs

other important activities including, but not limited to, investigating mine accidents; developing safety and health

standards; assessing and collecting civil monetary penalties for violations of mine safety and health standards;

reviewing for approval mine operators' mining plans; maintaining the National Mine Health and Safety Academy to

train inspectors; approving and certifying certain mining products; and, overseeing rescue and recovery operations.

The MINER Act of 2006 amended the Mine Safety and Health Act and contains a number of provisions to improve

safety and health in America's mines, including:  requiring MSHA to review and re‐certify each mine's emergency

response plan every six months; providing guidance to mines on wireless two‐way communications and an

electronic tracking system, permitting those on the surface to locate persons trapped underground; and requiring

each mine to make available two experienced rescue teams capable of a one‐hour response time.

MSHA uses the incidence rate – the number of fatalities and injuries per 200,000 hours worked by miners – to

assess the effectiveness of its efforts to protect the safety of the nation’s miners.  The rate combines the number of

miners’ fatalities and injuries with their exposure to potential hazards (hours worked).  The health indicators for this

performance goal targets reductions to exposures to noise and dust in coal mines.  These indicators address

significant health risks to miners; noise exposure is a major health concern because it may lead to hearing loss, and

exposure to coal and silica dust may cause lung disease such as pneumoconiosis (black lung) among coal miners.  

During FY 2009, MSHA continued its integrated approach toward the prevention of mining accidents, injuries, and

occupational illnesses.  MSHA elevated enforcement efforts and increased inspector presence at mine sites.  MSHA

accomplished its goal of completing all required inspections at every mine in the country.

   

On August 4, 2009, Secretary Solis visited with miners employed at the

Patriot Coal’s Federal No. 2 Mine located near Miracle Run, West Virginia.  

The mine employs nearly 500 miners.  During her tour, the Secretary

descended 700 feet down an elevator hoist and traveled two miles

underground to see the inner workings of the mine, which was supplied

with additional airtight emergency shelters and caches of oxygen self

rescuers, as required by the MINER Act.  “Whenever you turn on the light

switch, people may not think that it may have come from the coal that was

mined here in West Virginia;” said Secretary Solis.  “I am out here to say

that we stand by the workers, we stand by the good business men who

make these investments to help be ahead of the challenge so we know that

when miners come into a mine in the morning that they can come home at

night – and that to me is the bottom line.”  Photo credit:  DOL/ETA
Strategic Goal 3

FY 2009 Performance and Accountability Report     99

Analysis and Future Plans

MSHA achieved its FY 2009 performance goal by reaching all four indicator targets.  In the coming years, MSHA

plans to target the most common causes of fatal accidents and enhance enforcement to improve compliance with

standards.  To reduce health risks to miners, MSHA plans to greatly improve the effectiveness of its coal dust

enforcement efforts by developing and implementing a comprehensive black lung strategy that will include

rulemaking to reduce the coal dust permissible exposure level; education and training; enhanced enforcement; and

increased surveillance of miner respiratory health.

Net costs of MSHA activities increased by four percent from FY 2008‐2009 due to increased enforcement (number

of inspections) and support activity.  

Indicator * What worked What didn’t work

Mine fatality rate Y

 an increase in inspector presence at many mines

due to increased number of inspectors

 completion of all mandatory mine inspections

(twice and four times annually for above ground

and underground mines, respectively)

 Mine operators failed to

comply with MSHA

standards that could have

prevented many of the

fatalities.

Mine injury rate Y  Increased inspector onsite presence

Dust hazard exposure Y  Better quality dust control and ventilation plans

Noise hazard exposure Y  Increased inspector presence

Program Performance Improvement Plan

 Implement a fatal accident reduction strategy aimed at eliminating the types of hazards that most frequently cause or

contribute to the deaths of miners.  Foster consistent compliance with the identified standards with aggressive

enforcement by MSHA inspectors and specialists.  In addition, MSHA will require that mine operators who have a pattern

of violations implement safety and health management programs that targets the reduction of conditions which most

frequently cause or contribute to fatal accidents.

Fatality Rate ‐ All Mines

Incidents per 200,000 hours worked

0

0.01

0.02

0.03

2004 2005 2006 2007 2008 2009

Result Target

All‐Injury Rate ‐ All Mines

Incidents per 200,000 hours worked

0

1

2

3

4

5

2004 2005 2006 2007 2008 2009

Result Target

Coal Mine Dust and Noise Hazard Exposure

0

5

10

15

2004 2005 2006 2007 2008 2009

DustTarget Dust Result

Noise Target Noise Result

Performance Goal 09‐3B

Net Costs ($ Millions)

413 388

356 348

307

0

100

200

300

400

500

2005 2006 2007 2008 2009

Fiscal Year
Performance Section

100 United States Department of Labor

 Implement a comprehensive black lung reduction strategy that includes rulemaking to lower the exposure limit for

respirable coal mine dust.  Initiate systematic review of the quality of dust control parameters stipulated in semi‐annual

mine ventilation and dust control plans, review coal mine operator respirable dust practices during regular inspections,

and inspect coal mine operators’ dust monitoring programs annually.

 Speed processing of miners’ discrimination complaints and complete investigations of knowing and willful violations.

*Target reached (Y), improved (I), or not reached (N).

In 2010, MSHA’s activities will contribute to the following outcome goals in support of the Department’s Strategic

Vision of Good Jobs for Everyone:

 Securing safe and healthy workplaces, particularly in high‐risk industries; and

 Voice in the workplace.

Program Assessments, Evaluations and Audits

Findings and recommendations from a Mine Safety and Health Administration assessment completed in 2003

prompted specific actions to improve performance.  Here is a summary of progress in FY 2009:

 Implementing the MINER Act of 2006.  MSHA published the final rule on Refuge Alternatives and the final

rule on the Utilization of Belt Air and the Composition and Fire Retardant Properties of Belt Material in

Underground Coal Mining.  MSHA continues to work on wireless communications or tracking systems and

continues to review and approve Emergency Response Plans.

 Completing 100 percent of the required inspections.  MSHA completed all required inspections in FY 2009.

 Deploying a new Web tool which allows mining companies to review their history and how assessments are

broken down. MSHA activated a new feature on its Web site that provides additional tools to assess the

safety performance at mines and which will enable users to access violations per inspection day and repeat

violations of the same standard.

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10001101.2003.html.

Independent evaluations and audits completed in FY 2009 are summarized below.

“Complaints Received from The American Coal Company,” January 2009 (OIG)

Relevance: The workplace safety and health of our nation’s workers depends on DOL’s strong enforcement of these laws.   

Findings and Recommendations:

 Issue a written policy for eliminating the current backlog

of overdue coal mine plan reviews and maintaining

timely reviews in the future.

Actions:

 On June 2, 2009, MSHA implemented a written policy for

eliminating backlogs of coal mine reviews and

maintaining timely plan reviews.  

Additional Information:  The report (No. 05‐09‐002‐06‐001) is available at

http://www.oig.dol.gov/public/reports/oa/2009/05‐09‐002‐06‐001.pdf.

Data Quality and Top Management Challenges

Data quality for this goal is rated Very Good.

37  The OIG and GAO pointed out the lack of data on contractor38 hours

worked at the mine level and recommended that mine operators report all hours worked for both employees and

contractors.  MSHA could then verify that all data relevant to reported injuries and fatalities have been included.  

MSHA officials believe that the data on non‐exempt 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.   

 

37 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section. 38 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.
Strategic Goal 3

FY 2009 Performance and Accountability Report     101

Top Management Challenges pending include the OIG finding that MSHA had to forgo other statutory

responsibilities in order to complete 100 percent of the mandated mine inspections.  The Administrator for Coal

Mine Safety and Health issued a written plan to ensure timely coal mine reviews, which MSHA will implement in the

coming year.  MSHA has completed its pending Top Management Challenge to ensure the consistency and rigor of

the process to review and approve roof control plans and re‐evaluate roof control plans for all mines.  MSHA

published the revised Accountability Handbook and continues to strengthen the Office of Accountability.
Performance Section

102 United States Department of Labor

Ensure workers receive the wages due them.

Performance Goal 09‐3C (ESA)

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not  

reached (N)

**Estimated

FY 2004

Goal

Achieved

FY 2005

Goal

Achieved

FY 2006

Goal

Achieved

FY 2007

Goal Not

Achieved

FY 2008

Goal Not

Achieved

FY 2009

Goal

Achieved

Target — — baseline 296 274 275

Result — — 293 271 272 290

* — — Y N N Y

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 $123 $126

Target 74% 72% 73% 77% 67% 63%

Result 71% 72% 76% 66% 56% 66%

* N Y Y N N Y

Percent of prior violators who achieved and

maintained Fair Labor Standards Act (FLSA)

compliance following a full FLSA investigation

Cost — — $27 $30 $30 $31

Target — — — 304 422 305

Result — — — 418 302 318

* — — — Y N Y

Number of workers in low‐wage industries for

whom there is an agreement to pay or an

agreement to remedy per 1,000 case hours

Cost — — $39 $45 $38 $39

Target baseline 1,506 1,491 1,852 2,662 2,268

Result 1,491 1,667 1,834 2,636 2,246 2,534

* Y Y Y Y N Y

Number of wage determination data submission

forms processed per 1,000 hours

Cost — — $23 $23 $35 $36

Target — — — — — 93

Result — — — — — 41

* — — — — — Y

Average age (in months) of Davis‐Bacon wage

rates

Cost — — — — — —

Goal Net Cost (millions) — $214 $214 $221 $227 $232

Source(s): Wage and Hour Investigator Support and Reporting Database (WHISARD), statistically valid investigation‐based compliance

surveys, and Automated Survey Data System.

Legacy Data: Some indicators not shown for FY 2004‐06.  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 06‐2.1A.

Note:  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 DOL and by other Federal agencies.

Program Perspective and Logic

The Wage and Hour Division’s (WHD) mission is to promote and achieve compliance with labor standards to 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), 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 FY 2009 performance objectives were to maximize benefits for the greatest number of workers

through efficient complaint resolution, to promote sustained compliance among investigated employers, to
Strategic Goal 3

FY 2009 Performance and Accountability Report     103

increase compliance on behalf of low‐wage workers in industries

with the most persistent and serious violations, and to issue

accurate and timely wage rates for workers on Federally‐funded

or assisted contracts.  WHD balances its enforcement resources

among three strategies – enforcement (complaint‐driven and

directed investigations), education and outreach, and

partnerships.  Directed investigations in low‐wage industries –

where workers are reluctant to complain – detect, remedy, and

deter violations.  Complaint investigations serve individual

complainants and provide opportunities for detecting and

remedying violations on behalf of other employees.  Education

and outreach activities promote voluntary compliance by

employers.  Partnerships leverage resources and broaden the

program’s impact.  The wage determination strategies center on

increased wage survey participation, timely processing of wage

data submission forms, and effective verification of wage rate

information.

WHD measures program efficiency for three of its four

performance objectives.  Performance indicators for complaint

resolution and low‐wage industry compliance promote efficient

investigations and encourage the agency to secure remedies on

behalf of all potentially affected workers.  Complaint

investigations have a positive effect on individual employers’

future compliance, and directed enforcement initiatives deter   

violations and boost industry‐wide compliance.  Efficient

handling of complaint and directed investigations can serve to

promote compliance.  The wage determination performance

indicator tracks efficiencies in the review and analysis of survey

data, which in turn drives the goal for improved timeliness of

Davis‐Bacon Act wage rates.  While this measure reflects

productivity related to a specific step in the wage determination

process, it does not provide the public with an assessment of the

currency or accuracy of the issued wage rates.  For the fourth

performance objective, WHD conducts an annual compliance

survey of prior violators.  These investigation‐based compliance

survey results are used to evaluate the agency’s impact on

employer behavior and test the effectiveness of various regional

strategies on long‐term compliance.   

Changes in the economy, including in employees’ and employers’

economic security, have an impact on compliance with laws

enforced by WHD.  Factors such as the tightening of credit

markets, use of multiple levels of subcontracting, and greater use

of contingent workers can contribute to employer non‐

compliance.  Higher levels of unemployment are among the

factors affecting enforcement outcomes.  WHD attributes fewer

complaints and greater difficulty in identifying violations to

workers’ reluctance to discuss compliance issues given these

economic trends.  In recent years, back wage collections and the

number of workers assisted increased despite the declining number of cases and complaints.  WHD’s recovery

As part of the agency’s efforts to protect teens

from hazardous working conditions, WHD

conducted investigations in movie theaters

throughout the country.  Investigators found

workers under 18 years old were routinely

operating and loading trash compactors and paper

balers in violation of the ban prohibiting these

practices.  Many of the youth were employed in

theaters operated by American Multi‐Cinema

(AMC), which operates more than 350 movie

theaters in 30 States.  To resolve the current

violations and prevent future violations, AMC

agreed to pay over $140,000 in fines, committed

to in‐house training and compliance monitoring,

and produced a public service announcement on

child labor restrictions for operating paper

compactors.  The announcement, “Work Safe Tip #

12:  Talking Trash,” was shown in all AMC theaters,

on all screens, before all movies for four weeks

beginning on Labor Day weekend in 2008.  An

estimated 8 million people saw the notice warning

that no one under 18 is permitted to operate a

commercial trash compactor.   Photo Credit: DOL/ESA
Performance Section

104 United States Department of Labor

levels reflect its targeted enforcement strategy to conduct more resource intensive investigations to secure

compliance on behalf of more workers.  

Recovery Act

For FY 2009, the Recovery Act provided WHD an additional $22.0 million and 116 FTE to update prevailing wage

determinations and enforce the government contract acts’ labor standards provisions.  WHD’s objective is to

ensure that the greatest number of workers on Recovery Act projects receive the wages and benefits to which they

are entitled under the law.  Increased education and outreach is intended to minimize coverage disputes and

explain compliance principles to Federal, State, and local contracting agency staff who have limited experience with

the program.

To address concerns that existing prevailing wage determination did not accurately reflect prevalent practices and

wage rates on weatherization work, WHD conducted a nation wide wage determination survey of weatherization

construction.  WHD is expediting highway construction wage surveys, reducing the backlog of building and heavy

construction surveys, and taking inventory of other wage determination surveys to determine which are outdated

and should be replaced.  To strengthen enforcement, WHD promoted senior investigators to act as advisors to the

field staff.  Their primary focus will be to train district managers and identify investigators to work on investigative

teams when there is a Recovery Act complaint on file or a targeted Recovery Act investigation has been planned.

WHD is reaching out to contractors and their associations, employees and their representatives, and local

community groups to provide information on Davis‐Bacon requirements and rights.  Specific activities include

issuing guidance, creating a Web page for Davis‐Bacon Act and Service Contract Act labor standards, publishing a

revised edition of the Prevailing Wage Resource Manual, and numerous conferences and educational events.  For

more information, see http://www.recovery.gov/?q=content/program‐plan&program_id=7705.

Analysis and Future Plans

In FY 2009, WHD achieved its performance goal by reaching all performance targets.  WHD reached its target for

improving efficiency of assistance to workers in low‐wage industries.  WHD will continue refining its targeting

strategies based on the findings of its program evaluations in low‐wage industries. Strategies will emphasize

compliance in the agricultural industry where violations of safety and health standards are more likely to occur and

where younger workers are employed.

The number of workers assisted per 1,000 enforcement hours in complaint cases improved to 290 in FY 2009 from

272 in FY 2008.  WHD attributes this increase in efficiency to two factors.  The average number of hours to conclude

an investigation leveled, while the percentage of workers receiving back wages increased from FY 2008.  WHD also

received more complaints in FY 2009 than in the two years prior.  Despite this success, a focus on efficiency in

responding to complaints has also contributed, in part, to the deficiencies noted in the Government Accountability

Office’s audit entitled Wage and Hour Division Needs Improved Investigative Processes and Ability to Suspend

Statute of Limitations to Better Protect Workers Against Wage Theft.  As a result, WHD’s complaint investigation

program will be more customer‐service oriented with an aim of increasing the involvement of workers and

community organizations in identifying and reporting alleged workplace violations and using new technologies to

improve customer service, transparency, and openness.  

This past year, WHD saw a reverse in the most recent downward trend of increasing recidivism rates.  The overall

level of compliance among prior violators increased by 10 percentage points from 56 percent in FY 2008 to 66

percent in FY 2009.  WHD will implement strategies for deterring recidivist behavior among employers and for

targeting worst violators in all program areas for which the agency has responsibility.  WHD has established, as a

high priority, a goal of increasing compliance among prior violators.  WHD will evaluate its success in reducing

recidivism in FY 2010 and FY 2011.

   
Strategic Goal 3

FY 2009 Performance and Accountability Report     105

Wage determination efficiency also increased in FY 2009.  WHD processed 2,534 forms per 1,000 hours in FY 2009 –

a 13 percent increase over the FY 2008 result.  WHD has made rapid progress in processing survey data submission

forms more efficiently.  With the demands for accurate and timely wage determinations fueled by Recovery Act

funding, WHD is implementing revised Davis‐Bacon wage survey processes to improve the quality and timeliness of

wage determinations.  Further shift of emphasis from form processing to reengineering other steps in the wage

determination process will further improve the average age of the Davis‐Bacon wage rates issued by the agency.

Indicator * What worked What didn’t work

Complaint resolution

rate

Y

 WHD refined its investigator basic training

programs in FY 2008 and 2009.  The

addition of a new training director and the

refinement and standardization of

investigator training has contributed to

improved efficiencies.

 While some efficiency improvements were

realized, recent GAO audits have indicated

that customer service and the quality of

complaint case management has suffered as

a result of the agency’s concentration on

efficiency at the expense of quality.  

Compliance rate for

prior violators Y

 WHD regional offices have made a

concerted effort to apply various

strategies toward ensuring future

compliance of investigated employers

including emphasizing the quality of the

initial investigations.

 Prior surveys largely captured violation

cases from a period in which WHD was

emphasizing quick resolution of complaint

investigations.  This emphasis on timeliness

at the expense of quality may have resulted

in lower compliance rates in FY 2007‐2008.

Low‐wage case

efficiency Y

 WHD refined its investigator basic training

programs in FY 2008 and 2009.  The

addition of a new training director and the

refinement and standardization of

investigator training has contributed to

improved efficiencies.

 While efficiency has improved, this indicator

does not reflect compliance levels or

improvements as a result of WHD’s efforts

in low‐wage industries.  The improvements

in the indicator are too readily influenced by

individual cases.

Wage determination

efficiency Y  WHD resolved data entry and review

errors by retraining regional survey staff.

 Improved procedures are not yet fully

implemented.  

Average age of Davis‐

Bacon wage rates

Y

 Revised survey processes improved

timeliness and helped improve frequency

of determinations.

 Improving other steps in the process will

take more time.  

Program Performance Improvement Plan

 Over the next year, WHD will transition from the three efficiency indicators to performance measures that reflect the

agency’s emphasis on quality‐driven customer service and on its strategies to change compliance levels in high‐risk

industries that employ the most vulnerable workers.  To this end, WHD will implement several customer service goals to

promote improved responsiveness to complainants who seek WHD services and to increase the agency’s visibility and

accessibility among vulnerable worker populations.  WHD customer service strategies will be designed to increase the

benefits of filing a complaint with WHD when workers have been subject to an alleged violation—particularly in

industries in which violations are high and complaints are low.   

 In FY 2010, WHD will begin measuring compliance levels in industries and program areas by conducting baseline

investigation‐based compliance surveys.  These surveys, in addition to providing measures of compliance, inform WHD

on the likely causes of violative behavior and point to strategies for addressing high violation rates industry‐wide.  

 WHD will refine its investigation‐based recidivism survey to more accurately assess employer behavior and to account for

improvements in compliance that cannot be attributed to a WHD intervention.  An independent evaluation of WHD

enforcement efforts targeting recidivism will help WHD refine its strategies for securing long‐term sustained compliance.  

 WHD will also implement revised Davis‐Bacon Act prevailing survey procedures in FY 2010 that will allow the agency to

update wage determinations more timely.  

*Target reached (Y), improved (I), or not reached (N)

Net costs of WHD activities increased by three percent from FY 2008‐2009 due to increases in the FY 2009 funding

level for WHD.
Performance Section

106 United States Department of Labor

In 2010, WHD’s activities will contribute to the following outcome goals in support of the Department’s Strategic

Vision of Good Jobs for Everyone:

 Increasing workers’ incomes and narrowing wage and income inequality;

 Securing wages and overtime;

 Breaking down barriers to fair and diverse workplaces so that every worker’s contribution is respected;

 Providing workplace flexibility for family and personal care‐giving;

 Helping workers who are in low‐wage jobs or out of the labor market find a path into middle‐class jobs;

 Voice in the workplace; and

 Helping middle‐class families remain in the middle‐class.

Several significant developments will impact WHD’s operations in FY 2010.  The first, a regulatory effort related to

the Immigration and Nationality Act’s H‐2A program will result in increased enforcement to ensure compliance with

applicable labor standards statutes in the agricultural industry.  The second development, the multi‐billion dollar

Federal investment in infrastructure construction, will result in increased resources to enforce applicable labor laws

in the construction industry.  The third development also relates to the Immigration and Nationality Act.  Under a

delegation of authority from the Department of Homeland Security, WHD will assume labor standards enforcement

responsibility under the H‐2B temporary guest‐worker program.  Under this program, employers are certified by

the Department of Labor to employ foreign temporary non‐immigrants in a number of low‐skilled occupations.   

Program Assessments, Evaluations and Audits

Findings and recommendations from a Wage and Hour Enforcement and Compliance Program assessment

completed in 2006 prompted specific actions to improve performance.  Here is a summary of progress in FY 2009:

 Standardizing the organizational process for developing and monitoring strategic partnerships.  To increase

the effectiveness of its compliance assistance partnership programs, WHD required all regional and local

partnerships to capture and report their outputs related to their partnerships.

 Reviewing and implementing recommendations of independent evaluations to improve program

performance and efficiency.  WHD implemented the recommendations from an evaluation of the agency’s

enforcement efforts in low‐wage industries in its local planning.  The recommendations outlined

approaches for more effectively targeting FLSA violators in priority low‐wage industries and ensuring that

corresponding performance targets promote ambitious outcomes.

More information is at http://www.whitehouse.gov/omb/expectmore/summary/10003908.2006.html.

The Prevailing Wage Determination Program, which was assessed in 2003, made the following progress in FY 2009:

 Modifying wage survey and outreach strategies to improve data collection processes.  WHD has

implemented new survey procedures to improve the wage survey and data collection processes to reduce

the average age of Davis‐Bacon wage rates.  WHD also updated the Automated Survey Data System guide

to ensure consistent protocols among survey staff.

 Improving program management by establishing a new‐hire and refresher training program for Wage

Analyst, Wage Specialists, and Construction Industry Research and Policy Center staff.  WHD implemented a

training program for regional and national WHD staff and for the University of Tennessee’s Construction

Industry Research and Policy Center to improve program management.

For more information, see http://www.whitehouse.gov/omb/expectmore/summary/10001099.2003.html

Independent evaluations and audits completed in FY 2009 are summarized below.  

“Department of Labor:  Wage and Hour Division Needs Improved Investigative Processes and Ability to Suspend Statute of

Limitations to Better Protect Workers Against Wage Theft," July 2009 (GAO)

Relevance: In response to a congressional request, GAO examined WHD’s complaint and conciliation processes and policies.

Findings and Recommendations:

 Revise policies and processes to better ensure that relevant case

Actions:  

 WHD has revised the Field Operations
Strategic Goal 3

FY 2009 Performance and Accountability Report     107

information is recorded in WHD’s database.

 Assess WHD’s complaint intake and resolutions processes and

revise them as appropriate.

 Explore providing more automated research tools to WHD

personnel that would allow them to identify key information used

in investigating complaints such as bankruptcy filings.

 Explore gaining access to information maintained by the Internal

Revenue Service (IRS) and other agencies as needed through

voluntary consent from business being investigated.

 Monitor the extent to which new investigators and existing staff

are able to handle the volume of wage theft complaints, and if not,

what additional resources may be needed.

Handbook (FOH) and will be retraining all staff

on the agency’s policies and procedures for

entering all complaints into the Wage and Hour

Investigator Support and Reporting Database

(WHISARD).

 WHD has reintroduced customer service goals

and measures in its annual performance plan.

 WHD has begun pricing requirements for a

variety of automated resource tools.

 WHD is in the process of hiring 250 new

investigators.

Additional Information: The report (GAO‐09‐629) is available at http://www.gao.gov/products/GAO‐09‐629.

“Employee Misclassification: Improved Coordination, Outreach, and Targeting Could Better Ensure Detection and

Prevention," September 2009 (GAO)

Relevance: In response to a congressional request, GAO examined the extent of misclassification of employees as

independent contractors; actions DOL and IRS have taken to address misclassification, including the extent to which they

collaborate with each other, States, and other agencies; and options that could help address misclassification.

Findings and Recommendations:

 GAO found that by not regularly sharing information on cases

involving misclassification, Federal and State agencies are losing

opportunities to protect workers and to make the most effective

use of their resources.

 GAO recommended an increase in WHD’s focus on

misclassification of employees as independent contractors during

targeted investigations, and that WHD and OSHA share

information on cases involving misclassification to enhance efforts

to protect workers and make the most effective use of resources.

 To identify promising practices in addressing misclassification and

use agency resources most effectively, GAO recommended that

DOL and IRS establish an interagency effort with other Federal and

State agencies.  GAO also recommended that DOL and IRS

collaborate to offer education and outreach to workers on

classification rules and implications and related tax obligations.

Actions:  

 WHD will increase its focus on employee

classification during targeted investigations, and

is reexamining its training documents and the

FOH to ensure that employee classification is

addressed during all stages of an investigation.  

Also, WHD will focus on increasing compliance

for workers in industries where misclassification

is prevalent.

 WHD and OSHA committed to exchanging

information about cases involving

misclassification.  WHD and OSHA will work

closely with State and other relevant agencies to

enhance efforts to protect workers.

 DOL and IRS are exploring opportunities to

collaborate to prevent and respond to employee

misclassification.

Additional Information: The report (GAO‐09‐717) is available at http://www.gao.gov/cgi‐bin/getrpt?GAO‐09‐717.

Data Quality and Top Management Challenges

Data quality for this performance goal is rated Very Good.

39  With the exception of the wage determination

measures, performance information is extracted from the Wage and Hour Investigator Support and Reporting

Database (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 internal accountability

reviews.  The data are reported quarterly and performance statistics are considered throughout the agency’s

strategic planning process.  In FY 2008, WHD completed its fourth study to verify the accuracy and reliability of data

reported in WHISARD.  For data used to develop wage determinations, WHD implemented a time reporting process

to ensure accurate and timely reporting.  WHD tabulates and reviews the data monthly to ensure accuracy.

 

39 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.
Performance Section

108 United States Department of Labor

Federal contractors achieve equal opportunity workplaces.

Performance Goal 09‐3D (ESA)

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not  

reached (N)

FY 2004

Goal

Achieved

FY 2005

Goal

Achieved

FY 2006

Goal

Achieved

FY 2007

Goal

Achieved

FY 2008

Goal Not

Achieved

FY 2009

Goal Not

Achieved

Target 9% 7% 6% 2% 1% 1%

Result 1% 2% 1.7% 1% 2% 1.9%

* Y Y Y Y N N

Discrimination rate for audited federal

contractors

Cost — — $68 $72 $71 $72

Target 61% 62% 64% 86% 89% 90%

Result 91% 86% 87.2% 88% 86% 84.4%

* Y Y Y Y N N

Compliance rate for all other Equal

Employment Opportunity (EEO)

requirements

Cost — — $29 $31 $31 $31

Goal Net Cost (millions) — $99 $97 $103 $102 $102

Source(s): Case Management System (CMS).

Note:  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 DOL and by other Federal agencies.

Program Perspective and Logic

The Employment Standards Administration's Office of Federal Contract Compliance Programs (OFCCP) administers

and ensures compliance with two equal employment opportunity laws and one executive order that prohibit

Federal contractors and subcontractors from discriminating on the basis of race, color, religion, sex, national origin,

disability, and protected veterans' status.  The laws are: Section 503 of the Rehabilitation Act of 1973, and the

Vietnam Era Veterans' Readjustment Assistance Act of 1974.  The executive order is Executive Order 11246.

Through fair and effective enforcement of these laws, the Department seeks to ensure that Federal contractors

provide equal employment opportunity to all applicants.  Reduced incidence of discrimination among audited

federal contractors demonstrates a positive correlation between targeted enforcement and compliance assistance

activities with performance results.  While these results reflect only the Federal contractors audited in one fiscal

year, they do allow OFCCP to determine its progress in identifying and deterring discrimination among audited

contractors.

Initiatives implemented in the last several years have enabled OFCCP to become a more effective and efficient civil

rights enforcement agency.  For example, enforcement efforts now focus on systemic discrimination or cases

involving a significant number of workers or applicants subjected to discrimination.  The Data Integrity Team

Initiative has resulted in fewer hours spent researching contractor jurisdiction, improved case management, and

increased resources for systemic discrimination cases.  Finally, OFCCP’s Compliance Assistance Program raises

contractor awareness of equal employment opportunity obligations and encourages self‐evaluations through one‐

on‐one customer assistance, online tools and resources that teach contractors how to comply with Federal

employment laws, regional and area offices’ technical assistance seminars, Webinars, town hall meetings and

partnership with the industry liaison groups.

Recovery Act

The OFCCP received $7.2 million and 50 FTE through the Recovery Act.  OFCCP is using this additional funding to

evaluate the personnel practices of Federal contractors and subcontractors according to the following plan:
Strategic Goal 3

FY 2009 Performance and Accountability Report     109

 Conduct compliance evaluations of

construction contractors in receipt of

Recovery Act funding and grants.   

 Conduct compliance evaluations of supply

and service contractors in receipt of

Federal contracts through Recovery Act

funding.    

 Conduct a limited number of pre‐award

reviews of new supply and service

contractors with contracts of $10 million

or more.

 Evaluate compensation practices of

Recovery Act contractors.

 Recommend enforcement for contractors

where discrimination is identified or access

denied and conciliation efforts have failed.

 Schedule outreach events for first time

contract recipients, current Federal

contractors, and contracting officers to

educate on EEO requirements.

By the end of FY 2009:

 OFCCP reassigned or hired 44 of 50 FTEs,

or 88 percent.

 OFCCP implemented an active Recovery

Act Web page, which provides information to the general public and vested stakeholders.  

 OFCCP participated in a joint OFCCP‐WHD Prevailing Wage Recovery Act conference in July 2009 that

included workshops for new federal contractors, construction contractors, and Federal

contractor/procurement officers.

 Several Regional Offices hosted local Recovery Act forums and on September 9, 2009, OFCCP hosted its first

National Recovery Act Forum in Washington, DC.

For more information, see http://www.recovery.gov/?q=content%2Fprogram‐plan&program_id=7626.

Analysis and Future Plans

The performance goal for OFCCP was not achieved in FY 2009.  OFCCP did not reach its target for reducing the

discrimination rate among audited federal contractors.  OFCCP also did not reach its target for increasing the

compliance rate for all other equal employment opportunity requirements.  This was due to fewer compliance

evaluations closed against an increase in the number of cases where technical violations were found.  During FY

2010, OFCCP plans to evaluate the methodology for scheduling federal contractors for compliance evaluations.

Indicator * What worked What didn’t work

Discrimination rate N

 Via routine compliance evaluations of

scheduled Federal contractors, with the

assistance of the SOL, OFCCP determined and

resolved 77 systemic discrimination cases,

benefiting more than 21,820 workers.  

 OFCCP is finding more systemic cases

and completing fewer compliance

evaluations – which increases the

discrimination rate.

Other EEO

compliance rate

N

 In FY 2009, OFCCP increased its compliance

assistance events by more than 20 percent

above the number of events held in FY 2008.

 The number of completed compliance

evaluations decreased while the

number of cases where technical

violations were found increased.

The Good Faith Initiative for Veterans Employment (G‐FIVE) program

recognizes contractors' good faith efforts and best practices to

employ and advance veterans.  Standing before the OFCCP G‐FIVE

exhibit at the Veterans’ Employment and Training Service (VETS)

annual Salute to Veterans Program are James Pierce, Director of the

Functional Affirmative Action Plan Unit, Armando Fernandez, Senior

Equal Opportunity Specialist, and Terry Hankerson, Chief,

Regulations Development & Evaluation Branch.    Photo Credit: DOL/ESA
Performance Section

110 United States Department of Labor

Program Performance Improvement Plan

 Continue efforts to target likely violators and resolve findings of discrimination.  OFCCP will also increase its compliance

assistance efforts to educate and inform its contractor community.  The outcome of these performance plans will

support breaking down barriers to fair and diverse work places.

*Target reached (Y), improved (I), or not reached (N).

Net costs of OFCCP activities were virtually unchanged from FY 2008‐2009.

In 2010, OFCCP’s activities will contribute to the following outcome goals in support of the Department’s Strategic

Vision of Good Jobs for Everyone:

 Increasing workers’ incomes and narrowing wage and income inequality;

 Breaking down barriers to fair and diverse work places so that every worker’s contribution is respected;

 Helping workers who are in low‐wage jobs or out of the labor market find a path into middle‐class jobs; and

 Voice in the workplace.

Program Assessments, Evaluations and Audits

Findings and recommendations from an assessment completed in 2004 prompted specific actions to improve

performance.  Here is a summary of progress in FY 2009:

 Exploring the development and implementation of new performance measures with challenging targets for all

agency performance goals.  Commencing in FY 2010, OFCCP proposes that its performance indicators be

revised to measure its success in detecting and resolving all discrimination, not just systemic.  In addition,

OFCCP will seek to measure its success in increasing the percentage of compliance evaluations where no

violations are found.  This measure will be tied to OFCCP’s compliance assistance efforts.  Finally, OFCCP will

expand some of the data fields in its current Case Management System to assist in the measurement of its

performance and accomplishments.

 Continuing to modernize the agency's data collection system.  A Statement of Work for the new Federal

Contract Compliance System has been submitted for funding in FY 2010.  Upon approval of funding, OFCCP

will begin the development stage of the new system in 2010 and have it fully operational by FY 2012.

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10000332.2004.html.

Data Quality and Top Management Challenges

Data quality for this performance goal remains Very Good.40  OFCCP continues to explore its capability to support

the develop and report on alternative measures to improve measurement validity.  As discussed earlier,

performance results reflect compliance and discrimination rates among a different set of contractors each year.  

Nonetheless, issues related to programming capabilities and overall database system efficiency limit the extent to

which further improvements and changes can be realized.  A replacement system remains a top funding priority.   

OFCCP maintains robust quality controls for its core data on systemic discrimination, case closures, and violations –

the principal data reported in this report.  The data are cross‐checked at several organizational levels and used in

evaluating manager performance.  In addition, OFCCP’s multi‐divisional data integrity team audits the data system

for data quality.  Examples of OFCCP’s good data quality practices include updating the Case Management System

with compliance audit data supporting performance goals, which are available in monthly, quarterly, and annual

reports; and implementing a Business Process Rule which enforces the data collection requirements and

responsibilities of each organizational level.  This effort further enhances the timing and accuracy of data entries

completed at field offices.

 

40 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.
Strategic Goal 3

FY 2009 Performance and Accountability Report     111

Reduce employer‐employee employment issues originating from service members’

military obligations conflicting with their civilian employment.

Performance Goal 09‐3E (VETS)

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not  reached (N)

FY 2006

Goal

Achieved

FY 2007

Goal

Achieved

FY 2008

Goal Not

Achieved

FY 2009

Goal Not

Achieved

Target 105% 101% 115% 110%

Result 108% 113% 106% 99%

USERRA Progress Index (measures compliance and assistance

performance)

* Y Y N N

Goal Net Cost (millions) $11 $10 $10 $10

Source(s): USERRA Information Management System (UIMS).

Note:  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 DOL and by other Federal agencies.

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, from providing compliance assistance to employers and

protected individuals, to thoroughly investigating claims filed by individuals alleging that their USERRA rights have

been violated, to referring claims that the agency is unable to resolve to the Department of Justice or the Office of

the Special Counsel, as appropriate, for those agencies to consider whether to provide the claimant with legal

representation regarding their claim.   

In recent years, goal achievement has been measured using a comprehensive Progress Index that sought to assess,

in a single measure, the agency’s success in reducing violations and meritless claims through compliance assistance,

and in investigating claims in a timely manner.41  As explained in the next section, VETS is conducting research on

measures that will be clearer and more transparent.  In the meantime, the index will be replaced by two timeliness

measures.

Analysis and Future Plans

The goal was not achieved, largely due to the effects of a significant increase in VETS' USERRA claims compared to

the previous years in this goal cycle.  VETS' overall USERRA claims increased by eight percent in FY 2009 compared

to FY 2008, continuing an upward trend after a 15 percent increase from FY 2007 to FY 2008.  These increases were

due in part to the sunset of a Congressionally‐mandated demonstration program that shifted responsibility for

 

41 The index consolidates 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

sub‐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 (Reinstatement and Military

Obligations Discrimination), 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.  The assistance indicator is the number of USERRA assistance contacts per Guard/Reserve mobilized and

demobilized.  The Employer Support for the Guard and Reserve, an agency in the Department of Defense, also provides

outreach and handles USERRA inquiries.  However, that agency is outside the scope of VETS’ Progress Index.
Performance Section

112 United States Department of Labor

roughly half of all Federal USERRA claims to the U.S. Office of Special Counsel from February 2005 through

December 2007.   

Compliance assistance efforts will continue to focus on National Guard and Reserve components, because they are

the source of most USERRA claims.  In FY 2008, for example, claims by National Guard and Reservists accounted for

83 percent of total claims.  VETS expects this trend to continue and possibly increase due to continued use of the

National Guard and Reserve in America's ongoing wars overseas.  

VETS is committed to continuous improvement of its USERRA program, and toward that end conducted a rigorous

independent process evaluation using the Lean Six Sigma method.  The study, just completed at the end of

September, yielded recommendations for improving effectiveness of USERRA services to veterans that will be

reviewed in early FY 2010.  Also in FY 2010, VETS will assess performance of this program by timeliness of

investigations and referrals.  Other outcome‐oriented indicators will be added in FY 2011.  

Indicator * What worked What didn’t work

Progress Index N

 VETS’ focus on expediting USERRA claims

resulted in a 17 percent reduction in average

case investigation time from FY 2008.

 VETS experienced an increase in USERRA claims

compared to the previous years in this goal

cycle.  This increase, in part, can be attributed to

the continued deployment of National Guard

and Reserve Forces, the largest source of most

USERRA claims.

Program Performance Improvement Plan

 Independent process evaluation of VETS' USERRA program using the Lean Six Sigma method will provide

recommendations to improve performance and metrics.  VETS will use interim performance measures that target the

timeliness of investigations and referrals.

*Target reached (Y), improved (I), or not reached (N)

Net costs of USERRA activities were virtually unchanged from FY 2008‐2009.

In 2010, VETS’s activities will contribute to the following outcome goals in support of the Department’s Strategic

Vision of Good Jobs for Everyone:

 Increasing workers’ incomes and narrowing wage and income inequality;

 Breaking down barriers to fair and diverse work places so that every worker’s contribution is

respected;

 Providing workplace flexibility for family and personal care‐giving; and

 Helping middle‐class families remain in the middle‐class.

Program Assessments, Evaluations and Audits

As indicated above, USERRA processes are undergoing evaluation in a study to be completed in December 2009.

Data Quality and Top Management Challenges

Data quality for this performance goal was rated Good.

42  While the data are complete and timely, there is room for

improvement in verifiability and reliability.  These aspects of the UIMS are being addressed by Quality Assurance

Reviews at State, regional, and national levels and through the Lean Six Sigma evaluation referenced above.  VETS

has no DOL top management challenges.

 

42 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.
FY 2009 Performance and Accountability Report     113   

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, abuse, and

mismanagement; and insuring defined benefit pension plans.  These operations are carried out by three DOL

agencies and a government corporation whose board is chaired by the Secretary of Labor:  

 Employment and Training Administration (ETA),  

 Employment Standards Administration (ESA),

 Employee Benefits Security Administration (EBSA), and

 Pension Benefit Guaranty Corporation (PBGC).

For these agencies, protecting America’s workers means protecting their economic security.  DOL provides benefits

and enforces laws that provide a safety net for workers and ensure transparency among the unions that represent

them.  Every employee faces unforeseen risks, and these agencies work to ensure that unemployed workers receive

benefits; that workers in certain industries receive compensation when injured or fall victim to job‐related illnesses;

that pension contributions and health benefits are secure; and that unions conduct democratic elections and make

their financial records transparent.  Here are a few highlights of FY 2009 results:

For the Unemployed

 Results for all four indicators of performance for Unemployment Insurance administration were lower than

those reported last year, due to a 70 percent increase in new claims tied to the recession and new

temporary benefit programs created to assist unemployed workers.  

For the Injured or Ill Worker

 Federal non‐postal employees lost just 35 days of work per 100 employees, continuing a steady downward

trend that began at 62 days in FY 2004.

 Dramatic improvements were achieved in

processing nuclear industry workers’ initial

benefit claims.  Energy program Part B claims

took, on average, 113 days vs. 164 just last

year; Part E claims took 159 days vs. last

year’s 284.

Jill had worked for her former employer for three years when

she became too ill to work. Three months later her doctor

gave her permission to return to work.  Upon returning she

was devastated to find that her position had been eliminated

during her absence.  With the assistance of Maine’s

Reemployment and Eligibility Assessment (REA) program – a

program funded by DOL – Jill learned how to turn her passion

for baking into her own business.  It was an instant success:

she made her first profit in four months.  Jill started with 8

bakers and now has 15 working for her.  These bakers all

have State certified kitchens and thanks to Jill and the REA

program they no longer need to collect unemployment

benefits.  Currently, Jill is in the process of expanding her

business.  The only thing expanding faster than the

reputation of her bakery is its reputation for excellence.  Jill’s

establishment has been featured in all the local newspapers

and magazines for her exquisite bakery confections.  Earlier

this year the MSEA, SEIU Local 1989 ran a feature on her and

her bakery in all the Maine newspapers.  It is no wonder that

Jill is being considered for "Small Business Woman of the

Year".  If it happens, she certainly deserves it!  Photo Credit:

Maine Department of Labor
Performance Section

114 United States Department of Labor

For Union Members

 Audit effectiveness, as measured by the percent of targeted union audits that resulted in the opening of a

criminal case, improved from the FY 2008 baseline of 11.5 percent to 12.1 percent.

 Resolution of union officer election complaints took an average of 70 days – down from 92 days in FY 2008.

For Workers with Retirement and other Employer‐provided Benefits

 Employee Retirement Income Security Act (ERISA) fiduciary violations were corrected in 72 percent of the

civil cases closed during FY 2009.    

 Pension insurance program customers’ satisfaction for trusteed plan participants increased for the third

consecutive year (to 82 percent).  The length of time it takes to make a benefit determination, however,

increased to an average of 3.8 years.

For more specific information on the programs, see the Performance Goal narratives.

The following table provides net costs for all performance goals and indicators associated with this strategic goal.43   

Net Costs ($Millions)44

Goal or Indicator FY 2007

PY 2006

FY 2008

PY 2007

FY 2009

PY 2008

Strategic Goal 4:  Strengthened Economic Protections45 $38,495 $48,957 $128,640

Performance Goal 09‐4A (Unemployment Insurance)

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.

34,647 45,035 123,541

Mandated benefit payments46 32,069 42,281 120,300

Percentage of intrastate UI first payments made within 14 days in states with a

waiting week and 21 days if no waiting

− − −

Dollar amount established for recovery as a percentage of estimated

overpayments that states can detect and recover under state law

− − −

Percentage of UI claimants who received a first payment in a given quarter who

entered employment within the subsequent quarter

− − −

Percentage of determinations about UI tax liability of new employers made within

90 days of the end of the first quarter they became liable

− − −

Dollars not associated with indicators 2,645 2,755 3,241

 

43 Rows labeled “Dollars not associated with indicators” indicate costs that cannot be associated with the current set of

performance indicators.  For some goals, indicator costs 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). 44 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 DOL and by other Federal agencies.  Sums may not equal higher level totals due

to rounding. 45 Costs for Performance Goal 09‐4E (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/doc/2009AMR.pdf. 46 Mandatory benefit payments for Unemployment Insurance and Workers’ Compensation programs account for most costs for

Performance Goals 09‐4A and 09‐4B.  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.
Strategic Goal 4

FY 2009 Performance and Accountability Report     115

Performance Goal 09‐4B (Workers’ compensation)

Reduce the consequences of work‐related injuries.

3,554 3,693 4,878

Mandated benefit payments 3,050 3,204 4,458

Federal Employees' Compensation Act (FECA) Program

Lost production days rate (LPD per 100 employees) for all government agency

cases

7 7 8

Lost production days rate (LPD per 100 employees) for the United States Postal

Service

7 7 8

First‐year benefit savings realized as a result of periodic beneficiary roll

management review (in millions of dollars)

34 15 18

Rate of change in the indexed cost per case receiving medical treatment

compared to the Milliman USA Health Cost Index

40 25 33

Targets for six communications performance areas 12 8 10

Longshore and Harbor Workers’ Compensation Program

Average days required to resolve disputed issues in contested cases

6 4 5

Division of Coal Mine Workers’ Compensation

Average number of days to render a decision on a claim

26 17 19

Percent change in Black Lung average medical treatment cost for the previous

year compared to the National Health Expenditure Projection

− 2 3

Energy Employees Occupational Illness Compensation Program

Average number of days to process Part B initial claims

185 60 19

Average number of days to process Part E initial claims − 58 18

Percent of Part B and Part E final decisions processed within 180 days where

there is a hearing or 75 days where there is no hearing

18 18 11

Dollars not associated with indicators 172 270 270

Performance Goal 09‐4C (Labor‐Management Standards)

Ensure union financial integrity, democracy and transparency.

68 58 56

Union receipts audited per staff day − − −

Percent of audits resulting in a criminal investigation 35 29 30

Percent of unions filing reports electronically   16 11 11

Average number of days to resolve union officer election complaints 13 14 12

Dollars not associated with indicators 4 3 3

Performance Goal 09‐4D (EBSA)

Enhance pension and health benefit security.

176 170 165

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

Ratio of criminal cases accepted for prosecution to cases referred

103 102 117

Applications for Voluntary Compliance programs − − −

Dollars not associated with indicators 44 68 48
Performance Section

116 United States Department of Labor

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.

Performance Goal 09‐4A (ETA)

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not  

reached (N)

**Estimated

FY 2004

Goal Not

Achieved

FY 2005

Goal Not

Achieved

FY 2006

Goal Not

Achieved

FY 2007

Goal Not

Achieved

FY 2008

Goal Not

Achieved

FY 2009

Goal Not

Achieved

Target 89.2% 89.9% 89.9% 90.0% 88.4% 85.7%

Result 90.3% 89.3% 87.6% 88.2% 86.8% 83.8%**

Percentage of intrastate UI first payments

made within 14 days in States with a

waiting week and 21 days if no waiting * Y N N N N N

Target 59% 59.5% 59.5% 60.0% 56.0% 51.8%

Result 57.4% 58.7% 62.1% 54.8% 56.2% 54.9%**

Dollar amount established for recovery as

a percentage of estimated overpayments

that States can detect and recover under

State law * N N Y N Y Y

Target — — baseline 65.0% 65.2% 59.0%

Result — — 62.4% 65.1% 62.5% 58.0%**

Percentage of UI claimants who received a

first payment in a given quarter who

entered employment within the

subsequent quarter * — — Y Y N N

Target 82.2% 82.4% 82.5% 82.8% 84.9% 88.7%

Result 83.6% 82.4% 83.7% 85.6% 84.9% 84.1%**

Percentage of determinations about UI tax

liability of new employers made within 90

days of the end of the first quarter they

became liable * Y Y Y Y Y N

Goal Net Cost (millions) — $34,243 $33,340 $34,697 $45,035 $123,541

Source(s): Payment Timeliness: ETA 9050 and 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: Some indicators not shown for FY 2004‐05.  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 06‐2.2B.

Note:  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 DOL and by other Federal agencies.  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.  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.   

Program Perspective and Logic

By temporarily replacing part of unemployed workers’ lost wages, the Federal‐State Unemployment Insurance (UI)

system reduces individual financial hardship resulting from unemployment and stabilizes the economy during

economic downturns.  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.  For both workers and employers, success is measured

by timely payment of benefits; payment accuracy; prompt determination of new employers’ tax liabilities; and

promoting reemployment of claimants in suitable work.

As economic conditions change, the 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
Strategic Goal 4

FY 2009 Performance and Accountability Report     117

other hand, although business creation slows when unemployment rises, reducing the number of new employer tax

accounts, the timeliness of tax liability determinations may nevertheless decrease as States move staff to claims‐

taking and adjudication activities.  In addition, non‐economic events such as hurricanes and other natural disasters

can be extensive enough to affect aggregate UI system performance.  Performance targets are based on economic

forecasts, which are subject to change.

Recovery Act

Unemployment Insurance Administration State Grants

The Assistance for Unemployed Workers and Struggling Families Act, Title II of Division B of the Recovery Act,

provided for an immediate special transfer of administrative funding to all States totaling $500 million.  On March

2, 2009 ‐ just two weeks after passage of the Recovery Act – the Department made these funds available to all

States and territories.  States may use the administrative transfer only for:

 Implementing and administering the provisions of State law that qualify the State for incentive payments;

 Improved outreach to individuals who might be eligible by virtue of these provisions;

 The improvement of unemployment compensation (UC) benefit and tax operations, including responding to

increased demand for UC; and

 Staff‐assisted reemployment services for UC claimants.

Under the Recovery Act, each State’s share is calculated based on its proportion of the Federal Unemployment Tax

Act (FUTA) taxable wages.  For more information, see http://www.recovery.gov/?q=content%2Fprogram‐

plan&program_id=7669.

Unemployment Insurance Modernization Incentive Payments

The Recovery Act made a total of $7 billion available in UI modernization incentive payments to States that include

certain benefit eligibility provisions in their State UI programs.  Each State can qualify for a share of those funds by

showing that its law includes certain provisions.  Detailed information on qualifying may be found at

http://wdr.doleta.gov/directives/corr_doc.cfm?DOCN=2715.  As of September 2009, UI modernization incentive

payments totaled $2.6 billion.  Thirty‐two States enacted monetary eligibility requirements to qualify for one‐third

of the payments available to the State.  Nineteen States enacted other eligibility provisions to qualify for the

remaining two‐thirds incentive payments.  Summary information on UI Modernization incentive payments by State

is available at http://workforcesecurity.doleta.gov/unemploy/docs/app_form.doc.  Information on approved

applications is available at http://www.doleta.gov/recovery/#PressReleases.

Emergency Unemployment Compensation (EUC08)

This program was created in June 2008 to provide additional 100 percent federally‐funded benefit payments to

individuals who exhausted their regular unemployment compensation and have no other rights to extended

benefits.  Tier 1 provides up to 20 weeks of unemployment compensation to eligible individuals in all States.  Tier 2

expanded the program by providing up to 13 weeks of additional benefits for eligible individuals in States with high

unemployment.  The Recovery Act expanded Tier 2 benefits to include claimants exhausting Tier 1 benefits after

March 31, 2009 and establishing eligibility for all claimants for unemployment beginning after August 27, 2009.  

Through August 2009, the Recovery Act has funded nearly $3.3 billion of nearly $20 billion paid to EUC08 claimants.  

For more information on EUC, see http://workforcesecurity.doleta.gov/unemploy/euc.asp.

Federal Additional Compensation (FAC)

The FAC program provides a $25 weekly supplement to the unemployment compensation of eligible claimants. This

supplement, as well as additional administrative expenses incurred by the State in paying the supplement, is 100

percent federally‐funded.  Most individuals receiving Federal and State unemployment benefits receive the FAC

supplement.  Through June 2009, States issued a total of 141 million payments totaling $3.5 billion in benefits.  For

more information on FAC, see http://workforcesecurity.doleta.gov/unemploy/fac.asp.
Performance Section

118 United States Department of Labor

Analysis and Future Plans

The FY 2009 goal was not achieved; only one of four

targets was reached.  The target for detection and

establishment for recovery of UI overpayments was

reached.  States have increasingly used crossmatches

with the National Directory of New Hires (NDNH) to

accelerate detection of fraud (employed claimants are

the largest single cause of detectable overpayments).  

Earlier detection reduces the number of overpaid

weeks.  Targets for UI first payment timeliness,

reemployment of UI claimants, and timely completion

of UI tax liability determinations for new employers

were not reached.  Greater than expected

deterioration in the economy led to a 70 percent

increase in new claims, including new temporary

programs.  Timeliness results suffered, as many States

experienced funding and staffing problems and others encountered capacity limitations of aging computer systems

and call centers.  Although States are making use of reemployment and eligibility reviews to match claimants with

available jobs, adverse labor market conditions prevented them from reaching the target.  Tax liability

determinations usually speed up in economic downturns as business formation slows.  However, in this severe

recession, budgetary problems and staffing pressures have forced many States to divert tax staff to perform claims

activities.

Indicator * What worked What didn’t work

First payment timeliness N

 The sharp increase in UI benefit claims

overwhelmed the capacity of most State

agencies to meet the timeliness target.  

Reduce overpayments Y

 State Benefit Payment Control

(BPC) operations significantly

increased overpayment

detections due to appeals

reversals and the use of

crossmatches with the National

Directory of New Hires (NDNH).  

Facilitate reemployment

of UI claimants N

 Although the performance target was adjusted

in response to an anticipated increase in the

Total Unemployment Rate and the percentage

of UI claimants who are not expected to be

recalled to their former jobs, actual labor

market conditions did not reflect these original

economic assumptions.

Establish tax accounts

promptly N

 States diverted tax staff to perform UI claims

activities in response to the large increase in

workloads, resulting in a decrease in status

determination timeliness.

UI Indicators and Total Unemployment Rate

50%

55%

60%

65%

70%

75%

80%

85%

90%

95%

2003 2004 2005 2006 2007 2008 2009

Fiscal Year

UI Indicators

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

Timeliness

Overpayments

Reemployment rate Liability

Total Unemployment Rate
Strategic Goal 4

FY 2009 Performance and Accountability Report     119

Program Performance Improvement Plan

To meet all its performance goals in the future, the Department has several initiatives under way:

 Continue to promote the use of the NDNH by all States to address the largest cause of UI improper payments – claiming

benefits after returning to work.  States that have not fully implemented Benefit Accuracy Measurement matching with

NDNH will be required to submit a Corrective Action Plan in FY 2010.

 Continue to facilitate the design and implementation of the Unemployment Insurance Separation Information Data

Exchange System (SIDES) to address the second largest cause of overpayments – errors in handling employment

separation issues.  SIDES is expected to provide more timely and complete separation information.  The Department will

continue to work with a six‐state consortium, employers, and third party administrators and is planning a phased

implementation of SIDES.  After the six‐state consortium implements the system, the Department will assist the other

state agencies with their implementation.   

 Sponsor a National UI Integrity Conference, scheduled for April 2010, for States to share best practices and discuss new

strategies for reducing improper payments of UI benefits and the prompt identification and recovery of overpayments.

 Propose legislation that would allow States to redirect some of the overpayments that are recovered into integrity

activities, such as follow‐up investigations of claimant matches with the NDNH.

 Continue to work with other Federal agencies to allow States to recover certain Unemployment Compensation debts due

to fraud from Federal income tax refunds under the Treasury Offset Program (TOP).

*Target reached (Y), improved (I), or not reached (N)

In FY 2009, the UI system costs were $78.5 billion

higher than in FY 2008.  Approximately $29 billion of

this increase is attributable to the Emergency

Unemployment Compensation program and another

$6.5 billion is the cost of the temporary Federal

Additional Compensation program.  The rest of the

increase reflects the increase in the average

unemployment rate from 5.3 percent to 8.6 percent.  

Overall, benefit payments rose 185 percent to

$120.300 billion in FY 2009 from $42.281 billion in FY

2008.  Administrative costs increased by 18 percent,

from $2.755 billion to $3.241 billion.

In 2010, the UI system’s activities will contribute to the following outcome goals in support of the Department’s

Strategic Vision of Good Jobs for Everyone:

 Income support when work is impossible or unavailable;

 Helping workers who are in low‐wage jobs or out of the labor market find a path into middle‐class jobs; and

 Helping middle‐class families remain in the middle‐class.   

Program Assessments, Evaluations and Audits

Findings and recommendations from an Unemployment Insurance Administration State Grants program

assessment in 2003 prompted specific actions to improve performance.  Here is a summary of progress in FY 2009:

 Obtaining additional tools and resources to help States prevent fraud and reduce benefit overpayments.  As

of July 1, 2009, all but four State Workforce Agencies (SWAs) were matching paid claims cases with the

NDNH or their State Directory of New Hires (SDNH).  Of the four States not yet matching, two States have

signed data agreements with the Department of Health and Human Services, which maintains the NDNH.  

DOL sent letters to the other two agencies (District of Columbia and Indiana) requesting action plans to

meet the NDNH matching requirements.

 Advising, facilitating and coordinating State adjudication training designed to improve claimant eligibility

determinations.  Since 2007, a total of 400 staff have completed training.

 Supporting the development and testing of the Separation Information Data Exchange System (SIDES) to

automate and standardize the collection of employee separation information from employers and third

party administrators (TPA) to improve accuracy of claimant eligibility determinations. DOL is working with

Performance Goal 09‐4A

Net Costs ($ Millions)

123,543

45,035 34,243 34,647 33,240

0

50,000

100,000

150,000

2005 2006 2007 2008 2009

Fiscal Year
Performance Section

120 United States Department of Labor

the six‐State consortium and employers to develop eligibility protocols and procedures.  Testing for TPAs is

scheduled for FY 2010 Q1, and the system is scheduled to move into production during FY 2010 Q2.

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10001102.2003.html.

Independent evaluations and audits completed in FY 2009 are summarized below.

“Enhanced Oversight Will Improve State Workforce Agencies' Use of the National Directory of New Hires (NDNH) to

Prevent and Detect Unemployment Compensation (UC) Overpayments,” March 2009 (OIG)

Relevance:  This audit evaluated ETA’s oversight of State Workforce Agencies’ (SWA) utilization of the NDNH to prevent and

detect UC overpayments.

Findings and Recommendations:  

 ETA could not demonstrate it exercised sufficient

oversight to ensure that SWAs utilized information from

the NDNH to prevent and detect UC overpayments.  

ETA did not mandate use of the NDNH because it

expected that all States will soon be voluntarily

matching.

 OIG recommended that ETA update the current Review

Guide to include specific review steps addressing the

States’ use of NDNH for the Benefit Payment Control

cross‐match process; during on‐site reviews, assess the

filtering process for the NDNH crossmatch and validate

the data reported by the SWAs; increase the frequency

of on‐site reviews to more than once every four years;

require SWAs to submit quarterly reports that include a

line item for NDNH cross‐match results; and continue to

pursue legislation to define Date of Hire as the first day

of work for new hires and mandate its reporting by

employers.

Actions:  

 The update of the review guide is planned to be completed

by the first quarter of CY 2010.  It includes procedures for

review of States’ use of NDNH for BPC, assessment of the

filtering process, validation of data reported for NDNH and

other data matching tools.

 While ETA agrees that more frequent BPC reviews are

desirable, past and current staffing levels constrain such

activity.

 The ETA 227 Report, Overpayment Detection and Recovery

Activities, captures data matching results from SDNH and

NDNH in a single line item.  SDNH results are virtually

identical to NDNH matching and results are often received

earlier.  Nevertheless, ETA will assess the cost‐benefit of

modifying this report to include a separate line item to

report the NDNH cross match results.

 The Department supports the inclusion of Date of Hire

language in UI Integrity or other appropriate legislation.

Additional Information: The report is available at http://www.oig.dol.gov/public/reports/oa/2009/06‐09‐002‐03‐315.pdf.

“Unemployment Insurance Systems' Information Technology Contingency Plans Need Improvement,”

March 2009 (OIG)

Relevance:  This audit evaluated ETA’s oversight of SWA partners’ information technology (IT) contingency plans, which are

vital for maintenance of UI services in the event of a disaster or system interruption.

Findings and Recommendations:  

 OIG found that while ETA encouraged SWAs to follow

best practices for IT contingency plan elements, ETA did

not verify SWA plan existence nor did the SWAs provide

ETA with evidentiary verification.  In some cases, the

SWAs did not carry out the attestations in their

respective grant agreements to maintain plans.   

 OIG recommended that ETA conduct annual verification

and assessment of SWAs’ IT contingency plans using

risk‐based approaches that consider the SWAs’

contingency planning maturity and likelihood of

disasters.

Actions:  

 ETA issued Unemployment Insurance Program Letter No.

24‐4, Change 3, in March 2009 to provide IT security

guidance to the SWAs.

 ETA sent letters to 10 States that had incomplete IT

Contingency Plans to encourage requests for supplemental

funds to improve their plans.  Several States applied for the

funds.

 ETA made changes to its State Quality Service Plan to

include guidance on the implementation of system security

and contingency planning and plans issuance during FY

2009.

Additional Information:  The report is available at http://www.oig.dol.gov/public/reports/oa/2009/23‐09‐002‐03‐315.pdf.
Strategic Goal 4

FY 2009 Performance and Accountability Report     121

Data Quality and Top Management Challenges

Data quality for this performance goal was rated Very Good.

47 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.  In FY 2008, ETA implemented a UI Data Validation (DV) program to verify that UI activities are

reported according to prescribed definitions.  States are required to submit their DV results as part of the State

Quality Service Plan (SQSP) process.  States that fail to submit all of their DV results must address this deficiency in

the SQSP Corrective Action Plan.  States can address failing DV items in a narrative (provided all required DV items

have been submitted), which discusses the actions they plan to take to pass DV.  

Reducing improper payments and improving the integrity and solvency of the UI program remain among the

Department’s top management challenges (see Safeguarding Unemployment Insurance, which is one of the Top

Management Challenges in the Other Accompanying Information section).  DOL continues to aggressively address

the leading cause of overpayments – individuals who claim benefits after returning to work – by promoting use of

the NDNH, which provides State agencies with information on the claimants’ employment status.  All States are

required to cross‐match paid UI claims selected for audits with the NDNH data.  As of July 1, 2009, all but four State

programs had implemented NDNH matching.   

The weakening in the economy has severely impacted State Unemployment Trust Fund (UTF) accounts.  Twenty‐

two states borrowed from the Federal Unemployment Account this fiscal year in order to pay unemployment

benefits.  Aggregate state balances, net of loans, were negative at the end of FY 2009.  Several existing and

proposed measures are expected to improve trust funds’ solvency.  All States’ UI tax schedules are indexed; when

trust fund balances fall below predetermined levels, payroll tax rates rise automatically to increase contributions.  

Ongoing efforts to prevent, detect and recover overpayments will conserve scarce funds.  Finally, DOL is in the

process of implementing a regulation requiring that States requesting interest‐free cash‐flow loans from the

Federal Unemployment Account of the UTF first meet a funding goal for their own trust fund balance.  This

requirement will provide an incentive to States to improve solvency and will establish a DOL position on what

constitutes an adequate fund balance.

 

47 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.
Performance Section

122 United States Department of Labor

Reduce the consequences of work‐related injuries.

Performance Goal 09‐4B

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not  

reached (N)

**Estimated

FY 2004

Goal Sub‐

stantially

Achieved

FY 2005

Goal Sub‐

stantially

Achieved

FY 2006

Goal

Achieved

FY 2007

Goal Sub‐

stantially

Achieved

FY 2008

Goal Sub‐

stantially

Achieved

FY 2009

Goal Not

Achieved

Target 55.4 61.0 60.0 49.0 48.5 42.0

Result 61.9 56.0 52.2 46.3 41.3 35.3**

* N Y Y Y Y Y

Federal Employees’ Compensation Act

(FECA) program

Average lost production days (LPD) per

100 non‐Postal employees)  resulting

from work‐related injury and illness Cost — — $7 $7 $7 $8

Target 146 148 146 130 142 139

Result 147 135 142 135 134 146.8**

* N N Y N Y N

Average lost production days (LPD) per

100 Postal employees  resulting from

work‐related injury and illness

Cost — — $7 $7 $7 $8

Target $18 $17 $13 $8 $14 $15

Result $24 $23 $16 $17 $17 $14

* Y Y Y Y Y N

First‐year benefit savings as a result of

Periodic Roll Management (PRM) reviews

($million)

Cost — — $20 $34 $15 $18

Target ≤8.8% ≤8.8% ≤8.7% ≤8.3%  ≤8.5% ≤7.6%

Result +2.4% +2.8% +6.3% +8.1% +3.2% 5.1%**

* Y Y Y Y Y Y

Rate of change in medical cost per case is

below comparable measure of the

annual rate of change in the national

Milliman USA Health cost index (MHCI) Cost — — $22 $39 $25 $33

Target 3 3 4 4 5 5

Result 4 3 4 4 5 5

* Y Y Y Y Y Y

Targets for six communications

performance areas

Cost — — $7 $12 $8 $10

Target 273 245 250 248 baseline 242

Result 247 254 235 230 239 251

* Y N Y Y — N

Longshore and Harbor Workers’

Compensation Program

Days required to resolve disputed issues

in contested cases Cost — — $6 $6 $4 $5

Target — 320 315 247 220 218

Result — 323 251 224 205 201

* — — — Y Y Y

Division of Coal Mine Workers’

Compensation

Average number of days to render a

decision on a claim Cost — — $24 $26 $17 $19

Target — — — —  ≤6.1% ≤4.6%

Result — — — — +10% 4.3%

* — — — — N Y

Percent change in Black Lung average

medical treatment cost from the

previous year compared to the National

Health Expenditure Projection (NHEP) Cost — — — — $2 $3

Target — — — — 226 160

Result — — — 238 164 113

* — — — *— Y Y

Energy Employees Occupational Illness

Compensation Program (EEOIC)

Average number of days to process part

B initial claims Cost — — — *— $60 $19
Strategic Goal 4

FY 2009 Performance and Accountability Report     123

Target — — — — 290 195

Result — — — 293 284 159

* — — — — Y Y

Average number of days to process part

E initial claims

Cost — — — — $58 $18

Target — — 80% 85% 87% 88%

Result — —   89% 88% 93% 92%

* — — Y Y Y Y

Percent of Part B and Part E final

decisions processed within 180 days

where there is a hearing and within 75

days where there is no hearing Cost — — $16 $18 $18 $11

Goal Net Cost (millions) — $6,131 $2,130 $3,554 $3,693 $4,878

Source(s): FECA: Integrated Federal Employees’ Compensation System, Federal agency payroll offices, Office of Personnel Management

employment statistics, Medical Bill Payment data file, Milliman USA Cost Index Report, Definity telecommunications system standard

reports, district office and national MIS reports, customer surveys, focus group records, and other customer service performance data

sources.  Longshore Case Management System, Black Lung Automated Support Package, and Energy Program Case Management System.

Legacy Data: Some indicators not shown for FY 2004‐07.  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 06‐2.2C.  Complete indicators, targets

and results for FY 2007 are available at http://www.dol.gov/_sec/media/reports/annual2007/SG4.htm.  See Performance Goal 07‐4B.

Note:  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 DOL and by other Federal agencies.  

Program Perspective and Logic

Through the Office of Workers' Compensation Programs (OWCP), 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, and  

 Energy Employees Occupational Illness Compensation (EEOIC) for nuclear weapons employees of the

Department of Energy or its contractors.  

OWCP activities emphasize adjudicating claims and paying benefits accurately and in a timely manner, efficiently

mediating disputed claims, assisting claimants with injury recovery and return to work, controlling costs, being

responsive with informational and other assistance to customers, and assisting employers with regulatory

compliance and participation in their roles as partners in program administration.  OWCP examines the

relationships among investments, activities and program results to allocate resources to achieve program goals.

Performance measures for this goal track the outcomes of key OWCP strategies and program priorities.  Lost

production day (LPD) rates capture time away from work in Federal employee injury cases.  FECA uses nurse case

managers and other strategies to coordinate medical care and assist with return to work to significantly reduce the

LPD.   Communications goals increase customer access to program information and responsiveness to customer

requests for assistance.  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 payments.  The FECA and Black Lung programs measure themselves against

nationwide indices to gauge their effectiveness in containing medical benefit costs.  The Black Lung program

measures average time to render claims decisions and its efficiency in producing quality decisions.  By reducing the

average processing time for disputed claims, the Longshore program contributes to its chief outcome of resolving

claims appropriately and equitably at minimum cost to all parties.  Effective dispute resolution works to reduce

extended hearings and appeals processes by raising the quality of communications, medical evidence, mediation

services, and clarity of decisions.  The Energy program measures processing efficiency and service delivery time

using two measures that track average days to process initial claims and the share of final decisions produced
Performance Section

124 United States Department of Labor

timely.  Target levels take into consideration the differing complexities of Energy cases in terms of toxic exposures

and reported illness.

Several external factors challenge OWCP performance.  The number, types and skill requirements of jobs available

to persons with injury‐related limitations or disabilities are driven by employment and business technology trends.  

For example, the modernization of U.S. Postal Service (USPS) operations has resulted in the elimination of many

traditional jobs and an overall reduction in employment levels at that agency.  Shrinking numbers of available jobs

in the Nation’s current economy also makes reemployment of injured workers much more difficult.  The trend in

the nature of new injury cases and the type of assistance they require reflect an aging workforce.  For example,

while musculoskeletal injuries still predominate, back injuries that used to be the most common, are now

accompanied by knee, hip and shoulder problems.  The cost of medical care continues to rise with better and

earlier diagnostic medical technology, medicines and treatment procedures.  The nation’s expanded use of private

contractor resources to support the wars in Iraq and Afghanistan has increased the number of deaths and injuries

compensable under the Defense Base Act (DBA) and the War Hazards Compensation Act, both of which are

administered by OWCP.  New technologies and higher customer expectations continue to challenge OWCP to

provide greater information more quickly.  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) for

a dose reconstruction to determine the probability that cancer was caused by radiation or toxic exposure.  Length

of processing times in these cases impacts EEOIC’s overall program performance.  

Analysis and Future Plans

DOL did not achieve this performance goal in FY 2009.  However, eight of 11 targets were reached.   

Shortening the duration in which injured workers remain out

of work due to their injuries is a major indicator of the FECA

program results.  LPD is a ratio of days of work lost due to

injury or illness per 100 workers.  FECA’s LPD target for Non‐

Postal agencies was reached as FECA continued to reduce

lost production days for cases receiving Quality Case

Management assistance for injury recovery and return to

work.  Also, safety improvements by Federal agencies under

the Safety, Health and Return‐to‐Employment (SHARE)

initiative have continued and fewer new injury cases were

filed in FY 2009.  The U.S. Postal Service LPD target was not

reached in FY 2009.  The Postal Service experienced both an

increase in lost production days overall and a decline in

employment, due to the automation of many job functions

and economic cut‐backs at that agency, that greatly

increased their LPD rate.   

Measured in financial terms, FECA outcomes reflect the efficiency and quality of benefit payment activities and the

impact of case management and benefit services.  FECA did not reach the Periodic Roll Management (PRM) savings

target.  Just over one‐third of the over 3,700 cases reviewed in FY 2009 produced cost savings of $14 million (vs. a

target of $15 million).  FECA effectively manages medical costs through centralized bill processing, strengthened

reviews of treatment authorization requests, fee schedules, and stronger automated edits and other controls.  In FY

2009, the indexed rate of change in FECA average medical treatment costs indicator reached its target; it rose by

5.1 percent compared to the rate of increase in national health care costs of 7.6 percent reported by the Milliman

USA Health Cost Index.  Comparing the FECA medical cost growth rates to the nationwide rates since FY 2000

equates to (conservatively) a cost reduction of over $28 million annually.

Federal Employees’ Compensation Act program

Lost production days (LPD) per 100 employees

resulting from work‐related injury and illness

$14 $14 $14 $15

20

50

80

110

140

2003 2004 2005 2006 2007 2008 2009

Fiscal Year

$0

$5

$10

$15

$20

$25

Non‐postal Target Non‐postal Result

Postal Target Postal Result

Net Cost (Millions)
Strategic Goal 4

FY 2009 Performance and Accountability Report     125

Reorganized telephone claims handling and customer service operations focus on increasing customer access to

information sources, improving responsiveness to callers, and raising the level of call handling quality and

information accuracy.  Since FY 2003, results have included more than doubling of customers obtaining information

from, or submitting documentation through, OWCP automated systems.  Average caller wait times have been

reduced by almost two‐thirds; turnaround time to caller inquiries has been reduced to less than one day;

effectiveness resolving caller inquiries at the time of call has improved by 41 percent; and 98 percent of calls meet

program standards of quality.

In FY 2009, the average time to resolve disputed issues in Longshore claims was 251 days, representing a nine‐day

increase over the 2009 target.  Defense Base Act (DBA) injury and death cases in connection with the wars in Iraq

and Afghanistan have increased from 347 cases in FY 2002 to 12,255 cases in FY 2009.  In addition to the impact of

expanding case volumes on resources, DBA claims present unique challenges and require more time and claims

expertise to process than general Longshore claims.  Claims development and documentation are more

complicated and time‐consuming, processing is more labor‐intensive, response times from overseas are extended,

medical issues are more complex, and disputes are more difficult to resolve, especially for complex claims such as

Post Traumatic Stress Disorder.  OWCP will continue conducting outreach and working closely with parties to

contested cases to reach timely resolutions.

The Black Lung Program achieved its target for its average claims processing indicator.  Overall average claims

processing time was reduced from 205 days in FY 2008 to 201 days in FY 2009.  The Black Lung Program will

continue to evaluate the target for this indicator to ensure that it is realistic in relation to performance results.

    

A year ago, there wasn’t a line at all.  Ten a.m. was considered early.  But once word spread that the Division of Energy

Employees Occupational Illness Compensation (DEEOIC) was sponsoring monthly Traveling Resource Centers (TRCs) in

Shiprock, New Mexico, and Kayenta, Arizona, to assist the Navajo claimant community, the line began forming at 7 a.m.  One

by one, members of the Navajo Nation sign in and exchange greetings with one another, saying, “Yah‐tah‐hey,” the Navajo

word for hello.  Each individual is there to see somebody who cares, such as Paula, a technical assistant with DEEOIC in

Denver.  Paula travels from Denver to Shiprock and Kayenta each month to provide support to Navajo claimants seeking

benefits under the Energy Employees Occupational Illness Compensation Program Act (EEOICPA).  Many former uranium

workers live in remote or rural areas such as the Navajo and other reservations located across the western states.  DEEOIC is

determined to provide in‐person assistance to individuals regardless of where they live.  The goal of each TRC is to explain

how the EEOICPA program works, to encourage those potentially eligible to file claims, and to provide status updates to

those individuals who have already filed claims.  “I feel so fortunate to have the opportunity to provide this help and support

– we’re making a difference,” said Paula about the monthly TRCs.  Photo Credit: DOL/ESA
Performance Section

126 United States Department of Labor

The Energy Program continues to provide timely claims adjudication and benefit delivery.  In FY 2009, the Energy

program reached its performance targets for average days under Part B with a result of 113 days against a target of

160 days; average days under Part E with a result of 159 days against a target of 195 days; and final decisions with a

result of 92 percent against a target of 88 percent.

Indicator * What worked What didn’t work

FECA LPD – non‐

postal Y

 FECA’s ongoing Quality Case Management

strategy of providing nurses to assist

claimants with recovery and return to work

contributed to reductions in LPD rates.  

Average time lost time in the first year for

QCM cases declined to 140 days – a 28

percent reduction over the past decade.   

 Recent studies of the FECA program noted

that improvements were needed in

communication and coordination between

FECA and the employing agencies, to achieve

even earlier returns to work.

FECA LPD – postal N

 Total new Postal Service injury cases declined

by 10 percent from FY 2008, consistent with

declining employment levels at that agency.  

 USPS continues to review limited duty

positions for elimination.  Fewer positions are

available to USPS to transition and reemploy

their injured workers.  FECA’s Quality Case

Management is challenged by these

circumstances as well as by reduced

employment opportunities in the current

national economy making finding new jobs

for injured Postal workers even harder

FECA – PRM first

year savings N

 PRM case reviews increased by 20 percent

overall due to greater attention in several

district offices to change the ways staff and

workloads were assigned and to adopt new

case review approaches.   

 Despite an increase in cases reviewed, cases

yielding savings dropped by 19 percent,

indicating that the disability status of those

remaining in the PRM universe remain

constant and fewer are determined to have

return‐to‐work potential.

FECA medical cost

containment Y

 Bill review and medical bill processing system

cost controls kept the FECA rate of change

below the national average.  

 Increased medical care costs continue to

challenge most benefit payers, and the FECA

program will continue to seek controls for

specific cost areas.  FECA must also address

the reluctance of many physicians to treat

injured federal workers.

FECA

communications Y

 Specialized customer service staff in DFEC

district offices combined with an emphasis on

meeting communications standards

contributed to reaching targets.

 Automatic notification of injury and other

claims documentation from employing

agencies is currently limited to those

agencies compatible with FECA’s Electronic

Data Interchange technology.  

Longshore

dispute resolution N

 Longshore reduced call up times to the

carriers, causing them to move files quickly,

which increased district office resolution

timeliness.

 The number of cases requiring formal

hearings represented a large share of

disputed cases.  On average, these add at

least 200 days to the overall process.   

Black Lung

processing Y

 The program substantially achieved the target

for the indicator and will adjust out‐year

targets accordingly.

 This indicator has timeliness measures for

four sub‐categories of claims disposition.  The

sub‐category for Responsible Operator Merit

claims constitutes 58 percent of all decisions.  

In FY 2009 the target for this sub‐category

was increased by 10 days to encourage

granting time extensions so that operators

and insurers could develop and submit

evidence when requested.  The FY 2009

results were 10 percent below the target
Strategic Goal 4

FY 2009 Performance and Accountability Report     127

indicating that the program overestimated

the amount of time necessary.  The program

will adjust the target accordingly.

Black Lung

medical cost

Y

 As a result of the program’s review of its

medical cost experience and to control costs,

the program has adopted OWCP’s standards

for setting prescription prices.    

 Due to the unique medical service

requirements of the Black Lung beneficiary

population, their medical costs continue to

be subject to large annual variances outside

the program’s control.  

Energy Part B

initial claims Y

 Revising this indicator to a measure of

average days refocused claims processing on

reaching timely claims decisions.  Substantial

attention was devoted to resolving all claims

that were pending as of the beginning of the

year, allowing the program to reach steady

state processing timeliness.

Energy Part E

initial claims Y

 Measuring average days instead of

percentage of claims within a timeframe

focuses claims examiners on making the most

timely possible decision for each claim.  

Substantial attention was devoted to

resolving all claims that were pending as of

the beginning of the year, allowing the

program to reach steady state processing

timeliness for the first time since the

inception of Part E.

Energy final

decisions (B&E) Y

 Increases in the final decisions completion

target in FY 2009 were due to the Final

Adjudication Branch’s (FAB) efforts to

adjudicate and clean‐up late caseloads in the

beginning of the fiscal year.  In addition, FAB

managers increased meetings with staff

members, provided staff with additional

training and tools to track their performance,

and hired additional staff with the emphasis

on processing cases more timely.    

Program Performance Improvement Plan

 FECA is renewing its emphasis on return to work with a new goal to increase the proportion of injured workers

reemployed by Federal agencies and by seeking new strategies that will assist agencies to improve results.

 FECA seeks to increase the speed of claims receipt for wage‐loss compensation from agency employers to improve the

overall time of payment delivery and maintain uninterrupted income for claimants.

 FECA will convert claims receipt to a Web‐based application to expand the number of employing agencies capable of

transmitting claims and other documents electronically.  

 Longshore’s dispute resolution goal is best achieved through mediation and prompt, accurate communication.  To that

end, the program will use more aggressive interventions in disputes, closer and timelier follow up, educational initiatives

with attorney/employers/insurers, and better marketing of mediation services.  The affected claims community includes

attorneys, employers, and insurance carriers.

 Comparison of Black Lung cost changes to the Department of Health and Human Services’ broader National Health

Expenditure Projection has not proven to be a proper indicator.  Black Lung experiences significant variations in annual

costs that are unique to the program, such as disproportionate end‐of‐life medical expenditures experienced by the Black

Lung population.  Also, the relatively small number of miners receiving medical benefits means that a very few cases with

extraordinary costs in a given year can create large fluctuations in average costs.  The goal to effectively manage costs

remains a Black Lung priority.  While the program will drop the comparison to the NHEP as an indicator, it will continue to

pursue additional cost controls and strategies for improving medical cost management

*Target reached (Y), improved (I), or not reached (N)
Performance Section

128 United States Department of Labor

Net performance costs for OWCP increased by 32 percent between FY 2008 and FY 2009.  This increase is almost

entirely attributable to financing transactions associated with OWCP benefit accounts.  In FY 2009, a one‐time loss

transaction of $2.495 billion to repay the Black Lung Disability Trust Fund debt was implemented by the

Department of Treasury as authorized by the Emergency Economic Stabilization Act of 2008.   OWCP benefit

payments and administrative funding expenses declined in FY 2009.

In 2010, OWCP’s activities will contribute to the following outcome goals in support of the Department’s Strategic

Vision of Good Jobs for Everyone:

 Securing safe and healthy workplaces, particularly in high‐risk industries;

 Facilitating return to work for workers experiencing workplace injuries or illnesses who are able to

work and sufficient income and medical care for those who are unable to work;

 Income support when work is impossible or unavailable; and

 Helping middle‐class families remain in the middle‐class.

In FY 2010, return to work will be supported with a new performance goal to increase the percentage of injured

Federal workers reemployed by Federal agencies and through continued reduction of LPD rates.  Claims processing

and benefit delivery measures will continue to ensure that income support and medical care is provided timely and

assist in the maintenance of the economic position of injured workers.  New measures in the Longshore Program

will focus on reducing the time between cessation of wages and beginning of compensation to injured workers.  

Technology enhancements will expand automation of information exchanges, increase access to and the

transparency of program information, and improve responsiveness in communications services.

Program Assessments, Evaluations and Audits

Findings and recommendations from a Federal Employees Compensation Act program assessment completed in

2008 prompted specific actions to improve performance.  Here is a summary of progress in FY 2009:

 Work with Congress to update the benefit structure, adopt best practices from State workers' compensation

systems, and convert benefits for retirement‐age individuals to a typical retirement level.  The Department

continues to refine its FECA legislative reform proposal.

 Implement recommendations from an independent evaluation to improve significant components of FECA

processes, including industry best practices. Improvements being made to the Continuation‐of‐Pay (COP)

Nurse program include an electronic means to receive reports from employing agencies when an injured

employee has returned to work, a Web portal through which to receive reports from nurses in the field,

and a standardized case evaluation guide for nurses.

 Conducting preliminary work, including the development of a logic model, which will serve as a basis for a

future impact evaluation of FECA’s disability management activities and program effectiveness.  This work

was completed in August 2009 as part of an evaluation of FECA disability management processes.  

 Assess the recently implemented electronic case management system to determine long‐term program

benefits.  FECA continues to assess the capabilities of the new automated data processing system to

address performance gaps, support business process changes, provide improved program assessment

capability, and provide improved information and assistance to Federal employer partners.  Examples

include consolidation of the case creation activity, increased automation of the receipt of claims, upgrade

of the interactive voice response system, and improvements supporting video conferencing and telework.  

 Implement recommendations from an independent evaluation to improve significant components of FECA

processes.  Improvements underway include: speeding notices from employing agencies when an injured

worker has returned to work, easing transmission of case status reports from Continuation of Pay (COP)

nurses, and standardizing case evaluation guidelines for COP nurses.

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10000334.2008.html.  

An assessment of the Longshore and Harbor Workers' Compensation Program in 2005 led to another improvement

plan.  Here is a summary of progress in FY 2009:  

 Engaging program stakeholders to examine ways to improve and update the Longshore and Harbor

Workers' Compensation Act through legislative changes.  The Program is currently in the process of
Strategic Goal 4

FY 2009 Performance and Accountability Report     129

developing a regulation to address the issuance of Defense Base Act waivers.  A standard for granting new

waivers as well as clarification on existing waivers is needed.  Additionally, language in the American

Recovery and Reinvestment Act of 2009 amends the Longshore Act to exclude workers who repair

recreational vessels or dismantle them for repair, regardless of the length of the vessel on which they work.  

Longshore is working on a regulation to address the lack of a definition for recreational vessel, ensuring

employees don’t move in and out of coverage, and addressing employees who are excluded from State

workers’ compensation coverage.

 Evaluating proposed alternatives for modifying the automated claims system for tracking the benefit

delivery services of employers and carriers and to allow comparisons with similar programs.  Longshore is

developing and implementing an electronic database of authorized insurers.  Currently the Longshore

program collects and files handwritten 3x5 cards.

 Developing new performance measures to track and measure benefit facilitation to improve Longshore

insurance carriers' and self‐insured employers' timeliness in filing initial claims and initiating payments.  

Baselines for two new benefit facilitation performance measures were established during FY 2009.  The first

measure is to reduce the average number of days between the date of injury and OWCP’s receipt of the

Employer’s First Report of Injury (Form LS‐202).  The second measure is to reduce the average number of

days between the date of onset of disability and the date of first payment of compensation.

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10003904.2005.html.

The Black Lung Benefits Program was assessed in 2003.  Progress in FY 2009 on the resulting improvement plan is

summarized as follows:

 Establishing performance goals for the Office of Administrative Law Judges (ALJ), Benefits Review Board

(BRB), and Solicitor that are ambitious and contribute to efficient adjudication of Black Lung claims.  The

Department's BRB and Solicitor have established performance measures and targets. In 2008, the

Department successfully worked with ALJ to establish measures and targets for Black Lung claims.

 Increasing Responsible Operator and Insurer participation in evidentiary development of Black Lung claims

at the District Office level.  The Program continues to perform outreach to the operator/insurer community

emphasizing the importance of developing and submitting their evidence at the district director level to

avoid awards based on partial evidence which may be overturned.  The Program analyzed claim data and

individual files to determine the effectiveness of early development and to identify operators that

submitted such evidence.  The Program continues to encourage the district offices to grant extensions of

time to operators and insurers to develop and submit evidence when requested.  The response from the

operator/insurer community has been favorable.

 Reviewing medical cost containment objectives and the construction of the indicator used to measure

results, including the appropriateness of measuring against independent industry benchmarks.  The

program has adopted OWCP standards for prescription drug pricing and dispensing fees and will adopt

geographically‐adjusted pricing for other medical services when a new Central Bill Processing contract

begins.  There are a number of other interim measures that the Program is considering and, in some cases,

adopting.

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10001098.2003.html.

The Energy Employees Occupational Illness Compensation Program assessment in 2007 resulted in an improvement

plan for which FY 2009 progress is summarized below:

 Working with the National Institute for Occupational Safety and Health (NIOSH) to establish compatible

timeliness measures that are consistent with program goals, and reporting performance against those

goals.  The Department and NIOSH collaborated to establish NIOSH timeliness performance measures.  

Reporting against goals will be ongoing.

 Obtaining an independent, comprehensive evaluation of the program.  Based on the management study

conducted in FY 2008, the Energy program enhanced program operations; including outreach, training of

claims examiners, technology, workload, claims processing, and organization and management structure.
Performance Section

130 United States Department of Labor

 Improving coordination with State workers' compensation systems to prevent duplicate payments.  Cross‐

matching procedures were developed with the State of Ohio.  This information will be used to help EEOIC

coordinate Part E benefits with State workers’ compensation benefits to eliminate duplication of payments.

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10009004.2007.html.

Independent evaluations and audits completed in FY 2009 are summarized below.

“Dual Tracking of DFEC Quality Case Management Nurse and Vocational Rehabilitation Processes,” August 2009

(SRA International, Inc.)

Relevance:  The study was pursued to assist the design improvements for FECA Quality Case Management and Vocational

Rehabilitation and to strengthen their integration.

Findings and Recommendations:  

 Incorporate Early Intervention and Team Claim Handling into the FECA

program.

 Make communications with team members and stakeholders more efficient

and effective.

 Expand the use of return to work tools earlier and more broadly.

 Improve the performance of information systems that support case

management

 Organize and track information differently to better evaluate program

results.

Actions:  

 Review study recommendations for

implementation; consider feasibility,

priority and impact potential.

 Assess resource requirements for

implementing recommendations.

 Construct an implementation plan.

Additional Information:  Copies available from the Division of Federal Employees’ Compensation, U.S. Department of Labor,

Room S‐3229, 200 Constitution Ave., N.W., Washington, D.C. 20210.

“Special Report Relating to the Federal Employees’ Compensation Act Special Benefit Fund,” October 2008 (OIG)

Relevance: The OIG contracted with an independent certified public accounting firm to prepare the report on the Fund as of

and for the year ended September 30, 2008.

Findings and Recommendations:  

 Management should establish written policies and

procedures to provide supervisors with detailed guidance on

the proper schedule review to mitigate the risks of

misstatements.

Actions:  

 Current written procedures were updated in December

2008 to include, among other things, specific guidance

for staff and supervisors on the preparation and review

of quarterly and year‐end FECA schedules.

Additional Information:  The report is available at http://www.oig.dol.gov/public/reports/oa/2009/22‐09‐001‐04‐431.pdf.  

“Energy Employees Occupational Illness Compensation Program – DOL Could Do More to Assist Claimants and Further

Improve Timeliness,” November 2008 (OIG)

Relevance: OIG conducted an evaluation to: (a) determine if DOL issued claim decisions that complied with applicable law

and regulation and (b) assess whether DOL ensures that claims are adjudicated as promptly as possible and that claimants

are kept informed.  OIG also wanted to assess the validity of allegations from a former claims examiner that claims

examiners had been directed to inappropriately deny claims.

Findings and Recommendations:  

 Establish improved interagency agreements with all Federal partner

agencies that specify expectations and the details of work to be

performed.

 Establish an overall performance measure for the timeliness of

processing claims from point of application to final decision and

payment, as well as delineating more milestones and goals for the

initial processing phase.

 Expand Resource Centers’ responsibilities to include helping

claimants obtain evidence to support claims and better educate the

claimant on requirements for eligibility.

Actions:  

 DOL worked with the Department of Energy

and NIOSH to develop interagency

agreements by September 30, 2009.

 DOL provided the revised initial processing

goals on March 27, 2009.

 DOL provided the OIG with copies of

informational materials distributed to the

Resource Centers, instructing them on the use

of ECMS to provide better service to claimants

on March 27, 2009.

Additional Information:  The report is available at http://www.oig.dol.gov/public/reports/oa/2009/04‐09‐002‐04‐437.pdf.  
Strategic Goal 4

FY 2009 Performance and Accountability Report     131

“Longshore and Harbor Workers’ Compensation Act Special Fund Financial Statements and Independent Auditors’

Report,” February 2009 (OIG)

Relevance:  The OIG audited the financial statements of the Longshore and Harbor Workers’ Compensation Act Special Fund

as of September 30, 2008, and for the year then ended.

Findings and Recommendations:  

 OIG concluded that the Fund’s financial statements as of and for the years ended

September 30, 2008 and 2007, are presented fairly, in all material respects, in

conformity with U.S. generally accepted accounting principles.

 The OIG noted no matters involving the internal control and its operation that is

considered to be a material weakness as defined in this report.

 The results of the tests of compliance with certain provisions of laws and regulations

disclosed no instances of noncompliance or other matters that are required to be

reported.

Actions:  

 No recommendations made.

Additional Information: The report is available at http://www.oig.dol.gov/public/reports/oa/2009/22‐09‐004‐04‐432.pdf.  

“District of Columbia Workmen’s Compensation Act Special Fund Financial Statements and Independent Auditors’

Report,” February 2009 (OIG)

Relevance:  The OIG audited the financial statements of the District of Columbia Workmen’s Compensation Act Special Fund

as of September 30, 2008, and for the year then ended.

Findings and Recommendations:  

 OIG concluded that the Fund’s financial statements as of and for the years ended

September 30, 2008 and 2007, are presented fairly, in all material respects, in

conformity with U.S. generally accepted accounting principles.

 The OIG noted no matters involving the internal control and its operation that is

considered to be a material weakness as defined in this report.

 The results of the tests of compliance with certain provisions of laws and regulations

disclosed no instances of noncompliance or other matters that must be reported.

Actions:  

 No recommendations

made.

Additional Information:  The report is available at http://www.oig.dol.gov/public/reports/oa/2009/22‐09‐005‐04‐432.pdf.  

“Human Capital – Actions Needed to Better Track and Provide Timely and Accurate Compensation and Medical Benefits to

Deployed Federal Civilians,” June 2009 (GAO)

Relevance:  GAO compared agency policies and identified issues in policy or implementation regarding (1) compensation, (2)

medical benefits, and (3) identification and tracking of deployed civilians.

Findings and Recommendations:  

 Revise the application materials for Federal

Employees’ Compensation Act claims to make clear

what documentation applicants must submit with

their claims.

 Set a clear timeline for issuing implementing guidance

concerning the death gratuity granted by section

1105 of the National Defense Authorization Act for

Fiscal Year 2008, Public Law Number 110‐181.

Actions:  

 DOL committed to reviewing the instructions that accompany

the CA‐1 form, Federal Employees’ Notice of Traumatic Injury

and Claim for Continuation of Pay/Compensation, to

determine whether to include further guidance on what

medical information should be submitted to support a claim.

 Regarding the timeframe for issuing guidance concerning the

death gratuity, the FECA Death Gratuity Interim Final Rule

was published on August 18, 2009.

Additional Information:  The report is available at http://www.gao.gov/new.items/d09562.pdf.

“OWCP’s Jacksonville and New York District Offices Need to Improve Monitoring of Re‐employment Status of Claimants,”

September 2009 (OIG)

Relevance:  OIG conducted the audit to determine if OWCP provided adequate oversight of claimants whose re‐employment

status had not yet been determined.

Findings and Recommendations:  

 Create a specialized workgroup to (a) identify cases in the

re‐employment‐status‐not‐yet‐determined category that

need immediate case management; (b) determine the

intervention(s) that may be needed for those identified

cases; and (c) execute actions, as needed, to reduce

Next Steps:  

 DOL committed to developing a report that tracks the

frequency at which PR cases are reviewed, so claims

examiners can be alerted and prompted to take the next

necessary action.  In cases where no action has taken

place within a specified period of time, a reminder in
Performance Section

132 United States Department of Labor

compensation payments and/or remove claimants from

this periodic roll category.

 Implement a requirement that claims examiners use the

integrated Federal Employees’ Compensation System

(iFECS) Reminder Feature to alert them when to (a)

consider or reconsider referring claimants to a second

opinion specialist, (b) follow up on referrals to nurse or

vocational rehabilitation services, (c) follow up on pending

medical reports, and (d) mail 10‐month letters.

iFECS will be sent to the claims examiner, prompting

them to take action.  These reminders will also be

available through an on‐line query tool.  These actions

will be completed by March 1, 2010.

 Regarding the recommendation pertaining to the 10‐

month letter, DOL is developing a specific reminder that

will prompt the claims examiner to issue the letter at the

appropriate juncture in the case.  This feature will also be

available March 1, 2010.

Additional Information:  The report is available at http://www.oig.dol.gov/public/reports/oa/2009/04‐09‐004‐04‐431.pdf.

Data Quality and Top Management Challenges

Data quality for this performance goal is rated Excellent,

48 reflecting OWCP’s long history of managing workers’

compensation case record data and benefit payment histories.  Performance measurement, also a long‐standing

priority for OWCP, relies primarily upon data extracted from internal automated case management and benefit

payment systems.  Technology upgrades to OWCP automated data systems have made possible more efficient

reporting processes and improved statistical report design and content.  Enhanced systems also enable OWCP to

better test performance data, make quality improvements and increase accuracy.  Outside sources, including other

Federal agencies, the nationally known research institute, Milliman USA, and the Centers for Medicare and

Medicaid Services within the Department of Health and Human Services, 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 regular 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,

which emphasizes a culture of performance accountability.

In the Office of the Inspector General’s (OIG) recent report, concerns were raised with respect to the timeliness and

length of DEEOIC’s adjudication process and compliance with laws and regulations established in the EEOICPA.  The

OIG found the process to still be quite lengthy, with some claims taking up to two years to process.  However, the

OIG stated that DEEOIC has made major progress in shortening adjudication timeframes and has complied with

applicable laws and regulations in making final decisions to accept or deny claims.   DEEOIC is still faced with the

challenge of the length of time it takes NIOSH to complete a dose reconstruction, but does not have any regulatory

authority to control the NIOSH dose reconstruction process.

The OIG also reported the challenge to the FECA program of determining continuing eligibility to benefits and

ensuring proper payments while being responsive to claimants.  Departmental progress has included system

changes that improve tracking of due dates for periodic medical evaluations, assist revalidation of eligibility for

continued benefits, use data mining to prevent and identify improper payments, and improved services to

customers.  The OIG supports the Department’s efforts to seek legislative reforms to the FECA program which

would enhance incentives for employees who have recovered to return to work, address retirement equity issues,

discourage unsubstantiated or otherwise unnecessary claims, allow for easy access to Social Security Administration

wage records to ensure proper FECA payments, and make other benefit and administrative improvements.

 

48 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.
Strategic Goal 4

FY 2009 Performance and Accountability Report     133

Ensure union financial integrity, democracy, and transparency.

Performance Goal 09‐4C (ESA)

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not  reached (N)

FY 2008

Goal Not

Achieved

FY 2009

Goal Not

Achieved

Target — $92,500

Result $82,067 $77,271

* — N

Union receipts audited per staff day

Cost — —

Target baseline 12.0%

Result 11.5% 12.1%**

* — Y

Percent of audits resulting in a criminal investigation

Cost $29 $30

Target baseline 20.5%

Result 20% 20.9%

* — Y

Percent of unions filing reports electronically

Cost $11 $11

Target baseline 88

Result 92 70

* — Y

Number of days to resolve union officer election complaints

Cost $14 $12

Goal Net Cost (millions) $58 $55

Source(s): OLMS union compliance audit information and e.LORS data system.

Legacy Data:  None of the indicators shown were applied to goal achievement determination in FY 2008.  Results for those three indicators

are available at http://www.dol.gov/_sec/media/reports/annual2008/SG4.htm.  See Performance Goal 08‐4C.

Note:  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.

Program Perspective and Logic

The Office of Labor‐Management Standards (OLMS) administers the Labor‐Management Reporting and Disclosure

Act of 1959 (LMRDA), as amended, and related laws.  These laws primarily establish safeguards for union

democracy and union financial integrity and require public disclosure reporting by unions, union officers, union

employees, employers, labor consultants and surety companies, and impose criminal sanctions for embezzlement

of union funds and other crimes.  To implement the LMRDA protections, OLMS conducts criminal and civil

investigations and union audits, offers compliance assistance, and administers the reporting and public disclosure

program.

Financial transparency underpins the achievement of democracy and financial integrity objectives.  Labor unions,

union officers, union employees, employers, labor consultants and others covered by the LMRDA and related laws

are required to file financial and activity reports with OLMS.  OLMS operates an electronic reporting system for

LMRDA reports and an Internet public disclosure system that provides public access to information from filed

reports.  To increase transparency and improve the accuracy of financial reports, OLMS aims to increase the rate of

reports filed electronically.  In 2008, baseline results showed that 20.5 percent of the annual financial reports filed

by unions (Form LM‐2, LM‐3, and LM‐4) were submitted electronically.  OLMS reached this target by increasing the
Performance Section

134 United States Department of Labor

To equip union officers across nation with

clear and consistent information on the

Labor‐Management Reporting and

Disclosure Act (LMRDA), OLMS provides

seminars through a nationwide

educational program.  Topics include

recordkeeping, reporting, and union

officer elections; and each District Office

invites all unions in its jurisdiction.  Photo

Credit: DOL/ESA

percent of electronically field union reports to 20.9 percent.  OLMS is

redesigning its electronic filing system to address barriers to filing with

the aim of increasing the number of reports filed electronically.

Effective auditing is central to OLMS’ ability to determine compliance

with the LMRDA.  By using more effective methods to select unions for

audit, OLMS can make more effective use of resources needed to achieve

compliance with the law and discover instances of criminal violations,

principally union funds embezzlement.  In FY 2009, OLMS reached its

target to increase the percent of union audits that result in the opening

of a criminal case to 12.1 percent compared to the baseline of 11.5

percent.

In support of union democracy, OLMS introduced a new performance

measure in 2009 that tracks the average number of days elapsed for

union election cases’ resolution.  An internal study of election cases

indicated that the average election case required 92 days to resolve;

about 50 percent longer than the deadline required by the LMRDA.  To

reduce this timeframe, OLMS targets sources of delay, such as waivers

requesting extensions beyond the deadline.  OLMS reached its target for

FY 2009 by reducing days required to resolve unions complaints to 70

days compared with the FY 2009 baseline of 92 days.

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 its annual resources 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 annual budget to investigating union member complaints of election misconduct

and supervising union officer election reruns to assure compliance with LMRDA union democracy provisions.

Recovery Act

OLMS received additional funding of $391,000 in FY 2009 and $190,000 in FY 2010 as a result of the Recovery Act to

conduct certification of labor protections for public transit grants.  Specifically, the Recovery Act allocates $8.4

billion to the Federal Transit Administration (FTA) for assistance to States and municipalities for capital

expenditures on public transit investment.  These funds have a “use‐it‐or‐lose‐it” condition placed on them to

ensure that all apportioned funds are used promptly.  OLMS must certify that fair and equitable labor protective

provisions are in place to protect the interests of employees affected by the Recovery Act grants.  The FTA cannot

award funds without prior DOL certification.  The processing of these certifications is the same as under established

procedures for non‐Recovery Act grants.  OLMS expects an additional 800 to 1,000 grants and is using the funds to

handle the workload.  

To ensure that grants under the Recovery Act are issued in a timely and prompt manner, OLMS has established two

performance measures.  First, OLMS has established a goal that 100 percent of all Recovery Act grants will be

certified within the 60‐day time limit established by OLMS under its case processing guidelines.  Additionally, OLMS

has established a goal that the average elapsed time for processing of applications will be under 45 days.  OLMS

met both goals for FY 2009.  The Agency achieved an average processing time of 13.7 days per certification, while

certifying 100 percent of grants received within the 60‐day target.  As a result, no Recovery Act funds were forfeited

or reallocated for failure to meet the deadline under the “use‐it‐or‐lose‐it” condition.  OLMS credits the

achievement of both these goals to a successful outreach program that alerted parties to the availability of these

grants and provided guidance in meeting grant requirements.  For more information, see

http://www.recovery.gov/?q=content/program‐plan&program_id=7549.  
Strategic Goal 4

FY 2009 Performance and Accountability Report     135

Analysis and Future Plans

OLMS did not achieve its FY 2009 performance goal.  However, FY 2009 targets were reached for each of the three

measures established to advance the core performance goal to ensure union financial integrity, democracy, and

transparency.  Additionally, OLMS made strides in establishing procedures for increasing program effectiveness.  

OLMS initiated work on new electronic filing programs that will address barriers which formerly hindered the online

filing rate of smaller unions.  In addition, OLMS regional managers began sharing best practices for targeting audits.  

A statistical study of Labor‐Management (LM) reporting data is providing useful insights on how OLMS can use LM

data to better target audits.

Indicator * What worked What didn’t work

Audit efficiency N

 Management efforts to closely track

and reduce the number of staff days

devoted to compliance audits.

 Complex cases, which represent a growing portion

of OLMS audits, require longer staff time to

resolve.

Audit targeting Y

 Solicitation and sharing of best

targeting practices through

nationwide forums.

 A statistical study has thus far not been useful in

correlating LM reporting data with fraud findings.  

As a result, OLMS still lacks an empirically‐based

linkage between financial report data and

methods to improve targeting.

Electronic reporting Y

 Discontinued mailing paper LM‐3

forms to encourage online filing.

 Sent postcard advisories to LM‐3 filers

reminding them of report due dates

and the electronic filing option.

 Clarified instructions for downloading

forms on the OLMS Web pages.

 OLMS has identified the electronic signature

process as a principal deterrent to electronic filing.

OLMS is streamlining the electronic signature

process.

Complaint

resolution Y

 Reduced number and duration of

waivers requesting additional days.

 Improved coordination with SOL.

 Several barriers continue to impede timely

complaint resolution.  OLMS is working with other

agencies to ameliorate these barriers.

Program Performance Improvement Plan

 Upon implementation of the goal to reduce elapsed time for election complaints, OLMS identified a series of activities

and measures that assist in achieving this goal.  OLMS implemented a number of these measures, each of which will

contribute to achieving the goal and in the future.  OLMS will continue to work, both internally and with other agencies,

to identify additional sources of delays in the election complaint system.  These additional measures will contribute to

OLMS’ overall success in reducing processing time for election complaints.

 In support of its targeted enforcement strategy, OLMS is working with the Eastern Research Group to determine whether

LM report data correlates with the existence of fraud indicators.  The Agency will also continue to share targeting best

practices among District Offices.

 Redesigning its electronic submission process for the LM forms.  The new system will streamline e‐filing by eliminating

the electronic signature and enabling the use of a Web browser for data entry.  Once implemented, the new submission

procedures are expected to increase the percentage of unions filing electronically.

*Target reached (Y), improved (I), or not reached (N)

Net costs of OLMS activities decreased three percent from FY 2008‐2009 due to a similar decrease in

appropriations.

In 2010, OLMS’ activities will contribute to the outcome goal voice in the workplace in support of the Department’s

Strategic Vision of Good Jobs for Everyone.  OLMS plans to increase public disclosure concerning

employer/consultant agreements by increasing the number of Form LM‐20 reports filed by consultants.
Performance Section

136 United States Department of Labor

Program Assessments, Evaluations and Audits

Findings and recommendations from an Office of Labor‐Management Standards program assessment completed in

2005 prompted specific actions to improve performance.  Here is a summary of progress in FY 2009:

 Developing and implementing specific performance indicators to measure agency progress towards

ensuring union democracy.  Prior to 2009, OLMS measured compliance with LMRDA election standards.  In

2008 OLMS developed a timeliness measure and a baseline for this measure that does not rely on a random

sample of audited unions for data and replaced the democracy measure in 2009.  This measure relies on

data produced internally that is timelier, not subject to sampling error, and more closely ties program

outputs to outcomes and Agency goals.

 Conducting an external review of program processes to identify areas for improvement.  In 2007, OLMS

underwent an evaluation of its reporting and disclosure program.  In 2008, a subsequent cost‐benefit

analysis recommended ways to improve the electronic filing process for unions, which are currently under

review.  In 2009, OLMS is undergoing an independent program evaluation focusing strictly on improving the

efficiency of its manual filing process, which remains the predominant filing method for Labor‐Management

forms.  Recommendations will also focus on ways to improve the quality of the forms published online.  

This evaluation was completed in September 2009.

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10003903.2005.html.

Independent evaluations and audits completed in FY 2009 are summarized below.

“Business Process Analysis of OLMS Manual Reports Filing and Disclosure Process,” September 2009  

(Mathematica Policy Research, Inc.)

Relevance:  This evaluation provided recommendations to improve the efficiency of public disclosure reports processes in

OLMS, and included cost‐effective strategies for the transition to all‐electronic storage of forms.  Recommendations focused

on measures of efficiency and quality assurance to capture the benefits of proposed process improvements.

Findings and Recommendations:  

 Mathematica identified certain inefficiencies in report

processing, and made recommendations for improving

process documentation, identified potential areas for cost

savings, and suggested internal measures for quality

assurance.

Actions:  

 OLMS is reviewing the recommendations and expects to

implement process improvements, as feasible, during FY

2010.

Additional Information:  Copies available from the Office of Labor‐Management Standards, U.S. Department of Labor, FOIA

Coordinator, Room N‐5609, 200 Constitution Ave., N.W., Washington, D.C. 20210.

Data Quality and Top Management Challenges

Data quality for this performance goal was rated Very Good.

49  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.  In 2009, OLMS implemented three new performance measures, each of

which relies on data from either the Case Data System or the Electronic Labor Organization Reporting System.  Both

are mature, robust systems, and the data retrieved from these systems allows the OLMS to track long‐term trends

and identify areas in which program operations can be improved.  OLMS will continue to promote the use of

electronic filing by unions, which will improve the data accuracy of financial reports, by implementing a new,

Internet‐based filing system.  This new system will facilitate electronic filing and help ameliorate identified barriers

to electronic filing.  The data used for performance measurement is available in databases routinely used for agency

management, therefore, no additional resources are required to maintain and update the data set.

 

49 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.
Strategic Goal 4

FY 2009 Performance and Accountability Report     137

Enhance pension and health benefit security.

Performance Goal 09‐4D (EBSA)

Indicators, Targets and Results

*Indicator target reached (Y), improved (I), or not  reached (N)

FY 2007

Goal  

Achieved

FY 2008

Goal

Achieved

FY 2009

Goal

Achieved

Target 48% 50% 52%

Result 67% 74% 79%

* Y Y Y

Ratio of criminal cases accepted for prosecution to cases referred

Cost $103 $102 $117

Target 61% 64% 67%

Result 69% 70% 72%

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

cases

* Y Y Y

Target 13,838 21,000 21,500

Result 20,123 28,261 28,182

* Y Y Y

Applications to Voluntary Compliance programs

Cost — — —

Goal Net Cost (millions) $176 $170 $165

Source(s): Enforcement Management System and Delinquent Filer Voluntary Compliance Tracking System.

Note:  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 DOL and by other Federal agencies.  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 Employee Benefits Security Administration (EBSA) is responsible for ensuring 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.  DOL demonstrates its success in identifying and pursuing wrongdoers

through successful civil and criminal case closure and acceptance rates.  By providing outreach and education and

directly assisting plan participants, beneficiaries, employers and plan officials to understand their rights and

responsibilities under the law, DOL helps

protect workers’ and retirees’ benefits.

EBSA oversees benefit security for an estimated

695,000 private retirement plans, 2.5 million

health plans, and similar numbers of other

welfare benefit plans, such as those providing

life or disability insurance.  Benefit plans under

EBSA’s jurisdiction cover approximately 150

million participants and beneficiaries.

Recovery Act

The Recovery Act contains Consolidated Omnibus Budget Reconciliation Act (COBRA) premium assistance

provisions that expand COBRA eligibility and provide eligible individuals with a 65 percent reduction of their COBRA

premiums for up to nine months.  If eligible, these individuals pay only 35 percent of their COBRA premiums to the

plan; the remaining 65 percent is paid by the government to the employer through a payroll tax credit.

EBSA contacted a Dallas, Texas, group health plan on behalf of a

participant who had unpaid medical claims.  The participant had

recently been terminated but had properly extended his group health

benefits under COBRA.  The plan sponsor contended that the COBRA

premium payments had not been made and that notwithstanding,

were also being denied on the basis of a pre‐existing condition.  EBSA

assisted the participant in demonstrating that payments had been

made, and in evaluating the pre‐existing condition assertion of the

plan sponsor.  As a result of EBSA’s efforts, the plan reversed its

decision and paid the participant’s medical claims totaling $140,000.
Performance Section

138 United States Department of Labor

In 2009, EBSA developed and implemented a program that provides for expedited review and determination when

an individual has been denied COBRA Premium Assistance.  In addition, EBSA issued model notices, forms, and

disclosure notices and launched an aggressive outreach and education program.  In FY 2009, EBSA received almost

10,000 applications for expedited review and overturned the employer’s decision to deny COBRA Premium

Assistance in nearly 6,500 cases.  EBSA followed a detailed hiring plan to ensure appropriate staffing levels for the

program and processed approximately 96 percent of expedited reviews in 14 days or less.  For the duration of the

law, EBSA will continue to complete expedited reviews in a timely manner and implement its outreach and

education programs.   

Analysis and Future Plans

EBSA achieved its performance goal.  The agency reached its performance target for the ratio of closed civil cases

with corrected fiduciary violations to closed civil cases.  With respect to criminal case work, EBSA reached its target

to report cases accepted for prosecution.  Last year, EBSA began implementing a regulation that provided a safe

harbor for assessing the timeliness of forwarding participant contributions to 401(k) plans with less than 100

participants.  The regulation defines the period under which participant contributions to a small plan will be

deemed to be made in compliance with the law.  EBSA cautioned that the regulation could substantially impact

both the civil and criminal enforcement programs because approximately one‐third of the investigations conducted

by EBSA focus on this issue.  In EBSA’s preliminary analysis, the regulation did not materially reduce EBSA’s overall

enforcement ratios in FY 2009.  EBSA will continue to monitor the impact of the regulation subsequent to FY 2009

results and adjust performance targets, as necessary.

The table lists component indicators of the broader civil

ratio.  These performance measures may change from

year to year as the agency satisfies its commitments and

priorities change.  The Consultant Advisor Project (CAP)

ratio, which includes a small number of carefully targeted

cases and focuses on the receipt of improper, undisclosed

compensation by pension consultants and other

investment advisers, is a relatively new program with

extremely complex and time consuming cases.  EBSA has

not closed enough cases to develop a baseline.  EBSA

exceeded its targets for the Employee Contribution, and

Rapid ERISA Action Team projects.  Multiple Employer

Welfare Arrangements fell just short of the target; EBSA

continues to assess the data.  The Employee Stock

Ownership Plan target remains elusive because these

cases are difficult to bring to closure due to the complexity of the underlying financial transactions.   EBSA is

reviewing its strategies to maintain its performance and to improve, where appropriate.

EBSA reached its voluntary compliance target in FY 2009.  This measure demonstrates achievements in programs

such as the Voluntary Fiduciary Correction Program and the Delinquent Filer Voluntary Compliance Program.   

This year, Benefits Advisors provided superior participant assistance by responding to 99 percent of all written

inquiries within 30 days of receipt and responding to over 99 percent of telephone inquiries by the close of the next

business day.  In FY 2009, DOL obtained monetary results of approximately $1.3 billion.  Monetary results are a

product of EBSA's investigative, compliance and participant assistance activities.

  

National Enforcement Initiatives

Each Indicator is the Ratio of Closed Cases with

Corrected Fiduciary Violations to total closed cases

Target 83% Employee Contribution Project

Result 85%

Target 64% Employee Stock‐Ownership Plans

Result 53%

Multiple Employer Welfare Target 61%

Arrangements Result 55%

Target 54% Rapid ERISA Action Team

Result 71%

Target Baseline Consultant/Advisor Project (CAP)

Result 50%
Strategic Goal 4

FY 2009 Performance and Accountability Report     139

Indicator * What worked What didn’t work

Criminal

prosecution ratio Y

 EBSA effectively targeted

cases that are likely to be

accepted for prosecution.

 Legal issues prevented EBSA from posting the names of

individuals and entities against whom DOL obtained a health

fraud or MEWA‐related injunction on the DOL public website.

Civil correction

ratio Y

 EBSA effectively targeted

cases that are likely to

produce fiduciary results.

 Despite targeting efforts, Employee Stock Ownership Plan

cases remain difficult to close due to the complexity of the

underlying financial transactions.    

Voluntary

compliance

applications

Y

 EBSA improved compliance

with ERISA without the

expense of additional

investigations.

 As demonstrated by the fact that over 90 percent of all VFCP

applications relate to delinquent employee contribution

issues, the nature of the violations corrected through the

program are not as wide‐ranging as possible.

*Target reached (Y), improved (I), or not reached (N)

Net costs of EBSA activities decreased three percent from FY 2008‐2009 due to changes in administrative expenses.

In 2010, EBSA’s activities will contribute to the outcome goal Improving health benefits and retirement security

for all workers in support of the Department’s Strategic Vision of Good Jobs for Everyone.   

Program Assessments, Evaluations and Audits

Findings and recommendations from an Employee Benefits Security Administration assessment completed in 2004

prompted specific actions to improve performance.  Here is a summary of progress in FY 2009:

 Implementing program improvements based on the independent evaluations completed or currently

underway.  EBSA is conducting a Health Disclosure and Claims Issues (HDCI) evaluation under which a

statistically valid sample of over 1,700 group health plans are investigated over a two‐year period to

determine compliance with the health care laws in Part 7 of ERISA.  EBSA is completing the investigative

portion of the study and beginning the interpretation of data and quality control portions of the study.  

EBSA will use the findings to refine its compliance assistance and enforcement strategies. 

 Developing ways to quantify and reduce the burden imposed by EBSA’s regulations.  ICF International

completed an analysis that determined EBSA is publishing regulations in which benefits outweigh costs.  

The final report was submitted to EBSA on January 2, 2009.  EBSA conducted in‐house training sessions

relating to economic analysis of regulatory initiatives and intends to make further training opportunities

available to staff.  Further, EBSA is hiring additional staff to conduct regulatory analysis.

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10000338.2004.html.

Independent evaluations and audits completed in FY 2009 are summarized below.

“EBSA Could More Effectively Evaluate Enforcement Project Results,” March 2009 (OIG)

Relevance:  The OIG conducted a performance audit of EBSA’s processes for evaluating its civil enforcement results.  The

audit examined whether EBSA is effectively evaluating its civil enforcement project results and directing its resources to

enforcement issues that have a significant impact on American workers’ health, pension and other employee benefits.

Findings and Recommendations:  

 Clearly define the objective of each of its civil

enforcement projects.

 Establish a performance measure(s) that evaluate(s) each

civil enforcement project’s outcomes versus the stated

objective.

 Develop guidance for allocating enforcement resources

based on intended enforcement outcomes and actual

performance results.

Actions:  

 EBSA expanded its public description of the national

enforcement projects to include a specific objective of

“finding and correcting violations of ERISA.”  EBSA did

not agree with the other two recommendations.  

 In anticipation of the Department’s updated strategic

plan to be published in September 2010, EBSA will

develop measures that support the Secretary’s vision of

good jobs for everyone.

Additional Information:  The report is available at http://www.oig.dol.gov/public/reports/oa/2009/05‐09‐003‐12‐001.pdf.
Performance Section

140 United States Department of Labor

Data Quality and Top Management Challenges

Data quality for this performance goal is rated Excellent.

50  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.  The Voluntary Fiduciary Correction

Program data are maintained in the EMS and the Delinquent Filer Voluntary Compliance Program tracking system.

The Inspector General listed Implementing the American Recovery and Reinvestment Act of 2009 and Ensuring the

Security of Employee Benefit Plan Assets as major challenges for EBSA (see the Top Management Challenges in the

Other Accompanying Information section).  The OIG cites administering the COBRA provisions of the Recovery Act,

benefit plan audits, corrupt multiple employer welfare arrangements and civil enforcement project results as areas

of concern.  Because these risks go to the heart of EBSA’s goal to secure pension and health plans, the agency is

taking specific actions to address these concerns, including developing and implementing a program that provides

for expedited review and determination regarding an individual’s denial of the COBRA premium assistance;

strengthening benefit plan audits through increased oversight of accounting firms; meeting ambitious targets for

civil and criminal cases; expanding the public description of national enforcement projects; and vigorously pursuing

fraudulent multiple employer welfare arrangements.

 

50 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, is available in the

Introduction to the Performance Section.
Strategic Goal 4

FY 2009 Performance and Accountability Report     141

Improve the pension insurance program.

Performance Goal 09‐4E (PBGC)

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

Sub‐

stantially

Achieved

FY 2008

Goal Not

Achieved

FY 2009

Goal Not

Achieved

Target 71 72 74 68 69 70

Customer Satisfaction score for premium filers Result 69 68 68 70 72 72

* N N N Y Y Y

Target 77 78 80 80 80 80

Result 78 79 75 78 81 82

Customer Satisfaction score for trusteed plan

participant callers

* Y Y N I Y Y

Target — 84 84 85 85 85

Result — 85 85 88 89 88

Customer Satisfaction score for retirees receiving

benefits from the PBGC

* — Y Y Y Y Y

Target — — — — 3.0 3.0

Result — — — 3.0 3.3 3.8 Average Time to Issue Benefit Determinations

(years)

* — — — — N N

Source(s): American Customer Satisfaction Index and Corporate Performance Reporting System.

Legacy Data: Some indicators not shown for FY 2007.  Results for the three indicators that were dropped are available at

http://www.dol.gov/_sec/media/reports/annual2007/SG4.htm.  See Performance Goal 07‐4E.

Note:  Costs are not provided because the 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), the PBGC’s performance reporting is included in this report

because its performance goals are included in the Department’s performance budget.

Program Perspective and Logic

The Pension Benefit Guaranty Corporation (PBGC) operates in accordance with policies established by its Board of

Directors, which is comprised of the Secretaries of Labor (Chairman), Commerce and Treasury.  PBGC protects the

retirement incomes of 44 million American workers in over 29,000 defined benefit pension plans, which provide

specified monthly benefits at retirement, often based on salary and years of service.  The Corporation safeguards

the pension insurance program and provides service to its customers, while exercising stewardship over its

resources.  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 multiemployer pension plans receiving financial assistance.  At the end of FY

2009, PBGC was paying benefits to about 665,000 retirees and beneficiaries in terminated underfunded plans;

another 635,000 participants in these plans will become eligible to start receiving benefits in the future.

PBGC receives no funds from general 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 by

PBGC, and recoveries from the plans’ former corporate sponsors.  However, the PBGC’s premium structure does

not adequately reflect the risks posed by individual plans.  While the Deficit Reduction Act and the Pension

Protection Act, both enacted in 2006, made significant structural changes to the defined benefit system, they did

not fully address the Corporation’s long‐term challenges.  Although current assets are sufficient to meet liabilities

for a number of years, the PBGC does not have the resources to fully satisfy its long‐term obligations to plan

participants.  Further reforms are needed to address a growing gap between assets and liabilities (estimated at

$33.5 billion as of March 31, 2009).
Performance Section

142 United States Department of Labor

PBGC uses the American Customer Satisfaction Index (ACSI) survey methodology to monitor its progress in meeting

the needs and expectations of its customers – primarily participants and premium filers.  Using ACSI survey results,

PBGC evaluates the effectiveness of its services to customers and makes targeted improvements.  Another key

measure of PBGC mission effectiveness is the time required to provide participants with a final determination of

their benefits.  To address the shortage of resources needed to satisfy long‐term plan obligations, this year PBGC

provided an analysis of options for improving the pension insurance program’s financial condition.

  

Analysis and Future Plans

Although PBGC did not achieve all its goals in

2009, the Corporation’s continued focus on

customer service yielded positive results.  

PBGC reached all of its customer satisfaction

targets as demonstrated in the chart.  The

result for the premium filer customer

satisfaction indicator was 72, maintaining

2008’s record high for this measure.  

Retirees scored PBGC's service at 88,

surpassing the target of 85.  The ACSI score

for participant callers to the Customer

Contact Center was 82 this year, up one

point from 2008.  PBGC provides readily

accessible service to customers online using

My Pension Benefit Account (MyPBA) for participants and My Plan Administration Account (MyPAA) for pension

plan administrators through PBGC.gov as part of its customer service outreach.

As of September 2009, the average time to issue benefit determinations had increased to 3.8 years from 3.3 years

in 2008.  Performance has been impacted by several large plans requiring more complex benefit calculations.   

Indicator * What worked What didn’t work

Premium filer

satisfaction Y

 PBGC responded proactively to legislative

challenges to the filing dates by providing

automated email filing reminders and by

expanding phone and email coverage around

major filing dates to filers.

Participant caller

satisfaction Y

Retiree satisfaction Y

 PBGC enhanced its quality assurance

program, which has resulted in

improvements to customer care and

revisions to a number of PBGC’s standard

letters.

 To improve communication with its

customers, PBGC will assess and identify

ways to better serve customers through the

Internet and expand online services.

Benefit

determination

timeliness

N

 PBGC focused on completing benefit

determinations in its oldest plans to reduce

its aging inventory.

 To better measure benefits determination

timeliness, PBGC will focus on the

completion of entire plans rather than on

individual benefit determinations.

 PBGC will track tasks associated with the

processing of large, complex plans.

 PBGC will explore options to minimize the

impact of overpayments.

Program Performance Improvement Plan

PBGC actively promotes continuous improvement initiatives across all program areas:

 Expand online customer services,

 Explore more cost effective ways to improve customer communication,

Customer Satisfaction

65

70

75

80

85

90

2004 2005 2006 2007 2008 2009

Retiree Target

Retiree Result

Participant Target

Participant Result

Premium Target

Premium Result
Strategic Goal 4

FY 2009 Performance and Accountability Report     143

 Increase streamlining in benefit and premium processing areas and enhance the premium payment system,

 More efficiently manage its resources to meet its incoming workloads and strengthen performance accountability,

 Make technology improvements to replace outdated and overloaded infrastructure,  

 Renew the Corporation’s focus on succession management, leadership development, recruitment, and retention.

 Develop greater flexibility to fund unexpected workloads and address funding concerns.  

*Target reached (Y), improved (I), or not reached (N)

In 2010, PBGC’s activities will contribute to the outcome goal improving health benefits and retirement security for

all workers in support of the Department’s Strategic Vision of Good Jobs for Everyone.

Program Assessments, Evaluations and Audits

Findings and recommendations from a Pension Benefits Guaranty Corporation assessment completed in 2007

prompted specific actions to improve performance.  Here is a summary of progress in FY 2009:

 Refining and maturing the new certification and accreditation process for deployment of major systems and

General Support System using relevant information technology (IT) guidelines.  While PBGC made some

progress in strengthening the design and implementation of its entity‐wide information security

management program in 2008, additional reviews in 2009 identified significant deficiencies in the controls.  

PBGC will focus on strengthening its controls and monitoring accountabilities to ensure the certification and

accreditation process is compliant with Federal Information Systems Management Act (FISMA) and

National Institute of Standards and Technology (NIST) requirements.

 Educating the public on the issues facing the private defined benefit pension system and working with

Congress on legislative reforms to enable the PBGC to meet its long‐term obligations to retirees.  PBGC

completed an analysis of options to improve the financial condition of its single‐employer insurance

program.

More information is available at http://www.whitehouse.gov/omb/expectmore/summary/10002382.2007.html.

Independent evaluations and audits completed in FY 2009 are summarized below.

“High Risk Series: An Update,” January 2009 (GAO)

Relevance:  In 2003, PBGC’s single‐employer program was added to the GAO high risk list.  With a net accumulated deficit of

$11.5 billion at the end of September 2008, the program remains on the list.  (Note:  The deficit tripled to $33.5 billion in

March 31, 2009.)  In addition, GAO added the multiemployer program to the high‐risk list in 2009.

Findings and Recommendations:  

 The pension insurance programs that PBGC

administers need urgent attention and

transformation to ensure the mission set forth in

ERISA is carried out effectively and efficiently.

Actions:  

 Support Congress in closely monitoring the financial health of

PBGC programs and defined benefit plans and in taking

additional steps to safeguard the programs.

Additional Information: The full report (GAO‐09‐271) is available at http://www.gao.gov/new.items/d09271.pdf.

“Pension Benefit Guaranty Corporation: Financial Challenges Highlight Need for Improved Governance and Management,”

May 2009 (GAO)

Relevance:  Testimony before the Special Committee on Aging regarding PBGC’s financial, governance, and management

challenges.

Findings and Recommendations:  

 Mounting financial challenges exacerbated by the

economic downturn as well as governance and

management challenges require stronger governance

and a more strategic approach to acquisition and

human capital management.  

Actions:  

 Workload planning is ongoing to meet challenges during the

economic downturn.

 PBGC is working with its Board to ensure there is sufficient

communication to enable the Board to formulate appropriate

policy and PBGC to receive guidance.   

 Congress proposed legislation to strengthen governance.   

Additional Information:  The full report (GAO‐09‐702T) is available at http://www.gao.gov/highlights/d09702thigh.pdf.
Performance Section

144 United States Department of Labor

“Former Director’s Involvement in Contracting for Investment Services Blurs Roles and Raises Fairness Issues,,” May 2009

(PBGC Office of Inspector General)  

Relevance:  Audit of the Pension Benefit Guaranty Corporation’s (PBGC) implementation of its new investment policy.

Findings and Recommendations:  

 Serious allegations about a former PBGC director’s involvement in the

procurement process used to select the investment managers responsible for

executing aspects of the new policy.  The PBGC Board should require the:  

 current Acting Director to cancel the contracts; and  

 future Directors to ensure appropriate separation of duties, to include

refraining from service on technical evaluation panels and other de facto

procurement activities.

Actions:  

 Contracts were cancelled.

 The Board agrees with the

recommendation to ensure

separation of duties and issued a

resolution to address the issue,

which PBGC has now incorporated

into its procedures.   

Additional Information: The full report (AUD‐2009‐5/PA‐08‐63‐1) is available at http://oig.pbgc.gov/audit/2009/pdf/PA‐08‐

63‐1.pdf.

“Evaluation of the PBGC’S Activities With Respect to its Securities Lending Program,”

July 2009 (PBGC Office of Inspector General)

Relevance:  As part of its overall investment program, the PBGC engages in securities lending.  The report evaluates PBGC’s

policies and procedures governing the securities lending program.

Findings and Recommendations:  

 The findings addressed the absence of written policies and guidance for

the securities lending program.  There are 16 recommendations to

improve the program, including documenting policies and procedures.  

Actions:  

 PBGC proposed corrective actions and

reached agreement with the OIG for all the

report recommendations.

Additional Information:  The full report (EVAL‐09‐06/FA‐08‐51) is available at http://oig.pbgc.gov/audit/2009/pdf/FA‐08‐

51.pdf.

“Pension Benefit Guaranty Corporation: More Strategic Approach Needed for Processing Complex Plans Prone to Delays

and Overpayments,” August 2009 (GAO)

Relevance:  PBGC may be required to assume responsibility for a growing number of underfunded pension plans due to the

economic downturn.

Findings and Recommendations:  

 Processing benefit determinations in a small number

of complex plans and plans with missing data takes

longer.  PBGC should develop a better strategy for

processing benefits in complex plans, improve

communications with participants and make the

appeals process more accessible.

Actions:  

 By September 30, 2010, PBGC will implement steps for

tracking and monitoring tasks associated with processing

large complex plans; explore options to minimize the impact

of overpayments; revise guidelines for benefit statements;

and look for ways to better communicate the complexities of

PBGC benefits to participants.

Additional Information:  The full report (GAO‐09‐716) is available at http://www.gao.gov/new.items/d09716.pdf.

Data Quality and Top Management Challenges

Data quality for this performance goal is rated Very Good.

51  PBGC actively monitors customer satisfaction through

the American Customer Survey Index (ACSI).  This methodology, adopted in 2001, delivers high quality data and

provides a uniformed system of customer service measurement, which supports key performance goals in the

budget.  Through its Corporate Performance Reporting System (CPRS), an automated data mart and analytic tool

implemented in 2006, PBGC monitors performance measures related to plan termination and benefit processing.  

Each month, process owners perform accuracy checks of CPRS performance data and corrections are made, if

necessary.

 

51 Information on DOL’s Data Quality Assessments, conducted annually for each performance goal, can be found in the

Introduction to the Performance Section.
Strategic Goal 4

FY 2009 Performance and Accountability Report     145

PBGC’s Inspector General designated five areas as top management challenges:  governance, stewardship, PBGC’s

business model, information technology, and procurement and contracting in its Semi‐Annual Report to Congress.52

To address the governance issues, the Board of Directors amended PBGC by‐laws in 2008 to streamline processes

and clarify the roles and responsibilities of the Board, Board Representatives and PBGC Director.  However, further

changes were recommended by the Government Accountability Office in its testimony before the Special

Committee on Aging in 2009.  PBGC developed a comprehensive approach to information and infrastructure

security and is strengthening controls where deficiencies were found. Corrective actions are underway or planned

to strengthen processes in the remaining areas of PBGC’s purview.

 

52 Source: Semi‐Annual Report to Congress, October 1, 2008 – March 31, 2009.  For more information, please see the full report

at http://oig.pbgc.gov/reports/semi/pdf/SARC40.pdf.

FY 2009 Performance and Accountability Report   147

Financial Section

FY 2009 Performance and Accountability Report   149

Message from the Chief Financial Officer

I am pleased to report that the Department received an unqualified opinion from the

independent auditors on its consolidated financial statements for the thirteenth

consecutive year.  The Department complied with the Federal Financial Management

Improvement Act, and no material weaknesses have been reported.  These are

tremendous accomplishments in light of the many challenges, new mandates, and

transitions we experienced in FY 2009.

The American Recovery and Reinvestment Act of 2009 provided billions of dollars for

programs to foster American workers’ efforts to find jobs, develop new skills in the

workforce, and support an economic recovery.  These funds continue to be tracked and

reported to the public every week to promote transparency and accountability.  

Monitoring the appropriate use of these funds, and ensuring their clear delineation from regular operating funds,

has been a core focus of the Department’s financial management operations this fiscal year.

We also continued to prepare for the launch of our new core financial management system, which will occur in FY

2010.  We are training the entire Department’s financial management staff on how to use the new system and

significantly reengineering our business processes to ensure greater efficiencies, more useful and current data for

program managers and decision makers, stronger internal controls, and better reporting to our stakeholders.

We continue to improve our capabilities through employee training to enhance skill sets, hiring new staff to meet

core needs, and developing greater institutional knowledge to ensure our culture of strong financial management

remains firmly entrenched well into the future.  To that end, we held a very successful training conference for all

Departmental financial personnel during FY 2009.  At the same time, we continue to provide financial management

support for the new Departmental goals promoted by Secretary Solis and her team.

We received the Certificate of Excellence in Accountability Reporting from the Association of Government

Accountants for the ninth year in a row.  This certificate recognizes the Department’s excellence in linking budget

and performance information in its FY 2008 Performance and Accountability Report.

We made progress to resolve three outstanding significant deficiencies reported in the FY 2008 Performance and

Accountability Report.

 Management continues to address recommendations related to controls over access to key financial and

support systems; however, specific and compensating controls already in place are sufficiently designed

and effective to prevent unauthorized access to the financial systems.  Nonetheless, we will continue to

monitor and evaluate the risks associated with access control weaknesses and take appropriate corrective

actions during FY 2010.

 We will conduct periodic tests of reconciliation reports to examine timeliness and level of reviews, data

integrity, and resolution of discrepancies to address weaknesses noted over payroll accounting regarding

the reconciliation of DOL’s data submission to the U.S. Department of Agriculture’s National Finance

Center.  OCFO began successfully testing  reconciliation reports in the fourth quarter of FY 2009, and we

expect to close this finding in FY 2010.   
Financial Section

150     United States Department of Labor

 We issued manual procedures for posting journal entries into the Department’s legacy accounting system

to improve internal controls regarding segregation of duties.  With the implementation of the new core

financial management system, the posting and approval of journal entries will be electronically segregated

and will not take effect until electronically approved by the designated supervisory personnel.

I would like to take this opportunity to thank the financial management professionals throughout the Department

for their dedication and hard work throughout the past year.  Their efforts ensure that we deliver the most

accurate, transparent, and useful financial information possible.

Lisa D. Fiely

Acting Chief Financial Officer

November 16, 2009
FY 2009 Performance and Accountability Report   151

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, 2009 and 2008; the related consolidated statements of net cost and changes in net position, and 

combined statements of budgetary resources for the years then ended; and the statements of social insurance as of 

September 30, 2009, 2008, 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 2009 audit, we also considered DOL’s internal control over financial reporting and 

tested 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, 2009. 

SUMMARY 

As stated in our opinion on the consolidated financial statements, we concluded that DOL’s consolidated financial 

statements present fairly, in all material respects, the financial position of DOL as of September 30, 2009 and 2008; 

its net costs, changes in net position, and budgetary resources for the years then ended; and the financial condition of 

its social insurance program as of September 30, 2009, 2008, 2007, and 2006, in conformity with U.S. generally 

accepted accounting principles. 

As discussed in our opinion on the consolidated financial statements, the statements of social insurance present the 

actuarial present value of DOL’s future expenditures to be paid to or on behalf of participants, estimated future 

income to be received from excise taxes, and estimated expenditures for administrative costs during a projection 

period ending in 2040. 

Also as discussed in our opinion on the consolidated financial statements, in fiscal year 2009, DOL adopted new 

accounting and reporting requirements for fiduciary activities and changed the presentation of its statements of social 

insurance. 

Our consideration of internal control over financial reporting resulted in identifying certain deficiencies that we 

consider to be significant deficiencies, as follows:

1. Lack of Adequate Controls over Access to Key Financial and Support Systems 

2. Weakness Noted over Payroll Accounting 

3. Lack of Segregation of Duties over Journal Entries 

4. Lack of Sufficient Controls over Financial Statement Preparation 

KPMG LLP 

2001 M Street, NW 

Washington, DC 20036 

KPMG LLP, a U.S. limited liability partnership, is the U.S. 

member firm of KPMG International, a Swiss cooperative. 
Financial Section

We did not identify any deficiencies in internal control over financial reporting that we consider to be material 

weaknesses as defined in the Internal Control over Financial Reporting section of this report.

The results of our tests of compliance with certain provisions of laws, regulations, contracts, and grant agreements 

disclosed no instances of noncompliance and one other matter that are required to be reported herein under 

Government Auditing Standards and Office of Management and Budget (OMB) Bulletin No. 07-04, Audit 

Requirements for Federal Financial Statements, as amended. 

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, 2009. 

The following sections discuss our opinion on DOL’s consolidated financial statements; our consideration of DOL’s 

internal control over financial reporting; our tests of 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 U.S. Department of Labor as of September 30, 

2009 and 2008; the related consolidated statements of net cost and changes in net position, and the combined 

statements of budgetary resources for the years then ended; and the statements of social insurance as of September 

30, 2009, 2008, 2007, and 2006. The accompanying statement of social insurance as of September 30, 2005 was not 

audited by us and, accordingly, we do not express an opinion on it. 

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, 2009 and 2008; its net costs, changes in net 

position, and budgetary resources for the years then ended; and the financial condition of its social insurance program 

as of September 30, 2009, 2008, 2007, and 2006, in conformity with U.S. generally accepted accounting principles. 

As discussed in Note 1-W to the consolidated financial statements, the statements of social insurance present the 

actuarial present value of DOL’s future expenditures to be paid to or on behalf of participants, estimated future 

income to be received from excise taxes, and estimated expenditures for administrative costs during a projection 

period ending in 2040. In preparing the statements of social insurance, management considers and selects 

assumptions and data that it believes provide a reasonable basis for the assertions in the statements. However, 

because of the large number of factors that affect the statement of social insurance and the fact that future events and 

circumstances can not be known with certainty, there will be differences between the estimates in the statement of 

social insurance and the actual results, and those differences may be material. 

Also as discussed in Note 1-B to the consolidated financial statements, DOL changed its method of reporting 

fiduciary activities to adopt the provisions of the Federal Accounting Standards Advisory Board’s Statement of 

Federal Financial Accounting Standards (SFFAS) No. 31, Accounting for Fiduciary Activities, effective October 1, 

2008. 

Also as discussed in Note 1-W to the consolidated financial statements, in fiscal year 2009, DOL changed the 

presentation of its statements of social insurance to remove estimated interest payments from the statements. DOL 

revised its fiscal years 2005 through 2008 consolidated financial statements to conform to this fiscal year 2009 

presentation. 

The information in the Management’s Discussion and Analysis, Required Supplementary Information, and Required 

Supplementary Stewardship Information sections is not a required part of the consolidated financial statements, but is 

152   United States Department of Labor
Independent Auditors’ Report

supplementary information required by U.S. generally accepted accounting principles. 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 Other Accompanying Information 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 was not designed to identify all deficiencies in the internal control over 

financial reporting that might be deficiencies, significant deficiencies, or material weaknesses. 

A deficiency in internal control 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 and correct 

misstatements on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal 

control that is less severe than a material weakness, yet important enough to merit attention by those charged with 

governance. A material weakness is a deficiency, or combination of deficiencies, in internal control, such that there is 

a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or 

detected and corrected on a timely basis. 

In our fiscal year 2009 audit, we did not identify any deficiencies in internal control over financial reporting that we 

consider to be material weaknesses as defined above. However, we identified certain deficiencies in internal control 

over financial reporting that we consider to be significant deficiencies and that are described in Exhibit I. 

We noted certain additional matters that we will report to management of DOL in a separate letter.

COMPLIANCE AND OTHER MATTERS 

The results of our tests of compliance described in the Responsibilities section of this report, exclusive of those 

referred to in FFMIA, disclosed no instances of noncompliance that are required to be reported herein under 

Government Auditing Standards or OMB Bulletin No. 07-04, as amended. 

Other Matters. DOL is currently reviewing one incident regarding a potential violation of the Anti-deficiency Act. As 

of the date of this report, no final noncompliance determination has been made. 

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 DOL’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, 2009. Under section 803a of FFMIA, the U.S. 

Department of Labor’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 

FY 2009 Performance and Accountability Report   153
Financial Section

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, 2009. 

RESPONSIBILITIES 

Management’s Responsibilities. Management is responsible for the consolidated financial statements; establishing 

and maintaining effective internal control; and complying with laws, regulations, contracts, and grant agreements 

applicable to DOL. 

Auditors’ Responsibilities. Our responsibility is to express an opinion on the fiscal year 2009 and 2008 consolidated 

financial statements of 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, as amended. Those standards and OMB Bulletin No. 07-04, as amended, 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 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 2009 audit, we considered DOL’s internal control over financial reporting 

by obtaining an understanding of 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 did not test all 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 express an opinion on the effectiveness of DOL’s internal control over financial reporting. 

Accordingly, we do not express an opinion on the effectiveness of DOL’s internal control over financial reporting. 

As part of obtaining reasonable assurance about whether DOL’s fiscal year 2009 consolidated financial statements 

are free of material misstatement, we performed tests of 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, as amended. 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 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. 

154   United States Department of Labor
Independent Auditors’ Report

FY 2009 Performance and Accountability Report   155

Our responsibility also included expressing an opinion on DOL’s compliance with FFMIA section 803a requirements 

as of September 30, 2009, 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. 

______________________________ 

DOL’s response to the findings identified in our audit is presented in Exhibit I. We did not audit DOL’s response 

and, accordingly, we express no opinion on it. 

This report is intended solely for the information and use of DOL’s management, 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 15, 2009
Financial Section

Significant Deficiencies

Exhibit I

1. Lack of Adequate Controls over Access to Key Financial and Support Systems 

In fiscal years (FY) 2006 through 2008, we reported a significant deficiency relating to the lack of adequate 

controls over access to key financial and support systems. 

We recommended that management: 

• Identify key financial information technology (IT) controls and incorporate them into the U.S. Department of 

Labor’s (DOL) internal control and Office of Management and Budget (OMB) Circular No. A-123 testing 

process, to ensure that these controls are documented and operating effectively during the year. 

• Coordinate efforts among the DOL agencies to develop and/or enforce procedures and controls to address 

access control weaknesses in current financial management systems. 

During the FY 2008 audit, we noted that while DOL identified and tested key IT controls as part of its OMB 

Circular No. A-123 testing process, certain parts of the testing were performed concurrently with our IT testing 

and were not completed in time for us to assess the adequacy of the process. During our FY 2009 audit, we noted 

that DOL continued to identify and test key IT controls as part of its OMB Circular No. A-123 testing process, 

including follow-up on certain prior year IT findings and testing of the design and operating effectiveness of 

certain key current year controls during the year. Additionally, DOL provided the OMB Circular No. A-123 

testing results timely throughout the year. 

In response to the second recommendation, we noted that the Office of the Chief Information Officer (OCIO) 

updated Volume 1, Access Controls, of the DOL Computer Security Handbook in December 2008 and in May 

2009. The updates to this volume required agencies to be compliant with the latest standards set forth by the 

National Institute of Standards and Technology (NIST) Special Publication (SP) 800-53, Recommended Security 

Controls for Federal Systems. 

However, we noted that 25 prior year findings related to access controls have not been corrected (4 in the Office 

of the Chief Financial Officer (OCFO), 9 in the Employment and Training Administration (ETA), 3 in the Office 

of the Assistant Secretary for Administration and Management (OASAM), and 9 in the Employment Standards 

Administration (ESA)). Additionally, we noted two prior year findings that were not corrected until the third and 

fourth quarters of FY 2009 (1 in ETA and 1 ESA). In FY 2009, we identified access control weaknesses that 

resulted in 11 new findings (1 in OCFO, 7 in ETA, 1 in OASAM, and 2 in ESA). Additionally, we issued one 

new finding that was subsequently corrected in the third quarter of FY 2009 (in ESA). The specific nature of 

these weaknesses, their causes, and the systems impacted by them has been communicated separately to 

management. 

In summary, we noted issues with account management, configuration management, and review of system audit 

logs in our FY 2009 testing of DOL’s IT systems. While these issues are less severe than a material weakness, 

we determined that they are important enough to merit attention by those charged with governance. As such, we 

believe that these new weaknesses and the uncorrected prior year control weaknesses represent a significant 

deficiency over access to key financial and support systems. Specifically, the following control weaknesses were 

present in one or more financial systems across various DOL agencies. 

• Account Management 

• Account management controls were not performed, such as incomplete or missing access request, 

modification, and termination forms; 

• User accounts are not timely removed for separated users; 

156   United States Department of Labor
Independent Auditors’ Report

Significant Deficiencies

Exhibit I

• Periodic user account reviews or re-certifications were not performed; 

• Generic accounts existed on a system without a proper business justification for approximately half of 

the fiscal year; 

• Access authorization, modification, termination, recertification, and periodic reviews of data center 

access were not consistent with policies; and 

• Certain terminated personnel had active system accounts, and in some cases, terminated employees 

accessed systems after their termination date. 

• 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 DOL Computer Security Handbook; 

• Inactive accounts were not disabled or deleted in a timely manner; and 

• Certain human resources personnel had access to create and approve personnel action requests on their 

own. 

• 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 and finalized; 

• 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 procedures and 

controls. While the DOL agencies closed 17 prior year access control findings, they have not invested the 

necessary level of effort and resources to ensure that policies and procedures are designed and operating 

effectively. These access control weaknesses could result in users with inappropriate access to financial 

systems; inefficient processes; lack of completeness, accuracy, or integrity of financial data; and/or 

undetected unusual activity within financial systems. 

Based on these facts noted as part of our FY 2009 audit, we consider the recommendation related to testing 

key financial IT controls as part of the OMB Circular No. A-123 testing process closed. However, we 

consider the recommendation related to coordinating efforts among the DOL agencies to develop and/or 

enforce procedures and controls to address access control weaknesses in current financial management 

systems unresolved. To close this recommendation, the Chief Information Officer should (a) coordinate 

efforts among the DOL agencies to develop procedures and controls to address access control weaknesses in 

current financial management systems, (b) monitor the agencies’ progress to ensure that procedures and 

controls are appropriately implemented and maintained, and (c) ensure that sufficient resources are available 

to develop, implement, and monitor the procedures and controls that address access control weaknesses. 

FY 2009 Performance and Accountability Report   157
Financial Section

Significant Deficiencies

Exhibit I

Management’s Response: The Office of the Assistant Secretary for Administration and Management (OASAM) 

does not concur with this determination. DOL management asserts DOL policies, procedures and standards for 

management, operational, and technical controls are adequate and collectively provide compound safeguards and 

redundant security measures to ensure the integrity of DOL financial systems. Further, the controls inherent to 

specific applications are sufficiently designed and effective to prevent or detect any unauthorized access to DOL 

financial systems. 

The report, as presented, does not adequately represent the operating environments of the systems audited, nor 

does it accurately relay the risk associated with the identified vulnerabilities. In general, risk levels are inflated 

based on the nature of the weaknesses noted. For example, an account which is disabled, but not deleted, does 

not represent a high risk as portrayed in the audit review. A disabled account does not permit unauthorized access 

to a system. Additionally, the findings do not represent a systemic deficiency which, when taken in aggregate, 

could adversely impact financial business processing. 

As mentioned in the FY 2008 management response to this issue, a Department-wide comprehensive strategy 

was established to address the identified conditions. The following milestones were achieved in FY 2009: 

• Revised access control policy to strengthen account management procedures by requiring agencies to 

conduct semiannual account reviews; 

• Developed FY 2009 Security Testing and Evaluation plan that included access control and configuration 

management focused quarterly reviews; and 

• Implemented automated configuration management tool, Secure Elements C5, to measure agency 

compliance with configuration management requirements. 

The implemented strategy above attests to management’s serious commitment to safeguard DOL information and 

information systems. In FY 2010, management will continue to deploy processes and procedures aimed at 

enhancing and strengthening the overall security posture of DOL’s computer security program. 

Auditor Response: The details of our FY 2009 IT findings and recommendations were provided to DOL 

management through the established Notification of Findings and Recommendations process. While we did not 

identify any individual finding as a significant deficiency, we evaluated the combination of certain findings, in 

accordance with auditing standards generally accepted in the United States of America, to conclude that a 

significant deficiency does exist, taking into consideration that certain findings, when assessed in aggregate, 

identified deficiencies in both detective and preventive access controls related to one or more financial systems. 

Although management stated that they do not concur with our recommendations, they plan on taking steps to 

address them. Therefore, these recommendations are considered resolved and open. FY 2010 audit procedures 

will determine whether these recommendations have been adequately addressed and can be considered closed. 

2. Weakness Noted over Payroll Accounting 

During FYs 2006 through 2009, DOL used the U.S. Department of Agriculture’s (USDA) Office of Chief 

Financial Officer (OCFO)/National Finance Center (NFC) to process its payroll. For each 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. 

In FY 2006, we noted that DOL did not utilize the Detail Pay and Deduct Register 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 

the information that was submitted to NFC via Time and Attendance records was reconciled to what was shown 

as paid in the Detail Pay and Deduct Register. 

158   United States Department of Labor
Independent Auditors’ Report

Significant Deficiencies

Exhibit I

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, approved by an appropriate supervisor, and maintained. 

As part of DOL’s corrective action plan for FY 2007, the OCFO’s PeoplePower Task Force created a Time and 

Attendance Reconciliation Report, and the DOL OCFO issued policies and procedures that stated 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 in FY 2007 complied with the new OCFO 

procedures, but two offices that we tested performed their own reconciliation procedures. 

During FY 2008, the OCFO issued revised policies and procedures dated October 23, 2007, requiring a review of 

the Time and Attendance Reconciliation Reports, and implemented these policies and procedures. The OCFO 

also performed monitoring department-wide to ensure that the reviews were completed, documented, and 

approved by an appropriate supervisor, and maintained. However, we noted that the reconciliation tested from 

the Atlanta processing center did not contain a signature to validate the review. In addition, the Time and 

Attendance Reconciliation Reports do not contain a space for the date of the review; therefore, the timeliness of 

the reconciliations and certifications was not verifiable. 

The policies and procedures issued and the related reviews and audits appeared to reconcile and certify time and 

attendance records only. When we requested supporting documentation for the reviews of other NFC inputs and 

outputs (e.g., Gross Pay and Benefit Withholdings), we noted that the five agencies selected for FY 2008 

testwork were able to provide the Detail Pay and Deduct Register report; however, the agencies could not 

provide evidence of review or recalculations of payroll-related items other than time and attendance. Therefore, 

we could not conclude that such reviews and recalculations were completed. 

In FY 2009, DOL issued revised policies and procedures with an effective date of July 24, 2009, to provide 

guidance on the need for agencies to review payroll-related items other than time and attendance records. In 

addition to the revised policies issued, OCFO management has represented that they have also implemented a 

procedure to monitor the completion of the reviews of payroll-related items other than time and attendance. Since 

the revised policies and procedures were not effective until the last quarter of FY 2009, our testwork focused on 

the time and attendance reconciliation policies that were effective for the first three quarters (i.e., the majority) of 

FY 2009, and we did not test the revised procedures implemented in July 2009. 

We selected a sample of 8 time and attendance reconciliations from various agencies, none of which were 

provided to us. We also noted that the OCFO had requested 38 sample items from the Human Resource offices to 

monitor compliance with policies and procedures. The OCFO only received 6 of the 38 sample items requested. 

As a result, we noted that insufficient evidence exists to determine that the preparation and review of payrollrelated items, including time and attendance, were completed. 

The lack of compensating reconciliation controls around the NFC compensation outputs increases the risk that 

payroll-related line items may be misstated due to errors in payroll processing by 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 2009 Report No. 11401-30-FM, “The 

accuracy and reliability of data processed by NFC and the resultant reports ultimately rests with the customer 

agency and any compensating controls implemented by such agencies.” 

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.” 

FY 2009 Performance and Accountability Report   159
Financial Section

Significant Deficiencies

Exhibit I

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.” 

Based on our FY 2009 audit results, we consider the recommendation we made in FY 2006 as resolved and 

open. To close this recommendation in the future, the DOL OCFO should (a) ensure that Human Resource 

offices are reconciling all payroll information, not only time and attendance records, provided to the NFC to the 

payroll information processed by the NFC for each pay period and (b) ensure that these reconciliations are 

documented, reviewed, and approved by an appropriate supervisor, and maintained. 

Management’s Response: Over the past two years, management has made considerable progress in the area of 

payroll processing. First, we implemented policies and procedures requiring reconciliation of time and 

attendance data. We also implemented procedures to reconcile payroll data provided by the National Finance 

Center (NFC) to that recorded in DOLAR$, another critical reconciliation of payroll information. In FY 2009, 

OCFO modified a payroll exception report developed in prior years, the Payroll/Time & Attendance 

Reconciliation Report. This report was improved in that it now lists both input and output discrepancies noted for 

each payroll period. The report is distributed to each Human Resources Office (HRO) on the Monday following 

each pay period. OCFO procedures require the HROs to review all discrepancies listed on the reports and 

complete a certification by the second Friday after each pay period. The certifications require signatures of the 

preparer and an HR supervisor, and discrepancies are required to be resolved by the end of the following pay 

period. 

In July 2009, OCFO initiated procedures to monitor HRO compliance with the new certification process. OCFO 

performed independent reviews for a sample of the certifications, ensuring that the certification forms were 

properly completed, approved, and included all information listed on the reconciliation reports. OCFO reviews 

also included a determination as to whether reported discrepancies were subsequently resolved and corrected. 

Since the implementation of these procedures, OCFO has been successful in ensuring that HROs are completing 

and documenting the reconciliations in a timely fashion. We believe that the recommendations made by the 

auditors are fully resolved, and anticipate closure of this finding in the FY 2010 audit. 

Auditor Response: As indicated above, DOL could not provide supporting documentation for any of the 

reconciliations we selected for our testing. However, since management addressed our recommendations by 

implementing additional procedures during the last quarter of FY 2009, we consider these recommendations 

resolved and open. FY 2010 audit procedures will determine whether these recommendations have been 

adequately addressed and can be considered closed. 

3. 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 and Related Systems (DOLAR$) without approval. 

Although the OCFO had developed Department-wide manual policies and procedures designed to ensure the 

segregation of journal entry preparation and approval authority in the second quarter of FY 2007, which was 

revised and reissued in the second quarter of FY 2008, the same lack of supporting documentation evidencing 

management review and approval was noted during the FYs 2007 and 2008 audits. 

During the course of the FYs 2006, 2007, and 2008 audits, we issued several recommendations to the OCFO, 

including the FY 2007 recommendation that management reconfigure DOLAR$ (and its successor system) 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: 

160   United States Department of Labor
Independent Auditors’ Report

Significant Deficiencies

Exhibit I

• Agencies implement manual compensating review controls until system controls have been implemented. 

• OCFO management monitor DOL employees’ compliance with the Department wide-policies and 

procedures in place for documenting the review of all journal entries. 

• OCFO management design and implement detective controls that require supervisors to periodically generate 

and review activity reports that list all journal entries posted to DOLAR$. 

During FY 2009, we tested a sample of 622 journal entries recorded from October 1, 2008 through September 

30, 2009. For 55 of these journal entries, the OCFO did not provide support evidencing that they had been 

reviewed by a supervisor or someone other than the preparer before they were posted to DOLAR$. DOL 

management indicated that 24 of the 55 exceptions noted should not be subject to the OCFO policy since they are 

related to recording commitments and sub-allocations and are subject to other review controls in the budget 

office; however, no documentation was provided by the OCFO to support that these entries were reviewed by the 

budget office staff. In addition, the OCFO written policy does not exempt these types of entries from the journal 

entry review procedures. 

Furthermore, we noted that 20 journal entries were posted to DOLAR$ prior to review and approval as evidenced 

by the signature on the cover sheets of the journal entries. 

We also noted during our review of DOL’s June 30, 2009 consolidated financial statements that the OCFO staff 

made certain adjustments to the Combined Statement of Budgetary Resources (SBR) for a total of approximately 

$1.3 billion without posting these adjustments into DOLAR$ in the form of journal entries (i.e., top-side 

adjustments). No evidence existed to support that appropriate management personnel reviewed and approved 

these adjustments. In addition, DOL’s current policies and procedures do not specifically cover top-side 

adjustment entries. 

By posting transactions and making adjustments to the consolidated financial statements without proper review 

and approval and 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. In addition, there is a risk that employees are not following policies and management is unaware of their 

non-compliance. 

In addition, OCFO management represented that the New Core Financial Management System (NCFMS), to be 

implemented in January 2010 to replace DOLAR$, will require electronic approval by someone other than the 

preparer before journal entries are posted. As a result, we were again informed that DOL does not plan to 

implement the recommendation to reconfigure DOLAR$ so that journal entries entered into DOLAR$ are 

approved electronically by an individual other than the preparer before posting. 

Per GAO’s Standards of Internal Control in the Federal Government, “Key duties and responsibilities need to be 

divided or segregated among different people to reduce the risk of error or fraud. This should include separating 

the responsibilities for authorizing transactions, processing and recording them, reviewing the transactions, and 

handling any related assets. No one individual should control all key aspects of a transaction or event.” 

Because management provided timeframes to implement the new general ledger system that requires electronic 

approval by someone other than the preparer before journal entries are posted, we consider the recommendation 

we made in FY 2007 resolved and open. To close the recommendation, management must ensure that the 

NCFMS is configured, upon implementation, so that journal entries entered into it are required to be approved 

electronically by an individual other than the preparer. 

FY 2009 Performance and Accountability Report   161
Financial Section

Significant Deficiencies

Exhibit I

Because OCFO management does not consistently monitor DOL employees’ compliance with the OCFO policies 

and procedures in place that require all journal entries to be properly prepared, supported, and approved before 

posting to DOLAR$ and that proper segregation of duties is in place related to the preparation and posting of 

journal entries, we consider the manual control recommendation made in FY 2006 as unresolved. To close this 

recommendation, management should (a) develop and implement procedures to monitor DOL agencies to 

determine they are in compliance with OCFO policies and procedures related to journal entries, (b) design and 

implement detective controls that require supervisors to periodically generate and review activity reports that list 

all journal entries posted to DOLAR$, and (c) revise the department-wide policies and procedures to require that 

all manual entries, including top-side adjustment entries, be documented and reviewed and approved by a 

supervisor or someone other than the preparer before the financial statements are adjusted. These controls should 

ensure that all journal entries and top-side adjustments that are posted are appropriate, supported, and 

documented. 

Management’s Response: With respect to existing policies and procedures over journal entries, we disagree with 

the auditor’s conclusion that prior year issues remain unresolved. OCFO has significantly improved the 

documentation and approval requirements over journal entries. Additional procedures were implemented in 

January 2009 to ensure that journal entries recorded in DOLAR$ are sufficiently reviewed and approved, and 

that adequate segregation of duties exists over the authorization, recording, and review and approval functions. 

During the year, OCFO conducted independent reviews of journal entries recorded by ETA, OJC, OCFO, and 

other agencies, and provided guidance to those agencies. With the recent policy revisions and other OCFO 

actions taken since this finding originated, we believe that OCFO has appropriate monitoring procedures in place 

to ensure that journal entries recorded by DOL agencies are subjected to sufficient segregation of duties and 

review and approval procedures. 

We understand that many of the “errors” described by the auditors pertain specifically to entries made by ETA to 

record commitments and sub-allocations. The auditors contend that these transactions are recorded in DOLAR$ 

without proper review and approval or without appropriate segregation of duties. In fact, these transactions are 

initiated and authorized by different individuals prior to being recorded in DOLAR$, and are subjected to certain 

detective controls after recording to ensure accuracy. Commitments are recorded by the Budget Office only upon 

receipt of an EPS-generated document that records the initial request for funds and the subsequent approval by 

the program office. Sub-allocations are prepared by a budget analyst and are reviewed and approved by the 

Budget Officer prior to being recorded in DOLAR$. Subsequently, ETA’s Budget Office utilizes two reports 

which act as detective controls to ensure the accuracy and completeness of allocations and commitments 

recorded in DOLAR$. Since these transactions are initiated, authorized, recorded, and reviewed by different 

individuals, we believe that the segregation of duties is intact and that existing review procedures ensure that 

amounts recorded in DOLAR$ are accurate and complete. 

With respect to the new financial system, NCFMS, the system requires that the posting and approval functions 

for all journal entries be performed electronically and by separate individuals. All journal entries are held in 

suspense and are not recorded until electronic approval is received from the designated supervisor. 

Based on these facts, we believe that the FY 2006 recommendation should be considered resolved, and that this 

finding does not rise to the level of a significant deficiency. At most it should be considered a management 

advisory comment. 

Auditor Response: We believe that the results of our audit procedures support our conclusion that a significant 

deficiency exists in this area. As a result, we consider the system-related recommendation resolved and open

and the remaining recommendations unresolved pending completion of a corrective action plan and timeframes 

for implementation. 

162   United States Department of Labor
Independent Auditors’ Report

Significant Deficiencies

Exhibit I

4. Lack of Sufficient Controls over Financial Statement Preparation 

During our review of DOL’s June 30, 2009 and September 30, 2009 draft consolidated financial statements, we 

noted the following errors and omissions that were not detected by the OCFO’s review of the draft financial 

statements: 

1. The balance of distributed offsetting receipts reported in DOL’s SBR as of June 30, 2009 and September 30, 

2009 was understated by $22.5 billion and $197 million, respectively. 

2. Total unobligated balances available and unobligated balances not available reported in DOL’s SBR as of 

September 30, 2009 were misstated by $2.5 billion due to a classification error that caused this amount to be 

reported as unobligated balances not available instead of unobligated balances available. 

3. The OCFO removed estimated interest payments from the Statement of Social Insurance for fiscal year 2009 

and revised its fiscal years 2005 through 2008 consolidated financial statements to conform to this fiscal year 

2009 presentation. However, the OCFO did not include a footnote disclosure in DOL’s September 30, 2009 

draft consolidated financial statements to explain the changes made to the presentation of the statement. 

4. The earned revenue reported in Note 15 of the consolidated financial statements for one of DOL’s agencies 

was initially overstated by $44.7 million. This intra-departmental amount was incorrectly reported as earned 

revenue instead of a non-expenditure transfer. This error had no impact on the consolidated statements of net 

cost because it was eliminated during consolidation. 

5. Note 18D was initially incomplete as it did not include a reconciliation of distributed offsetting receipts from 

the SBR to the Budget of the United States Government. 

6. The unobligated balance available reported in Note 2 is understated by $151 million as of September 30, 

2009. This understatement is due to a classification error that is offset by overstatements of $69 million in 

obligated balance not yet disbursed and $82 million in unobligated balance unavailable. This classification 

error had no impact on the total Fund Balance with Treasury reported in Note 2. 

Except for condition no. 6 related to Fund Balance with Treasury, the above errors were subsequently corrected 

by management in the final FY 2009 consolidated financial statements. 

In addition, the OCFO did not complete the September 30, 2009 SBR to SF-133, Report on Budget Execution 

and Budgetary Resources (SF-133), reconciliation and research identified differences timely. The OCFO 

reconciliation was not completed until after the OCFO prepared two drafts of DOL’s consolidated financial 

statements. 

Furthermore, the OCFO did not provide us a complete set of DOL’s September 30, 2009 draft consolidated 

financial statements and trial balances in a timely manner. 

The above issues occurred because the OCFO did not perform a sufficiently detailed review of the consolidated 

financial statements to ensure that misstatements, errors, and omissions related to the statements, notes, required 

supplementary information, and required supplementary stewardship information were detected and corrected 

and that the draft financial statements were submitted timely. In addition, the U.S. Department of Labor Manual 

Series (DLMS) does not include specific guidance on the review procedures of the consolidated financial 

statements that would guide DOL supervisors during their reviews. Specifically related to condition no. 1, OCFO 

policy does not require the quarterly reconciliation of distributed offsetting receipts reported on DOL’s SBR to 

distributed offsetting receipts reported on the U.S. Department of the Treasury’s Quarterly Distributed Offsetting 

Receipts by Department Report. These issues resulted in the need to correct the consolidated financial statements 

prior to final submission, causing delays in the financial reporting process. 

FY 2009 Performance and Accountability Report   163
Financial Section

Significant Deficiencies

Exhibit I

U.S. Government Accountability Office’s (GAO), Standards for Internal Control in the Federal Government 

(Standards), states, “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.” 

Office of Management and Budget (OMB) Circular No. A-123, Management’s Responsibility for Internal 

Control, states “The agency head must establish controls that reasonably ensure that obligations and costs are in 

compliance with applicable laws; funds, property, and other assets are safeguarded against waste, loss, 

unauthorized use, or misappropriation; and revenues and expenditures applicable to agency operations are 

properly recorded and accounted for to permit the preparation of accounts and reliable financial and statistical 

reports...” 

Statement of Federal Financial Accounting Concepts No.1, Objectives of Federal Financial Reporting, paragraph 

163 states, “Financial reports should be consistent over time; that is, once an accounting principle or reporting 

method is adopted, it should be used for all similar transactions and events unless there is good cause to change.” 

OMB Circular No. A-136, Financial Reporting Requirements, section II.4.9.34, discusses the required financial 

statement note that explains the differences between the SBR and the Budget of the United States Government. 

“At a minimum, agencies should display the material differences for comparable line items related to budgetary 

resources, obligations, distributed offsetting receipts and outlays.” 

We recommend that the Chief Financial Officer (a) implement procedures to require that OCFO staff reconcile 

the amount of distributed offsetting receipts reported on DOL’s quarterly SBR to distributed offsetting receipts 

reported on Treasury’s Quarterly Distributed Offsetting Receipts by Department Report, (b) ensure that OCFO 

personnel perform a more detailed review of all financial information in the Performance and Accountability 

Report (PAR) including financial statements, notes, supplementary information, and supplementary stewardship 

information, (c) complete the quarterly reconciliations of the SBR to SF-133, including the completion of 

documented supervisory reviews over these reconciliations, by a certain date that facilitates timely identification 

and correction of potential SBR misstatements. and (d) update DLMS to include guidance for DOL supervisors 

to follow during their financial statement reviews, including procedures for comparing financial data reported on 

the different statements and notes to ensure accuracy and consistency. 

Management’s Response: We believe that this finding overstates certain facts, and that the actual events that 

occurred do not warrant issuance of a significant deficiency. The quarterly and year-end financial statements are 

subjected to a draft and final submission process, and it is normal and appropriate for various analyses and 

reviews of draft financial statements to result in subsequent corrections and adjustments in the finals. At yearend, due to the tight deadlines for submission of the audit and year-end statements, the OCFO’s reviews of the 

draft financial statements typically overlap with those of the auditors, and we believe it overstates the facts to 

conclude that our processes would not have detected many of the issues identified in this finding. The OCFO has 

the right to make corrections to draft financial statements until the final opinion is issued by the independent 

auditors. Furthermore, the auditor was made aware of all corrections to financial statements in all drafts 

submitted. 

In regards to the offsetting receipts, OCFO does not concur with the auditor’s statement that reconciliations of 

distributed offsetting receipts are not performed and does not believe there were any delays in the financial 

reporting process caused by this issue. The $197 million understatement was a result of the attempt to verify and 

reconcile FMS reported amounts to amounts recorded in DOL’s general ledger. The understated amount quoted 

for June 30, 2009 is incorrect, a fact that the OCFO determined by subsequent reconciliation to the amount 

reported on the FMS website. FMS subsequently changed the amount reported for June 30, 2009. We also note 

164   United States Department of Labor
Independent Auditors’ Report

Significant Deficiencies

Exhibit I

FY 2009 Performance and Accountability Report   165

that OCFO was not made aware that FMS had established a website for distributed offsetting receipts until after 

the June 30, 2009 unaudited interim statements were submitted to OMB. 

As to the other matters mentioned by the auditors: (1) OCFO was aware of a discrepancy in unobligated balances 

but did not include changes to draft financial statements until it was able to sufficiently investigate the cause and 

accurately quantify the adjustment required; (2) the proposed changes for the Statement of Social Insurance were 

provided to the auditor in May 2009, and the related disclosures were included in subsequent draft financial 

statements; (3) intra-departmental transfers were originally recorded in accordance with the SF 132 presentation, 

and were corrected after consultation with OMB to insure proper treatment; and (4) OCFO believes that entire 

amount of distributed offsetting receipts was not material and, accordingly, Note 18D as presented in the original 

draft was in accordance with OMB guidance. OMB Circular No. A-136, as cited by the auditors, only requires 

disclosures of material differences. 

While we do not concur with the auditor’s description of the facts or their resulting conclusions, we do 

acknowledge that the time frames for financial reporting, especially at year end, put significant pressure on those 

involved in preparation and review of the financial statements. We agree that enhancing certain processes, and 

changing the frequency and/or timing of certain reconciliations, would alleviate some of the pressure and 

improve timeliness. Therefore, we will review existing procedures utilized in the preparation and review of 

quarterly and year-end financial statements, including the footnotes, and will identify areas in need of 

improvement. We will also look at the numerous reviews and reconciliations currently performed by the OCFO 

and other agencies, and will consider the need for increased frequency and stepped up time frames. Revised 

procedures will be developed and implemented accordingly, and will be updated in the DLMS if necessary by 

June 30, 2010. 

Auditor Response: Although the OCFO stated that it does not concur with our comments, the OCFO will be 

taking steps to address our recommendations. Therefore, we consider these recommendations resolved and 

open. FY 2010 audit procedures will determine whether these recommendations have been adequately addressed 

and can be considered closed.

Annual Financial Statements

Principal Financial Statements and Notes
Financial Section

PRINCIPAL FINANCIAL STATEMENTS

170     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  

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) 2009 and 2008 consisted of the following:  

 The Consolidated Balance Sheet, which presents as of September 30, 2009 and 2008 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, 2009 and 2008.  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, 2009 and 2008.

 The Combined Statement of Budgetary Resources, which presents the budgetary resources available to DOL

during FY 2009 and 2008, the status of these resources at September 30, 2009 and 2008, the change in

obligated balance during FY 2009 and 2008, and net outlays of budgetary resources for the years ended

September 30, 2009 and 2008.

 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, 2009, 2008, 2007, 2006, and 2005.
Annual Financial Statements

CONSOLIDATED BALANCE SHEET

As of September 30, 2009 and 2008

(Dollars in Thousands)

 FY 2009 Performance and Accountability Report   171

2009 2008

ASSETS

Intra-governmental

Funds with U.S. Treasury (Notes 1-C and 2) 14,406,751 $ 9,428,930 $ 

Investments (Notes 1-D and 3) 20,111,346 73,564,675 

Accounts receivable (Notes 1-E and 4) 5,467,497 4,076,877 

Total intra-governmental 87,070,482 39,985,594 

Accounts receivable, net of allowance (Notes 1-E and 4) 1,353,841 976,428 

Property, plant and equipment, net

 of accumulated depreciation (Notes 1-F and 5) 1,154,240 1,140,999 

Other

Advances (Notes 1-G and 6) 756,410 1,691,098 

Total assets $ 89,944,319 44,184,773 $ 

LIABILITIES AND NET POSITION

Liabilities (Note 1-I)

Intra-governmental

Accounts payable $ 28,782 17,983 $ 

Debt (Notes 1-J and 8) 10,483,557 14,351,967 

Other liabilities (Note 9) 219,337 101,424 

Total intra-governmental 10,731,676 14,471,374 

Accounts payable 908,799 1,346,997 

Accrued benefits (Notes 1-K and 10) 4,627,250 1,775,576 

Future workers' compensation benefits (Notes 1-L and 11) 889,259 762,836 

Other

Energy employees occupational illness

 compensation benefits (Note 1-M) 8,063,563 8,099,319 

Accrued leave (Note 1-N) 111,507 107,311 

Other liabilities (Note 9) 240,849 150,442 

Total liabilities 29,656,196 22,630,562 

Contingencies (Note 13)

Net position (Note 1-R)

Unexpended appropriations - other funds 10,825,237 8,169,166 

Cumulative results of operations

Earmarked funds (Note 21) 62,052,699 4,562,666 

Other funds (2,908,108) (859,326) 

Total net position 14,528,577 67,313,757 

Total liabilities and net position $ 89,944,319 44,184,773 $ 

The accompanying notes are an integral part of these statements.
Financial Section

CONSOLIDATED STATEMENT OF NET COST

For the Years Ended September 30, 2009 and 2008

(Dollars in Thousands)

172     United States Department of Labor

2009 2008

NET COST OF OPERATIONS (Notes 1-S and 15)

CROSSCUTTING PROGRAMS

Income maintenance

Gross cost $ 133,351,382 $ 53,680,770

Less earned revenue (3,780,083) (3,365,944) 

Net program cost 129,571,299 50,314,826

Employment and training

Gross cost 5,703,975 7,205,646 

Less earned revenue (12,184) (11,439) 

Net program cost 5,691,791 7,194,207 

Labor, employment and pension standards

Gross cost 694,041 720,836 

Less earned revenue (13,240) (13,517) 

Net program cost 680,801 707,319 

Worker safety and health

Gross cost 920,563 943,808 

Less earned revenue (2,750) (2,837) 

Net program cost 917,726 941,058 

OTHER PROGRAMS

Statistics

Gross cost 611,049 629,399 

Less earned revenue (8,321) (5,275) 

Net program cost 605,774 621,078 

COSTS NOT ASSIGNED TO PROGRAMS

Gross cost 111,912 96,777 

Less earned revenue not attributed to programs (13,247) (15,836) 

Net cost not assigned to programs 83,530 96,076 

Net cost of operations $ 139,118,491 $ 58,306,994

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, 2009 and 2008

(Dollars in Thousands)

 FY 2009 Performance and Accountability Report   173

Consolidated Consolidated Consolidated Consolidated

Earmarked All Other Consolidated Earmarked All Other Consolidated

Funds Funds Total Funds Funds Total

Cumulative results

 of operations, beginning $ (2,908,108) 62,052,699 $ $ 59,144,591 $ 65,388,181 $ 63,275,328 (2,112,853) $ 

Adjustments

Change in accounting principle

 (Note 1-B) - (30,268) (30,268) - - - 

Beginning balances, as adjusted 62,052,699 (2,938,376) 59,114,323 65,388,181 63,275,328 (2,112,853) 

Budgetary financing sources

 (Note 1-T)

Appropriations used - 42,689,532 42,689,532 10,107,739 - 10,107,739 

Non-exchange revenue (Note 16)

Employer taxes 35,954,378 - 35,954,378 38,307,831 - 38,307,831

Interest 2,059,807 187 2,059,994 3,639,276 3,644,699 5,423 

Assessments - 779 779 136,827 - 136,827 

Reimbursement of 

 unemployment benefits 2,763,817 - 2,763,817 1,768,182 - 1,768,182

Total non-exchange revenue 40,778,002 966 40,778,968 43,715,289 43,857,539 142,250 

Transfers without 

 reimbursement (Note 17) 18,514,212 (18,414,660) 99,552 (3,683,586) 89,779 3,773,365 

Other financing sources

 (Note 1-U)

Imputed financing from 

 costs absorbed by others 170 136,483 136,653 117,814 195 118,009 

Transfers without 

 reimbursement (Note 17) - 2,803 2,803 3,191 - 3,191 

Total financing sources 59,292,384 24,415,124 83,707,508 40,031,898 54,176,257 14,144,359 

Net cost of operations (116,782,417) (22,336,074) (139,118,491) (43,367,380) (14,939,614) (58,306,994) 

Net change (57,490,033) 2,079,050 (55,410,983) (3,335,482) (4,130,737) (795,255) 

Cumulative results

 of operations, ending (859,326) 4,562,666 3,703,340 62,052,699 59,144,591 (2,908,108) 

Unexpended appropriations,

 beginning - 8,169,166 8,169,166 8,207,904 - 8,207,904 

Budgetary financing sources

 (Note 1-T)

Appropriations received

 (Note 18-F) - 43,475,352 43,475,352 10,936,004 - 10,936,004 

Appropriations transferred - 2,516,238 2,516,238 (431,909) - (431,909) 

Appropriations not available - (645,987) (645,987) (435,094) - (435,094) 

Appropriations used - (42,689,532) (42,689,532) (10,107,739) - (10,107,739) 

Subtotal - 2,656,071 2,656,071 (38,738) - (38,738) 

Unexpended appropriations,

 ending - 10,825,237 10,825,237 8,169,166 - 8,169,166 

Net position $ 9,965,911 4,562,666 $ 14,528,577 $ 62,052,699 $ 5,261,058 $ 67,313,757 $ 

2009 2008

The accompanying notes are an integral part of these statements.
Financial Section

COMBINED STATEMENT OF BUDGETARY RESOURCES

For the Years Ended September 30, 2009 and 2008

(Dollars in Thousands)

174     United States Department of Labor

2009 2008

BUDGETARY RESOURCES

Unobligated balance, brought forward, October 1 4,157,428 $ 4,311,781 $ 

Recoveries of prior year unpaid obligations 262,069 418,195 

Budget authority

Appropriations received (Note 18-F) 167,463,706 58,784,002

Borrowing authority 14,445,717 426,000

Spending authority from offsetting collections

Earned

Collected 2,947,436 1,860,954 

Change in receivables from Federal sources 5,136 (3,996) 

Change in unfilled customer orders

Advance received 2,312 (23,131) 

Expenditure transfers from trust funds 5,348,330 3,772,387 

Total budget authority 189,100,712 65,928,141

Nonexpenditure transfers, net (9,750) (1,703) 

Temporarily not available pursuant to Public Law (35,130) (198,557) 

Permanently not available

Redemption of debt (10,483,557) - 

All other (1,080,459) (852,906) 

Total budgetary resources $ 181,919,360 $ 69,596,904

STATUS OF BUDGETARY RESOURCES

Obligations incurred (Note 18-A)

Direct $ 174,719,690 $ 62,457,299

Reimbursable 2,982,177 3,075,035 

Total obligations incurred 177,794,725 65,439,476

Unobligated balances available

Apportioned 2,499,272 3,232,633 

Exempt from apportionment 239,399 301,633 

Total unobligated balances available 3,534,266 2,738,671 

Unobligated balances not available 590,369 1,418,757 

Total status of budgetary resources $ 181,919,360 $ 69,596,904

CHANGE IN OBLIGATED BALANCE

Obligated balance, net 

Unpaid obligations, brought forward, October 1 9,363,199 $ 9,369,528 $ 

Less uncollected customer payments from Federal sources, 

 brought forward, October 1 (1,183,351) (1,261,368) 

Total unpaid obligated balance, net 8,179,848 8,108,160 

Obligations incurred, net 177,794,725 65,439,476

Less gross outlays (168,678,920) (65,027,610)

Less recoveries of prior year unpaid obligations, actual (262,069) (418,195) 

Change in uncollected customer payments from Federal sources (1,148,424) 78,017 

Obligated balance, net, end of period

Unpaid obligations 18,216,935 9,363,199

Less uncollected customer payments from Federal sources (2,331,775) (1,183,351) 

Total unpaid obligated balance, net, end of period 15,885,160 $ $ 8,179,848

NET OUTLAYS

Gross outlays $ 168,678,920 $ 65,027,610

Less offsetting collections (6,788,590) (6,078,853) 

Less distributed offsetting receipts (24,625,433) (740,880)

Net outlays $ 137,974,634 $ 57,498,140

The accompanying notes are an integral part of these statements.
Annual Financial Statements

STATEMENT OF SOCIAL INSURANCE  

As of September 30, 2009, 2008, 2007, 2006, and 2005

(Dollars in Thousands)

 FY 2009 Performance and Accountability Report   175

Unaudited

2009 2008 2007 2006 2005

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 2,170,943 $ $ 2,139,810 $ 2,450,064 $ 2,622,302 2,722,801 $ 

Present value of estimated future

 administrative costs during 

 the projection period 984,996 827,437 831,439 848,218 845,158 

Actuarial present value of future benefit

 payments and present value of estimated 

 administrative costs during the projection period 3,155,939 2,967,247 3,281,503 3,571,019 3,467,460 

Less the present value of estimated future

 excise tax income during 

 the projection period 8,876,813 8,009,265 7,897,423 8,536,401 7,957,821 

Excess of present value of estimated future

 excise tax income over actuarial present value of 

 benefit payments and present value of 

 estimated administrative costs for

 the projection period 5,720,874 $ $ 5,042,018 $ 4,615,920 $ 4,386,802 $ 5,068,941

 

Trust fund net position deficit at start 

 of projection period (Note 21) (6,320,321) $ $ (10,439,186) $ (10,027,701) $ (9,604,743) $ (9,160,009)

Projection Periods Ending September 30, 2040

The accompanying notes are an integral part of these statements.
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

176     United States Department of Labor

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 2009 Strategic Goals are shown below.  

1. Major program agencies

 Employment and Training Administration (ETA)

 Employment Standards Administration (ESA)

 Office of Job Corps

 Occupational Safety and Health Administration (OSHA)

 Bureau of Labor Statistics (BLS)

 Mine Safety and Health Administration (MSHA)

 Employee Benefits Security Administration (EBSA)  

 Veterans’ Employment and Training Services (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 Inspector General

- Bureau of International Labor Affairs

- Women’s Bureau

- Office of Disability Employment Policy

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.
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   177

NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ‐ Continued

A. Reporting Entity ‐ Continued

2. Major programs

 Income maintenance – Strategic Goal 4      

 Employment and training – Strategic Goals 1 and 2    

 Labor, employment, and pension standards – Strategic Goals 3 and 4

 Worker safety and health – Strategic Goal 3   

 Statistics – Strategic Goal 1

Note 15 shows expenses by major program agencies which correspond to the Department's strategic goals.

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, fiduciary 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.  

   

Fiduciary activities are the collection or receipt, and the management, protection, accounting, investment

and disposition by the Federal Government of cash or other   assets in which non‐Federal individuals or

entities have an ownership interest that the Federal Government must uphold.  Fiduciary cash and other

assets are not assets of the   Federal Government and accordingly are not recognized on the balance

sheet.

Earmarked funds, fiduciary 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.   
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

178     United States Department of Labor

NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ‐ Continued

A. Reporting Entity ‐ Continued

3. Fund accounting structure ‐ continued

Earmarked funds ‐ continued

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.

Fiduciary funds

 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 Act authorizes the Department to assess insurance carriers on

behalf of these beneficiaries.

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.    The Act

authorizes the Department to assess insurance carriers on behalf of these beneficiaries.

 Deposit fund

The Wage and Hour and Public Contracts Restitution Fund, established by the Fair Labor Standards

Amendments of 1949, authorized the Department to assess employers for any unpaid minimum wages or

unpaid overtime compensation owed to any employee or employees as a result of violation of labor laws and

statutes and pay these wages directly to the employee or employees affected.  
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   179

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.  Management and administration of Job

Corps activities was transferred from the Employment and Training Administration to an autonomous office

under the Secretary during FY 2006.    Job Corps funding, appropriated to ETA in 2006 and 2007, was

transferred to the Office of Job Corps via an allotment process.

The Office of Job Corps supports the administration and management of the Job Corps program, which

helps at‐risk youth who need and can benefit from intensive education and training services to become

more employable, responsible, and productive citizens.    The Consolidated Appropriations Act, 2008

appropriated Job Corps funding directly to the Office of Job Corps, requiring the creation of a new Federal

account symbol for the Office of Job Corps.    In FY 2008, Job Corps costs associated with the 2008

appropriation were reported under a new sub‐organization for the Office of Job Corps at the Departmental

level.  Costs associated with prior year appropriations were reported under the Employment and Training

Administration’s Training and Employment Services where they were originally budgeted and appropriated.  

In FY 2009, under mandate by OMB, all outstanding Job Corps balances under prior year appropriations

were transferred from ETA to the sub‐organization for the Office of Job Corps at the Departmental level.

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.   
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

180     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

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 loans to the Black Lung Disability Trust Fund to make disability payments

whenever the fund balance proves insufficient.

Federal Unemployment Benefits and Allowances provides for payment of benefits, training, job search, and

relocation allowances as authorized by the Trade Act of 1974.

Community Service Employment for Older Americans provides part time work experience in community

service activities to unemployed, low income persons aged 55 and over.

The Federal Employees’ Compensation Act Special Benefit Fund provides wage replacement benefits and

payment for medical services to covered Federal civilian employees injured on the job, employees who have

incurred a work‐related occupational disease, and beneficiaries of employees whose death is attributable to

a job‐related injury.  The Fund also provides for rehabilitation of injured employees to facilitate their return

to work.   

The Energy Employees Occupational Illness Compensation Fund was established to adjudicate, administer,

and pay claims for benefits under the Energy Employees Occupational Illness Compensation Program Act of

2000.  The Act authorizes lump sum payments and the reimbursement of medical expenses to employees of

the Department of Energy (DOE) or of private companies under contract with DOE, who suffer from

specified diseases as a result of their work in the nuclear weapons industry.    The Act also authorizes

compensation to the survivors of these employees under certain circumstances.  The Act was amended by

the Ronald Reagan National Defense Authorization Act of 2005 to provide coverage to additional claimants.   

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.

Federal Additional Unemployment Compensation was established under the American Recovery and

Reinvestment Act of 2009 (Recovery Act) to provide a $25 weekly supplement to the unemployment

compensation of eligible claimants.   
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   181

NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ‐ Continued

A. Reporting Entity ‐ Continued

3. Fund accounting structure ‐ continued

All other funds ‐ continued

The Recovery Act was enacted on February 17th, 2009.  DOL’s key roles in the Recovery Act effort include

providing worker training for jobs and easing the burden of the recession on workers and employers by

providing extended and expanded unemployment benefits and assisting and educating them regarding

expanded access to continued health benefits.  These efforts are funded through additional Federal account

symbols, established under existing programs, including Training and Employment Services, Office of Job

Corps, State Unemployment Insurance and Employment Service Operations, and Payments to the

Unemployment Trust Fund.

 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.

 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.
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

182     United States Department of Labor

NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ‐ Continued

B. Basis of Accounting and Presentation

These consolidated financial statements present the financial position, net cost of operations, changes in net

position and budgetary resources of the U.S. Department of Labor, and estimated and actuarial projections for the

Department’s Black Lung social insurance program, in accordance with U.S. generally accepted accounting

principles and the form and content requirements of OMB Circular No. A 136, “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 inter‐fund 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.   

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.   

OMB Circular No. A‐136 requires the parent to report all budgetary and proprietary activity in its financial

statements.   DOL allocates appropriations to the Department of Agriculture and the Department of Interior to

provide funds for youth training programs.  Accordingly, all activity for these allocation accounts is included in the

DOL financial statements for FY 2009 and FY 2008. Appropriations have been allocated to DOL from the

Environmental Protection Agency, the State Department and the Agency for International Development.    These

amounts have not been included in the DOL financial statements for FY 2009 or FY 2008, as they are reported by

those other agencies.

Effective in FY 2009, paragraphs 83‐87 of Statement of Federal Financial Accounting Standards (SFFAS) 7

("dedicated collections") have been rescinded per paragraph 34 of SFFAS 31, "Accounting for Fiduciary Activities.”  

Fiduciary activities are the collection or receipt, and the management, protection, accounting, investment and

disposition by the Federal Government of cash or other assets in which non‐Federal individuals or entities have an

ownership interest that the Federal Government must uphold. Fiduciary cash and other assets are not assets of the

Federal Government.  Fiduciary activities are no longer recognized on the proprietary financial statements, but are

required to be reported in the notes to the financial statements. (See Note 22)   The effect of removing the funds

which account for these fiduciary activities from the proprietary financial statements on beginning cumulative

results of operations is reflected as a change in accounting principle on the Consolidated Statement of Changes in

Net Position.

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 a liability is incurred.

Budgetary accounting facilitates compliance with legal constraints on, and controls over, the use of federal funds.

These consolidated financial statements are different from the financial reports, also prepared by DOL pursuant to

OMB directives, used to monitor DOL’s use of budgetary resources.
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   183

NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ‐ Continued

B. Basis of Accounting and Presentation ‐ Continued

Throughout these financial statements, intra‐governmental assets, liabilities, earned revenue, and costs have been

classified according to the type of entity with whom the transactions were made. Intra‐governmental assets and

liabilities are those from or to other federal entities. Intra‐governmental earned revenue represents collections or

accruals of revenue from other federal entities, and intra‐governmental costs are payments or accruals to other

federal entities.

C. Funds with U.S. Treasury  

DOL’s cash receipts and disbursements are processed by the U.S. Treasury.    Funds with U.S. Treasury represent

obligated and unobligated balances available to finance allowable expenditures and restricted balances, including

amounts related to expired authority and amounts not available for use by DOL.  (See Note 2)

D. Investments       

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.    Balances held in the Energy Employees Occupational Illness

Compensation Fund are invested in non‐marketable Treasury one day certificates.  In FY 2008, balances held in the

Longshore and Harbor Workers’ Compensation Act Trust Fund and the District of Columbia Workmen’s

Compensation Act Trust Fund were invested in non‐marketable Treasury one day certificates. (See Note 3)
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

184     United States Department of Labor

NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ‐ Continued

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.

2. Accounts receivable due from the public

DOL recognizes as accounts receivable State unemployment taxes due from covered employers and

reimbursements of benefits paid on behalf of reimbursable 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. 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.   Internal use software is considered general purpose

PP&E.  
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   185

NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ‐ Continued

F. Property, Plant and Equipment, Net of Accumulated Depreciation ‐ Continued

DOL’s capitalization thresholds are displayed in the following table.

PP&E purchases and additions are stated at cost.    Normal repairs and maintenance are charged to expense as

incurred.   PP&E  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 the remaining life of the lease or the useful life of the improvements,

whichever is shorter, using the straight‐line method of amortization.  DOL operating leases have one year terms with

multiple option years.   The leases are cancelable by the government upon appropriate notice as specified in the

lease agreements. Historically, these leases have not been canceled, and DOL has no intention to cancel these leases

in the near term.

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 PP&E, and the depreciation periods used for each

major classification.  (See Note 5)     

   Years

Structures, facilities and improvements 20 ‐ 50

Furniture and equipment    2 ‐ 36

Internal use software    2 ‐ 15

G. 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 6)

Property classification    Prior to FY 1996 FY 1996 through  

FY 2001

FY 2002 and

thereafter

Useful life

        

Equipment – WCF > $5,000 > $5,000 >= $50,000 >= 2 years

Equipment – Non WCF > $5,000 > $25,000 >= $50,000 >= 2 years

Real Property Purchases or Improvements > $5,000 > $25,000 > $500,000 >= 2 years

Leasehold Improvements > $5,000 > $25,000 > $500,000 >= 2 years

Internal Use Software – WCF > $5,000   > $5,000   > $300,000 >= 2 years

Internal Use Software – Non WCF > $5,000 > $300,000 > $300,000 >= 2 years
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

186     United States Department of Labor

NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ‐ Continued

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.   

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. Debt

DOL’s debt consisted of the following:

1. Black Lung Disability Trust Fund borrowings from U.S. Treasury

Repayable advances outstanding as of September 30, 2008 were retired on October 7, 2008 under the

refinancing agreement authorized by the enactment of the Energy Improvement and Extension Act of 2008

(P.L. 110‐343, section 113) on October 3, 2008.  The Act gave authority to the Black Lung Disability Trust

Fund to issue new obligations to the Secretary of Treasury and gave authority to the Secretary of Treasury to

purchase the new obligations.  However, as the Act did not provide Treasury with an appropriated funding

for the  purchase, the refinancing could not be effected as a sale and purchase and was therefore treated by

Treasury as a loan through Treasury’s Federal Borrowings Program.     
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   187

NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ‐ Continued

J. Debt ‐ Continued

1. Black Lung Disability Trust Fund borrowings from U.S. Treasury ‐ Continued

These borrowings from Treasury’s Bureau of Public Debt were structured with provisions identical to the

zero‐coupon bonds that were to be the original obligations issued by the Trust Fund.    The borrowings

repayment provisions are structured as 32 discounted instruments with sequential annual September 30th

maturities over the 32‐year period 2009 through 2040 and bear interest rates ranging from 1.412% to

4.556%.  Interest on each instrument accrues until its September 30th maturity date or the instrument is

prepaid, whichever occurs first.  These repayments will be funded by coal excise taxes.  In the event that the

Trust Fund cannot repay a discounted instrument when it matures, cannot make benefit payments, or

cannot make other authorized expenditures, the Act authorizes the issuance of one‐year discounted

instruments to finance these activities.  There were no additional borrowings in FY 2009.  

The Act authorized restructuring of the Trust Fund debt by the repayment of the market value of

outstanding repayable advances with the proceeds of the borrowings described above and a one‐time

appropriation.   Pursuant to the refinancing, the market value of the outstanding repayable Advances from

U.S. Treasury plus accrued interest was $12.994 billion. The total value of the new borrowings was $6.496

billion. The one‐time appropriation amount was $6.498 billion. The Trust Fund recognized a loss of $2.496

billion for the difference between the market value of the outstanding advances of $12.994 billion as

determined by Treasury and the carrying value of the outstanding advances and accrued interest of

$10.498 billion.

2. Black Lung Disability Trust Fund advances from U.S. Treasury

Prior to October 3, 2008, the Benefits Revenue Act provided 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 were

provided through transfers from the Advances to the Unemployment Trust Fund and Other Funds

appropriation, to the extent of borrowings under the authority.  Advances were payable 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 bore interest rates ranging from 4.250% to 13.875% at September 30, 2008.
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

188     United States Department of Labor

NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ‐ Continued

J. Debt ‐ Continued

3. Unemployment Trust Fund advances from U.S. Treasury

The repayable advances outstanding as of September 30, 2009 are borrowings from the General Fund of the

U.S. Treasury pursuant to the authority of section 1203 of the Social Security Act (42 USC 1323) and  

appropriated through P.L. 111‐8 (123 Stat. 754) and P.L. 111‐46 (123 Stat. 1970) to fund Title XII loans to

states for unemployment benefits. These repayable advances bear an interest rate of 3.375% and were

computed as the average interest rate, as of the end of the calendar month preceding the issuance date of

the advance, for all interest bearing obligations of the United States then forming the public debt, to the

nearest lower one‐eighth of 1 percent. Interest on the repayable advances is due on September 30th of

each year.  Advances will be repaid by transfers from the Unemployment Trust Fund to the General Fund of

the Treasury when the Secretary of the Treasury, in consultation with the Secretary of Labor, has

determined that the balance in the Unemployment Trust Fund is adequate to allow repayment.

K. 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 10)

1. Unemployment benefits payable

The Unemployment Trust Fund provides benefits to unemployed workers who meet State and Federal

eligibility requirements.  Regular and extended unemployment benefits are paid from State accounts within

the Unemployment Trust Fund, financed primarily by a State unemployment tax on employer payrolls.  Fifty

percent of the cost of extended unemployment benefits is paid from the Extended Unemployment

Compensation Account (EUCA) within the Unemployment Trust Fund, financed by a Federal unemployment

tax on employer payrolls.  However, the Recovery Act has provided for a 100% Federal funding of extended

benefits through December 2009.    Emergency unemployment benefits, 2008, authorized by the

Supplemental Appropriations Act, 2008, are paid from EUCA and are financed by Federal unemployment

taxes and general fund appropriations.  This emergency program has been extended to May 2010 by the

Recovery Act, which also provided additional general fund appropriations.  Emergency benefits were paid in

prior years 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.  The Recovery Act also provided for Federal Additional

Unemployment Compensation, which is a $25 weekly supplement to the unemployment compensation of

eligible claimants. This supplement is 100% funded from Federal general revenues and is payable to

individuals who are otherwise entitled under state law to receive any type of unemployment compensation

discussed above through December 2009.    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.   
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   189

NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ‐ Continued

K. Accrued Benefits ‐ Continued

2. Federal employees disability and 10(h) benefits payable

The Federal Employees’ Compensation Act Special Benefit Fund provides income and medical cost

protection to covered Federal civilian employees injured on the job, employees who have incurred a work‐

related occupational disease and beneficiaries of employees whose death is attributable to a job‐related

injury or occupational disease. The fund is reimbursed by other Federal agencies for the FECA benefit

payments made on behalf of their workers.    The fund assumes the liability for unreimbursed (non‐

chargeable) FECA benefits.    The fund also provides 50% of the annual cost‐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.

L.  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 2009 and FY 2008 were as follows:
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

190     United States Department of Labor

NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ‐ Continued

L.  Future Workers’ Compensation Benefits ‐ Continued

            COLA               CPIM                            

  FY    2009 2008 2009 2008

   

2009 N/A    3.87% N/A    4.01%   

2010 0.47% 2.73% 3.42% 3.86%   

2011 1.40% 2.20% 3.29% 3.87%

2012 1.50% 2.23% 3.48% 3.93%   

2013 1.80% 2.30% 3.71% 3.93%

2014+ 2.00% 2.30% 3.71% 3.93%

Projected annual payments were discounted to present value based on OMB’s interest rate assumptions for ten year

Treasury notes.    For 2009, interest rate assumptions were 4.223% in year one and 4.715% in year two and

thereafter.  For 2008, interest rate assumptions were 4.368% in year one and 4.77% in year two and thereafter.  (See

Note 11)

M. 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 the Radiation Exposure Compensation Act (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 paid by the Department of Justice (DOJ).
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   191

NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ‐ Continued

M. Energy Employees Occupational Illness Compensation Benefits ‐ Continued

DOL has recognized an $8.064 billion and $8.099 billion actuarial liability for estimated future benefits payable by

DOL at September 30, 2009 and 2008, respectively, to eligible individuals under the EEOICPA.  At September 30,

2009, the undiscounted liability is $12.759 billion discounted to a present value liability of $8.064 billion based on

an interest rate of 4.715% projected over a 51 year period.  At September 30, 2008, the undiscounted liability is

$13.066 billion discounted to a present value liability of $8.099 billion based on an interest rate 4.770% projected

over a 52 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.  

N. 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.

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 2009, DOL’s contributions to the FEHBP and FEGLIP were $82.5

and $2.2 million, respectively.   During 2008, DOL’s contributions to the FEHBP and FEGLIP were $79.6 and $2.1

million, respectively.  These contributions are recognized as current operating expenses.

P. Other Retirement Benefits

DOL employees eligible to participate in the FEHBP and the FEGLIP may continue to participate in these programs

after their retirement.  DOL recognizes a current operating expense for the future cost of these other retirement

benefits (ORB) at the time the employee’s services are rendered.    This ORB expense must be financed by OPM.  

Using cost factors supplied by OPM, DOL recorded ORB imputed costs and imputed financing sources of $97.5

million in 2009 and $81.1 million in 2008.
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

192     United States Department of Labor

NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ‐ Continued

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 Civil Service 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 $78.5 million in 2009 and

$74.5 million in 2008.

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 2009, 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 2009.  CSRS and FERS contribution limits were the same

during calendar year 2008.  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, 2009 and 2008

 FY 2009 Performance and Accountability Report   193

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.  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, 2009 and 2008

194     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 primarily 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, the Panama Canal Commission Compensation Fund, and the Energy

Employees Occupational Illness Compensation Fund receive interest on fund investments.    The

Unemployment Trust Fund receives interest from states that had accounts with loans payable to the Federal

unemployment account at the end of the prior fiscal year.  Interest is also earned on Federal funds in the

possession of non‐Federal entities.  Interest is recognized as non‐exchange revenue when earned.  
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   195

NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ‐ Continued

T. Budgetary Financing Sources ‐ Continued

2. Non‐exchange revenue ‐ continued

 Assessments

Assessments consist of penalties levied against employers by ESA for regulatory violations.    In FY 2008,

assessments levied on insurance companies and self‐insured employers by the Longshore and Harbor

Workers’ Compensation Act Trust Fund and District of Columbia Workmen’s Compensation Act Trust

Fund were also included.  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 the Longshore and Harbor Workers’ Compensation Act Trust Fund for administrative costs

and transfers from various DOL general fund unexpended appropriation accounts to the Working Capital

Fund’s cumulative results of operations.  There are also transfers between DOL entities, primarily for the

administration of the unemployment insurance program, Recovery Act appropriations for extended

unemployment benefits and a one‐time appropriation for restructuring of the Black Lung Disability Trust

Fund debt. (See Note 17)

U. Other Financing Sources

Other financing sources include 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, 2009 and 2008

196     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.   (See Notes 1‐B and 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.  Prior to October 3, 2008, the Black Lung Benefits Revenue

Act provided for repayable advances to the BLDTF from the General Fund of the Treasury, in the event that BLDTF

resources were not adequate to meet program obligations.

P.L. 110‐343, Division B‐‐Energy Improvement and Extension Act of 2008, enacted on October 3, 2008, in section

113, (1) allowed for the temporary increase in coal excise tax rates to continue an additional five years beyond the

current statutory limit and (2) restructured the BLDTF debt by refinancing the outstanding high interest rate

repayable advances with the proceeds from issuing low interest rate discounted debt instruments similar in form to

zero‐coupon bonds, plus a one‐time appropriation.    The Act also allowed that any debt issued by the BLDTF

subsequent to the refinancing may be used to make benefit payments, other authorized expenditures, or to repay

debt and interest from the initial refinancing.  All debt issued by the BLDTF was effected as borrowing from the

Bureau of Public Debt.  (See Notes 1J and 8)

DOL changed the presentation of the statements of social insurance to remove estimated interest payments from

the statements.  DOL also revised its fiscal years 2005 through 2008 consolidated financial statements to conform

to this fiscal year 2009 presentation. The change was made to reflect only the financial statement line items

required by SFFAS 17, “Accounting for Social Insurance.”

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

and medical cost inflation.  
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   197

NOTE 1 ‐ SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ‐ Continued

W. Significant Assumptions Used in the Statement of Social Insurance ‐ Continued

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 higher coal excise tax rate

structure is $1.10 per ton of underground‐mined coal and $0.55 per ton of surface‐mined coal sold, with a cap of

4.4% of sales price.  Based on Treasury’s interpretation of the Act, the higher excise tax rates will continue until the

earlier of December 31, 2018 or the first December 31 after 2008 in which there exist no (1) balance of repayable

debt described in section 9501 of the Internal Revenue Code and (2) unpaid interest on the debt.  Starting in 2019,

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 2.0% of sales price.   Although section 9501 of the Internal Revenue Code uses the terminology "advance,"

the Treasury has interpreted this to mean any debt owed by the BLDTF to the Bureau of the Public Debt.

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, the future benefit rate

increases 4.6% in 2010 and 3.6% in each year thereafter and medical cost increases 3.4% in 2010, and ranges from

3.3% to 3.8% thereafter.   Estimates for administrative costs for the first 11 years of the projection are supplied by

DOL’s Budget Office, based on current year enacted amounts, while later years are based on the number of

projected beneficiaries.   

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

4.25%.  This rate is for Treasury loans to government agencies for loans up to 30 years.  Thirty years is the maximum

period for which Treasury publishes rates for loans to government agencies and approximates the projection

period.  

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, 2009 and 2008

198     United States Department of Labor

NOTE 2 ‐ FUNDS WITH U.S. TREASURY

Funds with U.S. Treasury at September 30, 2009 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 16,351 $ $ - $ 61,785 $ 78,136 $ 78,136 - $ 

Trust funds 2,340,232 - (298,848) 2,041,384 2,040,697 (687) 

General funds 2,742,223 637,147 8,902,843 12,282,213 12,282,213 - 

Other - - - - 5,705 5,705 

$ 637,147 5,098,806 $ $ 8,665,780 $ 14,401,733 $ 5,018 14,406,751 $ 

Entity Assets

Funds with U.S. Treasury at September 30, 2008 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 13,388 $ $ - $ 45,518 $ 58,906 $ 58,906 - $ 

Trust funds 192,605 - (285,620) (93,015) (93,518) (503) 

General funds 2,489,715 1,340,149 5,555,362 9,385,226 9,385,226 - 

Other - - - - 78,316 78,316 

$ 1,340,149 2,695,708 $ $ 5,315,260 $ 9,351,117 $ 77,813 9,428,930 $ 

Entity Assets

The negative fund balances reported as of September 30, 2009 and 2008 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 at September 30, 2009 includes $558 million of funds apportioned for use in the

subsequent year.
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   199

NOTE 3 ‐ INVESTMENTS

Investments at September 30, 2009 consisted of the following:

Face Premium Interest Net Market

(Dollars in thousands) Value (Discount) Receivable Value Value

Unemployment Trust Fund

Non-marketable

Special issue U.S. Treasury Bonds

3.250% maturing June 30, 2010 334,382 $ $ - $ 32 $ 334,382 334,414 $ 

4.500% maturing June 30, 2011 19,293,800 - 217,055 19,293,800 19,510,855 

 19,628,182 - 217,087 19,628,182 19,845,269 

Panama Canal Commission

 Compensation Fund

Marketable

U.S. Treasury Notes

3.500% to 4.625% various maturities 66,664 44 1,103 67,268 67,811 

U.S. Treasury Bonds

11.750% to be called November 15, 2009 5,163 52 228 5,234 5,443 

 71,827 96 1,331 72,502 73,254 

Energy Employees Occupational Illness 

 Compensation Fund

Non-marketable

One Day Certificate

0.070% maturing October 1, 2009 192,823 - - 192,823 192,823 

$ 96 19,892,832 $ $ 218,418 $ 20,111,346 19,893,507 $ 

Entity investments $ 96 19,856,989 $ $ 218,022 $ 19,857,665 20,075,107 $ 

Non-entity investments 35,843 - 396 35,842 36,239 

$ 96 19,892,832 $ $ 218,418 $ 20,111,346 19,893,507 $ 
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

200     United States Department of Labor

NOTE 3 ‐ INVESTMENTS ‐ Continued

Investments at September 30, 2008 consisted of the following:

Face Premium Interest Net Market

(Dollars in thousands) Value (Discount) Receivable Value Value

Unemployment Trust Fund

Non-marketable

Special issue U.S. Treasury Bonds

4.875% maturing June 30, 2009 3,304,955 $ $ - $ 40,279 $ 3,304,955 3,345,234 $ 

5.000% maturing June 30, 2009 11,000,000 - 137,500 11,000,000 11,137,500 

5.000% maturing June 30, 2010 24,855,747 - 310,697 24,855,747 25,166,444 

4.500% maturing June 30, 2010 5,000,000 - 56,250 5,000,000 5,056,250 

4.500% maturing June 30, 2011 28,271,737 - 318,057 28,589,794 28,271,737 

 72,432,439 - 862,783 73,295,222 72,432,439 

Panama Canal Commission

 Compensation Fund

Marketable

U.S. Treasury Notes

3.500% to 4.750% various maturities 70,089 5 1,166 71,247 71,260 

U.S. Treasury Bonds

11.750% various maturities 5,163 472 228 5,863 5,729 

 75,252 477 1,394 77,123 76,976 

Longshore and Harbor Workers' 

 Compensation Act Trust Fund

Non-marketable

One Day Certificate

0.330% maturing October 1, 2008 61,905 - - 61,905 61,905 

District of Columbia Workmen's 

 Compensation Act Trust Fund

Non-marketable

One Day Certificate

0.330% maturing October 1, 2008 5,160 - - 5,160 5,160 

Energy Employees Occupational Illness 

 Compensation Fund

Non-marketable

One Day Certificate

0.330% maturing October 1, 2008 125,265 - - 125,265 125,265 

$ 477 72,700,021 $ $ 864,177 $ 72,701,745 73,564,675 $ 

Entity investments $ 477 72,590,369 $ $ 862,871 $ 72,592,093 73,453,717 $ 

Non-entity investments 109,652 - 1,306 109,652 110,958 

$ 477 72,700,021 $ $ 864,177 $ 72,701,745 73,564,675 $ 

 
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   201

NOTE 4 ‐ ACCOUNTS RECEIVABLE, NET OF ALLOWANCE

           

Accounts receivable at September 30, 2009 consisted of the following:

Gross Net

(Dollars in thousands) Receivables Allowance Receivables

Entity intra-governmental assets

Due for UCFE and UCX benefits 474,770 $ $ 474,770 - $ 

Due for workers' compensation benefits 4,982,929 4,982,929 - 

Other 9,798 9,798 - 

 5,467,497 5,467,497 - 

Entity assets

State unemployment taxes 945,324 262,970 (682,354) 

Due from reimbursable employers 733,404 687,213 (46,191) 

Benefit overpayments 1,989,258 348,683 (1,640,575) 

Other 5,247 4,406 (841) 

 3,673,233 1,303,272 (2,369,961) 

Non-entity assets

Fines and penalties 91,143 (40,574) 50,569 

 3,764,376 1,353,841 (2,410,535) 

$ 9,231,873 $ (2,410,535) 6,821,338 $ 

Accounts receivable at September 30, 2008 consisted of the following:

Gross Net

(Dollars in thousands) Receivables Allowance Receivables

Entity intra-governmental assets

Due for UCFE and UCX benefits 292,833 $ $ 292,833 - $ 

Due for workers' compensation benefits 3,771,775 3,771,775 - 

Other 12,269 12,269 - 

 4,076,877 4,076,877 - 

Entity assets

State unemployment taxes 823,667 183,985 (639,682) 

Due from reimbursable employers 502,342 473,802 (28,540) 

Benefit overpayments 1,935,897 257,102 (1,678,795) 

Other 13,126 10,999 (2,127) 

 3,275,032 925,888 (2,349,144) 

Non-entity assets

Fines and penalties 76,778 44,173 (32,605) 

Backwages 16,785 (10,418) 6,367 

 93,563 (43,023) 50,540 

 3,368,595 976,428 (2,392,167) 

$ 7,445,472 $ (2,392,167) 5,053,305 $ 
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

202     United States Department of Labor

NOTE 5 ‐ PROPERTY, PLANT AND EQUIPMENT, NET OF ACCUMULATED DEPRECIATION

Property, plant and equipment at September 30, 2009 consisted of the following:

Accumulated

Depreciation/ Net Book

(Dollars in thousands) Cost Amortization Value

Structures, facilities and improvements

Structures and facilities 1,111,949 $ $ 643,060 (468,889) $ 

Improvements to leased facilities 420,863 176,189 (244,674) 

 1,532,812 819,249 (713,563) 

Furniture and equipment

Equipment held by contractors 170,681 8,053 (162,628) 

Furniture and equipment 33,248 (22,614) 10,634 

 203,929 18,687 (185,242) 

Internal use software 196,561 123,153 (73,408) 

Construction-in-progress 97,377 97,377 - 

Land 95,774 95,774 - 

$ 2,126,453 $ 1,154,240 (972,213) $ 

2009

Property, plant and equipment at September 30, 2008 consisted of the following:

Accumulated

Depreciation/ Net Book

(Dollars in thousands) Cost Amortization Value

Structures, facilities and improvements

Structures and facilities 1,067,982 $ $ 630,935 (437,047) $ 

Improvements to leased facilities 423,580 189,782 (233,798) 

 1,491,562 820,717 (670,845) 

Furniture and equipment

Equipment held by contractors 166,504 6,892 (159,612) 

Furniture and equipment 51,777 (36,132) 15,645 

 218,281 22,537 (195,744) 

Internal use software 206,369 114,259 (92,110) 

Construction-in-progress 90,233 90,233 - 

Land 93,253 93,253 - 

$ 2,099,698 $ 1,140,999 (958,699) $ 

2008
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   203

NOTE 6 ‐ ADVANCES

Advances at September 30, 2009 and 2008 consisted of the following:

(Dollars in thousands) 2009 2008

Advances to states for UI benefit payments 1,583,858 $ 706,556 $ 

Advances to grantees and contractors to finance future DOL program expenditures 16,298 35,947 

Other 13,907 90,942 

$ 756,410 1,691,098 $ 

NOTE 7 ‐ NON‐ENTITY ASSETS

Non‐entity assets consisted of the following at September 30, 2009 and 2008:

(Dollars in thousands) 2009 2008

Intra-governmental

Funds with U.S. Treasury $ 77,813 5,018 $ 

Investments 36,239 110,958 

 188,771 41,257 

Accounts receivable, net of allowance 50,569 50,540

$ 91,826 239,311 $ 

NOTE 8 ‐ DEBT

DOL’s debt during 2009 consisted of the following:

Balance at Balance at

September 30, Net September 30,

(Dollars in thousands) 2008 Refinancing Borrowing 2009

Intra-governmental

Debt to Treasury

Black Lung Disability Trust Fund

 Advances from U.S. Treasury 10,483,557 $ $ (10,483,557) $ - $ - 

 Borrowing from U.S. Treasury - 6,495,717 6,370,580 (125,137) 

Unemployment Trust Fund

 Advances from U.S. Treasury - - 7,981,387 7,981,387

$ 10,483,557 $ (3,987,840) $ 14,351,967 7,856,250 $ 

DOL’s debt during 2008 consisted of the following:

Balance at Balance at

September 30, Net September 30,

(Dollars in thousands) 2007 Refinancing Borrowing 2008

Intra-governmental

Debt to Treasury

Black Lung Disability Trust Fund

 Advances from U.S. Treasury 10,057,557 $ $ - $ 10,483,557 426,000 $ 
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

204     United States Department of Labor

NOTE 8 ‐ DEBT ‐ Continued

Refinancing includes the replacement of high interest rate Advances from U.S. Treasury with borrowings in the form

of discounted instruments, similar to zero coupon bonds.  Net borrowing includes capitalized interest of $212,335

and repaid debt of $337,472 for the Black Lung Disability Trust fund and new advances of $7,950,000 and accrued

interest of $31,387 for the Unemployment Trust Fund. (See Note 1‐J)

NOTE 9 ‐ OTHER LIABILITIES

Other liabilities at September 30, 2009 and 2008 consisted of the following current liabilities:

(Dollars in thousands) 2009 2008

Intra-governmental

Accrued payroll benefits $ 13,055 15,222 $ 

Unearned FECA assessments 52,724 18 

Non-entity receivables due to U.S. Treasury 50,332 42,803 

Amounts held for the Railroad Retirement Board 35,552 110,455 

Advances from other Federal agencies 300 300 

Total intra-governmental 101,424 219,337 

Accrued payroll and benefits 59,043 69,124 

Due to Backwage recipients 84,925 - 

Unearned assessment revenue 41,217 - 

Deposit and clearing accounts 1,127 5,944 

Readjustment allowances and other Job Corps liabilities 75,374 54,537 

 150,442 240,849 

$ 460,186 251,866 $ 

NOTE 10 ‐ ACCRUED BENEFITS

Accrued benefits at September 30, 2009 and 2008 consisted of the following:

(Dollars in thousands) 2009 2008

State regular and extended unemployment benefits payable 1,775,266 $ 966,415 $ 

Federal extended unemployment benefits payable 520,503 39,144 

Federal emergency unemployment benefits payable, 2008 1,230,920 324,534 

Federal emergency unemployment benefits payable, other 69,505 70,710 

Federal employees' unemployment benefits payable 28,104 25,431 

Federal employees' unemployment benefits for existing

 claims due in the subsequent year 614,451 202,759 

Federal additional unemployment benefits payable 231,361 - 

Total unemployment benefits payable 4,470,110 1,628,993 

Black lung disability benefits payable 36,017 40,003 

Federal employees' disability and 10(h) benefits payable 90,017 76,952 

Energy employees occupational illness compensation benefits payable 31,106 24,712 

Longshore and harbor workers disability benefits payable 4,571 - 

District of Columbia disability benefits payable 345 - 

$ 4,627,250 $ 1,775,576
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   205

NOTE 11 ‐ FUTURE WORKERS' COMPENSATION BENEFITS

DOL’s liability for future workers’ compensation benefits at September 30, 2009 and 2008 consisted of the

following:

(Dollars in thousands) 2009 2008

Projected gross liability of the Federal government

 for future FECA benefits $ 26,953,702 27,589,632 $ 

Less liabilities attributed to other agencies:

U.S. Postal Service (9,543,798) (9,507,251) 

Department of Navy (2,685,911) (2,425,587) 

Department of Army (1,980,257) (1,790,270) 

Department of Veterans Affairs (1,734,929) (1,905,472) 

Department of Air Force (1,286,935) (1,395,449) 

Department of Transportation (970,738) (985,336) 

Department of Homeland Security (1,826,221) (1,795,351) 

Tennessee Valley Authority (505,491) (532,499) 

Department of Treasury (593,196) (525,430) 

Department of Agriculture (845,995) (832,013) 

Department of Justice (1,136,570) (1,233,899) 

Department of Interior (692,389) (697,210) 

Department of Defense, Other (815,854) (800,883) 

Department of Health and Human Services (253,312) (282,517) 

Social Security Administration (310,636) (297,932) 

General Services Administration (135,953) (163,826) 

Department of Commerce (171,187) (169,580) 

Department of Energy (104,734) (95,897) 

Department of State (68,892) (71,621) 

Department of Housing and Urban Development (69,058) (84,529) 

Department of Education (16,554) (16,199) 

National Aeronautics and Space Administration (56,912) (63,977) 

Environmental Protection Agency (44,122) (44,615) 

Small Business Administration (29,640) (27,061) 

Office of Personnel Management (21,695) (22,139) 

National Science Foundation (1,319) (1,198) 

Nuclear Regulatory Commission (7,628) (7,059) 

Agency for International Development (26,885) (23,137) 

Other (569,922) (586,569) 

 (26,064,443) (26,826,796) 

$ 762,836 889,259 $ 

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 616,541 $ 473,892 $ 

FECA benefits due to eligible workers of DOL and Job Corps enrollees 216,793 235,382 

FECA benefits due to eligible workers of the Panama Canal Commission 55,925 53,562 

$ 762,836 889,259 $ 
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

206     United States Department of Labor

NOTE 12 ‐ LIABILITIES NOT COVERED BY BUDGETARY RESOURCES

Liabilities not covered by budgetary resources at September 30, 2009 and 2008 consisted of the following:

(Dollars in thousands) 2009 2008

Intra-governmental

Debt $ 14,320,580 $ 10,483,557

Accrued benefits 515,593 - 

Future workers' compensation benefits 296,339 231,965 

Accrued annual leave 105,763 99,737 

Readjustment allowances and other Job Corps liabilities 74,699 54,537 

 986,368 392,265 

$ 15,306,948 $ 10,875,822

NOTE 13 ‐ CONTINGENCIES

The Department is involved in various lawsuits incidental to its operations.   Judgments resulting from litigation

against the Department are generally 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 2009 consisted of the following:

Total

Employer Costs Imputed Pension

(Dollars in thousands) Contributions by OPM Expense

Civil Service Retirement System 21,938 $ $ 58,330 36,392 $ 

Federal Employees' Retirement System 110,402 113,251 2,849 

Thrift Savings Plan 41,613 41,613 - 

$ 173,953 $ 39,241 $ 213,194

Pension expense in 2008 consisted of the following:

Total

Employer Costs Imputed Pension

(Dollars in thousands) Contributions by OPM Expense

Civil Service Retirement System 22,251 $ $ 59,176 36,925 $ 

Federal Employees' Retirement System 103,805 103,805 - 

Thrift Savings Plan 39,286 39,286 - 

$ 165,342 $ 36,925 $ 202,267

     
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   207

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

2009.   
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

208     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, 2009 consisted of the following:  

Employment Employment Office Occupational

and Training Standards of Safety and Health

(Dollars in thousands) Administration Administration Job Corps Administration

CROSSCUTTING PROGRAMS

 Income maintenance

Intra-governmental 208,566 $ $ 2,843,904 $ - $ - 

With the public 125,688,846 4,624,270 - - 

 Gross cost 125,897,412 7,468,174 - - 

Intra-governmental earned revenue (1,015,214) (2,787,375) - - 

Public earned revenue - - - - 

 Less earned revenue (1,015,214) (2,787,375) - - 

Net program cost 124,882,198 4,680,799 - - 

 Employment and training

Intra-governmental 42,936 - 17,029 - 

With the public 5,451,065 - 1,480,441 - 

 Gross cost 5,494,001 - 1,497,470 - 

Intra-governmental earned revenue (11,611) - - - 

Public earned revenue - - (378) - 

 Less earned revenue (11,611) - (378) - 

Net program cost 5,482,390 - 1,497,092 - 

 Labor, employment and pension

 standards

Intra-governmental - 119,662 - - 

With the public - 259,890 - - 

 Gross cost - 379,552 - - 

Intra-governmental earned revenue - - - - 

Public earned revenue - - - - 

 Less earned revenue - - - - 

Net program cost - 379,552 - - 

 Worker safety and health

Intra-governmental - - 125,474 - 

With the public - - - 417,460 

 Gross cost - - - 542,934 

Intra-governmental earned revenue - - (16) - 

Public earned revenue - - - (1,370) 

 Less earned revenue - - - (1,386) 

Net program cost - - - 541,548

OTHER PROGRAMS

 Statistics

Intra-governmental - - - - 

With the public - - - - 

 Gross cost - - - - 

Intra-governmental earned revenue - - - - 

Public earned revenue - - - - 

 Less earned revenue - - - - 

Net program cost - - - - 

COSTS NOT ASSIGNED TO PROGRAMS

 Gross cost - - - - 

 Less earned revenue not attributed to programs - - - - 

Net cost not assigned to programs - - - - 

Net cost of operations $ 130,364,588 $ 5,060,351 $ 1,497,092 $ 541,548
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   209

Bureau of Mine Safety Employee Benefits Veterans' Other

Labor and Health Security Employment Departmental

Statistics Administration Administration and Training Programs Eliminations Total

$ - $ - $ - $ - $ 1,428 $ 3,011,356 (42,542) $ 

 - - - - 6,874 20,036 130,340,026 

 - - - - 8,302 133,351,382 (22,506) 

 - - - - - (3,780,083) 22,506 

 - - - - - - - 

 - - - - - 22,506 (3,780,083) 

 - - - - 8,302 - 129,571,299

 - - - 9,729 435 48,284 (21,845) 

 - - - 203,816 745 21,295 7,157,362 

 - - - 213,545 1,180 (550) 7,205,646 

 - - - - - (11,061) 550 

 - - - - - - (378) 

 - - - - - 550 (11,439) 

 - - - 213,545 1,180 - 7,194,207

 - 56,438 - 971 15,527 146,687 (45,911) 

 - - 131,108 19,521 117,719 45,911 574,149 

 - - 187,546 20,492 133,246 - 720,836 

 - (12,526) - - (983) (13,509) - 

 - - (8) - - - (8) 

 - - (12,534) - (983) - (13,517) 

 - - 175,012 20,492 132,263 - 707,319

 128,686 - - - 4,459 198,668 (59,951) 

 - 260,774 - - 6,955 59,951 745,140 

 - 389,460 - - 11,414 - 943,808 

 - - - - - (16) - 

 - (1,364) - - - - (2,734) 

 - (1,364) - - - - (2,750) 

 - 388,096 - - 11,414 - 941,058

 205,484 - - - 12,818 194,333 (23,969) 

 391,100 - - - 19,997 23,969 435,066 

 596,584 - - - 32,815 - 629,399 

 (5) - - - - (5) - 

 (8,316) - - - - - (8,316) 

 (8,321) - - - - - (8,321) 

 588,263 - - - 32,815 - 621,078

 - - - - 99,536 96,777 (2,759) 

 - - - - (16,006) 2,759 (13,247) 

 - - - - 83,530 - 83,530

$ 588,263 $ 388,096 $ 175,012 $ 234,037 $ 269,504 $ - $ 139,118,491
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

210     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, 2009 consisted of the

following:

Training and

Employment Employment

(Dollars in thousands) Security Programs Eliminations Total

CROSSCUTTING PROGRAMS

 Income maintenance

Benefits 120,912,065 $ 82 $ $ - $ 120,912,147

Grants 4,475,166 - - 4,475,166

Interest 34,228 - - 34,228

Administrative and other 475,472 399 - 475,871

 Gross cost 125,896,931 481 - 125,897,412

Less earned revenue (1,015,214) - - (1,015,214)

Net program cost 124,881,717 481 - 124,882,198

 Employment and training

Benefits 10,045 - - 10,045

Grants 1,747 5,289,212 - 5,290,959

Administrative and other 192,997 - - 192,997

 Gross cost 1,747 5,492,254 - 5,494,001

Less earned revenue (11,611) - - (11,611)

Net program cost 1,747 5,480,643 - 5,482,390

Net cost of operations $ 124,883,464 $ 5,481,124 $ - $ 130,364,588

  

            
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   211

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, 2009 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 4,398,133 $ $ - $ - $ - $ 4,396,062 (2,071) $ 

Interest 231,292 - - - 231,292 - 

Loss on debt refinancing 2,495,660 - - - 2,495,660 - 

Administrative and other 345,160 - - - 345,160 - 

 Gross cost 7,470,245 - - - 7,468,174 (2,071) 

Less earned revenue (2,789,446) - - - 2,071 (2,787,375) 

Net program cost 4,680,799 - - - 4,680,799 - 

 Labor, employment and

 pension standards

Benefits 11,198 - 25,740 7,280 44,218 - 

Administrative and other 87,040 - 202,363 45,931 335,334 - 

 Gross cost 98,238 - 228,103 53,211 379,552 - 

Less earned revenue - - - - - -

Net program cost 98,238 - 228,103 53,211 379,552 - 

Net cost of operations $ 4,680,799 $ 98,238 $ 228,103 $ 53,211 $ - $ 5,060,351

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

2008.   
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

212     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, 2008 consisted of the following:

Employment Employment Office Occupational

and Training Standards of Safety and Health

(Dollars in thousands) Administration Administration Job Corps Administration

CROSSCUTTING PROGRAMS

 Income maintenance

Intra-governmental 224,744 $ $ 901,873 $ - $ - 

With the public 47,143,092 5,387,831 - - 

 Gross cost 47,367,836 6,289,704 - - 

Intra-governmental earned revenue (728,874) (2,658,557) - - 

Public earned revenue - - - - 

 Less earned revenue (728,874) (2,658,557) - - 

Net program cost 46,638,962 3,631,147 - - 

 Employment and training

Intra-governmental 40,395 - 9,493 - 

With the public 4,634,551 - 808,342 - 

 Gross cost 4,674,946 - 817,835 - 

Intra-governmental earned revenue (11,569) - (47) - 

Public earned revenue (245) - (323) - 

 Less earned revenue (11,814) - (370) - 

Net program cost 4,663,132 - 817,465 - 

 Labor, employment and pension

 standards

Intra-governmental - 122,364 - - 

With the public - 257,241 - - 

 Gross cost - 379,605 - - 

Intra-governmental earned revenue - - - - 

Public earned revenue - (1,000) - - 

 Less earned revenue - (1,000) - - 

Net program cost - 378,605 - - 

 Worker safety and health

Intra-governmental - - 121,944 - 

With the public - - - 416,170 

 Gross cost - - - 538,114 

Intra-governmental earned revenue - - (264) - 

Public earned revenue - - - (1,321) 

 Less earned revenue - - - (1,585) 

Net program cost - - - 536,529

OTHER PROGRAMS

 Statistics

Intra-governmental - - - - 

With the public - - - - 

 Gross cost - - - - 

Intra-governmental earned revenue - - - - 

Public earned revenue - - - - 

 Less earned revenue - - - - 

Net program cost - - - - 

COSTS NOT ASSIGNED TO PROGRAMS

 Gross cost - - - - 

 Less earned revenue not attributed to programs - - - - 

Net cost not assigned to programs - - - - 

Net cost of operations $ 51,302,094 $ 4,009,752 $ 817,465 $ 536,529
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   213

Bureau of Mine Safety Employee Benefits Veterans' Other

Labor and Health Security Employment Departmental

Statistics Administration Administration and Training Programs Eliminations Total

$ - $ 11,693 - $ $ - $ 1,400 $ 1,052,358 (87,352) $ 

 - - 23,254 - 8,370 65,865 52,628,412 

 - - 34,947 - 9,770 53,680,770 (21,487) 

 - - - - - (3,365,944) 21,487 

 - - - - - - - 

 - - - - - 21,487 (3,365,944) 

 - - 34,947 - 9,770 - 50,314,826

 - - - 10,262 427 42,879 (17,698) 

 - - - 199,760 745 17,698 5,661,096 

 - - - 210,022 1,172 - 5,703,975 

 - - - - - (11,616) - 

 - - - - - - (568) 

 - - - - - - (12,184) 

 - - - 210,022 1,172 - 5,691,791

 - 44,430 - 1,023 15,787 129,491 (54,113) 

 - - 111,589 19,047 122,560 54,113 564,550 

 - - 156,019 20,070 138,347 - 694,041 

 - (12,097) - - (100) (12,197) - 

 - - (30) - (13) - (1,043) 

 - - (12,127) - (113) - (13,240) 

 - - 143,892 20,070 138,234 - 680,801

 115,333 - - - 4,164 183,016 (58,425) 

 - 256,221 - - 6,731 58,425 737,547 

 - 371,554 - - 10,895 - 920,563 

 (5) - - - - (269) - 

 - (1,247) - - - - (2,568) 

 - (1,252) - - - - (2,837) 

 - 370,302 - - 10,895 - 917,726

 204,912 - - - 11,973 192,615 (24,270) 

 374,813 - - - 19,351 24,270 418,434 

 579,725 - - - 31,324 - 611,049 

 (1) - - - - (1) - 

 (5,274) - - - - - (5,274) 

 (5,275) - - - - - (5,275) 

 574,450 - - - 31,324 - 605,774

 - - - - 115,823 111,912 (3,911) 

 - - - - (19,747) 3,911 (15,836) 

 - - - - 96,076 - 96,076

$ 574,450 $ 370,302 $ 178,839 $ 230,092 $ 287,471 $ - $ 58,306,994
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

214     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, 2008 consisted of the

following:  

        

Training and

Employment Employment Office of

(Dollars in thousands) Security Programs Job Corps Eliminations Total

CROSSCUTTING PROGRAMS

 Income maintenance

Benefits 42,543,343 $ 91 $ $ - $ 42,543,434 - $ 

Grants 4,301,250 - - 4,301,250 - 

Interest 3,519 - - 3,519 - 

Administrative and other 519,222 41,411 - 519,633 (41,000) 

 Gross cost 47,367,334 41,502 - 47,367,836 (41,000) 

Less earned revenue (769,874) - - (728,874) 41,000 

Net program cost 46,597,460 41,502 - 46,638,962 - 

 Employment and training

Benefits 16,178 - 4,023 20,201 - 

Grants 3,829,199 - 99,997 3,929,196 - 

Administrative and other 295,410 - 430,139 725,549 - 

 Gross cost 4,140,787 - 534,159 4,674,946 - 

Less earned revenue (11,272) - (542) (11,814) - 

Net program cost 4,129,515 - 533,617 4,663,132 - 

Net cost of operations $ 46,597,460 $ 4,171,017 $ 533,617 $ - $ 51,302,094
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   215

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, 2008 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 5,170,202 $ $ - $ - $ - $ 5,168,490 (1,712) $ 

Interest 739,469 - - - 739,469 - 

Administrative and other 381,745 - - - 381,745 - 

 Gross cost 6,291,416 - - - 6,289,704 (1,712) 

Less earned revenue (2,660,269) - - - 1,712 (2,658,557) 

Net program cost 3,631,147 - - - 3,631,147 - 

 Labor, employment and

 pension standards

Benefits 12,575 - 27,903 7,986 48,464 - 

Administrative and other 86,773 - 197,433 46,935 331,141 - 

 Gross cost 99,348 - 225,336 54,921 379,605 - 

Less earned revenue - - (1,000) - (1,000) - 

Net program cost 99,348 - 224,336 54,921 378,605 - 

Net cost of operations $ 3,631,147 $ 99,348 $ 224,336 $ 54,921 $ - $ 4,009,752
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

216     United States Department of Labor

NOTE 16 ‐ NON‐EXCHANGE REVENUE

Non‐exchange revenues reported on the Consolidated Statement of Changes in Net Position in 2009 and 2008

consisted of the following:

(Dollars in thousands) 2009 2008

Employer taxes

Unemployment Trust Fund

Federal unemployment taxes 6,658,309 $ 7,281,534 $ 

State unemployment taxes 30,373,647 28,651,188 

 37,655,181 35,309,497 

Black Lung Disability Trust Fund excise taxes 644,881 652,650

 38,307,831 35,954,378 

Interest

Unemployment Trust Fund 3,635,617 2,056,548 

Longshore and Harbor Workers' Compensation Act Trust Fund 1,044 - 

District of Columbia Workmen's Compensation Act Trust Fund 127 - 

Panama Canal Commission Compensation Fund 1,976 3,108 

Energy Employees Occupational Illness Compensation Fund 187 4,252 

Black Lung Disability Trust Fund 551 1,283 

 3,644,699 2,059,994 

Assessments

Longshore and Harbor Workers' Compensation Act Trust Fund 127,418 - 

District of Columbia Workmen's Compensation Act Trust Fund 8,920 - 

Other 489 779 

 136,827 779 

Reimbursement of unemployment benefits from state and

 local governments and non-profit organizations

 to the Unemployment Trust Fund 2,763,817 1,768,182 

$ 40,778,968 43,857,539 $ 

NOTE 17 ‐ TRANSFERS WITHOUT REIMBURSEMENT

Transfers from (to) other Federal agencies in 2009 and 2008 consisted of the following:

(Dollars in thousands) 2009 2008

Budgetary financing sources

From H-1B Nonimmigrant Petitioner Account, Department of Homeland Security 94,451 $ 86,779 $ 

From Longshore and Harbor Workers' Compensation Act Trust Fund 2,101 - 

From DOL general fund unexpended appropriation

 accounts to the DOL Working Capital Fund 3,000 3,000 

 99,552 89,779

Other financing sources

From General Services Administration 2,803 3,191 

 2,803 3,191

$ 92,970 102,355 $ 

The balance of $99,552 and $89,779 in budgetary financing sources for FY 2009 and 2008, respectively, reflects

the elimination of intra‐DOL transfers of $18,514,212 and $3,683,586.
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   217

NOTE 18 ‐ STATUS OF BUDGETARY RESOURCES

       

A. Apportionment Categories of Obligations Incurred

Obligations incurred reported on the Combined Statement of Budgetary Resources in 2009 and 2008 consisted of

the following:

(Dollars in thousands) 2009 2008

Direct Obligations

Category A $ 4,075,613 4,269,886 $ 

Category B 9,137,416 44,407,391 

Exempt from apportionment 126,042,413 49,244,270

Total direct obligations 62,457,299 174,719,690 

Reimbursable Obligations

Category A 206,345 231,280 

Category B 2,843,755 2,775,832

Total reimbursable obligations 3,075,035 2,982,177 

$ 177,794,725 $ 65,439,476

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, 2009 and 2008 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, 2009 and 2008

218     United States Department of Labor

NOTE 18 ‐ STATUS OF BUDGETARY RESOURCES ‐ Continued

C. Legal Arrangements Affecting Use of Unobligated Balances ‐ Continued

(Dollars in millions) 2009 2008

Unemployment Trust Fund unavailable collections, beginning $ 69,509 72,448 $ 

Budget authority from current year appropriations and borrowing authority 66,556 43,852 

Less obligations (46,791) (121,844) 

Excess (deficiency) of budget authority over obligations (55,288) (2,939)

Unemployment Trust Fund unavailable collections, ending $ 14,221 $ 69,509

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, 2009 has not

been published as of the issue date of these financial statements.  This document will be available in February 2010.   

A reconciliation of budgetary resources, obligations incurred and net 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, 2008 is shown below.

Distributed

Budgetary Obligations Offsetting Net

(Dollars in millions) Resources Incurred Receipts Outlays

Combined Statement of Budgetary Resources $ 65,439 69,597 $ (741) $ 57,498 $ 

Pension Benefit Guaranty Corporation 

 reported separately 17,817 4,735 1,377 - 

Distributed offsetting receipts - - 741 - 

Expired accounts (1,077) (36) - - 

Other (24) (16) (36) 1 

Budget of the United States Government $ 86,313 70,122 $ (777) $ 59,617 $ 

E. Undelivered Orders

Undelivered orders at September 30, 2009 and 2008 were as follows.

(Dollars in thousands) 2009 2008

Undelivered orders $ 12,169,557 5,604,384 $ 
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   219

NOTE 18 ‐ STATUS OF BUDGETARY RESOURCES ‐ Continued

F. Appropriations Received

The Combined Statement of Budgetary Resources discloses appropriations received of $167,464 and $58,784

million for FY 2009 and 2008, respectively.  Appropriations received on the Consolidated Statement of Changes in

Net Position are $43,475 and $10,936 million for FY 2009 and 2008, respectively.  The differences of $123,989 and

$47,848 million primarily represent certain fiduciary and earmarked receipts recognized as exchange revenue or

non‐exchange revenue reported on the Consolidated Statement of Net Cost or the Consolidated Statement of

Changes in Net Position, respectively, in the current or prior years.  Detail of these differences is presented below.

(Dollars in millions) 2009 2008

Receipts recognized as revenue in current or prior years

Unemployment Trust Fund $ 46,854 113,894 $ 

Black Lung Disability Trust Fund 7,177 671 

Other earmarked funds 193 193 

Fiduciary funds (Dedicated collections in 2008) 145 130

 47,848 121,409 

Other

Unemployment Trust Fund borrowing authoriy realized (7,950) - 

Black Lung Disability Trust Fund redemption of debt 10,484 - 

Other 46 - 

 2,580 - 

$ 123,989 47,848 $ 

G. Borrowing Authority

As of September 30, 2009, section 2 of P.L. 111‐46 (123 Stat. 1970 dated August 7, 2009) granted borrowing

authority for repayable advances and other debt in the amount of “such sums as may be necessary” to the

following trust funds:  (1) Unemployment Trust Fund for advances as authorized by sections 905(d) and 1203 of the

Social Security Act and (2) Black Lung Disability Trust Fund (BLDTF) for advances as authorized by section 9501(c)(1)

of the Internal Revenue Code.  Although section 9501 of the Internal Revenue Code and section 2 of P.L. 111‐46

both use the terminology "advance," the Treasury has interpreted this to mean any debt owed by the BLDTF to the

Bureau of the Public Debt.
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

220     United States Department of Labor

NOTE 19 ‐ RECONCILIATION OF BUDGETARY RESOURCES OBLIGATED TO NET COST OF OPERATIONS  

(Dollars in thousands) 2009 2008

Resources used to finance activities

Budgetary resources obligated

Obligations incurred $ 177,794,725 $ 65,439,476

Recoveries of prior year obligations (262,069) (418,195) 

Less spending authority from offsetting collections (7,191,289) (6,718,139)

Obligations, net of offsetting collections and recoveries 170,341,367 58,303,142

Other resources

Imputed financing from costs absorbed by others 136,653 118,009 

Transfers, net 3,191 2,803 

Exchange revenue not in budget (2,211,750) (733,748)

Total resources used to finance activities 168,269,073 57,690,594

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 (5,825,269) (139,399) 

Resources that finance the acquisition of assets (98,743) (102,539) 

Obligations of fiduciary funds (140,736) - 

Transfers that do not effect the net cost of operations (23,809,019) - 

Total resources used to finance items not part of the net cost of operations (29,873,767) (241,938)

Total resources used to finance the net cost of operations 138,395,306 57,448,656

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 (decrease) in annual leave liability (4,196) 10,250 

Increase in benefits liabilities 503,072 803,610 

Other 233,161 (27,912)

Total 732,037 785,948

Components not requiring or generating resources

Depreciation and amortization 76,038 66,248 

Revaluation of assets and liabilities 656,595 483,119 

Benefit overpayments (741,485) (476,977)

Total (8,852) 72,390

Total components of the net cost of operations that will not

 require or generate resources in the current period 858,338 723,185 

Net cost of operations $ 139,118,491 $ 58,306,994
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   221

NOTE 20 ‐ SOURCES AND DISPOSITIONS OF CUSTODIAL REVENUE

Custodial revenues in 2009 consisted of the following:

Net Cash Increase

Collections (Decrease) in

and Transfers to Amounts to

Cash Less U.S. Treasury be Collected Total

(Dollars in thousands) Collections Refunds General Fund and Transferred Revenues

Civil monetary penalties

OSHA 65,418 $ (145) $ $ 65,273 $ 71,350 6,077 $ 

MSHA 63,527 (120) 63,407 64,361 954 

EBSA 25,511 (475) 25,036 24,833 (203) 

ESA 15,947 - 15,947 53 16,000

 (740) 170,403 169,663 176,544 6,881 

ETA disallowed grant costs 5,479 - 5,479 6,127 648 

Other 1,292 (4) 1,288 (1) 1,287

$ 177,174 $ (744) $ 176,430 $ 7,528 $ 183,958

Custodial revenues in 2008 consisted of the following:

Net Cash Increase

Collections (Decrease) in

and Transfers to Amounts to

Cash Less U.S. Treasury be Collected Total

(Dollars in thousands) Collections Refunds General Fund and Transferred Revenues

Civil monetary penalties

OSHA 71,367 $ (182) $ $ 71,185 $ 72,547 1,362 $ 

MSHA 56,004 - 56,004 64,087 8,083 

EBSA 25,776 - 25,776 20,490 (5,286) 

ESA 27,442 - 27,442 (1,305) 26,137

 (182) 180,589 180,407 183,261 2,854 

ETA disallowed grant costs 15,627 - 15,627 (3,765) (19,392) 

Other 1,209 - 1,209 (286) 923

$ (182) 197,425 $ $ 197,243 $ 180,419 (16,824) $ 
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

222     United States Department of Labor

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, 2009 is shown below.

Black Lung

(Dollars in thousands) Unemployment Disability Other Total

Assets

Intra-governmental

Funds with U.S. Treasury 1,988,130 $ $ 52,469 $ 2,385,177 344,578 $ 

Investments 19,845,269 - 19,918,523 73,254 

Accounts receivable, net

Due from other Federal agencies

 for UCX and UCFE benefits 475,630 - 475,630 - 

Total intra-governmental 22,309,029 52,469 22,779,330 417,832 

Accounts receivable, net

State unemployment tax 262,970 - 262,970 - 

Due from reimbursable employers 687,213 - 687,213 - 

Benefit overpayments 308,359 15,129 323,488 - 

Other - - 2 2 

Advances 1,510,624 - 1,510,624 - 

Other - - 588 588 

Total assets $ 25,078,195 $ 67,598 $ 25,564,215 418,422 $ 

Liabilities

Intra-governmental

Accounts payable to DOL agencies 2,283,650 $ $ - $ 2,283,650 - $ 

Debt 7,981,387 6,370,580 14,351,967 - 

Amounts held for the Railroad

 Retirement Board 35,552 - 35,552 - 

Other - - 7,372 7,372 

Total intra-governmental 10,300,589 6,370,580 16,678,541 7,372 

Accounts payable - - 10,371 10,371 

Future workers' compensation benefits - - 55,925 55,925 

Accrued benefits 4,238,749 17,339 4,256,088 - 

Other - - 624 624 

Total liabilities 14,539,338 6,387,919 74,292 21,001,549 

Net position

Cumulative results of operations 10,538,857 (6,320,321) 4,562,666 344,130 

Total liabilities and net position $ 25,078,195 $ 67,598 $ 25,564,215 418,422 $ 
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   223

NOTE 21 ‐ EARMARKED FUNDS ‐ Continued

The net results of operations of the earmarked funds for the year ended September 30, 2009 is shown below.

Black Lung

(Dollars in thousands) Unemployment Disability Other Total

Cost, net of earned revenues

Benefits (114,281,060) $ $ (240,625) $ (114,530,424) (8,739) $ 

Grants - - (110,869) (110,869) 

Interest (34,228) (231,292) (265,520) - 

Loss on debt refinancing - (2,495,660) (2,495,660) - 

Administrative and other (368,303) (384) (15,688) (384,375) 

 (114,683,591) (2,967,961) (117,786,848) (135,296) 

Earned revenue 1,004,431 - 1,004,431 - 

 (113,679,160) (2,967,961) (116,782,417) (135,296) 

Net financing sources

Taxes 35,309,497 644,881 35,954,378 - 

Interest 2,056,548 1,283 2,059,807 1,976 

Reimbursement of unemployment benefits 2,763,817 - 2,763,817 - 

Imputed financing - - 170 170 

Transfers-in

Department of Homeland Security - - 94,451 94,451 

DOL entities 17,273,663 6,497,989 23,771,652 - 

Transfers-out

DOL entities (5,294,564) (57,327) (5,351,891) - 

 52,108,961 7,086,826 96,597 59,292,384 

Net results of operations (61,570,199) 4,118,865 (57,490,033) (38,699) 

Net position, beginning of period 72,109,056 (10,439,186) 62,052,699 382,829 

Net position, end of period $ 10,538,857 $ (6,320,321) $ 4,562,666 344,130 $ 
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

224     United States Department of Labor

NOTE 21 ‐ EARMARKED FUNDS ‐ Continued

The financial position of the earmarked funds as of September 30, 2008 is shown below.

Black Lung

(Dollars in thousands) Unemployment Disability Other Total

Assets

Intra-governmental

Funds with U.S. Treasury (147,882) $ $ 53,064 $ 286,983 381,801 $ 

Investments 73,295,222 - 73,372,345 77,123 

Accounts receivable, net

Due from other Federal agencies

 for UCX and UCFE benefits 292,981 - 292,981 - 

Total intra-governmental 73,440,321 53,064 73,952,309 458,924 

Accounts receivable, net

State unemployment tax 183,985 - 183,985 - 

Due from reimbursable employers 473,802 - 473,802 - 

Benefit overpayments 220,191 10,776 230,967 - 

Other - - 2 2 

Advances 706,556 - 706,556 - 

Other - - 366 366 

Total assets $ 75,024,855 $ 63,840 $ 75,547,987 459,292 $ 

Liabilities

Intra-governmental

Accounts payable to DOL agencies 1,176,351 $ $ - $ 1,176,351 - $ 

Debt - 10,483,557 10,483,557 - 

Amounts held for the Railroad

 Retirement Board 110,455 - 110,455 - 

Other - - 7,616 7,616 

Total intra-governmental 1,286,806 10,483,557 11,777,979 7,616 

Accounts payable - - 14,683 14,683 

Future workers' compensation benefits - - 53,562 53,562 

Accrued benefits 1,628,993 19,469 1,648,462 - 

Other - - 602 602 

Total liabilities 2,915,799 10,503,026 76,463 13,495,288 

Net position

Cumulative results of operations 72,109,056 (10,439,186) 62,052,699 382,829 

Total liabilities and net position $ 75,024,855 $ 63,840 $ 75,547,987 459,292 $ 
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   225

NOTE 21 ‐ EARMARKED FUNDS ‐ Continued

The net results of operations of the earmarked funds for the year ended September 30, 2008 is shown below.

Black Lung

(Dollars in thousands) Unemployment Disability Other Total

Cost, net of earned revenues

Benefits (42,533,112) $ $ (266,960) $ (42,808,610) (8,538) $ 

Grants - - (90,490) (90,490) 

Interest (3,519) (739,469) (742,988) - 

Administrative and other (414,822) (376) (21,769) (436,967) 

 (42,951,453) (1,006,805) (44,079,055) (120,797) 

Earned revenue 711,675 - 711,675 - 

 (42,239,778) (1,006,805) (43,367,380) (120,797) 

Net financing sources

Taxes 37,655,181 652,650 38,307,831 - 

Interest 3,635,617 551 3,639,276 3,108 

Reimbursement of unemployment benefits 1,768,182 - 1,768,182 - 

Imputed financing - - 195 195 

Transfers-in

Department of Homeland Security - - 86,779 86,779 

DOL entities 2,396 - 2,396 - 

Transfers-out

DOL entities (3,714,880) (57,881) (3,772,761) - 

 39,346,496 595,320 90,082 40,031,898 

Net results of operations (2,893,282) (411,485) (3,335,482) (30,715) 

Net position, beginning of period 75,002,338 (10,027,701) 413,544 65,388,181

Net position, end of period $ 72,109,056 $ (10,439,186) $ 62,052,699 382,829 $ 
Financial Section

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

226     United States Department of Labor

NOTE 22 ‐ FIDUCIARY ACTIVITY

The Department has one deposit fund and two trust funds that fall under the definition of fiduciary activity

promulgated by SFFAS 31, "Accounting for Fiduciary Activities” which the Department implemented effective

October 1, 2008.   The schedule of fiduciary activity for these funds for the year ended September 30, 2009 is shown

below.

Longshore District of

Wage and Hour and Harbor Columbia

and Public Workers' Workmen's

Contracts Compensation Compensation Total

Restitution Act Trust Act Trust Fiduciary

(Dollars in thousands) Fund Fund Fund Funds

Fiduciary activity

Assessments 37,941 $ $ 130,209 $ 178,880 10,730 $ 

Investment earnings - 44 48 4 

Administrative and other expenses - (2,101) (2,101) - 

Transfer of funds to Treasury (9,783) - (9,783) - 

Disbursements to beneficiaries (23,653) (128,993) (9,777) (162,423) 

Increase (decrease) in fiduciary net assets 4,505 (841) 4,621 957 

Fiduciary net assets, beginning of year 81,942 27,245 112,210 3,023 

Fiduciary net assets, end of year $ 86,447 $ 26,404 $ 3,980 116,831 $ 

The schedule of fiduciary net assets for these funds as of September 30, 2009 is shown below.

Longshore District of

Wage and Hour and Harbor Columbia

and Public Workers' Workmen's

Contracts Compensation Compensation Total

Restitution Act Trust Act Trust Fiduciary

(Dollars in thousands) Fund Fund Fund Funds

Fiduciary assets

Cash 80,034 $ $ 2,085 $ 83,114 995 $ 

Investments - 58,969 64,197 5,228 

Other assets 6,413 3,756 10,843 674 

Less: liabilities - (38,406) (2,917) (41,323) 

Total fiduciary net assets $ 86,447 $ 26,404 $ 3,980 116,831 $ 

Unqualified opinions were given on separate financial statements issued for the Longshore and Harbor Workers’

Compensation Act Trust Fund and the District of Columbia Workmen’s Compensation Act Trust Fund for FY 2008.  

These separate financial statements were presented in accordance with U.S. GAAP.
Annual Financial Statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

For the Years Ended September 30, 2009 and 2008

 FY 2009 Performance and Accountability Report   227

NOTE 23 ‐ SUBSEQUENT EVENTS

The financial statements, notes, and required supplementary information do not reflect the effects of the

subsequent events described below.  

A. P.L. 111‐92, the Worker, Homeownership, and Business Assistance Act of 2009  

P.L. 111‐92, the Worker, Homeownership, and Business Assistance Act of 2009, was enacted on November 6, 2009.  

The Act amended section 4002 of P.L. 110‐252 (26 USC 3304 note), Supplemental Appropriations Act, 2008, to

extend unemployment benefits to eligible recipients up to 14 additional weeks in all States and a total of up to 20

additional weeks in States with unemployment of 8.5 percent or greater. The Act also amended section 3301 of the

Internal Revenue Code of 1986 to extend the 0.2 percent Federal Unemployment Tax Act (FUTA) surtax on covered

employers through June 30, 2011.  No benefits are payable for weeks of unemployment commencing before the

date of enactment of the Act.

B. Employment Standards Administration

  

The Employment Standards Administration (ESA) was dissolved on November 8, 2009.  The Wage and Hour Division

(WHD), Office of Federal Contract Compliance Programs (OFCCP), Office of Workers’ Compensation Programs

(OWCP), and Office of Labor‐Management Standards (OLMS) now report directly to the Office of the Secretary.

Required Supplementary Stewardship Information
Financial Section

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION

(Unaudited)

230     United States Department of Labor

STEWARDSHIP INVESTMENTS IN HUMAN CAPITAL

Stewardship investments are made by DOL on behalf of the nation, providing long‐term benefits that cannot be

measured in traditional financial reports.  These investments are made for the general public, and are intended to

maintain or increase national economic productive capacity.  DOL’s stewardship investments are in human capital,

reported as employment and training expenses in DOL’s net cost of operations.  Within DOL, the Employment and

Training Administration (ETA), the Office of Job Corps (OJC), and the Veterans’ Employment and Training Service

(VETS) administer training programs that invest in human capital.   

Employment and Training Administration and the Office of Job Corps

In 2009, ETA incurred total net costs of $130.4 billion. The majority of ETA’s total net costs consisted of

unemployment benefit payments, which increased by over $80 billion in 2009.   Also included in ETA’s total net

costs were investments in human capital of $4.7 billion, which provided services to over 6.7 million participants in

2009.  These investments were made through job training programs authorized by the Workforce Investment Act of

1998 (WIA), 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.  The Office of Job Corps also invests in

human capital through WIA job training programs.  OJC’s investment in human capital in 2009 was $1.6 billion.  In

February 2009, Congress enacted the American Recovery and Reinvestment Act (ARRA), which authorized

additional funding for job training, to be distributed through these established training programs.  The ETA and OJC

job training programs under WIA are discussed below.    

Workforce Investment Act Job Training Programs

 Adult employment and training programs – ETA awards grants to States and territories to design and operate

training and employment assistance programs for disadvantaged adults, including public assistance recipients.  

ETA’s 2009 investment in human capital through WIA adult programs was $878 million.

 Dislocated worker employment and training programs – ETA awards grants to States to provide reemployment

services and retraining assistance to individuals dislocated from their employment.   ETA awards non‐

competitive grants for unexpected economic impacts and emergency dislocations; and competitive grants from

the national reserve account to build training capacity and to train workers through community and technical

colleges.  ETA’s 2009 investment in human capital through WIA dislocated worker programs was $1,440 million.

 Youth programs – ETA awards grants to states 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 2009 investment in human capital through WIA  

youth programs was $1,125 million.

 Job Corps program – 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 2009 investment in human capital

through the WIA Job Corps program was $1,640 million.
Annual Financial Statements

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION

(Unaudited)

 FY 2009 Performance and Accountability Report   231

 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

2009 investment in human capital through ex‐offender programs was $58 million.

 National programs – ETA’s National programs provide employment and training services and support through

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 to eligible participants.  ETA’s 2009 investment in human capital

through WIA National Programs was $206 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 low‐

income 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 2009 investment in human capital through the

CSEOA program was $543 million.

Trade Act of 1974, as Amended

ETA makes investments in human capital through training programs authorized by the Trade Act of 1974, as

amended by the Trade Adjustment Assistance Reform Act of 2002, which consolidated the 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 agreements.  TAA benefit payments

are classified as income maintenance program costs and are not included as investments in human capital.  

ETA’s 2009 investment in trade adjustment assistance training programs was $286 million.

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 2009 investment in

apprenticeship programs was $25 million.
Financial Section

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION

(Unaudited)

232     United States Department of Labor

Program Costs and Outputs

The cost of ETA and OJC investments in human capital, and the participants served by each, are shown in the chart

below, for the five year period 2005 through 2009.

ETA And OJC Investments In Human Capital

Program Costs (in Millions and Participants Served (in Thousands)*

For The Five Year Period 2005 Through 2009

 

2009 2008 2007 2006 2005

Program Costs  

Part.

Served Costs  

Part.

Served Costs

Part.

Served Costs

Part.

Served Costs

Part.

Served

WIA

Adult (1) $878 4,921.8 $844 2,828.7 $ 896 1,723.2 $ 912 1,052.6 $ 906 441.8

Dislocated

Worker (2) 1,440 842.1 1,307 401.3 1,409 413.1 1,543 398.2 1,472 361.4

Youth (3) 1,125 438.9 966 250.7 866 248.9 1,017 272.9 947 390.8

Job Corps 1,640 60.9 1,589 63.4 1,485 64.8 1,402 61.0 1,309 61.9

Ex‐ 

Offenders (4) 58 9.8 61 14.2 76 15.7 52 11.5 24 6.8

National

Programs (5) 206 35.0 206 44.7 220 44.0 267 42.1 178 54.7

Title V

CSEOA 543 89.0 479 89.6 444 86.4 432 93.5 426 92.1

Trade Act

TAA Training 286 105.0 248 82.1 223 79.2 189 84.2 223 95.8

Apprenticeship

Act

Apprenticeship

System 25 301.6 25 385.7 24 309.5 25 237.9 23 196.2

Other (6) 120 Na 108 Na 91 Na 99 Na 37 Na

TOTAL $6,321 6,804.1 $5,833 4,160.4 $5,734 2,984.8 $5,938 2,253.9 $5,545 1,701.5

  *     Certain program costs were reclassified, beginning in 2005, due to changes in allocation methodologies adopted in 2009.

(1) Adult program increases in participants served, beginning in 2006, can be attributed to state reports that include self‐

service only participants and/or co‐enrolled Wagner‐Peyser participants.

(2) Dislocated Worker programs include Community Based Job Training Grant and National Emergency Grant costs and

participants served.  These programs account for the 2009 increases in participants served.  

(3)   Youth program participants served in 2009 include youth reported in Recovery Act monthly reports.

(4) Ex‐Offender programs include the Prisoner Re‐entry and Youthful Offender programs.

(5) National Programs include the Native American and Migrant and Seasonal Farmworker programs.

(6) Other includes training programs for highly skilled occupations funded through H1‐B fees, and costs for lapsed programs.  
Annual Financial Statements

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION

(Unaudited)

 FY 2009 Performance and Accountability Report   233

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 08.1B (Job Corps) – PY 2008

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

employment and education.

This goal was not achieved.  Job Corps did not reach the target for one of its three performance indicators.

 Performance Goal 08.1C (WIA Youth) – PY 2008

Increase placements and educational attainments for youth served through the WIA Youth Program.

This goal was achieved; ETA reached targets for all three performance indicators.   

 Performance Goal 09.1D (Apprenticeship) – FY 2009

Improve the registered apprenticeship system to meet the prospective training needs of business and workers.

This goal was not achieved. ETA failed to reach the target for two performance indicators.

Strategic Goal 2 – A Competitive Workforce

 Performance Goal 08.2A (WIA Adult) – PY 2008

Increase the employment, retention and earnings of individuals under the WIA Adult Program.

This goal was achieved. ETA reached targets for all three performance indicators.

 Performance Goal 08.2B (WIA Dislocated Workers) – PY 2008

Increase the employment, retention and earnings of individuals under the WIA Dislocated Worker Program.

This goal was not achieved. ETA failed to reach the target for one of three performance indicators.

 Performance Goal 08.2D (CSEOA) – PY 2008

Assist older workers enter growth industries through the Senior Community Service Employment Program.

This goal was not achieved. ETA failed to reach targets in one of three performance indicators.

 Performance Goal 09.2E (TAA) – FY 2009

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.
Financial Section

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION

(Unaudited)

234     United States Department of Labor

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, maximizing employment

opportunities, protecting 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, (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, (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, (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 (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 (38 U.S.C. 2021) promotes education of employers and employees on the employment

rights of the individual veterans.

Homeless Veterans and Veterans’ Workforce Investment Programs

 Homeless Veterans Reintegration Project (HVRP) – The HVRP (38 U.S.C. 2021) provides employment assistance

to homeless veterans through competitive 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.

 Veterans’ Workforce Investment Program (VWIP) ‐ The VWIP (38 U.S.C. 2913) provides competitive grants for

training and retraining of veterans to create highly skilled employment opportunities for targeted veterans.
Annual Financial Statements

REQUIRED SUPPLEMENTARY STEWARDSHIP INFORMATION

(Unaudited)

 FY 2009 Performance and Accountability Report   235

Program Costs and Outputs

The full cost of VETS programs is presented in the Statement of Net Costs.  The costs of VETS investments in human

capital, and the participants served by this investment, are presented below, by major program.

VETS Investments In Human Capital

Program Costs and Participants Served (in Thousands)

For The Five Year Period 2005 Through 2009

 

2009 2008 (1) 2007 2006 2005

Program Costs

Part.

Served Costs

Part.

Served Costs

Part.

Served Costs

Part.

Served Costs

Part.

Served

DVOP

   

$91,064 345.1 $86,844 363.8 $86,667 363.4 $86,153 398.1 $86,104 342.8

LVER

   

83,917 362.3 80,028 366.4 80,000 400.6 79,526 429.3 79,481 330.0

TAP

   

7,233 124.7 6,898 150.0 7,704 151.3 4,792 139.5 4,919 134.3

USERRA

   

10,075 107.9 9,100 93.0 9,170 70.8 8,819 109.9 9,123 126.9

HVRP

   

28,962 13.7 27,620 14.0 27,504 12.8 26,975 13.8 24,883 13.8

VWIP

   

8,023 3.6 7,651 3.3 7,667 3.6 9,123 3.8 7,966 4.3

   TOTAL

   

$229,274 957.3 $218,141 990.5 $218,712 1,002.5 $215,388 1,094.4 $212,476 952.1

(1) DVOP and LVER participants served in 2008 were restated, based on final reports for the period.  

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 2009 are summarized below:

Strategic Goal 1 – A Prepared Workforce

 Performance Goal 08.1E (VETS) – PY 2008

Improve employment outcomes for veterans receiving One‐Stop Career Center and veterans’ program services.

This goal was not achieved.  VETS did not meet targets for all four performance indicators.

Strategic Goal 3 – Safe and Secure Workplaces

 Performance Goal 09.3E (VETS) – FY 2009

Reduce employer‐employee employment issues originating from service members’ military obligations

conflicting with their civilian employment.

This goal was not achieved.  VETS fell short of their target for the performance indicator.

Required Supplementary Information
Financial Section

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

238     United States Department of Labor

DEFERRED MAINTENANCE

The U.S. Department of Labor (DOL) maintains one hundred twenty‐two (122) 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

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

consistently applied, including:

      ‐  condition descriptions of facilities  ‐  recommended maintenance schedules

      ‐  estimated costs of maintenance actions  ‐  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. 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 By FCI Scores(1)

For the Years Ended 2005 – 2009

 

2009 2008 2007 2006(2) 2005(2)

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‐ 100% 3,037 84.6 2,878 81.9 2,966 80.9 2,665 75.1 2,507 74.8

Good 80‐ 89% 290 8.1 311 8.9 338 9.2 433 12.2 412 12.3

Fair 70‐ 79% 95 2.6 115 3.3 126 3.4 145 4.1 151 4.5

Poor 60‐ 69% 71 2.0 89 2.5 98 2.7 135 3.8 120 3.6

Very Poor < 60% 96 2.7 118 3.4 136 3.8 170 4.8 161 4.8

   

3,589 100.0 3,511 100.0 3,664 100.0 3,548 100.0 3,351    100.0

(1)  FCI = 1 – (Repair Backlog / Plant Replacement Value).  An FCI closer to 100 % indicates better asset condition.

(2) FCI scores for 2005‐2006 were distributed based on modifications to the calculation of asset condition implemented in 2007.                                              
Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

 FY 2009 Performance and Accountability Report   239

Portfolio Condition and Deferred Maintenance Cost Estimates

The FCI assessments by building and structure are consolidated to calculate an FCI score for the entire portfolio of

constructed assets, which is used to evaluate the overall asset condition of the Job Corps 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 constructed assets. In 2009, the portfolio’s aggregate FCI

score for 3,589 constructed assets was 91.7%, and deferred maintenance costs to return the portfolio to an

acceptable condition were estimated at $83.9 million, as shown in the table below. The final graph juxtaposes

deferred maintenance cost estimates with the FCI trend line for the five year period ending in 2009.

Job Corps Center Constructed Assets

Portfolio Condition and Deferred Maintenance Cost Estimates at

September 30, 2005 ‐ 2009

 

Constructed Assets ‐ FY

Number of

Constructed

Assets

Portfolio Condition

Based on

Aggregate FCI Score

Deferred Maintenance

Costs to Return Assets

To Acceptable Condition

Buildings and structures ‐ 2009 3,589 Excellent  ‐  91.7%    $83,861,828

Buildings and structures ‐ 2008 3,511 Excellent  ‐  92.2%       $71,901,425

Buildings and structures ‐ 2007 3,664 Excellent  ‐  90.8%       $87,372,000

Buildings and structures ‐ 2006 3,548 Excellent  ‐  96.3%       $92,100,000

Buildings and structures ‐ 2005 3,351 Excellent  ‐  97.0%       $94,800,000

Deferred Maintenance Cost Estimates and FCI Trend Line

$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

$90,000,000

$100,000,000

2005 2006 2007 2008 2009

Fiscal Year

Defer red Maintenance

86.0%

88.0%

90.0%

92.0%

94.0%

96.0%

98.0%

Facilities Condition Index

DM FCI FCI Trendline
Financial Section

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

240     United States Department of Labor

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 paid an effective Federal tax of

0.8% (0.6% starting January 1, 2009).  Federal unemployment taxes are collected by the Internal Revenue

Service.  
Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

 FY 2009 Performance and Accountability Report   241

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 American Recovery and Reinvestment Act of 2009 waived interest on advances to

State accounts for the period February 17, 2009, through December 31, 2010.  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.   
Financial Section

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

242     United States Department of Labor

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.

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 non‐repayable 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.  
Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

 FY 2009 Performance and Accountability Report   243

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.

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.  The American Recovery and

Reinvestment Act of 2009 has provided for a temporary one hundred percent Federal funding of extended

benefits.
Financial Section

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

244     United States Department of Labor

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 began in July

2008, authorized under the Supplemental Appropriations Act, 2008.    This emergency program has been

temporarily extended and additionally funded by the Recovery Act.    Before this fiscal year, 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, 2009, total assets within the UTF exceeded liabilities by $10.5 billion.    This fund balance

approximates the accumulated surplus of tax revenues and earnings on these revenues over benefit payment

expenses and is available to finance benefit payments in future periods when tax revenues may be insufficient.  

Treasury invests this accumulated surplus in Federal securities.  The net value of these securities, including interest

receivable, at September 30, 2009 was $19.8 billion.    This interest is distributed to eligible State and Federal

accounts within the UTF.   Interest income from these investments during FY 2009 was $2.1 billion.  Federal and

State UI tax and reimbursable revenues of $38.1 billion and regular, extended and emergency benefit payment

expense of $114.3 billion were recognized for the year ended September 30, 2009.

As discussed in Note 1.K.1 to the consolidated financial statements, DOL recognized a liability for regular, extended

and emergency 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, 2009 were $4.2 billion.   

FUA has borrowed $8.0 billion from the general fund of the U.S. Treasury as of September 30, 2009.    These

repayable advances bear an interest rate of 3.375%.  

P.L. 111‐92, the Worker, Homeownership, and Business Assistance Act of 2009, was enacted on November 6, 2009.

The Act extended unemployment benefits to eligible recipients up to 14 additional weeks in all States and a total of

up to 20 additional weeks in States with unemployment of 8.5 percent or greater.  The Act also extended the FUTA

surtax on covered employers through June 30, 2011.    The required supplementary information for the

Unemployment Insurance Program does not reflect the effect of these subsequent events.  Refer to Note 23 for

additional discussion.
Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

 FY 2009 Performance and Accountability Report   245

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)

246     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 9.92% during FY 2010,

decreasing steadily to below 6% in FY 2015 and thereafter.  Total cash outflows exceed total cash inflows

through FY 2012, whereas total cash inflows exceed total cash outflows beginning in FY 2013 and through

the end of the projected period.  The net outflow decreases from $67.8 billion in FY 2010 to $3.5 billion in

FY 2012.  The net inflow increases from $7.9 billion in FY 2013 to $19.5 billion in FY 2015, leveling off at the

$17.2 billion to $11.8 billion range after that, indicating that most States have replenished their funds to

desired levels.  The net outflow occurs due to State unemployment benefits.  The net inflow is sustained by

the excess of Federal tax collections over Federal expenditures.

These projections, excluding interest earnings, indicate decreasing net cash outflow from FY 2010 to FY

2011, then net cash inflows at varied levels through 2019.   

Chart I

Unemployment Trust Fund 

Cash Inflow and Outflow

30

50

70

90

110

130

150

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

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 2009 Performance and Accountability Report   247

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, 2019.  Yearly projected total cash inflows, including interest

earnings, and cash outflows, including interest payments, are depicted as well as the net effect of this cash

flow on UTF assets.  

Total cash outflows exceed cash inflows for FYs 2010 through 2012 and total cash inflows exceed total cash

outflows beginning in FY 2013 and all other years in the projected period.  The excess of total cash inflows

over total cash outflows peaks in FY 2015.  Starting at $13.6 billion at the beginning of FY 2010, net UTF

assets decrease by $102.6 billion over the next three years to an $89.0 billion fund balance deficit by the

end of FY 2012 and then increase by $101.4 billion over the next seven years to a $12.4 billion fund net

assets balance by the end of FY 2019.  The fund is in a deficit situation from FY 2010 through FY 2017.

Chart II

Unemployment Trust Fund 

Effect of Net Cash Flow on Net Assets

(100)

(75)

(50)

(25)

0

25

50

75

100

125

150

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Excludes the Federal Employee Compensation Account

$ - Billions

Total Cash Inflows Total Cash Outflows Net Assets
Financial Section

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

248     United States Department of Labor

Recovery 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, 2019, under two recovery scenarios.    Each

scenario uses an open group, which includes current and future participants in the UI program.  Chart III assumes

decreasing rates of unemployment beginning in FY 2010 and Chart IV assumes higher unemployment in FY 2010

and then decreasing rates of unemployment beginning in FY 2011.

  

Effect on UTF Assets of Recovery Scenario 1

The Department projects the effect of decreasing unemployment rates beginning in FY 2010 on the cash

inflows and outflows of the UTF.  Under this scenario, which utilizes a decreasing unemployment rate of

8.94% beginning in FY 2010, net cash outflows including projected interest earnings and expenses from

Federal sources are projected in FY 2010 through FY 2012.  Net cash inflows are reestablished in FY 2013

and peak in FY 2015 with a drop in the unemployment rate to 5.37% and then 5.20% for FYs 2016 through

2019.  Starting at $13.6 billion at the beginning of FY 2010, net UTF assets decrease by $69.6 billion over the

next three years to a $56.0 billion fund balance deficit in FY 2012 and then increase by $94.1 billion over

the next seven years to a $38.1 billion fund net assets balance by the end of FY 2019.  The fund is in a deficit

situation from FY 2010 to FY 2015.

Chart III

Unemployment Trust Fund 

Effect of Net Cash Flow on Net Assets

(80)

(60)

(40)

(20)

0

20

40

60

80

100

120

140

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Excludes the Federal Employee Compensation Account

$ - Billions

Total Cash Inflows Total Cash Outflows Net Assets
Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

 FY 2009 Performance and Accountability Report   249

Effect on UTF Assets of Recovery Scenario 2  

The Department also estimates the effects of an increasing unemployment rate of 10.62% in FY 2010 and

decreasing unemployment rates beginning in FY 2011 on the cash inflows and outflows of the UTF.  Net cash

outflows including projected interest earnings and expenses from Federal sources are projected in FY 2010

through FY 2012, with the fund in a deficit situation from 2010 to 2019.  The net assets of the UTF decrease

$122.8 billion from a $13.6 billion net assets fund balance at the beginning of FY 2010 to a $109.2 billion

fund deficit balance in 2012.  Net cash inflows are reestablished in FY 2013 and peak in FY 2015 with a drop

in the unemployment rate to 5.82% and then lower rates for FYs 2016 through 2019.  By the end of FY 2019,

this positive cash flow has decreased the UTF fund deficit to $2.9 billion.  At the end of the projection period

of recovery scenario 2, net assets are $15.3 billion less than under expected economic conditions.

Chart IV

Unemployment Trust Fund 

Effect of Net Cash Flow on Net Assets

(150)

(100)

(50)

0

50

100

150

200

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Excludes the Federal Employee Compensation Account

$ - Billions

Total Cash Inflows Total Cash Outflows Net Assets

The three examples of expected economic conditions and two recovery scenarios demonstrate 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.    In the three examples, State accounts

without sufficient reserve balances to absorb negative cash flows are forced to borrow funds from the FUA

to meet benefit payment requirements.    State borrowing demands also deplete the FUA, which borrows

from the ESAA and the EUCA until they are depleted.  The FUA then requires advances from the general

fund of the U.S. Treasury to provide for State borrowings.    (See following discussion of State solvency

measures.)
250     United States Department of Labor (Dollars in thousands) 2010 2011 2012 2013 2014 2015 2016 2017 2

Balance, start of year $ 13,572,826 $ (54,246,705) $ (85,547,154) $ (89,033,483) $ (81,111,927) $ (64,928,173) $ (45,383,187) $ (28,140,681) $ (1Cash inflow

State unemployment taxes 44,377,000 56,451,000 63,866,000 66,222,000 65,731,000 63,647,000 60,914,000 59,096,000 5

Federal unemployment taxes 5,703,000 5,466,000 7,652,000 9,975,000 12,436,000 14,876,000 15,595,000 16,768,000 1

General revenue appropriation 22,128,000                    ‐      24,000                          ‐                               ‐                               ‐                               ‐                               ‐                               

           

Interest on loans ‐      2,240,000 3,207,000 3,388,000 3,398,000 3,067,000 2,590,000 2,194,000 

CMIA receipts 3,400 3,400 3,400 3,400 3,400 3,400 3,400 3,400 

Deposits by the Railroad Retirement Board 106,135 119,835 125,035 114,135 106,335 116,235 128,335 127,335 

Total cash inflow excluding interest 72,317,535 64,304,235 74,853,435 79,702,535 81,674,735 81,709,635 79,230,735 78,188,735 7

Interest on Federal securities 995,895 423,275 127,110 172,968 334,069 601,370 841,387 1,150,840 

Total cash inflow 73,313,430 64,727,510 74,980,545 79,875,503 82,008,804 82,311,005 80,072,122 79,339,575 7

Cash outflow

State unemployment benefits 133,625,000 88,481,000 70,691,000 63,855,000 57,642,000 54,887,000 55,430,000 55,721,000 5

State administrative costs 5,724,000 4,333,000 4,293,000 4,308,000 4,322,000 4,376,000 4,446,000 4,517,000 

Federal administrative costs 258,095 263,686 269,466 275,443 281,623 290,013 297,621 306,452 

Interest on tax refunds 2,436 2,097 2,686 3,491 4,869 6,457 7,200 7,974 

CMIA interest payment 100 100 100 100 100 100 100 100 

Interest on advances 1,410,000 2,830,000 3,090,000 3,390,000 3,450,000 3,080,000 2,520,000 2,000,000 

Railroad Retirement Board withdrawals 113,330 118,076 120,622 121,913 124,458 126,449 128,695 130,841 

Total cash outflow 141,132,961 96,027,959 78,466,874 71,953,947 65,825,050 62,766,019 62,829,616 62,683,367 6Excess of total cash inflow excluding

interest over total cash outflow (68,815,426) (31,723,724) (3,613,439) 7,748,588 15,849,685 18,943,616 16,401,119 15,505,368 1

Excess of total cash inflow over

total cash outflow (67,819,531) (31,300,449) (3,486,329) 7,921,556 16,183,754 19,544,986 17,242,506 16,656,208 1

Balance, end of year $ (54,246,705) $ (85,547,154) $ (89,033,483) $ (81,111,927) $ (64,928,173) $ (45,383,187) $ (28,140,681) $ (11,484,473) $ 

Total unemployment rate 9.92% 9.05% 7.85% 7.05% 6.12% 5.62% 5.55% 5.37% 

FOR THE TEN YEAR PERIOD ENDING SEPTEMBER 30, 2019

(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 2009 Performance and Accountability Report     251

(Dollars in thousands) 2010 2011 2012 2013 2014 2015 2016 2017 2Balance, start of year $ 13,572,826 $ (41,245,614) $ (55,308,520) $ (55,979,693) $ (49,837,917) $ (35,287,812) $ (16,725,415) $ 1,027,833 $ 15Cash inflow

State unemployment taxes 44,139,000 54,152,000 59,879,000 61,856,000 62,075,000 60,648,000 58,543,000 57,051,000 55

Federal unemployment taxes 5,766,000 5,563,000 7,760,000 9,973,000 12,282,000 14,257,000 15,034,000 14,903,000 14

General revenue appropriation 21,973,000                    ‐      18,000                          ‐                               ‐                               ‐                               ‐                               ‐                               

            

Interest on loans ‐      1,713,000 2,360,000 2,507,000 2,485,000 2,187,000 1,825,000 1,473,000 1

CMIA receipts 3,400 3,400 3,400 3,400 3,400 3,400 3,400 3,400 

Deposits by the Railroad Retirement Board 106,135 119,835 125,035 114,135 106,335 116,235 128,335 127,335 

Total cash inflow excluding interest 71,987,535 61,569,235 70,127,435 74,453,535 76,951,735 77,211,635 75,533,735 73,557,735 70

Interest on Federal securities 1,029,013 524,855 394,304 461,187 634,360 907,512 1,284,870 1,652,590 1

Total cash inflow 73,016,548 62,094,090 70,521,739 74,914,722 77,586,095 78,119,147 76,818,605 75,210,325 72

Cash outflow

State unemployment benefits 120,797,000 69,656,000 64,434,000 61,895,000 56,112,000 52,962,000 52,919,000 54,529,000 56

State administrative costs 5,474,000 3,957,000 4,156,000 4,257,000 4,283,000 4,332,000 4,393,000 4,486,000 4

Federal administrative costs 258,095 263,686 269,466 275,443 281,623 290,013 297,621 306,452 Interest on tax refunds 2,463 2,134 2,724 3,490 4,809 6,188 6,941 7,087 

CMIA interest payment 100 100 100 100 100 100 100 100 

Interest on advances 1,190,000 2,160,000 2,210,000 2,220,000 2,230,000 1,840,000 1,320,000 820,000 Railroad Retirement Board withdrawals 113,330 118,076 120,622 121,913 124,458 126,449 128,695 130,841 

Total cash outflow 127,834,988 76,156,996 71,192,912 68,772,946 63,035,990 59,556,750 59,065,357 60,279,480 61Excess of total cash inflow excluding

interest over total cash outflow (55,847,453) (14,587,761) (1,065,477) 5,680,589 13,915,745 17,654,885 16,468,378 13,278,255 9

Excess of total cash inflow over

total cash outflow (54,818,440) (14,062,906) (671,173) 6,141,776 14,550,105 18,562,397 17,753,248 14,930,845 10

Balance, end of year $ (41,245,614) $ (55,308,520) $ (55,979,693) $ (49,837,917) $ (35,287,812) $ (16,725,415) $ 1,027,833 $ 15,958,678 $ 26

Total unemployment rate 8.94% 7.32% 7.12% 6.90% 5.95% 5.37% 5.20% 5.20% 

FOR THE TEN YEAR PERIOD ENDING SEPTEMBER 30, 2019

(2) RECOVERY SCENARIO 1 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
252     United States Department of Labor (Dollars in thousands) 2010 2011 2012 2013 2014 2015 2016 2017 2

Balance, start of year $ 13,572,826 $ (64,647,379) $ (103,192,322) $ (109,219,131) $ (102,203,296) $ (86,077,719) $ (66,105,002) $ (46,806,443) $ (28Cash inflow

State unemployment taxes 44,598,000 58,013,000 66,133,000 68,675,000 68,055,000 65,835,000 62,924,000 60,218,000 58

Federal unemployment taxes 5,672,000 5,427,000 7,600,000 10,014,000 12,514,000 14,828,000 15,919,000 17,075,000 16

General revenue appropriation 23,084,000                    ‐      36,000                          ‐                               ‐                               ‐                               ‐                               ‐                               

            

Interest on loans ‐      2,557,000 3,710,000 3,978,000 4,039,000 3,710,000 3,210,000 2,673,000 2

CMIA receipts 3,400 3,400 3,400 3,400 3,400 3,400 3,400 3,400 

Deposits by the Railroad Retirement Board 106,135 119,835 125,035 114,135 106,335 116,235 128,335 127,335 

Total cash inflow excluding interest 73,463,535 66,156,235 77,571,435 82,784,535 84,717,735 84,492,635 82,184,735 80,096,735 76

Interest on Federal securities 968,208 480,766 205,611 150,261 420,922 685,080 952,590 1,215,571 1

Total cash inflow 74,431,743 66,637,001 77,777,046 82,934,796 85,138,657 85,177,715 83,137,325 81,312,306 78

Cash outflow

State unemployment benefits 144,733,000 96,955,000 75,194,000 66,992,000 59,891,000 56,352,000 55,530,000 55,468,000 56

State administrative costs 5,945,000 4,503,000 4,387,000 4,376,000 4,371,000 4,410,000 4,455,000 4,520,000 4

Federal administrative costs 258,095 263,686 269,466 275,443 281,623 290,013 297,621 306,452 Interest on tax refunds 2,423 2,082 2,667 3,505 4,899 6,436 7,350 8,120 

CMIA interest payment 100 100 100 100 100 100 100 100 

Interest on advances 1,600,000 3,340,000 3,830,000 4,150,000 4,340,000 4,020,000 3,420,000 2,800,000 2

Railroad Retirement Board withdrawals 113,330 118,076 120,622 121,913 124,458 126,449 128,695 130,841 

Total cash outflow 152,651,948 105,181,944 83,803,855 75,918,961 69,013,080 65,204,998 63,838,766 63,233,513 63Excess of total cash inflow excluding

interest over total cash outflow (79,188,413) (39,025,709) (6,232,420) 6,865,574 15,704,655 19,287,637 18,345,969 16,863,222 13

Excess of total cash inflow over

total cash outflow (78,220,205) (38,544,943) (6,026,809) 7,015,835 16,125,577 19,972,717 19,298,559 18,078,793 14

Balance, end of year $ (64,647,379) $ (103,192,322) $ (109,219,131) $ (102,203,296) $ (86,077,719) $ (66,105,002) $ (46,806,443) $ (28,727,650) $ (14

Total unemployment rate 10.62% 9.65% 8.35% 7.45% 6.42% 5.82% 5.57% 5.37% 

FOR THE TEN YEAR PERIOD ENDING SEPTEMBER 30, 2019

(3) RECOVERY SCENARIO 2 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 2009 Performance and Accountability Report   253

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 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 FY 2009, the balances in the FUA were depleted

and the FUA borrowed from the Treasury general fund.   

Chart V presents the State by State results of this analysis at September 30, 2009 in descending order by ratio.  As

the table below illustrates, 37 state funds were below the minimal solvency ratio of 1.00 at September 30, 2009.

Chart V  

State Ratio State Ratio State Ratio

Wyoming 2.21 Hawaii 0.75 Alabama 0.00

Louisiana 2.19 Kansas 0.65 Minnesota 0.00

Mississippi 2.15 Arizona 0.64 Virgin Islands 0.00

New Mexico 1.91 West Virginia 0.63 Florida 0.00

Utah 1.90 Delaware 0.47 Illinois 0.00

Oklahoma 1.68 New Hampshire 0.42 Texas 0.00

Montana 1.64 Tennessee 0.38 New Jersey 0.00

Washington 1.51 Vermont 0.38 Rhode Island 0.00

Nebraska 1.38 Maryland 0.33 Arkansas 0.00

Maine 1.36 Colorado 0.30 Idaho 0.00

Oregon 1.32 Georgia 0.27 New York 0.00

Alaska 1.31 Nevada 0.20 Pennsylvania 0.00

District of Columbia 1.31 Massachusetts 0.18 Missouri 0.00

North Dakota 1.20 Virginia 0.15 California 0.00

Iowa 1.08 South Dakota 0.10 Wisconsin 0.00

Puerto Rico 1.01 Connecticut 0.06 Kentucky 0.00

Ohio 0.00

North Carolina 0.00

South Carolina 0.00

Michigan 0.00

Indiana 0.00

Minimally Solvent Not Minimally Solvent Not Minimally Solvent
Financial Section

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

254     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.  Prior to October 3, 2008, the Black Lung Benefits Revenue Act provided for

repayable advances to the BLDTF from the general fund of the Treasury, in the event that BLDTF resources were not

adequate to meet program obligations.  

P.L. 110‐343, Division B‐‐Energy Improvement and Extension Act of 2008, enacted on October 3, 2008, in section

113, (1) allowed for the temporary increase in coal excise tax rates to continue an additional five years beyond the

current statutory limit and (2) restructured the BLDTF debt by refinancing the outstanding repayable advances

(which had higher interest rates) with the proceeds from issuing discounted debt instruments similar in form to

zero‐coupon bonds (which had lower interest rates), plus a one‐time appropriation.  The Act also allowed that any

debt issued by the BLDTF subsequent to the refinancing may be used to make benefit payments, other authorized

expenditures, or to repay debt and interest from the initial refinancing.  All debt issued by the BLDTF was effected

as borrowing from the Treasury's Bureau of Public Debt.  (See Notes 1J and 8)

Program Finances and Sustainability

At September 30, 2009, total liabilities of the BLDTF exceeded assets by $6.3 billion.    This deficit fund balance

represents the accumulated shortfall of excise taxes necessary to meet benefit payments, administrative costs, and

interest expense incurred prior to the debt refinancing pursuant to P.L. 110‐343.  Prior to enactment of P.L. 110‐343,

this shortfall was funded by repayable advances to the BLDTF, which are repayable with interest.  Pursuant to P.L.

110‐343, any shortfall will be financed with debt instruments similar in form to zero‐coupon bonds.  Outstanding

debt at September 30, 2009 was $6.4 billion, bearing interest rates ranging from 1.606% to 4.556%.    Excise tax

revenues of $644.9 million, benefit payment expense of $240.6 million and interest expense of $231.3 million were

recognized for the year ended September 30, 2009.   The interest expense is accrued and capitalized to the principal

of the debt until the debt reaches its face value at the time of maturity.  At September 30, 2009, there were 31 debt

instruments with staggered maturities of September 30 for years 2010 through 2040, with a total carrying value of

$6,370.6 million and a total face value at maturity of $11,081.6 million.  
Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

 FY 2009 Performance and Accountability Report   255

As discussed in Note 1.K.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, 2009 were $17.3 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 debt issued by the BLDTF.  These projections are sensitive to changes in the tax

rate and changes in interest rates on debt issued by the BLDTF.

These projections, made over the thirty‐one 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 $14.9 billion by the year 2040.  However, when  payments from

the BLDTF’s maturing debt are applied against this surplus cash inflow, the BLDTF’s cash flow turns negative in 2011

and each of the subsequent periods included in the projections.   Net cash outflows after payments on maturing

debt are projected to reach $16.0 billion by the end of the year 2040, resulting in a projected deficit of $1.3 billion at

September 30, 2040.  (See Chart I)   

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, 2009, 2008, 2007, 2006, and 2005 are presented in the

Statement of Social Insurance.

Chart I

BLACK LUNG DISABILITY TRUST FUND 

CASH INFLOW AND OUTFLOW

0

200

400

600

800

1,000

1,200

1,400

2010 2014 2018 2022 2026 2030 2034 2038

$ - Millions

Total Cash Outflow Total Cash Inflow Cash Outflow Before Repayment of Debt

   

Yearly cash inflows and outflows are presented in the table on the following page.        
256     United States Department of Labor (Dollars in thousands) 2010 2011 2012 2013 2014 2015 - 2040 

Balance, start of year $ (6,320,321) (5,959,183) $ (5,588,448) $ (5,212,434) $ (4,839,874) $ (4,471,859) $ 

Cash inflow

Excise taxes 670,000 678,000 687,000 691,000 695,000 11,488,752 

Total cash inflow 670,000 678,000 687,000 691,000 695,000 11,488,752 

Cash outflow

Disabled coal miners benefits 239,035 225,410 211,673 198,320 185,396 2,230,331 Administrative costs 58,494 60,236 62,114 64,084 66,123 1,316,934 

Cash outflows before repayment of debt 297,529 285,646 273,787 262,404 251,519 3,547,265 

Cash inflow over cash outflow  before payment of debt 372,471 392,354 413,213 428,596 443,481 7,941,487 

Maturity of Obligations 364,757 400,905 431,486 452,439 472,849 8,959,144 

Total cash outflow 662,286 686,551 705,273 714,843 724,368 12,506,409 Total cash inflow over total cash outflow 7,714 (8,551) (18,273) (23,843) (29,368) (1,017,657) 

Reduction of debt 353,424 379,286 394,287 396,403 397,383 4,237,460 

Balance, end of year $ (5,588,448) (5,959,183) $ (5,212,434) $ (4,839,874) $ (4,471,859) $ (1,252,056) $ 

U.S. DEPARTMENT OF LABOR

SUPPLEMENTARY SOCIAL INSURANCE INFORMATION

CASH INFLOW AND OUTFLOW OF THE BLACK LUNG DISABILITY TRUST FUND

FOR THE THIRTY-ONE YEAR PERIOD ENDING SEPTEMBER 30, 2040
Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

 FY 2009 Performance and Accountability Report   257

STATEMENT OF BUDGETARY RESOURCES

The principal Statement of Budgetary Resources combines the availability, status and outlay of DOL’s budgetary

resources during FY 2009 and 2008.    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)

258     United States Department of Labor

COMBINING STATEMENT OF BUDGETARY RESOURCES  

For the Year Ended September 30, 2009

   Employment Employment Office

and Training Standards of 

(Dollars in thousands) Administration Administration Job Corps

BUDGETARY RESOURCES

Unobligated balance, brought forward, October 1 1,582,993 $ $ 535,878 1,981,758 $ 

Recoveries of prior year unpaid obligations 151,234 25,095 17,170 

Budget authority

Appropriations received 154,078,690 1,851,962 9,473,825 

Borrowing authority 7,950,000 6,495,717 - 

Spending authority from offsetting collections

Earned

Collected 47,728 8,435 1,585,050 

Change in receivables from Federal sources 387 (1) - 

Change in unfilled customer orders

Advance received - (52,706) - 

Expenditure transfers from trust funds 5,002,885 34,409 - 

Total budget authority 167,079,690 1,860,397 17,536,294 

Nonexpenditure transfers, net (109,057) 96,530 16,064 

Temporarily not available pursuant to Public Law - (35,130) - 

Permanently not available

Redemption of debt - (10,483,557) - 

All other (616,062) (5,740) (436,890) 

Total budgetary resources $ 168,088,798 $ 8,595,709 2,512,160 $ 

STATUS OF BUDGETARY RESOURCES

Obligations incurred

Direct $ 165,772,186 $ 1,754,939 4,845,083 $ 

Reimbursable 27,930 593 2,793,010 

Total obligations incurred 165,800,116 1,755,532 7,638,093 

Unobligated balances available

Apportioned 1,779,084 745,105 642,118 

Exempt from apportionment - 301,542 - 

Total unobligated balances available 1,779,084 745,105 943,660 

Unobligated balances not available 509,598 13,956 11,523 

Total status of budgetary resources $ 168,088,798 $ 8,595,709 2,512,160 $ 

CHANGE IN OBLIGATED BALANCE

Obligated balance, net 

Unpaid obligations, brought forward, October 1 8,154,190 $ $ 256,014 291,054 $ 

Less uncollected customer payments from Federal sources, 

 brought forward, October 1 (1,176,445) (183) - 

Total unpaid obligated balance, net 6,977,745 256,014 290,871 

Obligations incurred, net 165,800,116 1,755,532 7,638,093 

Less gross outlays (156,949,874) (1,614,768) (7,642,138) 

Obligated balance transferred, net Actual transfers, unpaid obligation (128,496) 128,496 - 

Less recoveries of prior year unpaid obligations, actual (151,234) (25,095) (17,170) 

Change in uncollected customer payments from Federal sources (1,107,686) 1 - 

Obligated balance, net, end of period

Unpaid obligations 16,724,702 500,179 269,839 

Less uncollected customer payments from Federal sources (2,284,131) (182) - 

Total unpaid obligated balance, net, end of period 14,440,571 $ $ 500,179 269,657 $ 

NET OUTLAYS

Gross outlays 156,949,874 $ $ 1,614,768 7,642,138 $ 

Less offsetting collections (3,943,314) (8,435) (1,566,752) 

Less distributed offsetting receipts (18,096,067) (350) (6,502,766) 

Net outlays 134,910,493 $ $ 1,605,983 (427,380) $ 
Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

 FY 2009 Performance and Accountability Report   259

Occupational Bureau of Mine Safety Employee Benefits Veterans' Other

Safety and Health Labor and Health Security Employment Departmental

Administration Statistics Administration Administration and Training Programs Total

$ 9,431 14,009 $ 1,466 $ $ 3,000 $ 3,779 $ 4,157,428 25,114 $ 

 6,366 10,854 2,209 1,794 5,067 262,069 42,280 

 518,918 513,042 347,003 143,419 26,330 167,463,706 510,517 

 - - - - - 14,445,717 - 

 8,434 2,004 1,518 13,170 141 1,860,954 194,474 

 - - - - - 5,136 4,750 

 - - - - - (23,131) 29,575 

 77,406 - - - 202,469 31,161 5,348,330 

 604,758 515,046 348,521 156,589 228,940 189,100,712 770,477 

 (537) 5,945 (30) 5,552 - (1,703) (16,170) 

 - - - - - (35,130) - 

 - - - - - (10,483,557) - 

 (1,222) (8,109) (149) (1,919) (630) (1,080,459) (9,738) 

$ 618,796 537,745 $ 352,017 $ 165,016 $ $ 237,156 $ 181,919,360 811,963 $ 

$ 601,599 520,698 $ 348,465 $ 146,590 $ $ 232,001 $ 174,719,690 498,129 $ 

 8,580 1,235 1,241 12,534 - 3,075,035 229,912 

 610,179 521,933 349,706 159,124 232,001 177,794,725 728,041 

 2,909 69 - 3,953 - 3,232,633 59,395 

 - - - - - 91 301,633 

 2,909 69 - 3,953 - 3,534,266 59,486 

 12,903 8,617 2,242 1,939 5,155 24,436 590,369 

$ 618,796 537,745 $ 352,017 $ 165,016 $ $ 237,156 $ 181,919,360 811,963 $ 

$ 73,947 86,938 $ 34,378 $ $ 50,627 $ 61,596 $ 9,363,199 354,455 $ 

 (8,113) - - - - (1,183,351) 1,390 

 73,947 78,825 34,378 50,627 61,596 8,179,848 355,845 

 610,179 521,933 349,706 159,124 232,001 177,794,725 728,041 

 (575,458) (506,538) (349,277) (161,684) (221,765) (168,678,920) (657,418) 

 - - - - - - - 

 (6,366) (10,854) (2,209) (1,794) (5,067) (262,069) (42,280) 

 - - - - - (40,739) (1,148,424) 

 102,302 91,479 32,598 46,273 66,765 18,216,935 382,798 

 (8,113) - - - - (39,349) (2,331,775) 

$ 102,302 83,366 $ 32,598 $ $ 46,273 $ 66,765 $ 15,885,160 343,449 $ 

$ 575,458 506,538 $ 349,277 $ 161,684 $ $ 221,765 $ 168,678,920 657,418 $ 

 (85,840) (2,004) (1,518) (13,170) (202,610) (6,078,853) (255,210) 

 - (73) - (25,036) - (24,625,433) (1,141) 

$ 489,618 504,534 $ 347,686 $ 123,478 $ $ 19,155 $ 137,974,634 401,067 $ 
Financial Section

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

260     United States Department of Labor

COMBINING STATEMENT OF BUDGETARY RESOURCES

For the Year Ended September 30, 2008

Employment Employment Office

and Training Standards of 

(Dollars in thousands) Administration Administration Job Corps

BUDGETARY RESOURCES

Unobligated balance, brought forward, October 1 2,403,760 $ $ 1,837,745 $ - 

Recoveries of prior year unpaid obligations 358,350 11,401 - 

Budget authority

Appropriations received 52,202,263 1,626,855 3,075,668 

Borrowing authority - 426,000 - 

Spending authority from offsetting collections

Earned

Collected 74,527 371 2,645,916 

Change in receivables from Federal sources - (844) - 

Change in unfilled customer orders

Advance received - 1,531 - 

Expenditure transfers from trust funds 3,436,272 34,783 - 

Total budget authority 55,713,062 1,627,226 6,183,054 

Nonexpenditure transfers, net (7,200) (13,215) (674) 

Temporarily not available pursuant to Public Law (62,962) (135,595) - 

Permanently not available (766,612) (11,546) (28,421) 

Total budgetary resources $ 57,638,398 $ 7,884,385 1,585,590 $ 

STATUS OF BUDGETARY RESOURCES

Obligations incurred

Direct $ 56,045,818 $ 1,026,949 3,183,078 $ 

Reimbursable 32,032 317 2,719,549 

Total obligations incurred 56,077,850 1,027,266 5,902,627 

Unobligated balances available

Apportioned 524,223 558,324 1,411,223 

Exempt from apportionment - 239,306 - 

Total unobligated balances available 524,223 558,324 1,650,529 

Unobligated balances not available 1,036,325 331,229 - 

Total status of budgetary resources $ 57,638,398 $ 7,884,385 1,585,590 $ 

CHANGE IN OBLIGATED BALANCE

Obligated balance, net 

Unpaid obligations, brought forward, October 1 8,370,953 $ $ 292,207 $ - 

Less uncollected customer payments from Federal sources, 

 brought forward, October 1 (1,242,900) (1,027) - 

Total unpaid obligated balance, net 7,128,053 291,180 - 

Obligations incurred, net 56,077,850 1,027,266 5,902,627 

Less gross outlays (55,951,639) (755,877) (5,892,378) 

Less recoveries of prior year unpaid obligations, actual (358,350) (11,401) -

Change in uncollected customer payments from Federal sources 66,456 844 -

Obligated balance, net, end of period

Unpaid obligations 8,138,814 271,389 291,055 

Less uncollected customer payments from Federal sources (1,176,444) (183) - 

Total unpaid obligated balance, net, end of period 6,962,370 $ $ 271,389 290,872 $ 

NET OUTLAYS

Gross outlays 55,951,639 $ $ 755,877 5,892,378 $ 

Less offsetting collections (3,577,254) (371) (2,682,231) 

Less distributed offsetting receipts (736,291) (4,589) - 

Net outlays 51,638,094 $ $ 3,205,558 755,506 $ 
Annual Financial Statements

REQUIRED SUPPLEMENTARY INFORMATION

(Unaudited)

 FY 2009 Performance and Accountability Report   261

Occupational Bureau of Mine Safety Employee Benefits Veterans' Other

Safety and Health Labor and Health Security Employment Departmental

Administration Statistics Administration Administration and Training Programs Total

$ 9,060 16,286 $ 1,271 $ $ 16,976 $ 5,521 $ 4,311,781 21,162 $ 

 7,506 8,309 5,719 1,797 989 418,195 24,124 

 476,861 494,641 339,862 141,790 31,522 58,784,002 394,540 

 - - - - - 426,000 - 

 5,584 2,354 1,408 12,460 124 2,947,436 204,692 

 14 - - - - (3,996) (3,166) 

 - - - - - 2,312 781 

 75,120 - - - 195,247 30,965 3,772,387 

 557,565 497,009 341,270 154,250 226,893 65,928,141 627,812 

 (514) (1,035) (2,182) (177) - (9,750) 15,247 

 - - - - - (198,557) - 

 (13,484) (11,090) (6,382) (3,334) (754) (11,283) (852,906) 

$ 562,527 507,085 $ 339,696 $ 169,512 $ $ 232,649 $ 69,596,904 677,062 $ 

$ 547,532 491,592 $ 337,062 $ 154,382 $ $ 228,869 $ 62,457,299 442,017 $ 

 5,565 1,483 1,169 12,130 - 2,982,177 209,932 

 553,097 493,075 338,231 166,512 228,869 65,439,476 651,949 

 15 29 - 33 49 2,499,272 5,376 

 - - - - - 93 239,399 

 15 29 - 33 49 2,738,671 5,469 

 13,995 9,430 1,436 2,967 3,731 19,644 1,418,757 

$ 562,527 507,085 $ 339,696 $ 169,512 $ $ 232,649 $ 69,596,904 677,062 $ 

$ 75,289 95,692 $ 48,610 $ 40,172 $ $ 56,100 $ 9,369,528 390,505 $ 

 (8,099) - - - - (1,261,368) (9,342) 

 75,289 87,593 48,610 40,172 56,100 8,108,160 381,163 

 553,097 493,075 338,231 166,512 228,869 65,439,476 651,949 

 (546,931) (493,520) (346,743) (154,261) (222,385) (65,027,610) (663,876) 

 (7,506) (8,309) (5,719) (1,797) (989) (418,195) (24,124) 

 (14) - - - - 10,731 78,017 

 73,949 86,938 34,379 50,626 61,595 9,363,199 354,454 

 (8,113) - - - - (1,183,351) 1,389 

$ 73,949 78,825 $ 34,379 $ 50,626 $ $ 61,595 $ 8,179,848 355,843 $ 

$ 546,931 493,520 $ 346,743 $ 154,261 $ $ 222,385 $ 65,027,610 663,876 $ 

 (80,704) (2,354) (1,408) (12,460) (195,370) (6,788,590) (236,438) 

 - - - - - (740,880) - 

$ 466,227 491,166 $ 345,335 $ 141,801 $ $ 27,015 $ 57,498,140 427,438 $ 

Other Accompanying Information

FY 2009 Performance and Accountability Report     265   

Top Management Challenges

The Top Management Challenges identified by the Office of the Inspector General (OIG) for the Department of

Labor (DOL) are discussed below.  The Department’s responses and presentation of its progress on the Top

Management Challenges are shown following the OIG report.

2009 Top Management Challenges Facing the Department of Labor

For 2009, the OIG considers the following as the most serious management and performance challenges facing the

Department:   

 Implementing the American Recovery and Reinvestment Act of 2009

 Protecting the Safety and Health of Workers

 Improving Performance Accountability of Grants

 Ensuring the Effectiveness of the Job Corps Program

 Safeguarding Unemployment Insurance

 Improving the Management of Workers’ Compensation Programs

 Improving Procurement Integrity

 Maintaining the Integrity of Foreign Labor Certification Programs

 Securing Information Technology Systems and Protecting Related Information Assets

 Ensuring the Security of Employee Benefit Plan Assets  

For each challenge, the OIG presents an overview of the challenge, a description of the challenge, and the OIG’s

assessment of the Department’s progress in addressing the challenge.  The OIG continues to review and monitor

how these complex issues are addressed.

CHALLENGE:  Implementing the American Recovery and Reinvestment Act of 2009

OVERVIEW:  The American Recovery and Reinvestment Act of 2009 (Recovery Act) was signed into law on

February 17, 2009.  It is an unprecedented effort to jumpstart the economy, while creating or saving millions of

jobs.  DOL has three key roles in the Recovery Act effort:  providing worker training for these jobs; easing the

burden of the recession on workers and employers by providing for extensions and expansions of unemployment

benefits; and assisting and educating unemployed workers regarding expanded access to continued health benefits.  

The Recovery Act also appropriates substantial funding for construction, alteration, and repair of Federal buildings

and for infrastructure projects such as roads, bridges, and public transit.

CHALLENGE FOR THE DEPARTMENT:  The Recovery Act provided the Department with approximately $45 billion

and mandated that these funds be spent expeditiously while ensuring transparency, accountability, and results.  

The risk for fraud and abuse grows when large sums of money are being disbursed quickly, eligibility requirements

are being established or changed, or new programs are being created.  Consequently, the Department has to meet

the challenges inherently created by increased funding and the corresponding increase in the attempts at fraud and

abuse that will likely follow.  In addition, the Department has new or increased requirements impacting many of its

ongoing programs.  For example, the Recovery Act contains premium assistance provisions that expand the

Consolidated Omnibus Budget Reconciliation Act (COBRA) eligibility and provide eligible individuals with a 65

percent reduction of their COBRA premiums for up to nine months.  The Employee Benefits Security Administration

(EBSA) will now be responsible for administering the extension and subsidization of COBRA for certain groups of

eligible laid off workers and for handling appeals, outreach, and regulatory responsibilities.  Handling the appeals in

a timely manner, and having the necessary, trained personnel to do so, is a major challenge, as EBSA has reported

receiving 6,000 inquiries per week about the COBRA premium reduction.   
Other Accompanying Information

266     United States Department of Labor

In addition, the increased funding tied to improvements to the Nation’s infrastructure work will have an impact on

Departmental enforcement efforts related to worker pay.

About $40 billion of the Department’s Recovery Act funds will be used to provide extensions of unemployment

benefits and to fund a new temporary Federal Additional Compensation program, which increases the Weekly

Benefit Amount for unemployment benefits by $25 per week.  While costly, the Recovery Act provisions relating to

benefit extensions are (1) a continuation of the Emergency Unemployment Compensation program created by the

Supplemental Appropriations Act 2008, and (2) an inducement for states to pay benefits under the permanent

federal‐state extended benefit program.  The Federal Additional Compensation program is new to the Department,

as well as to the States that are paying the additional weekly benefit and the Department will be challenged to

ensure that these benefits are accounted for correctly.   

The Recovery Act provided almost $5 billion for Workforce Investment Act (WIA) programs, most of which will be

expended through non‐Federal entities, rather than directly by the Department.  While these WIA programs are not

new, our past audits have demonstrated problems with respect to grant accountability.  Given the large number of

grants being awarded under tight time frames, the pressure to spend the funds quickly, and the increased reporting

requirements mandated by the Recovery Act, the Department now faces even greater challenges in demonstrating

and reporting that grants are properly awarded, funds are properly spent, and that these investments achieve their

intended outcomes.

The amount of Recovery Act funding designated for infrastructure work will increase the number of Federal

construction projects over the course of two years.  The Wage and Hour Division (WHD) will be required to publish

up‐to‐date and accurate prevailing wage determinations for use on the newly funded construction projects, and to

establish an active enforcement program for Recovery Act covered projects.  Many WHD investigators have little or

no experience with Davis‐Bacon Act enforcement.  Davis‐Bacon complaint workloads are expected to substantially

increase, an increase that may continue over a number of years given that some of the funded projects may be

under construction for several years.  It will be a challenge for WHD to assign a sufficient number of trained

personnel that will ensure workers receive the wages they are legally due, and avoid a backlog of non‐Recovery Act

complaints as a result of increased Recovery Act worker complaints.

The Recovery Act requires Federal agencies to implement an unprecedented level of transparency and

accountability to ensure the public can see where and how their tax dollars are being spent.  The Department faces

several challenges in implementing the performance reporting requirements of the Recovery Act.  Most

importantly, the Department needs to report whether recipients used Recovery Act funds to train and place

participants in high‐demand occupations or industries.  Additionally, the Department needs to develop policies and

procedures to perform data quality reviews of the quarterly reports submitted by recipients.

DEPARTMENT’S PROGRESS:  The Department continues to implement its responsibilities under the Recovery Act

and financial and performance reporting guidance issued by the Office of Management and Budget (OMB).  In

keeping with the Recovery Act’s goals for accountability and transparency, DOL established a Web site

(http://www.dol.gov/recovery/) to keep the public informed on how it is spending Recovery Act funds, and updates

it regularly. The Department reassigned staff to address Recovery Act workload and launched a hiring initiative to

meet its expanded program responsibilities.  Individual agencies have taken steps to address their increased

responsibilities under the Recovery Act.  The Department appointed a Senior Accountable Official for the Recovery

Act.  The Senior Accountable Official has held weekly meetings to discuss the Department’s progress in fulfilling the

Recovery Act’s responsibilities.  The Office of the Chief Financial Officer has developed new accounting codes to

enable it to separately account for Recovery Act funds.  EBSA responded to more than 110,000 telephone inquiries

related to COBRA premium assistance in the first five months after Recovery Act passage, and the Employment and

Training Administration (ETA) made available to the states $40 billion to support and expand unemployment

insurance and $3.5 billion in training and employment formula funds.  WHD has selected a senior executive to
Top Management Challenges

FY 2009 Performance and Accountability Report     267   

manage implementation of its Recovery Act plan, and budget, administrative, procurement, human resources and

wage determination and enforcement staff have been reassigned to assist in Recovery Act efforts.  

OIG completed several audits in fiscal year (FY) 2009 assessing the Department’s progress under the Recovery Act.  

For Recovery Act financial activity, OIG found that, generally, the Department has implemented procedures to

account for Recovery Act financial activity as required by Federal law and OMB guidance, and report on the use of

Recovery Act funds in accordance with OMB guidance.  

OIG’s audit of the implementation of the Federal Assistance Compensation program in 10 states found that all of

the states had aggressively implemented the program.  As of June 30, 2009, the 10 states had paid about $1.3

billion in benefits to Federal Assistance Compensation program recipients.  Challenges encountered by the states

included overpayment identification, recovery capabilities, and the withholding of taxes.  The audit also found non‐

compliance issues concerning states not reporting overpayment information to ETA and not withholding taxes

when requested by claimants.  

OIG’s audit of EBSA’s implementation of the COBRA premium assistance provisions of the Recovery Act found that

EBSA quickly started outreach activities to implement the COBRA provisions under the Recovery Act, and designed

and implemented a process to provide timely reviews of appeals of premium assistance denials.  EBSA could

improve several aspects of its efforts through improved coordination with ETA to ensure Recovery Act COBRA

premium assistance materials are displayed and distributed at all One‐Stop centers, using feedback from

enforcement investigations to help assess outreach efforts, developing a resource contingency plan, improving

controls to assure accurate dates are used on applicant determination letters, and redesigning the letters sent to

appellants.

CHALLENGE:  Protecting the Safety and Health of Workers

OVERVIEW:  The Department administers the Occupational Safety and Health Act of 1970 and the Federal Mine

Safety and Health Act of 1977 (Mine Act), as amended by the Mine Improvement Emergency Response Act of 2006.  

The workplace safety and health of our nation’s workers depends on DOL’s strong enforcement of these laws.  

CHALLENGE FOR THE DEPARTMENT:  The two DOL agencies primarily responsible for worker safety and health are

the Occupational Safety and Health Administration (OSHA) and the Mine Safety and Health Administration (MSHA).  

OSHA is responsible for ensuring safe and healthful working conditions for 111 million workers at more than seven

million establishments.  MSHA is responsible for the safety and health of over 390,000 miners who work at more

than 14,800 mines.  Given the scope of their responsibilities, OSHA and MSHA are continually challenged to

effectively utilize their operating resources to meet mission needs in all areas of responsibility.

With more than 7 million workplaces nationwide and with 5,071 fatal workplace injuries reported by the Bureau of

Labor Statistics in 20081

,OSHA’s challenge is to target its limited resources to workplaces where they can have the

greatest impact.  In 2003, OSHA developed the Enhanced Enforcement Program (EEP).  The EEP was designed to

identify employers indifferent to their obligations under the Occupational Safety and Health Act in order to target

their worksites with increased enforcement attention.   

Our recent audit of OSHA’s EEP found that OSHA did not always properly identify employers for enhanced

enforcement.  When it did, OSHA did not always take proper action nor place the appropriate management

emphasis on compliance, commit the necessary resources, and provide clear policy guidance.  For example, in 29

OSHA‐designated EEP cases, OSHA did not take any of the appropriate enhanced enforcement actions, and 16 of

 

1

These numbers include fatalities not under OSHA jurisdiction, such as deaths among miners, transportation workers, domestic workers,

some public employees, and the self‐employed, as well as fatalities that fall outside of OSHA's definition of work‐relatedness.
Other Accompanying Information

268     United States Department of Labor

the 29 employers reported 20 subsequent fatalities.  Of these, 14 fatalities were in cases that shared similar

violations.  The OIG recommended that OSHA form a task force to make recommendations to improve program

efficiency and effectiveness in the following areas: targeting employers indifferent to the safety of their employees

which are most likely to have unabated hazards and/or company‐wide safety and health issues at multiple

worksites; ensuring appropriate actions (i.e., follow‐up and related worksite inspections) are taken on indifferent

employers and related companies; centralizing data analysis to identify employers with multiple EEP qualifying

and/or fatality cases that occur across Regions; and identifying and sharing Regional and Area Offices’ “best

practices” to improve compliance with EEP requirements.  

Regarding MSHA, the OIG’s reviews over the past several years revealed a pattern of weak oversight, inadequate

policies, and a lack of accountability on the part of MSHA, which were exacerbated by years of resource shortages.  

Historically, MSHA was not meeting its statutory responsibility to conduct inspections at the nation’s coal mines.  

Insufficient resources during a period of increasing mining activity made it difficult for the Department to ensure

that it had enough resources in the right places to protect the safety of miners.  While Congress allocated

supplemental funding to MSHA in FY 2006 to hire additional mine inspectors, the full impact of that increase was

not immediately realized.  MSHA states that it takes from 18 to 24 months of classroom and on‐the‐job training for

a new hire to become a qualified mine inspector.  Therefore, MSHA is just now reaching a point where those new

mine inspectors can have an impact on MSHA’s workload.  Retirements and other attritions make maintaining a

sufficient number of trained mine inspectors an ongoing challenge.  

DEPARTMENT’S PROGRESS:  OSHA has established an EEP Revision Task Force to design a new program that will be

able to identify and inspect recalcitrant employers more effectively.  Some changes under consideration include

mandatory follow‐up inspections, more inspections of other establishments of an identified company, and

additional enhanced settlement provisions.  OSHA plans for the new program to include a more intensive

examination of an employer’s history for systemic problems that would trigger additional mandatory inspections.  

All personnel hired under the FY 2006 supplemental funding provided to MSHA by Congress have now completed

their training and are mine inspectors.  As of April 30, 2009, MSHA reported that it had increased its enforcement

personnel by 30 percent over 2006 levels.  Additional hiring of trainees, due to attrition of enforcement personnel

is an ongoing activity.  Efforts are also underway to attract and retain engineers and specialists.  In 2008, for the

first time in its history, MSHA reported that it completed 100 percent of all mandatory mine inspections.  However,

the OIG remains concerned that MSHA has improved its efforts in inspecting mines at the cost of not fulfilling other

statutory responsibilities, such as mine plan reviews.

CHALLENGE:  Improving Performance Accountability of Grants

OVERVIEW:  In FY 2008, the Department’s ETA reported program costs totaling $3.2 billion for the WIA Adult,

Dislocated Worker, and Youth programs.  WIA Adult employment and training programs are provided through

financial assistance grants to States and territories to design and operate programs for disadvantaged persons,

including public assistance recipients.  ETA also awards grants to States to provide reemployment services and

retraining assistance to individuals dislocated from their employment.  Youth programs are also funded through

grant awards that 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.   

CHALLENGE FOR THE DEPARTMENT:  DOL is challenged to ensure that discretionary grants are properly awarded

and that the Department receives the quality of services that the taxpayers deserve.  Successfully meeting the

employment and training needs of citizens requires selecting the best service providers, making expectations clear

to grantees, ensuring that success can be measured, providing active oversight, evaluating outcomes, and

disseminating and replicating proven strategies and programs.  Past OIG and Government Accountability Office
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FY 2009 Performance and Accountability Report     269   

(GAO) audits have found weaknesses in how ETA manages its grants to this end.  In audits involving the High

Growth, Community Based, and WIRED initiatives, weaknesses found included the lack of competition in awarding

grants, grants that failed to achieve major performance goals, grant agreements with goals that were so unclear it

was impossible to determine success or failure, and grants whose required matching funds were not provided.  Our

audits also found that ETA has not evaluated the usefulness of individual grant products or the overall effectiveness

of its discretionary grant initiatives.  ETA is also challenged to provide adequate oversight and monitoring of the

grants it awards, as the agency lacks reliable and timely performance data that would allow identification of

problems in time to correct them.  In 2005, ETA implemented a data validation initiative to ensure that state

workforce agencies (SWA) report accurate and reliable performance data for WIA programs.  OIG’s recent audit of

three states found that they were not using the appropriate ETA criteria or source documentation to perform the

data validations.  As a result, ETA has no assurance that data validation is operating as designed, or that the data

reported by states can be relied upon for accurately reporting performance results.

The large increase in funding provided by the Recovery Act challenges the Department even more in ensuring that

grant funds are appropriately spent on activities that will yield the desired training and employment outcomes.  

DEPARTMENT’S PROGRESS:  As a result of the audits by the OIG and GAO, ETA has indicated that it will increase the

emphasis placed on awarding discretionary grants competitively, developed procedures designed to better

document decisions and discussions that lead to grant actions, implemented new procedures to ensure the proper

justification of any future non‐competitive awards, and provided training to agency grant officers on these new

procedures.  ETA has also stated that future agreements for pilots and demonstration grants will require grantees

to obtain an independent evaluation of grant results.  While these actions, if effectively implemented, should help

to improve performance accountability, ETA needs to focus its future efforts on determining how best to prioritize

its available resources to adequately monitor grant performance and how to evaluate grants to ensure desired

results are achieved.  In conjunction with our planned Recovery Act audit work, we will review the Department’s

stated progress in this challenge area.

CHALLENGE:  Ensuring the Effectiveness of the Job Corps Program

OVERVIEW:  Education, training, and support services are provided to approximately 60,000 students at 122 Job

Corps centers located throughout the United States and Puerto Rico.  Job Corps centers are operated for DOL by

private companies through competitive contracting processes, and by other Federal Agencies through interagency

agreements.  The program was appropriated nearly $1.7 billion in FY 2009.   

CHALLENGE FOR THE DEPARTMENT: The OIG’s work has consistently identified challenges to the effectiveness of

the Job Corps program.  These challenges include ensuring the safety and health of students and having accurate,

reliable, performance data necessary to determine the success of the program.  OIG audits have identified safety

program weaknesses at some centers, including unsafe or unhealthy conditions and the lack of required safety

inspections.  Unsafe or unhealthy conditions affect the learning environment and could adversely impact the overall

success of the Job Corps program.  Further, Job Corps officials need to do more to address the problems of centers

not taking appropriate action for student misconduct, including illegal drug use and violence.  The OIG found that

some centers did not hold required behavior review board meetings to evaluate student misconduct and initiate

disciplinary action.  The lack of appropriate disciplinary action, including termination of enrollment, may place the

remaining students at risk.  

OIG audits have found that weak controls at centers have resulted in the overstatement and misrepresentation of

performance data.  The OIG has found problems with the reporting of student outcomes, on‐board strength and

attendance.  This is a particular challenge for Job Corps when centers are operated by contractors through

performance‐based contracts, which tie cost reimbursement, incentive fees and bonuses directly to contractor

performance largely measured by on‐board strength, attendance, and outcomes.  Under such contracts, there is a
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risk that contractors will graduate students with incomplete training or inflate their performance reports so they

can continue to operate centers.  It is essential for Job Corps to have reliable, accurate, and timely data, so that the

Department can effectively evaluate contractor performance and participant outcomes.

DEPARTMENT’S PROGRESS:  Job Corps continues to take actions such as strengthening policies and procedures,

conducting periodic center assessments, and following up on issues identified in center assessments and contractor

assessments.  Specifically, Job Corps has recently revised its policies regarding the completion of training records,

which was intended to mitigate both the risk of contractors graduating students with incomplete training or

inflating their performance reporting.  However, our audits continue to identify problems.  Job Corps’s actions may

not achieve the desired outcomes unless proactive, consistent, and rigorous oversight of contractors and personnel

is provided at all centers.

CHALLENGE:  Safeguarding Unemployment Insurance  

OVERVIEW:  The Department partners with the states to administer unemployment benefit programs.  State

Unemployment Insurance (UI) provides benefits to workers who are unemployed and meet the eligibility

requirements established by their respective states.  UI benefits are largely 2 financed through employer taxes

imposed by the states and deposited in the Unemployment Trust Fund (UTF), from which the states pay the

benefits.   

The Department funds State Workforce Agencies (SWAs), which administer the UI program through grant

agreements.  These grant agreements are intended to ensure that SWAs both administer the UI program efficiently

and comply with Federal laws and regulations.  In addition, the SWAs are required to have disaster contingency

plans in place to enable them to administer benefits in the aftermath of a disaster.

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 benefits.   

CHALLENGE FOR THE DEPARTMENT:  Reducing and preventing UI and DUA overpayments by improving controls

over eligibility, timely detecting and recovering overpayments, and combating fraud against these programs remain

major challenges for the Department.  Another challenge involves ensuring that SWAs have adequate information

technology contingency plans that provide for the continuation of services in the aftermath of disasters.  

In FY 2008, the Department reported a total overpayment rate of 9.92 percent, which equates to more than  

$3.8 billion in UI overpayments – an increase from the $3 billion reported in FY 2007.  The Department met its

target goal of identifying and establishing for recovery 56 percent of UI overpayments in FY 2008; however, this

goal had been reduced from the target levels of 59‐60 percent established during the previous five years.  It is a

challenge for the Department and the SWAs to have systems and controls in place to quickly prevent or respond to

improper payments.  The current economic downturn increases this challenge, as more claims are filed and states

shift resources from detecting improper payments to processing claims.  The Department needs to promote the

states’ use of the National Directory of New Hires (NDNH) database to prevent and timely detect overpayments.  

Our recent audit found that ETA could not demonstrate it exercised sufficient oversight to ensure SWAs utilized

information from the NDNH to prevent and detect unemployment compensation overpayments.  Without effective

reviews of SWAs’ use of the NDNH for cross‐matching UI claims, ETA cannot ensure the reliability of the data

provided by the states, and the dollar value of detected or possible undetected overpayments is unknown or

cannot be validated.  We also found that California (which accounts for roughly 16 percent of total UI benefits

paid), Indiana, the District of Columbia, and Puerto Rico were not using the NDNH to detect unemployment

compensation overpayments.   

 

2

Employees also contribute to Unemployment Insurance in three states.
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FY 2009 Performance and Accountability Report     271   

Reducing fraud committed against the UI program is also a challenge.  ETA estimates that about $1 billion of the

$3.8 billion total overpayments resulted from willful misrepresentation by the claimant – a fraud overpayment rate

of 2.7 percent of UI benefits paid in FY 2008.  The OIG investigates fraud committed by individuals who do not

report or who underreport earnings and income while receiving UI benefits.  In addition to single claimants and

fictitious employer‐related schemes, OIG investigations continue to uncover schemes in which individuals and/or

conspirators commit identity theft to illegally obtain benefits in which UI benefits have been paid to ineligible

claimants.

The Department also needs to ensure that SWAs have adequate Information Technology (IT) Contingency Plans that

will enable them to continue to pay UI benefits in the event of a disaster such as a hurricane.  Our recent audit

found that ETA had not ensured that SWA partners had established and maintained required IT contingency plans.  

Specifically, 50 out of 51 plans lacked critical elements to ensure the continued availability of the UI systems.  It is

critical that all SWAs have IT contingency plans for UI to ensure that individuals who rely on these benefits receive

this vital support in a time of need and uncertainty.

DEPARTMENT’S PROGRESS:  The Department has taken some measures to reduce and prevent UI and DUA

overpayments.  The Department stated in the DOL 2008 Performance and Accountability Report that it is

continuing to promote the use of NDNH by all states, facilitating a National UI Benefits and Adjudication Conference

for states to share best practices and discuss improvement strategies, and issuing guidance to the states to address

legislative requirements of the Unemployment Compensation Integrity Act of 2008, which authorizes recovery of

some UI fraud overpayments by offsetting Federal income tax refunds.  Despite the Department’s efforts, the UI

overpayment rate over the seven‐year period from CY 2002‐2008 averaged 9.6 percent, an increase over the

previous 12‐year period, which averaged 8.3 percent.   

The OIG continues to work with UI’s state partners to more effectively provide training to detect and prevent UI

fraud. In addition, UI was a participant at the OIG’s recent investigators training conference where it provided

instruction on its efforts to recognize, refer and address fraud relating to its program.

The Department generally agreed to implement our recommendations that ETA conduct annual verification of

SWAs’ IT contingency plans.  ETA plans to begin working with a selected group of SWAs each year to verify the

existence and reliability of their IT contingency plans, using the risk based approach that was recommended by the

OIG.  ETA also plans to issue advisories to the SWAs informing each about the availability of FY 2009 funds to

develop or update IT contingency plans, including a requirement that the states awarded UI grants obtain

independent verification and validation of their contingency plans’ acceptability.

CHALLENGE:  Improving the Management of Workers’ Compensation Programs

OVERVIEW:  The Department has responsibility for managing the Energy Employees Occupational Illness

Compensation Act Program (Energy workers’ program) and the Federal Employees’ Compensation Act (FECA)

Program, both of which were designed to address the needs of employees who are injured on the job.

The Energy workers’ program was created to provide compensation to civilian employees who incurred an

occupational illness, such as cancer, as a result of their exposure to radiation while employed in the nuclear

weapons production and testing programs of the Department of Energy and its predecessor agencies.  In certain

circumstances, these employees’ survivors may be eligible for compensation.  Since the program began in 2001,

through September 30, 2009, DOL reports it has received 183,456 claims, and issued decisions on nearly 90 percent

of these claims. DOL had approved slightly more than 38 percent of claims filed and paid nearly $4.8 billion in

compensation.
Other Accompanying Information

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The FECA program provides income and pays medical expenses for covered Federal civilian employees injured on

the job, those 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, impacting all

Federal agencies’ budgets and employees.  FECA benefit expenditures totaled $2.7 billion in 2008.  Most of 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 challenge for the Energy workers’ program centers on the number of

claims that are denied compensation and on the timeliness of its claim decisions.  For the FECA program, the

determination of continuing eligibility is the primary challenge.

Inquiries by several members of Congress and the public raised concerns as to whether the Department unfairly

denied too many Energy claims and whether claims decisions were timely.  In response to those concerns, the OIG

conducted an evaluation to determine whether claim decisions issued by the Department complied with applicable

law and regulations, and whether the Department has a system in place to ensure that claims are adjudicated as

promptly as possible and claimants are kept informed.  The OIG found that claims decisions complied with

applicable laws and regulations, and were based on the evidence provided by or obtained on the behalf of

claimants.  The OIG also found that the Energy workers’ program has made progress in reducing the time it takes to

adjudicate claims.  However, we found that the claims process remained lengthy and it could take up to two years

or more to process and adjudicate a claim.  Part of the challenge is that the National Institute for Occupational

Safety and Health (NIOSH) must prepare a dose reconstruction of the amount of radiation to which an employee

with cancer was exposed.  The dose reconstruction process is complicated and time consuming.  The Department

has no regulatory authority to control the time it takes to complete the NIOSH process.  Nonetheless, more can be

done to further reduce the time it takes to process claims, to assist claimants in developing their claims, and to

better educate claimants on general program requirements.  The timeliness of adjudicating claims from the

viewpoint of the claimant, (i.e., how long it takes from the time they apply for benefits to reaching a final decision),

needs to be measured and reported to show how well the Energy workers’ program is serving claimants, rather

than solely measuring how long a claim is at DOL.

For FECA, the structure and operation of the program is both a Departmental and a government‐wide challenge.  All

Federal agencies rely upon OWCP to adjudicate the eligibility of claims, to manage the medical treatment of those

claims, to make compensation payments, and to pay medical expenses.  Ensuring proper payments while being

responsive and timely to eligible claimants is a challenge for OWCP.  Among these challenges are moving claimants

off the periodic rolls when they can return to work or their eligibility ceases, preventing ineligible recipients from

receiving benefits, and preventing fraud by service providers, and by individuals who receive FECA benefits while

working.  A recent OIG audit found OWCP needs to improve its process for monitoring claimants in the temporary

“reemployment status not yet determined” category.  FECA claims examiners are responsible for proactively

managing these cases until the claimant either returns to work, is found to be entitled to reduced compensation, or

it is determined the claimant has no reemployment potential for an indefinite future.  OIG noted 2,860 claimants

who had been receiving FECA compensation while in the temporary “reemployment status not yet determined”

category for 15 years or longer.

The OIG recognizes that it is difficult to identify and address improper payments and/or fraud in the FECA program.  

Another difficulty is that OWCP does not have the legal authority to match FECA compensation recipients against

social security wage records. Currently, OWCP must obtain permission from each individual claimant each time in

order for it to check records.  Being able to do the match would enable OWCP to identify individuals who are

collecting FECA benefits while working and collecting wages.

DEPARTMENT’S PROGRESS:   For the Energy workers’ program, the Department has implemented new procedures

to reduce the time it takes to develop impairment claims and is revamping its procedural guidance.  Additionally,

the Department is measuring its timeliness performance from the point of application to final decision and
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FY 2009 Performance and Accountability Report     273   

payment.  The Department now publishes on its Web site graphs that show the processing times for various types

of cases, including those sent to NIOSH for completion of a dose reconstruction.  These measures are updated

quarterly.  The Department has also provided its Resource Centers with expanded access to the Energy Case

Management System (ECMS), which will provide enhanced customer service to claimants.  The Resource Centers

are also working to improve the level of education provided to potential claimants regarding the benefits available

under the Act.

For FECA, the Department completed the roll‐out of its new FECA benefit payment system, the Integrated Federal

Employee Compensation System, that is designed to track due dates of medical evaluations, revalidate eligibility for

continued benefits, use data mining to prevent improper payments, boost efficiency, and improve customer

satisfaction.   

The Department needs to continue its efforts to seek legislative reforms to the FECA program to enhance incentives

for employees who have recovered to return to work, address retirement equity issues, discourage unsubstantiated

or otherwise unnecessary claims, and make other benefit and administrative improvements.  Through the

enactment of these proposals, the Department estimates savings to the government over 10 years to be  

$384 million.  These legislative reforms would assist the Department to focus on improving case management and

to ensure only eligible individuals receive benefits.  In addition, to help ensure proper payments in the FECA

program, the Department is seeking legislative authority to allow for easy and expeditious access to Social Security

Administration (SSA) wage records.    

The OIG continues to provide training to DOL and to other Federal agencies in the detection and prevention of

fraud against the FECA program.  This training is designed to upgrade and develop the best investigative practices

and techniques throughout the investigative community to keep pace with the new types of fraudulent schemes

confronting the program.  Additionally, OWCP participated in the OIG’s recent investigator training conference

where it provided guidance on its various programs and suggestions for working with the OIG to effectively address

fraud in those programs.

CHALLENGE:  Improving Procurement Integrity

OVERVIEW:  The Department contracts for many goods and services to assist in carrying out its mission.  In FY 2008,

the Department’s acquisition authority exceeded $1.8 billion and included over 9,300 acquisition actions.   

CHALLENGE FOR THE DEPARTMENT:  Ensuring integrity in procurement activities is a continuing challenge for the

Department.  The OIG’s past audit work has identified violations of Federal procurement regulations, preferential

treatment in awards, procurement actions that were not in the government’s best interest, and conflicts of interest

in awards.   

The Services Acquisition Reform Act (SARA) of 2003 requires that executive agencies appoint a Chief Acquisition

Officer (CAO) whose primary duty is acquisition management.  The Department’s organization has not been in

compliance with this requirement, as the Assistant Secretary for Administration and Management serves as the

CAO while retaining other significant non‐acquisition responsibilities.  Until procurement and programmatic

responsibilities are properly separated and effective controls are put in place, the Department will continue to be at

risk for wasteful and abusive procurement practices.   

DEPARTMENT’S PROGRESS:   In January 2007, then‐Secretary of Labor Chao 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 a 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.  However, the Department is not in compliance with the full intent of SARA, as
Other Accompanying Information

274     United States Department of Labor

the delegated CAO continues to perform many other duties unrelated to acquisition management, such as serving

as the Department’s Chief Information Officer and overseeing the Department’s budget operations.  The new DOL

leadership is considering its options regarding compliance with the requirements of SARA.   

CHALLENGE:  Maintaining the Integrity of Foreign Labor Certification Programs

OVERVIEW:  The Department’s Foreign Labor Certification (FLC) programs provide United States (U.S.) employers

access to foreign labor to meet worker shortages under terms and conditions that do not adversely affect U.S.

workers.  The permanent labor certification program allows an employer to hire a foreign worker to work

permanently in the United States, if a qualified U.S. worker is unavailable and the employment of the foreign

worker will not adversely affect the wages and working conditions of similarly employed U.S. workers.  The H‐1B

program allows the Department to certify employers’ applications to hire temporary foreign workers in specialty

occupations such as medicine, biotechnology, and business.  The H‐2B program permits employers to hire foreign

workers to come temporarily to the United States and perform temporary non‐agricultural labor on a one‐time,

seasonal, peak load, or intermittent basis.

CHALLENGE FOR THE DEPARTMENT:  Maintaining the integrity of its FLC programs, while also ensuring a timely and

effective review of applications to hire foreign workers, is a continuing challenge for the Department.   

OIG investigations, initiated on referrals from ETA, other law enforcement and non‐law enforcement entities, as

well as on pro‐active OIG efforts, continue to uncover schemes carried out by immigration attorneys, labor brokers,

and transnational organized crime groups, some with possible national security implications.  OIG investigations

have repeatedly revealed schemes involving fraudulent applications filed with DOL on behalf of fictitious

companies, and those wherein fraudulent applications were filed using the names of legitimate companies without

their knowledge.  Additionally, OIG investigations have uncovered complex schemes involving fraudulent DOL FLC

documents filed in conjunction with or in support of similarly falsified identification documents required by other

Federal and state organizations.  

From an audit standpoint, the OIG has looked at how the Department is challenged to maintain the integrity of the

FLC programs. In a prior audit of the Department’s FLC programs, we found ETA’s statutory role in the H‐1B

program to be limited by law to a perfunctory review of applications.  ETA is required to approve an H‐1B

application if the form is complete and free of obvious errors, which amounts to a review function without any

meaningful impact.  In addition, a recent OIG audit of the ETA’s iCert H‐1B Labor Condition Applications processing

system found that system improvements are needed to better identify incomplete and/or obviously inaccurate

labor condition applications.

In March 2005, ETA created the PERM (Permanent Electronic Review Management) system which removed the

states from a direct role in reviewing and auditing applications for permanent foreign labor certification, eliminated

the 100 percent review of such applications, and established a sampling and targeting approach to auditing

applications to ensure compliance with the law and program requirements.  An OIG audit of the PERM system

found that ETA had discontinued certain types of audits.  We also found that ETA had not conducted audits of all

the applications selected for audit. As a result, ETA may have certified fraudulent applications or applications that

did not meet required criteria.  Certifying labor applications for foreign workers who were not eligible for

employment could negatively affect the U.S. workforce by reducing the number of jobs available for U.S. workers.

DEPARTMENT’S PROGRESS:  The OIG and the Department have been working collaboratively to identify and reduce

fraud in the FLC process by providing training and instruction to ETA personnel on better and more creative ways of

identifying and referring to the OIG possible labor‐related fraud.  In March 2008, ETA's Office of Foreign Labor

Certification launched its Fraud Detection and Prevention Unit designed to recognize application fraud by reviewing
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FY 2009 Performance and Accountability Report     275   

for inconsistencies, errors, and omissions.  The OIG continues to work closely with ETA’s fraud unit, which, as a

presenter at the OIG’s recent investigator training conference, provided program insight and ideas for better

addressing fraud uncovered in its programs.   

In the first quarter of FY 2009, the Department began a review to determine the feasibility of reinstituting the

audits it had previously discontinued doing and is conducting audits as resources permit.  The Department has also

implemented other protocols to protect program integrity, including steps to ensure that all audits of applications

identified for audit are actually conducted, and having experienced analysts manually review all applications.     

CHALLENGE:  Securing Information Technology Systems and Protecting Related Information Assets

OVERVIEW: DOL systems contain vital sensitive information that is central to the Department’s mission and to the

effective administration of its programs. DOL systems are used to determine and house the Nation’s leading

economic indicators, such as the unemployment rate and the Consumer Price Index.  They also maintain critical

data related to worker safety and health, pension and welfare benefits, job training services, and other worker

benefits.  The Congress and the public have voiced concerns over the ability of government agencies to provide

effective information security and to protect critical data.   

CHALLENGE FOR THE DEPARTMENT:  Management of information technology (IT) systems is a continuing challenge

for DOL.  Keeping up with new threats, IT developments, providing assurances that IT systems will function reliably,

and safeguarding information assets will continue to challenge the Department today and in the future.   

The OIG’s IT audits have identified access controls, oversight of contractor systems, and the effectiveness of the

Chief Information Officer’s oversight of the Department’s full implementation of mandatory, minimum information

security controls as DOL’s most significant challenges.  The OIG has reported on access control weaknesses over the

Department’s major information systems since FY 2001.  These weaknesses represent a significant deficiency over

access to key systems and may permit unauthorized users to obtain or alter sensitive information, including

unauthorized access to financial records.   

In light of these challenges, the OIG continues to recommend the creation of an independent Chief Information

Officer (CIO) to provide exclusive oversight of all issues affecting the IT capabilities of the Department.  

Accountability can be further enhanced by developing and implementing new reporting lines of communication for

the Chief Information Security Officer (CISO) and the Component Program Information Security Officers (CPISOs).  

These new communication lines will require the CISO to report directly to both the CIO and an Executive in the

Secretary’s Office dealing with major security matters, including progress on maintaining an effective Department‐

wide information security program.  The CPISOs would continue to report directly to their respective component

program Assistant Secretary while also reporting to DOL’s CISO.  These steps will help to establish a greater degree

of accountability for an overall effective information security program.  

DEPARTMENT’S PROGRESS: The Department is continuing to take steps to improve the security of its information

systems by focusing on security controls identified as having the greatest risks throughout the Department, such as

access controls and configuration management.  The Department’s CIO issued updated policy to implement

minimum security controls developed by the National Institute of Standards and Technology and required by the

Federal Information Security Management Act (FISMA) in those areas.  The Department’s CISO plans to focus

testing on the technical and operational controls identified as having the greatest risks throughout the Department.
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CHALLENGE:  Ensuring the Security of Employee Benefit Plan Assets  

OVERVIEW:  The Department’s mission is to protect the security of retirement, health, and other private‐sector

employer‐provided benefits for America’s workers, retirees, and their families.  These benefit plans consist of

approximately $5.6 trillion in assets covering more than 150 million workers and retirees.  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 these benefit plan assets against fraud, misconduct, and

negligence is a challenge for the Department.  OIG labor racketeering investigations demonstrate the continued

vulnerability of plan assets to criminal activity.  The Department is further challenged by its restricted authority to

oversee plan audits, ERISA’s limited scope audit exemption, and inadequate assessments of program effectiveness.

Employer benefit 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 challenge in providing adequate oversight.  However, DOL’s authority to require plan audits to meet

standards remains limited, because the Department does not have the authority to suspend, debar, or levy civil

penalties against employee benefit plan auditors who perform substandard audits.  The Department must obtain

legislative change to address deficient benefit plan audits and ensure that auditors with poor records do not

perform additional plan audits.

Further, OIG investigations have shown that benefit plan assets remain vulnerable to labor racketeering and

organized crime influence.  Those pension plans, health plans, and welfare benefit plans comprise hundreds of

billions of dollars in assets.  Dishonest benefit plan service providers, including accountants, investment advisors,

and plan administrators, continue to be a strong focus of OIG investigations, as well as corrupt union officials and

organized crime members.

Another challenge involves EBSA’s ability to assess the effectiveness of its civil enforcement programs.  Our recent

audit found that EBSA could not determine whether its civil enforcement projects, such as the Multiple Employer

Welfare Arrangements project, were increasing compliance with the ERISA, or whether the projects were

decreasing the risk that workers will lose benefits.  We also found that EBSA could not clearly demonstrate it was

directing its resources to the enforcement areas with the most impact on its mission to deter and correct ERISA

violations.  Each EBSA regional office differed in its interpretation of enforcement program impact and desired

outcomes because EBSA Headquarters did not provide clear guidance on intended enforcement outcomes.  As a

result, the allocation of resources differed among the regional offices and agency resources may not have been

directed at areas with the most impact.

OIG’s audit of EBSA’s Rapid ERISA Action Team (REACT) project found similar challenges.  In the REACT project,

EBSA aims to respond in an expedited manner to protect the rights and benefits of plan participants when the plan

sponsor faces severe financial hardship or bankruptcy and the assets of the employee benefit plan are in jeopardy.

The audit concluded that EBSA does not have a comprehensive method for measuring the desired activities and

outcomes of the REACT project, and does not perform a national assessment to judge the value of the REACT

project in meeting its overall enforcement mission.

DEPARTMENT’S PROGRESS: While the Department has sought the recommended legislative changes, such as

expanding the authority of EBSA to address substandard benefit plan audits and ensuring that auditors with poor

records do not perform additional plan audits, these changes have not been enacted.  In response to OIG’s audit

report on the effectiveness of its civil enforcement projects, EBSA agreed that objectives for these projects could be

more clearer; however, it disagreed with the recommendation to establish performance measures that evaluate

each civil enforcement project’s outcomes versus the stated objective, and with the recommendation to develop

guidance for allocating enforcement resources based on intended outcomes and actual performance results.
Top Management Challenges

FY 2009 Performance and Accountability Report     277   

Changes from Last Year

Changes to the Top Management Challenges from FY 2008 include a revised management challenge previously

entitled, “Improving the Federal Employees’ Compensation Act Program,” which has been renamed to “Improving

the Management of Workers’ Compensation Programs.”  Our revised title incorporates concerns regarding the

Federal Employees Compensation Act Program as well as the Energy Employees Occupational Illness Compensation

Program.  As discussed below, we removed the challenge entitled, “Preserving Departmental Records.”

Preserving Departmental Records

Preserving Departmental Records was previously discussed in our FY 2008 Top Management Challenges.  The

Department took prompt action in responding to the multiple concerns we reported.  This included providing

annual training to all DOL employees; issuing guidance on the preservation of records, proper disposal of records,

and management of electronic and hard copy records; and updating its cost‐benefit analysis regarding the

establishment of an electronic recordkeeping and document management system.  As a result of the corrective

actions taken by DOL management, we have removed this item from the list of Top Management Challenges.

FY 2009 Performance and Accountability Report     279   

Management’s Response to the  

2009 Top Management Challenges

The Department’s responses and presentation of its progress on the Top Management Challenges are shown as

actions and planned actions to address each challenge and are displayed below.  The tables also include

information from Government Accountability Office (GAO) audits and planned actions identified for FY 2009 from

the FY 2008 PAR.  The table’s three columns break out the Management Challenges into specific issues (left

column), actions taken in FY 2009 (center column), and actions remaining/expected completion date (right column).  

Throughout the past year, the Department closely tracked its progress in addressing the Top Management

Challenges, with agencies reporting quarterly on their corrective actions.  Also included is a progress assessment for

FY 2009 using a stoplight system:  Green – Actively Implementing All Remedial Actions; Yellow – Actively

Implementing Most Remedial Actions; and, Red – Not Implementing Most Remedial Actions.  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, the Office of the Chief Financial Officer (OCFO), or other sources within the Department.   

CHALLENGE:  Implementing the American Recovery and Reinvestment Act of 2009

DEPARTMENT’S RESPONSE:  This challenge was first identified in FY 2009, and affects all Strategic Goals.  Following

are DOL FY 2009 actions, remaining actions, and expected completion dates for challenges identified by the OIG,

GAO, and DOL.  

DOL’s Assessment of Progress:  Green.

Management Challenge/

Significant Issue  

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

Implement Recovery Act Performance

Reporting Requirements.   

(OIG Report 06‐09‐003‐07‐001)

Report on the number and percent of

participants who receive industry‐

specific training and employment under

the WIA Adult and Dislocated Worker

programs.  

Refer to “Actions Remaining and

Expected Completion Dates.”

Develop and issue report on Recovery

Act funded WIA Adult and Dislocated

worker programs, including the number

and percent of participants by

occupation of training – Sept 2010.   

Report to be updated to provide

entered employment numbers and

rates – June 2011.

Establish and implement internal

controls for conducting data quality

reviews of recipient reporting in

advance of the OMB October deadline.  

Issued four Recovery Act Contract

Recipient Reporting guidance

memoranda to the DOL acquisition

community as required by the Recovery

Act.   

Completed.

Update Risk Management Plans to

ensure that program‐specific risks are

included.

Refer to “Actions Remaining and

Expected Completion Dates.”

Ensure that all final Recovery Act risk

plans include program‐specific risks and

that the performance measures in

program‐specific Recovery Act plans are

consistent with the Risk Management

requirements in OMB’s April 3, 2009

Recovery Act guidance.  Coordinate

changes to plans, as necessary, with

OMB – Dec 2009.
Other Accompanying Information

280 United States Department of Labor

Management Challenge/

Significant Issue  

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

Implement procedures for accounting

and reporting financial activity under

Recovery Act  

(OIG Report 18‐09‐002‐01‐001)

Took the necessary steps to account for

the $44.9 billion received in Recovery

Act funds.  Issued ETA guidance letter

on recipient reporting.  

Completed.

Administer the extension and

subsidization of COBRA for certain

groups of eligible laid off workers.  

(OIG Report 18‐09‐003‐12‐001)

Conducted extensive outreach,

education, participant and compliance

assistance programs and promulgated,

under very tight time frames, model

notices and regulations covering

changes in COBRA eligibility and the

Recovery Act’s new premium assistance

provisions.   

For the duration of the law, which will

sunset on December 31, 2009, EBSA will

continue its outreach and education

programs – Dec 2009.  

Ensure all local one‐stop centers have

COBRA premium assistance information

available.  

Refer to “Actions Remaining and

Expected Completion Dates.”

ETA will issue a change to their Training

and Employment notice to clarify that

One Stop Centers should display EBSA’s

COBRA/ARRA flyers and materials – Oct

2009.

Assess outreach effectiveness by using

data from enforcement investigations.

On September 4, 2009, EBSA instructed

Regional Directors to report any

violations of the requirement to provide

ARRA COBRA notices to eligible

participants and beneficiaries.   

Completed.

Develop a contingency plan with

specific resource plans for meeting the

15‐day requirement in case of system

failure or undesirable events.

Regional Directors were instructed in a

memorandum dated May 14, 2009, to

adjust their allocation of personnel and

other resources as necessary to meet

the demand created by the COBRA

premium reduction program.

Completed.

Improve controls in the EBSA Technical

Assistance Information System (TAIS)

determination dates to ensure that

determination dates in the TAIS match

with the dates on the determination

letter received by applicants.  

The TAIS system has been corrected so

that the date on the letter is changed to

the date that the letter was mailed or

faxed.   

Completed.

Revise the current version of the final

determination letter by moving up the

notification of the decision to the

beginning of the appellant’s letter.

EBSA revised the letters by amending

the subject line to indicate the

determination made.  

Completed.  

Hiring and training personnel necessary

to process appeals in a timely manner.

EBSA developed and implemented a

program that provides for expedited

review of COBRA premium subsidy

denials.  EBSA followed a detailed hiring

plan to ensure appropriate staffing

levels for the program and is processing

approximately 95 percent of expedited

reviews in 14 days or less.   

EBSA has demonstrated its ability to

complete expedited reviews in a timely

manner and will continue to do so.  

EBSA has sufficient levels of trained

staff to handle inquiry volume,

processing of expedited review

applications and maintaining the

program – FY 2010.    
Management’s Response to Top Management Challenges

FY 2009 Performance and Accountability Report     281   

Management Challenge/

Significant Issue  

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

Enhanced the system for State monthly

reporting on Federal Additional

Compensation Benefit payments (ETA

2112 report).  Compared the weekly

funds drawn‐down by States for the $25

supplement shown in Treasury’s Federal

Additional Unemployment

Compensation account with the ETA

report.  

Continue to review and address any

accounting and reporting discrepancies

– FY 2010.

Conducted comprehensive reviews of

States' Federal Additional

Compensation implementation.

Collect and discuss review findings with

the States to determine appropriate

action(s) – FY 2010.

Follow up with each of the applicable

states to ensure that they complete the

required programming for income tax

withholding and identify recover and

report FAC overpayments – FY 2010.

Ensure that the Federal Additional

Compensation (FAC) benefits are

accounted for correctly.   

(OIG Report 18‐09‐004‐03‐315)

Issue guidance to all states to reaffirm

FAC requirements – FY 2010.

Announced Solicitations for Grant

Applications for Green Jobs Training and

Healthcare, High Growth and Emerging

Industries.

Facilitate award of Green Jobs grants

and Healthcare, High Growth and

Emerging Industries grants after the

solicitation closing dates of Sept 2009

and Oct 2009, respectively – FY 2010.

Awarded 75 YouthBuild grant awards

funded by Recovery Act.

Completed.

Obligated all WIA, Wagner‐Peyser Act,

Dislocated Worker National Reserve,

Senior Community Service Employment

Program, and Indian and Native

American Program grants in March

2009.

Completed.

Incorporated precise contracting

language in initial award of grants to

ensure proper execution of funds

awarded.

Implement a rigorous Recipient

Reporting System to collect data on the

use of Recovery Act funds at the

program service level for online public

review – FY 2010.

Demonstrate that grants are properly

awarded, funds are properly spent,

and these investments achieve their

intended outcomes.   

(reference OIG letter above)

Using regional readiness reports,

created training modules for Federal

Project Officers to increase their

effectiveness in providing Recovery Act

services and collecting Recovery Act

data.

Monitor the progress of these

investments to ensure they yield

intended outcomes – FY 2010.
Other Accompanying Information

282 United States Department of Labor

CHALLENGE:  Protecting the Safety and Health of Workers

DEPARTMENT’S RESPONSE:  This challenge, which was first identified in FY 2005, affects Strategic Goal 3 – Safe and

Secure Workplaces.  The following are DOL FY 2009 actions, remaining actions, and expected completion dates to

challenges identified by the OIG, GAO, and DOL.

DOL’s Assessment of Progress:  Yellow.

Management Challenge/

Significant Issue  

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

Provide guidance on performance‐

based criteria for acceptable

alternatives to underground wireless

communications.   

(Significant issue from previous PAR)  

Issued Program Policy Letter No. P09‐V‐

01, Guidance for Compliance with Post‐

Accident Two‐Way Communications and

Electronic Tracking Requirements of the

Mine Improvement and New Emergency

Response Act (MINER Act), on January

16, 2009.

Completed.

Publish final rules on refuge

alternatives and fire retardant

properties of belt material.   

(Significant issue from previous PAR)  

On December 31, 2008, published final

rules on refuge alternatives and fire

retardant properties of belt material.   

Completed.

Review Emergency Response Plans

(ERPs) every six months.  (Significant

issue from previous PAR)  

Completed evaluations of all ERPs,

ventilation, and roof control plans that

were due for six‐month review.

Ongoing.

Strengthen MSHA accountability

program and Office of Accountability

to monitor the implementation of

management controls.   

(Significant issue from previous PAR)  

Continued to strengthen the Office of

Accountability to provide focused

oversight and examination of existing

enforcement programs, as well as to

ensure that management and

employees are accountable for

performance.  Issued revised

Accountability Handbook.  

Implement the Revised Handbook and

Program – FY 2010.

Ensure the consistency and rigor of the

process to review and approve roof

control plans.  Re‐evaluate roof control

plans for all mines.   

(Significant issue from previous PAR)  

Documentation on an improved roof

control plan approval process has been

provided to the OIG to close the

recommendation.

Completed pending OIG review.

Issue revised Metal and Nonmetal

General Inspection Procedures

Handbook.   

(Significant issue from previous PAR)  

Published the Metal and Nonmetal

General Inspection Procedures

Handbook in March 2009.

Completed.

Replace retiring mine inspectors.  

Implement localized and targeted

recruiting to increase the applicant

pool. Implement Human Resources

Strategic Plan FY 2006 ‐2011 for hiring

new mine inspectors.   

(Significant issue from previous PAR)  

MSHA conducted 23 job fairs (12 for

Coal and 11 for M/NM) for hiring of

inspectors in targeted localities.

Continue to implement MSHA staffing

plan for addressing efforts to attract

and retain specialists – FY 2010.  
Management’s Response to Top Management Challenges

FY 2009 Performance and Accountability Report     283   

Management Challenge/

Significant Issue  

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

Address the concern that MSHA has

improved its efforts in inspecting

mines at the cost of not fulfilling other

statutory responsibilities.   

(Reference OIG Letter above)

The Administrator for Coal Mine Safety

and Health issued a memo on June 2,

2009 to ensure timely mine plan

reviews, including a staffing plan

addressing hiring and efforts to attract

and retain specialists.  In addition, an

effort is underway to increase the speed

in which mine plans are reviewed by

using an electronic uniform mine file.

Increase the speed of mine plan reviews

by using an electronic uniform mine file

– FY 2010.

Establish a written plan for eliminating

the current backlog of overdue mine

plan reviews and maintaining timely

reviews in the future.   

(OIG Report No. 05‐09‐002‐06‐001)

Provided documentation on overdue

mine plan reviews to the OIG to close

the recommendation.

Completed pending OIG review.

Form an OSHA Enhanced Enforcement

Program (EEP) Task Force to make

recommendations to improve program

efficiency and effectiveness.   

(OIG report No. 02‐09‐203‐10‐105).

Created task force in April 2009. Completed.

Revise the EEP directive to address

issues with prior qualifying history and

designation and to provide specific

criteria when National Office EEP Alert

Memoranda are to be issued.   

(OIG report No. 02‐09‐203‐10‐105)

Revised EEP directive, now referred to

as the Severe Violators Enforcement

Program.

Completed.  

Develop and distribute a crosswalk to

Federal OSHA citations for State

standards that have different coding

than Federal OSHA Standards.   

(OIG report No. 02‐09‐203‐10‐105)

Refer to “Actions Remaining and

Expected Completion Dates.”

Develop and distribute crosswalk,

conditional on priorities and funding –

Oct 2011.

Develop a documentation policy for

information on actions taken by

OSHA’s regions in response to fatalities

and serious injuries at Voluntary

Protection Programs (VPP) sites.   

(GAO‐09‐395)  

Agency head issued memorandum

August 3, 2009 on Improving the

Administration of VPP, which detailed a

documentation policy for information

on actions taken by OSHA’s regions in

response to fatalities and serious

injuries at VPP sites.    

Completed.  

Establish internal controls that ensure

consistent compliance by OSHA

Regions with VPP policies.  

(GAO‐09‐395)

The August 3 memorandum directed all

personnel to follow the policies and

procedures published in the VPP Policies

and Procedures Manual, CSP 03‐01‐003,

April 18, 2008, and the VPP Federal

Register Notice, 74 FR 927, January 9,

2009.

Modifications to current VPP

procedures are being reviewed and will

be modified as necessary – Sept 2010.

Develop goals and performance

measures for the VPP.  (GAO‐09‐395)

The August 3 agency head

memorandum will enhance consistency

in implementing VPP policy and

procedures and help provide sound

information as a basis for considering

appropriate goals and measurements

for VPP.   

Explore additional ways to measure

participant performance and program

impact – Sept 2010.  
Other Accompanying Information

284 United States Department of Labor

CHALLENGE:  Improving Performance Accountability of Grants

DEPARTMENT’S RESPONSE:  This challenge, first identified in FY 2007, affects Strategic Goal 1: A Prepared

Workforce and Goal 2:  A Competitive Workforce.  The following are DOL FY 2009 actions, remaining actions, and

expected completion dates to challenges identified by the OIG, GAO, and DOL.

DOL’s Assessment of Progress:  Yellow.

Management Challenge/

Significant Issue  

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

Commissioned independent evaluations

of demonstrations and initiatives as

funding allowed.  Three High Growth

Job Training Initiative (HGJTI) grant

evaluations are underway.  Required

HGJTI grantees to demonstrate clear

and specific outcomes.  

Conduct evaluations of newer high

growth awards for Science, Technology,

Engineering and Math skills and Older

Workers.  These evaluations will provide

continual assessment of these grants—

Sept 2010.

Ensured that grant products were

reviewed and disseminated as

appropriate; products are not useable

by audiences other than the grantee

were sent send back to the grantees for

modification.

Continue to ensure that results are

distributed to other grantees and the

workforce system – Ongoing.  

Evaluate the usefulness of individual

grant products or the overall

effectiveness of ETA discretionary

grant initiatives.  

(Reference OIG letter above)

Required all grant applicants to include

outcome projections. Grantees report

progress on meeting outcomes

quarterly.

Continue to require all grant applicants

to include outcome projection –

Ongoing.

Monitored third‐party evaluation of

implementation and net impacts of

activities at five selected HGJTI sites.

Issue evaluation report on activities at

five selected HGJTI sites – Nov 2009.

Monitored third‐party evaluation of

CBJTGs, describing characteristics of

grants awarded through the end of FY

or PY 2008.   

Issue evaluation report on CBJTGs –  

Oct 2009.

Complete evaluation of other aspects of

CBJTGs – Dec 2010.

Release interim reports from the WIRED

evaluation – Feb 2010.

Monitor third party evaluations of High

Growth Job Training Initiative (HGJTI),

Community Based Job Training Grants

(CBJTG), and Workforce Innovation in

Regional Economic Development

(WIRED) training grants and identify

any interim successes and findings.

(Significant issue from previous PAR)

Monitored third‐party evaluations of

the WIRED Generation I and II.

Evaluate other aspects of WIRED grants

– Dec 2011.

Provide adequate oversight and

monitor grants.  ETA lacks reliable and

timely performance data that would

allow identification of problems in time

to correct them.   

(Significant issue from previous PAR)

The Workforce Investment Streamlined

Performance Reporting (WISPR) system,

for the Workforce Investment Act title I,

Wagner‐Peyser Act, and the Trade

Adjustment Assistance Act, which was

approved by OMB for implementation

in July 1, 2009, was not implemented.   

Resolved pending decision on whether

to implement WISPR, in light of

concerns about priorities and budgeting

– Sept 2010.

Collect Common Measures data and

compute results.   

(Significant issue from previous PAR)  

Collected and computed Common

Measure results for High Growth and

Community and began collecting and

computing results for WIRED grantees.

Require all grant applicants to report

progress on meeting Common

Measures outcomes quarterly –

Ongoing.
Management’s Response to Top Management Challenges

FY 2009 Performance and Accountability Report     285   

Management Challenge/

Significant Issue  

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

Monitor grantee compliance with OMB

Circular A‐133 “Audits of States, Local

Governments, and Non‐Profit

Organizations”, and enforce this

requirement in grant packages.  

(Significant issue from previous PAR)  

Completed reviews and identified

delinquent status findings.

Review audit status as part of the Core

Monitoring process and include any

delinquent status as a finding requiring

follow‐up and compliance by grantees –

Ongoing.

Trained Federal Project Officers in the

use of electronic reports in tracking and

evaluating grantees’ actual cash needs.

Continue to train Federal Project

Officers in use of the SF‐9130, used to

report expenditures charged against

grant awards made by ETA, as a

management tool for evaluating

grantee cash as needed – Ongoing.

Use electronic reports to track and

evaluate grantees’ actual cash needs.  

(Significant issue from previous PAR)  

Used the SF9130 (electronic report) to

evaluate the cash needs of CBJTGs and

WIRED grantees.

Use electronic reports in evaluating

grantees’ cash needs – Ongoing.

Train Grant Officers on reviewing

Statements of Work and other areas of

grant operations.   

(Significant issue from previous PAR)  

Trained Grant Officers in reviewing

Statements of Work and other areas of

grant operations.

Train Grant Officers in reviewing

Statements of Work and other areas of

grant operation – Ongoing.

Developed and implemented a technical

assistance plan.  Held 15 on‐line classes

and issued the Training and

Employment notice in June.  

Issue plan for technical assistance to

grantees and provide technical

assistance to grantees.   

(Significant issue from previous PAR)  

Provided indirect cost training classes to

grantees in the Chicago, Atlanta, and

Boston regions.  Materials were posted

to the workforce3one Web site.

Provide technical assistance to grantees

as new grants are awarded – Ongoing.  

Conducted FPO pilot test of 31⁄2 Day

Training Course in January.

Conduct pilot test of 31⁄2 Day Training

Course and Web‐based tutorial for

Federal Project Officers (FPO) and

conduct additional FPO training

sessions.   

(Significant issue from previous PAR)  

Held seven 31⁄2 day training sessions for

approximately 210 grantees and posted

Web‐based tutorials.

Completed.

Conducted fiscal and program reviews

of Generation II and III WIRED grantees.

Complete fiscal monitoring reviews of

all three generations of WIRED

grantees – Dec 2009.

Conduct fiscal and program reviews of

Generation II WIRED grantees.   

(Significant issue from previous PAR)  

Transferred monitoring authority for

WIRED grants completely to the

corresponding Regional Offices,

consistent with other grant

management efforts.

Programmatic monitoring is scheduled

in each region throughout the fiscal

year – Ongoing.

Conduct FPO training on grant

monitoring, particularly

documentation required of grantees.  

(Significant issue from previous PAR)  

31⁄2 day training sessions and Web‐based

tutorials included Federal Project

Officer training on grant monitoring and

documentation required.  

Completed.  

Send follow‐up letters to grantees who

continue to be delinquent.   

(Significant issue from previous PAR)  

Put process in place to monitor

delinquent grantees and send follow‐up

letters on a regular basis.   

Completed.
Other Accompanying Information

286 United States Department of Labor

Management Challenge/

Significant Issue  

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

Codify standard operating procedures

into Procedures Manuals.   

(Significant issue from previous PAR)  

Updated procedures in Procedures

Manuals to include steps for sending

delinquent notices to grantees once the

list has been received from accounting.

Completed.  

CHALLENGE:  Ensuring the Effectiveness of the Job Corps Program

DEPARTMENT’S RESPONSE:  This challenge affects Strategic Goal 1 – A Prepared Workforce.  The following are DOL

FY 2009 Actions, remaining Actions, and expected completion dates to challenges identified by the OIG, GAO, and

DOL.

DOL’s Assessment of Progress:  Green.

Management Challenge/

Significant Issue  

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

Promote effective regional monitoring,

including ensuring that contractors

provide accurate performance data.  

(Significant issue from previous PAR)  

Regional Offices conducted center

assessments and monitoring.  Improve

data integrity was added to Regional

Director performance standards.  

Conducted technical compliance and

fiscal reviews of 66 Option Year

Contracts for PY 2008.

Ongoing.

Conduct rigorous data integrity audits

concurrently with onsite

compliance/quality assessments.

(Significant issue from previous PAR)  

Performed data integrity audits of

Outreach and Admission, Center, and

Career Transition Service contractors at

least once every 24 months, resulting

in recovery of $146,507 in liquidated

damages for July 2008‐June 2009.

Conduct rigorous data integrity audits

concurrently with onsite compliance/

quality assessments – Ongoing.

Atlanta Regional Director will increase

monitoring efforts at the Oconaluftee

Job Corps Center operated by the

USDA.   

(Significant issue from previous PAR)  

The Atlanta Regional Director

personally conducted two monitoring

visits to the Oconaluftee Job Corps

Center, meeting with staff and

students about operations and

services.

Continue desktop monitoring – FY 2010.

Ensure student safety and health.  

(Significant issue from previous PAR)  

Published numerous notices on safety

and health, released the revised safety

section for the Policy Requirements

Handbook, and published Safety Circle

newsletters.  Conducted 87

Occupational Safety and Health

Reviews, 33 Safety and Health Plan

Reviews, and 15 pre‐occupancy

inspections.  Assisted over 3,200

callers/emails and held a National Job

Corps Safety Conference.

Ongoing.

Enforce the Zero Tolerance Policy

against violence and drugs.   

(Significant issue from previous PAR)  

In PY 2008, Job Corps terminated 7,369

students for Zero Tolerance policy

infractions.

Ongoing.
Management’s Response to Top Management Challenges

FY 2009 Performance and Accountability Report     287   

Management Challenge/

Significant Issue  

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

Assess training options to offer more

career training that is both attractive

to females and that could lead to

careers that will enable them to

become self‐sufficient.   

(GAO‐09‐470, June 2009)

Aligned training programs with

industry‐endorsed standards and

certifications so students, including

females, have the skills employers

require across eleven high‐growth

industry sectors.

Research new and emerging industries

more responsive to changes in global

and local labor markets for the entire Job

Corps Student population including

females – Sept 2010.

Developed information sheets for each

Career Technical Training area to

inform students about what they can

expect to learn, certifications available,

length of training, and earnings

potential.  The sheets also include

center rules and regulations.

Continue to explore innovative ways of

informing applicants and their families

about the services and expectations

regarding the Job Corps programs at

each Center – FY 2010.

Continue to explore innovative ways of

informing applicants and their

families/guardians about the services

and expectations regarding the Job

Corps program at each center.  Explore

cost‐effective options to creating a

center‐specific video for all Job Corps

centers.  Develop a DVD that will

combine center video footage and

center‐specific still photography.   

(GAO‐09‐470, June 2009)

Determined most cost‐effective

methods to create Center specific

videos on a program overview, Career

Pathways, and life at the centers.

Create Center‐specific outreach

materials – Sept 2010.

CHALLENGE:  Safeguarding Unemployment Insurance  

DEPARTMENT’S RESPONSE:  This challenge was first identified in FY 2000 and it affects Strategic Goal 4 –

Strengthened Economic Protections.  The following are DOL FY 2009 actions, remaining actions, and expected

completion dates to challenges identified by the OIG, GAO, and DOL.

DOL’s Assessment of Progress:  Green.

Management Challenge/

Significant Issue  

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

States not already implementing

National Directory of New Hires

(NDNH) cross‐matching should include

Corrective Action Plans in their FY 2009

State Quality Service Plans.   

(Significant issue from previous PAR)  

Requested Corrective Action Plans from

the two States not completing cross‐

matching agreements with DHS.

Agencies that have not fully

implemented Benefit Accuracy

Measurement matching with NDNH will

be required to submit a Corrective

Action Plan as part of their FY 2010

State Quality Service Plan – FY 2010.

Develop web services architecture and

test plan documentation for the

Separation Information Data Exchange

System (SIDES) and initiate system

testing and user training in the six

consortium States.   

(Significant issue from previous PAR)  

Worked with the six‐state consortium

and employers to develop protocols and

procedures required for

implementation and began SIDES

testing.  

Implement SIDES – Dec 2010.  

Promote State use of a variety of

databases – UI Interstate Benefits

Inquiry application, Social Security,

Alien Verification for Entitlement,

Department of Motor Vehicles, and

Department of Corrections – to

prevent and detect improper UI

benefit payments.   

(Significant issue from previous PAR)  

National and Regional Office staff

promoted the use of databases during

on site Benefit Payment Reviews.

Conduct a Webinar to provide technical

assistance and promote use of a variety

of databases to initiate the use of the

cross matches – Sept 2010.  
Other Accompanying Information

288 United States Department of Labor

Management Challenge/

Significant Issue  

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

Planned UI Integrity Conference.   Conduct UI Integrity Conference – May

2010.  

Develop policy and legislative language

for 2009 integrity proposals and

conduct an Integrity Conference for

State UI agencies.   

(Significant issue from previous PAR)  

Proposed legislative changes to provide

States with new tools to collect benefit

overpayments and boost their resources

to address overpayments and UI tax

evasion.

Completed.

Obtained estimates that annual

verifications would require about $19M

in the initial year with lower on‐going

annual costs for updating, maintaining

and testing.

Issued Unemployment Insurance

Program Letter 24‐04, Change 3

providing IT security guidance.  A CD

and Executive Manager’s paper were

included.

Sent letters to 10 high‐risk States with

incomplete IT contingency plans to

encourage them to request

supplemental funds to improve their IT

contingency preparedness.  Several

submitted requests for funding that are

being reviewed.

Conduct annual verifications of State

Workforce Agencies’ (SWAs) IT

contingency plans for existence and

reliability using risk‐based approaches

that consider the SWAs’ contingency

planning maturity and likelihood of

disasters.  

(OIG Report No. 23‐09‐002‐03‐315)

Updated Employment and Training

Handbook No. 336 to incorporate IT

Contingency Planning.

Review State requests for additional

funds to improve their IT Contingency

Plans and provide funding if warranted

– FY 2010.

Update the current Review Guide to

include specific review steps

addressing the States’ use of NDNH for

the Benefit Payment Control cross

match process to include an

assessment of the filtering process for

the NDNH crossmatch and validate the

data reported by the States.   

(OIG Report 06‐09‐002‐03‐315)

Updated the Review Guide, including

procedures for reviewing States’ use of

NDNH, assessment of the filtering

process, and validation of data reported

for NDNH and other data matching

tools.

Issue updated Review Guide – FY 2010.

Require SWAs to submit quarterly ETA

227 Reports that include a line item for

NDNH cross match results.   

(OIG Report 06‐09‐002‐03‐315)

The ETA 227 Report, Overpayment

Detection and Recovery Activities,

captures data matching results from

both State Directory of New Hires as

well as the NDNH results in a single line

item.  Changes to existing reporting

requirements require OMB clearance

and would impose new costs on States.  

Assess the cost‐benefit of modifying

this report to include a separate line

item to report the NDNH cross match

results – FY 2010.

Continue to pursue legislation to

define the “Date of Hire” and mandate

its reporting by employers.   

(OIG Report 06‐09‐002‐03‐315)  

The Department supports the inclusion

of Date of Hire language in UI Integrity

or other appropriate legislation.

Ongoing.
Management’s Response to Top Management Challenges

FY 2009 Performance and Accountability Report     289   

CHALLENGE:  Improving Workers’ Compensation Programs

DEPARTMENT’S RESPONSE:  This challenge, which affects Strategic Goal 4 – Strengthened Economic Protections,

was first identified in FY 2005.   Following are DOL FY 2009 Actions, Remaining Actions, and Expected Completion

Dates to Challenges Identified by the OIG, GAO, and DOL.

DOL’s Assessment of Progress:  Green.

Management Challenge/

Significant Issue  

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

Implement a Unified Energy Case

Management System (UECMS) that will

allow more effective monitoring of

case progress and timely outcomes.  

(OIG Report No. 04‐09‐002‐04‐437)

Development of UECMS continued on

schedule, concurrently with

enhancements to the current system.

Obtain additional contracts to complete

implementation of the Unified Energy

Case Management System – FY 2010.

Explore the potential for developing

formal Memorandum of Under‐

standing (MOU) with the other

agencies which have EEOICPA

responsibility.  

(OIG Report No. 04‐09‐002‐04‐437)

Carried out discussions to develop

formal agreements with partner

Agencies with a shared goal of

improving efficiency.

Continue to work with partner agencies

to identify opportunities for

improvement and implement a formal

MOU for this – Sept 2010.

Establish an overall performance

measure for the timeliness of claims

processing as well as delineating more

milestones and goals for the initial

processing phase.   

(OIG Report No. 04‐09‐002‐04‐437)

Added timelines for claims processing

for different types of claims (specific

medical conditions, NIOSH time, etc.) to

the Energy Program Web site and

updated these performance measures

quarterly – including time from receipt

of a claim to final adjudication.

Update the Energy Program FY 2010

operational plan to add additional goals

and milestones for the initial processing

phase – Oct 2010.  

Pursue multiple sources of information

to develop evidence to establish an

EEOICPA claim simultaneously, rather

than one source at a time.    

(OIG Report No. 04‐09‐002‐04‐437)

Issued policy guidance on March 1,

2009 detailing procedures for expedited

collection of employment information

from SSA.

Begin requesting National Institute for

Occupational Safety and Health (NIOSH)

records and employment verification at

the same time when possible, avoiding

delays caused when NIOSH has to

gather information from DOE after

receipt of a claim from DOL – Dec 2010.

Deploy UECMS to provide a platform

that will support more substantial

electronic communications, such as

case imaging and internet access to

case status.   

Development of UECMS continued on

schedule, concurrently with additions to

the current system.

Deploy UECMS – FY 2010.

UECMS imaging begins – FY 2011.

Give the Resource Centers increased

access to UECMS information to allow

them to provide more detailed case

status information to all claimants.  

(OIG Report No. 04‐09‐002‐04‐437)

Developed a modified UECMS interface

for the Resource Centers to allow them

to provide more detailed case status

information.  Procedures were released

and training conducted January 5, 2009.

Completed.

Reduce improper FECA payments.  

Ensure that medical information for

claimants is current so payments are

not made to those who are no longer

disabled.  Monitor and adjust the

Integrated Federal Employees

Compensation System (iFECS) as

necessary.   

(Significant issue from previous PAR)  

Developed and deployed a series of  

e‐Learning training modules to

emphasize appropriate case actions

necessary to conduct periodic

entitlement reviews.  

Completed.
Other Accompanying Information

290 United States Department of Labor

Management Challenge/

Significant Issue  

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

Create a FECA electronic form to

quickly report the return to work

without a paper form and mailing.  

(Significant issue from previous PAR)  

Implemented electronic form in June

2009.

Completed.

Collect information in iFECS to analyze

potential FECA erroneous payments,

including reason codes.   

(Significant issue from previous PAR)  

Completed iFECS modifications to

include information to analyze potential

erroneous payments including reason

codes.  

Analyze potential erroneous payments

using information from iFECS – FY 2010.

Analyze FECA underpayments and

overpayments to identify training

needs and consider establishing

corresponding performance goals.  

(Significant issue from previous PAR)  

Analyzed underpayments and

overpayments to identify training to

improve performance.

Establish new performance goals –

March 2010.

Revised FECA performance indicators to

emphasize payment accuracy, internal

controls, and overpayment recoveries.  

Revise FECA program performance

measures to emphasize payment

accuracy, internal controls, and

overpayment recoveries and collect

more detailed information on

improper payments to better identify

improper payment risks and to address

areas of high risk.   

(Significant issue from previous PAR)  

Collected more detailed information on

improper payments to better identify

improper payment risks and to address

areas of high risk.

Completed.

Create a FECA training module

addressing pay rates and initial

payments to improve accuracy.  

(Significant issue from previous PAR)  

Developed and deployed an e‐Learning

training module addressing pay rates

and initial payments.  

Completed.  

Enhance iFECS to notify the user when

FECA payment is being made on a

claim with an existing overpayment or

if the claimant has an overpayment in

another case.   

(Significant issue from previous PAR)  

Requirements and analysis for software

modifications have been completed and

are scheduled for deployment as part of

iFECS Release 27.0.  

Completed.

Seek legislative reforms to discourage

unsubstantiated claims and make

other improvements, including

matching of FECA payment records

with SSA records.  Work with Congress

to adopt FECA legislative reform

proposal.   

(Significant issue from previous PAR)  

The FECA legislative reform package

was proposed in the FY 2009 President’s

Budget but not adopted by Congress.  

The proposal is not included in the FY

2010 Budget.

Ongoing.

CHALLENGE:  Improving Procurement Integrity

DEPARTMENT’S RESPONSE:  This challenge was first identified in FY 2005 and affects all four Strategic Goals.  

Following are DOL FY 2009 actions, remaining actions, and expected completion dates to challenges identified by

the OIG, GAO, and DOL.
Management’s Response to Top Management Challenges

FY 2009 Performance and Accountability Report     291   

DOL’s Assessment Progress:  Yellow.

Management Challenge/

Significant Issue  

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

Strengthen oversight of the Purchase

Card Program. Issue guidance in

relation to recent OIG findings   

(OIG Report 06‐09‐003‐07‐001,

Significant issue from previous PAR)  

Issued guidance that includes a

purchase card checklist to be used to

conduct assessments of a sampling of

purchase card transactions.  Guidance

to all DOL purchase card holders,

approving officials and Agency

Administrative Officers also reminded

them of requirements to complete

training, properly input information into

the property management system, and

in recovering unauthorized purchases.

Completed.

Complete the comprehensive review of

the Department of Labor Management

Series (DLMS) section for contracts and

grants for required updates.  

(Significant issue from previous PAR)  

In progress.   Rescheduled for Q2 FY 2010 due to

complexity and new priorities.  

Complete comprehensive review of

Department of Labor Acquisition

Regulations for required updates.  

(Significant issue from previous PAR)  

In progress. Rescheduled for Q3 FY 2010 due to

complexity and new priorities.

Conduct procurement reviews of BLS

and MSHA procurement offices.  

(Significant issue from previous PAR)  

Completed in Q4 FY 2009. Completed.

Implement a mandatory training and

monitoring program for the acquisition

workforce.   

(Significant issue from previous PAR)  

Federal Acquisition Certification for

Program/Project Management

completed.  Federal Acquisition

Certifications for Contracting and for

Contracting Officers’ Technical

Representatives in progress.  

Complete Federal Acquisition

Certifications for Contracting and for

Contracting Officers’ Technical

Representatives – Q1 FY 2010.

Draft regulations and implement a new

mandatory oversight procedure for

telecommunications orders.

(Significant issue from previous PAR)  

Procedures drafted and being piloted.    Full implementation scheduled for Q1

FY 2010.

Continue to provide overall

procurement policy support, training

and guidance.   

(Significant issue from previous PAR)  

Completed in Q4 FY 2009. Completed.

Resolve the “unresolved and open”

OIG procurement recommendation.

(OIG 2007‐8, 2006‐7 DOL)  Appoint a

Chief Acquisition Officer (CAO) whose

primary duty is acquisition

management.   

(Significant issue from previous PAR)

Considering options for meeting the

Services Acquisition Reform Act of 2003

(SARA) objectives.

Recommendation resolved per OIG.
Other Accompanying Information

292 United States Department of Labor

CHALLENGE:  Maintaining the Integrity of Foreign Labor Certification Programs

DEPARTMENT’S RESPONSE:  This challenge was first identified in FY 2001 and affects Strategic Goal 2 – A

Competitive Workforce.  Following are DOL FY 2009 actions, remaining actions, and expected completion dates to

challenges identified by the OIG, GAO, and DOL.

  

DOL’s Assessment of Progress:  Green.

Management Challenge/

Significant Issue  

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

Monitor the impact of the actions

taken in FY 2008 and make

adjustments as necessary to enhance

detection of fraud.   

(Significant issue from previous PAR)  

Monitored the impact of Supervised

Recruitment and made adjustments as

necessary.  The pilot was effective at

detecting fraud and eliminating non‐

meritorious applications.   

Completed.

Redesign the Labor Condition

Application online filing system to

include data validation edits and logic

checks to help detect fraud.  

(Significant issue from previous PAR)  

Launched the ICERT electronic portal on

April 16, 2009, improving integrity by

implementing mandatory registration

checks and numerous data validation

edits.  Preliminary results very positive.

Monitor impact of ICERT

implementation and adjust as necessary

to enhance integrity – Ongoing.

Revise regulations implementing the H‐

2A program and institute changes.

(Significant issue from previous PAR)  

On September 4, 2009, the Department

issued a proposed rule to amend the

regulations governing the employment

of aliens under the H‐2A program.  Key

provisions of the enhancement of the

recruitment process and the elimination

of the existing attestation‐based

applications.  The proposed rule is

accessible at

http://www.dol.gov/federalregister/.  

Completed.

Develop plans for an online filing

system.   

(Significant issue from previous PAR)  

Conducted initial planning work for the

online filing system.

Complete development plans for online

filing system, test and implement – July

2010.

Monitor the impact of actions taken in

FY 2008 and make adjustments to

prevent backlogs.   

(Significant issue from previous PAR)  

Increased integrity at the Chicago

National Processing Center, which is

monitoring workload for potential

backlog issues.   

Monitor impact of actions taken and

make adjustments as necessary to

enhance integrity – Ongoing.  

CHALLENGE:  Securing Information Technology Systems and Protecting Related Information Assets

DEPARTMENT’S RESPONSE:  This challenge, which affects all four Strategic Goals, was first identified in FY 2001.   

Following are DOL FY 2009 actions, remaining actions, and expected completion dates to challenges identified by

the OIG, GAO, and DOL.  

DOL’s Assessment of Progress:  Yellow.

Management Challenge/

Significant Issue  

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

Continue Security Controls Test and

Evaluation (SCT&E) Program on access

controls.   

(Significant issue from previous PAR)  

Completed quarterly FY 2009 SCT&E for

all DOL major information systems

which are part of the Department’s

Continuous Monitoring program.  

Completed.
Management’s Response to Top Management Challenges

FY 2009 Performance and Accountability Report     293   

Management Challenge/

Significant Issue  

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

Implement solution for logging

computer readable data extracts.  

(Significant issue from previous PAR)  

Upon receipt of OMB guidance, develop

Departmental guidance and

implementation plan for logging

computer readable extracts.

To be determined based on date OMB

guidance is released.

Complete DOL Computer Security

Handbook update.   

(Significant issue from previous PAR)  

Completed updates to the Computer

Security Handbook to incorporate NIST

800‐53 revision 2 Requirements for

Access Controls and Configuration

Management in March.   

Completed.

Review certification and accreditation

documentation to ensure adequacy as

it is revised and updated.   

(Significant issue from previous PAR)  

Reviewed agency certification and

accreditation documentation as an

ongoing effort as a part of the

Department’s Continuous Monitoring

program.

Ongoing.

Collaborate with agencies on long‐term

Social Security Number (SSN) reduction

issues.   

(Significant issue from previous PAR)  

Agencies successfully eliminated 10 SSN

collections as of March 31, 2009.   

The SSN Task Force will determine if

there are additional opportunities for

reduction in the remainder of DOL SSN

collections – Ongoing.   

Create an independent Chief

Information Officer (CIO) to provide

exclusive oversight of IT issues.  

Implement a reorganization to require

the Chief Information Security Officer

(CISO) and the Component Program

Information Security Officers (CPISO) to

report directly to both the CIO and an

Executive in the Secretary’s Office

dealing with major security matters,

including progress on maintaining an

effective Department‐wide information

security program.  The CPISOs would

continue to report directly to their

respective component program

Assistant Secretary while also reporting

to DOL’s CISO.  

(Significant issue from previous PAR)

With legislative changes to FISMA under

consideration, including legislation

creating a Chief Information Security

Officer (CISO) in each agency, action on

this issue was held in abeyance.   

Ongoing.

CHALLENGE:  Ensuring the Security of Employee Benefit Plan Assets  

DEPARTMENT’S RESPONSE:  This challenge affects Strategic Goal 4 – Strengthened Economic Protections; it was

first identified in FY 2000.   Following are DOL FY 2009 actions, remaining actions, and expected completion dates to

challenges identified by the OIG, GAO, and DOL.
Other Accompanying Information

294 United States Department of Labor

DOL’s Assessment of Progress:  Green.

Management Challenge/

Significant Issue

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

Expand the public description of the

national enforcement projects.   

(OIG Audit Report No. 05‐09‐003‐12‐

001)

Expanded the public description of the

national enforcement projects.  Further

information may be found at

http://www.dol.gov/ebsa/erisa_enforce

ment.html.  

Completed.

Establish a list of criteria that regions

should consider when determining

whether a company is experiencing

“severe financial hardship” – FY 2010.

Strengthen policies and procedures for

the Rapid Employee Retirement

Income Security Act (ERISA) Action

Team (REACT).   

(OIG Audit Report No. 05‐09‐005‐12‐

001)

Refer to “Actions Remaining and

Expected Completion Dates.”

Conduct an overall REACT project

assessment – FY 2010.

Implement the Pension Protection Act

of 2006.   

(Significant issue from previous PAR)  

Issued or undertook multiple PPA‐

related regulatory or guidance actions

and worked closely with the other ERISA

agencies (Treasury/IRS and PBGC) to

coordinate regulatory and guidance

efforts to implement the PPA.  Further

information may be found at

http://www.dol.gov/ebsa/pensionrefor

m.html.

Continue to promulgate and implement

regulations – FY 2010.

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 2010.

Continued to implement CPA firm

inspection program, focusing on firms

who conduct a significant number of

employee benefit plan audits.  

Reviewed 241 sets of audit work papers

from CPA firms with smaller employee

benefit plan audit practices.

Strengthen oversight authority over

plan auditors and ensure that auditors

with poor records do not perform

additional plan audits.   

(Significant issue from previous PAR)  

Referred five CPA firms to the

Professional Ethics Division of the

American Institute of Certified Public

Accountants (AICPA) or a State board of

public accountancy.

Explore regulatory and legislative

initiatives to improve audit quality – FY

2010.

Worked with DOJ to prosecute these

complex white‐collar crimes. Closed 45

civil and criminal MEWA cases.

Continue to coordinate closely with DOJ

and NAIC officials – FY 2010.

Initiated monitoring of health fraud

recidivists by listing on EBSA’s intranet

individuals and entities against whom

the agency obtained a health fraud or

MEWA‐injunction.

Decrease the number of fraudulent

Multiple Employer Welfare

Arrangements (MEWAs).  Work closely

with State insurance commissioners,

the Department of Justice, and the

National Association of Insurance

Carriers (NAIC) to identify and

prosecute fraudulent MEWAs.  

(Significant issue from previous PAR)   

Proposed providing State insurance

departments with a list of individuals

and entities against whom EBSA

obtained a health fraud or MEWA‐

related injunction.

Share information on health fraud

recidivists with State departments of

insurance – FY 2010.

Implement program improvements

based on the independent evaluations

that have been completed or are

currently underway.  Conduct

Conducted a Health Disclosure and

Claims Issues (HDCI) evaluation using a

statistically valid sample of over 1,700

group health plans to determine

Follow‐up the HDCI evaluation and use

the findings to refine compliance

assistance and enforcement strategies –

FY 2010.  
Management’s Response to Top Management Challenges

FY 2009 Performance and Accountability Report     295   

Management Challenge/

Significant Issue

Actions Taken in FY 2009 Actions Remaining and Expected

Completion Date

independent program evaluations to

identify additional opportunities for

improvement.   

(OMB Program Assessment)

compliance with the health care laws in

Part 7 of ERISA.  

Work with the Office of the Assistant

Secretary for Policy to identify potential

areas for program evaluations – FY

2010.

Develop ways to quantify and reduce

the burden imposed by its regulations.

(OMB Program Assessment)

Contracted regulatory analysis

determined that EBSA is publishing

regulations where benefits outweigh

costs.  Conducted in‐house training

sessions regarding economic analysis of

regulatory initiatives and initiated plans

to hire additional staff to conduct

regulatory analysis.

Conduct a robust research program that

provides timely statistical/economic

information and assesses the economic

cost and benefit of regulations – FY

2010.
Other Accompanying Information

296    United States Department of Labor

Summary of Financial Statement Audit and Management Assurances

The following tables provide a summary of the Department’s FY 2009 financial statement audit and its management

assurances.

Summary of Financial Statement Audit

Audit Opinion Unqualified

Restatement   No

Material Weaknesses   Beginning

Balance

New Resolved Consolidated Ending Balance

Total Material Weaknesses   0 0 0 0 0

Summary of Management Assurances

Effectiveness of Internal Control over Financial Reporting (FMFIA § 2)

Statement of Assurance   Unqualified

Material Weaknesses   Beginning

Balance  

New   Resolved   Consolidated   Reassessed   Ending

Balance  

Total Material Weaknesses   0 0 0 0 0 0

Effectiveness of Internal Control over Operations (FMFIA § 2)

Statement of Assurance   Unqualified

Material Weaknesses   Beginning

Balance  

New   Resolved   Consolidated   Reassessed   Ending

Balance  

Total Material Weaknesses   0 0 0 0 0 0

Conformance with financial management system requirements (FMFIA § 4)

Statement of Assurance   Systems conform to financial management system requirements  

Non‐Conformances   Beginning

Balance  

New   Resolved   Consolidated   Reassessed   Ending

Balance  

Total non‐conformances   0 0 0 0 0 0

Compliance with Federal Financial Management Improvement Act (FFMIA)

Agency Auditor  

Overall Substantial Compliance   Yes   Yes  

     1. System Requirements   Yes Yes  

     2. Accounting Standards   Yes Yes  

     3. USSGL at Transaction Level   Yes Yes  
FY 2009 Performance and Accountability Report     297   

Improper Payments Information Act Reporting Details

The Improper Payments Information Act (IPIA) of 2002, as implemented by OMB Circular A‐123, Appendix C,

Requirements for Effective Measurement and Remediation of Improper Payments, requires Federal agencies to

review their programs and activities annually, identify programs that may be susceptible to significant improper

payments, perform testing of programs considered high risk, and develop and implement corrective action plans for

high risk programs.   

The Department’s review for FY 2009 identified one program, the Unemployment Insurance (UI) benefit program,

to be at risk of significant improper payments in accordance with OMB criteria (programs with annual improper

payments exceeding both $10 million and 2.5 percent of annual program payments). One additional program, the

Workforce Investment Act (WIA) grant program, is classified as high risk in OMB’s Circular A‐123, Appendix C, due

to its level of expenditures, although the Department’s risk assessment does not support such a high risk

designation.  A third program, Federal Employees’ Compensation Act (FECA) benefit program, is also classified as

high risk in Appendix C.  However, pursuant to Part I, Section K of OMB Circular A‐123 Appendix C, OMB granted

DOL relief from reporting for FECA and barring any significant changes to legislation or funding, DOL will next be

required to report on FECA in FY 2012.

In FY 2009, the Department performed detailed testing for the UI and WIA programs to estimate the level of

improper payments and their major causes. The Department has corrective actions to address the causes and

reduce improper payments in these programs and has established improper payment reduction targets in

accordance with OMB guidance.  

The Department’s UI improper payments target for FY 2009 was 10.0%, whereas the estimated error rate is 10.3%.  

This difference is primarily due to an increase in overpayments to UI claimants who were not actively registered, as

required, for job referral and reemployment services, as States struggled to keep pace with the large increase in

workload due to the adverse labor market conditions.   The higher improper payment rate for WIA in FY 2009 is

primarily due to including the results of DOL Office of Inspector General audits and other monitoring activities in

the measurement methodology as described in Section II below.

   

             Estimated Improper Payments Rates for the Department’s At‐Risk Programs  

DOL Program FY 2008 FY 2009 FY 2010

Target Actual Target Actual Target

Unemployment Insurance 11.5% 10.0% 10.0% 10.3% 9.9%

Workforce Investment Act      0.19%      0.07%      0.07%    0.2%    0.07%

I. Risk Assessment

The Department’s FY 2009 risk assessment of its various programs included the following:

 Reviewed prior three year’s results of IPIA risk assessments and detailed tests.  In addition to testing the

two programs designated as high risk (UI and WIA), DOL performed detailed testing on all its other

significant programs in the last 3 years. These programs included Black Lung Disability Trust Fund, Federal

Employees’ Compensation Act, Energy Employees Occupational Illness Compensation Program, State

Unemployment Insurance and Employment Service Operations, Payroll Costs and Non Payroll Costs.  The

results of this detailed testing showed that these programs were low risk.

 Reviewed DOL OIG and Government Accountability Office (GAO) audit reports issued for DOL programs to

determine whether the reports indicate that control weaknesses or other issues could potentially impact

the amount of improper payments for DOL programs.

 Reviewed results of the Department’s OMB Circular A‐123 internal control assessment to determine

whether control weaknesses were identified that could potentially impact the amount of improper

payments for DOL programs.  
Other Accompanying Information

298     United States Department of Labor

 Reviewed DOL programs’ funding levels for FY 2009 for significant changes in program funding that may

impact the amount of improper payments.

Outlays for State UI, Unemployment Compensation for Federal Employees (UCFE), Unemployment Compensation

for Ex‐Service Members (UCX), Extended Benefits (EB), Emergency Unemployment Compensation 2008 (EUC08) and

Federal Additional Compensation (FAC) increased sharply in FY 2009 to an estimated $119 billion, compared with

just over $42 billion in FY 2008, reflecting the adverse labor market conditions.  FY 2009 UI outlays include

approximately $24.9 billion provided by the American Recovery and Reinvestment Act of 2009 (Recovery Act) for

benefit payments to unemployed individuals by extending the period of eligibility for benefits and providing

additional weekly benefits.  For WIA, the Recovery Act provided additional resources primarily for formula grants to

states and for other discretionary grants; the Recovery Act outlays in FY 2009 are estimated to be about $0.8 billion.

The additional funds are disbursed/monitored through established systems and processes as utilized in the past.  In

addition, the Department has taken and will continue to take various actions to minimize and manage the risk

associated with the Recovery Act programs, including the following:

 Issued specific guidance on the use of the funds distributed through the Recovery Act programs.

 Conducted outreach to states and other eligible grant applicants to communicate policies and guidelines

and is utilizing the regional office Federal Project Officers to conduct and document quarterly desk reviews

of financial obligations, expenditures and program performance.  Grantees identified as “high risk grantees”

through these reviews are given priority attention for on‐site monitoring.   

 Trained grantees on Federal grant requirements, performance expectations, fiscal and program

requirements, and allowable use of funds.  

 Closely monitor the draw‐down of UI Recovery Act funds from the specific accounts and has systems in

place for reporting information required for monitoring and evaluating the operations of these programs.

 Conduct program reviews to ensure that the various activities included in the Recovery Act are properly

implemented, including the use of these funds according to various operating instructions/guidance

provided to the states.

II. Statistical Sampling

The following sampling was performed for the two programs designated as high risk:  

Unemployment Insurance

Sampling Process:  Improper payment rates are estimated from the Benefit Accuracy Measurement (BAM)

program.  BAM includes the three largest permanently authorized unemployment compensation (UC) programs:

State UI3

, UCFE, and UCX.  The Department reports two overpayment rates ‐‐ the Annual Report rate and the

Operational rate, as well as an underpayment rate.   

BAM investigators in each state conduct comprehensive audits for randomly selected weekly samples of paid and

denied claims.  Effective January 2008, all paid claims sampled for BAM investigation must be matched with the

National Directory of New Hires (NDNH) database to improve the ability to detect overpayments due to individuals

who claim benefits after returning to work, the largest single cause of UI overpayments.  The universe (population)

includes paid and denied claims under the State UI, UCFE, and UCX programs.  However because the claims

processes and eligibility requirements are very similar for the additional benefits paid to unemployed individuals

under the EB, EUC08, and FAC programs, the estimated improper payment rates are assumed to generally reflect

 

3 Included in the UI program are the 50 states and Puerto Rico, US Virgin Islands and the District of Columbia (referred to as

states/areas).  The US Virgin Islands does not participate in BAM.   
Improper Payment Information Act Reporting Details

FY 2009 Performance and Accountability Report     299   

the accuracy of these benefit payments.  Overpayment and underpayment rates for FY 2009 shown in the Improper

Payment Reduction Outlook Table are for the period July 1, 2008, to June 30, 2009.  Data are shown for this period

rather than the fiscal year because a higher percentage of BAM investigations have been completed and will,

therefore, produce more accurate estimates.  For the period July 1, 2008, to June 30, 2009, state agencies

completed audits for 22,700 paid claims cases, a completion rate of 99.0 percent.  Additional information about the

BAM methodology can be found at:  http://workforcesecurity.doleta.gov/unemploy/bam/2008/bam‐facts.pdf.

Workforce Investment Act  

Sampling Process:  The Department performed a detailed risk assessment of the WIA program in FY 2009 and is

currently evaluating the results to develop a new measurement methodology that incorporates this information

and which could be used for future reporting on WIA improper payments.  For FY 2009, the Department used a

separate methodology (similar to its previous measurements) to estimate the improper payments rate in the WIA

grant program because grant programs 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 19964

) to monitor funding to all grant recipients.  

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.  

Therefore, these Single Audit Act Reports, along with other data in FY 2009, were utilized to determine the

improper payment rate for the WIA grant program.  

  

The Department reviewed FY 2007 (most recent available) Single Audit Act Reports with DOL‐related findings from

the Federal Audit Clearinghouse (which is the national repository of Single Audit Act Reports) and identified all WIA

program questioned costs included in such reports.  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.  In addition to using the Single

Audit Act Reports, in FY 2009 the Department performed additional procedures to assess the level of improper

payments which included a review over the last three year period of (1) the results of the monitoring work

performed by the ETA staff who are responsible for managing the WIA program; (2) the Government Accountability

Office (GAO) and DOL Office of Inspector General (OIG) audit reports issued for the WIA program; and (3) the

results of DOL’s OMB Circular A‐123, Appendix A internal control assessment.  To determine an approximate rate of

improper payments for the grant programs, the Department divided the average annual amount of questioned

costs from these sources by the direct program outlays.  The resulting improper payment rate (assumed to be

representative of the FY 2009 rate) was applied to the WIA program outlays for FY 2009 to determine the estimated

improper payment amount for FY 2009.

III. Corrective Actions

Unemployment Insurance

Many errors in the UI program are due to eligibility errors that can be prevented or detected early through state

use of third‐party verification resources, such as matching claimant records with new hire and Social Security data.  

 

4 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.
Other Accompanying Information

300     United States Department of Labor

The leading cause of overpayments is claimants who have returned to work and continue to claim UI benefits.  Early

detection of these overpayments ‐‐ which represented nearly 30 percent of all overpayments in FY 2009 ‐‐ allows

agencies to stop payments sooner and to recover these overpayments more readily.  Matching the Social Security

Numbers (SSNs) of UI claimants with the National Directory of New Hires (NDNH) and State Directory of New Hires

(SDNH) databases is the most effective tool in identifying these improper payments.  For the period July 2008 to

June 2009, Benefit Payment Control operations in all agencies except Puerto Rico reported using new hire matching

to detect and establish for recovery over $140 million in overpayments.  During the same period, BAM identified an

estimated $342 million in overpayments through matching with the NDNH or SDNH.   

The second largest cause of overpayments is errors in handling separation issues, which represented nearly 25

percent of all overpayments in FY 2009.  To reduce improper payments due to separation issues, the Department

has two efforts underway.  First, the Department is working closely with a six‐state consortium and its contractor to

facilitate the design and implementation of the Separation Information Data Exchange System (SIDES) ‐‐ an

automated employer response system to standardize the collection of information on employee separations from

employers and third‐party administrators (TPAs) to improve the accuracy of claimant eligibility determinations.  The

Department is planning a phased implementation of SIDES.  After the six‐state consortium implements the system,

the Department will assist the other state agencies with their implementation.  Currently, SIDES implementation is

scheduled to begin in FY 2010.  Second, the Department provided funding to train over 400 state adjudicators.  Ten

training sessions were conducted during FY 2008 and 2009.  These training sessions were designed to improve

claimant eligibility determinations and thus reduce improper payments that result from nonmonetary

determination errors.   

Most of the improper UI payments not caused by benefit year earnings or separation errors are due to the claimant

not meeting one or more of the continued eligibility requirements, such as conducting an active work search,

registering with the state employment service, and being able and available for work.   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.  During FY 2009, funding was provided to support REA activities in 34 states.

Workforce Investment Act

The improper payment rate estimate work indicated that the major types of errors found in the WIA program are

primarily administrative in nature, including unallowable costs and insufficient documentation for participant and

vendor payments.  The grant management and monitoring processes focus on both of these items to reduce and

prevent improper payments.  ETA currently uses a multi‐step approach to ensure proper administration and

effective program performance of WIA grants.  First, ETA starts its review/oversight process by conducting a

structured risk assessment of all new grants and grantees.  Risk assessments are periodically revised as new

information about a grant and grantee becomes available 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 sub‐recipients

(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 conducts onsite

review of local areas as part of its review of the state grantee.  The results of the onsite monitoring are also
Improper Payment Information Act Reporting Details

FY 2009 Performance and Accountability Report     301   

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.

The ETA Division of Policy Review and Resolution processes each grant at closeout, reviewing final grantee reports, the

grant closeout package, FPO recommendations, and other documents available to them to determine whether the

objectives of the grant were accomplished and that all funds were expended as authorized.  Expenditures which are

questioned are resolved through the normal determination process and disallowed costs are forwarded for collection.  

The Audit Resolution staff receives grantee A‐133 audit reports(Single Audit Act reports) which report questioned costs

and/or administrative weaknessesin need of correction.  These items are followed up using the same determination

process noted above, disallowed costs are forwarded for collection, and resolution reported back to the OIG.  In addition,

these units participate in special grantee reviews and provide fiscal policy training for grantee and Federalstaff.

IV. Improper Payment ReductionOutlook FY 2008– FY 2012 ($ in millions)   

Program FY 2008 FY 2009 FY 2010 FY 2011 FY 2012

Outlays % $ Outlays % $ Est

Outlays

% $ Est

Outlays

% $ Est

Outlays

% $

Unemployment

Insurance

  

$42,430

    

$119,249 $140,190

  

$89,720

    

$71,510

Operational Rate 5.49% $2,329 5.2% $6,201 5.4% $7,570 5.3% $4,755 5.2% $3,719

Annual Report Rate

Over‐payment

    

9.25%

  

$3,925 9.6% $11,448 9.15% $12,827

    

9.05%

  

$8,120 8.95% $6,400

         Underpayment 0.71% $301 0.7% $835 0.71% $995 0.71% $637 0.71% $508

         

Workforce

Investment Act

$3,547 0.07% $2.5 $4,300 0.2% $8.6 $5,970 0.07% $4.2 $4,412 0.07% $3.1 $3,723 0.07% $2.6

Notes:   

UI outlays and error amounts for FY 2008 were revised from what was published in FY 2008 to include outlays of the EUC08 program

(approximately $3.3 billion).  Actual UI outlays in FY 2009 and projected FY 2010 outlays include approximately $24.9 and $29.2 billion,

respectively, of Recovery Act benefit payments under the EB, FAC and EUC08 programs.  Recovery Act UI modernization incentive and

administrative cost payments to states are not included.  For WIA, the FY 2009 to 2011 outlays include $0.8, $2.4 and $0.8 billion,

respectively, of Recovery Act grants.

The rates were determined as described in the preceding pages and applied to the outlays for the fiscal year.  UI rates are estimates

based on a statistical survey of State UI, UCFE, and UCX payments.  Because the claims processes and eligibility requirements are very

similar for the EB, EUC08, and FAC programs, the estimated improper payment rates are assumed to generally reflect the accuracy of

these benefit payments.  These rates, which include full and partial overpayments, overestimate the improper payments relating to FAC

outlays (about 5% of total outlays), as the FAC payments are payable in full to claimants entitled to at least $1 in unemployment

compensation.

Only an estimated 2.31 percent of UI benefits were overpaid due to fraud in FY 2009.  Overpayments due to fraud are included as part

of both the Annual Report and Operational overpayment rates.    

Recovery of Improper Payments

State Benefit Payment Control (BPC) operations identify UI overpayments for recovery through such methods as

crossmatching claimant SSNs with State and National Directories of New Hires, wage record files submitted each

quarter by employers, matches with other databases, such as Workers Compensation and State Corrections, and

other sources such as appeals, reversals and tips and leads.  States collect overpaid claims through offsets of UI

benefits, state income tax offsets, and direct cash reimbursement from the claimant.  The identification of

overpayments for recovery for the WIA program is primarily done through ETA’s onsite monitoring activities, the
Other Accompanying Information

302     United States Department of Labor

Single Audit Act reports and Office of Inspector General (OIG) program audits.  From FY 2004 through FY 2009

approximately $3,379 million has been recovered for the UI and the WIA programs.

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, etc.  

Prior to FY 2008 the Department performed statistical sampling of non‐payroll costs consisting of department

expenses, including contract payments, related to the operation and administration of programs' and headquarters'

activities.  Such testing found these costs to be at low risk for improper payments.  In FY 2008, the Department

performed a recovery audit of the contract payments made in FY 2007.  The work was performed by an

independent contractor under a contingency fee arrangement.  The contract auditor performed an analysis of the

payment database and reviewed supporting documentation for various selected payments.  The contract auditor

examined over 80,000 payments covering approximately $1.75 billion.  Excluded from the contractors review were

payments to other Federal departments and payments for travel reimbursements to and on behalf of employees.  

The contract auditor did not identify any improper payments.  

    Recovery Audit Results for FY 2007 Payments (in millions)

Agency Amount Subject to

Review

Actual Amount

Reviewed

Amounts Identified

for Recovery

Amounts

Recovered

DOL $1,751 $1,751 $0 $0

Since the recovery contractor’s work in FY 2008 did not identify any improper payments, in FY 2009, the

Department again statistically sampled non payroll costs as it did prior to FY 2008.  Such testing found these costs

to be at low risk for improper payments.  In FY 2010, the Department plans to conduct a Recovery Audit of the

contract payments made in FY 2008 and 2009.

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 documented, sufficiently

tested, and properly assessed.  In turn, improved internal controls enhance safeguards against improper payments,

fraud, waste, and abuse and better ensure that the Department's resources continue to be used effectively and

efficiently to meet the intended program objectives.  Furthermore, this Department‐wide effort supports the

Secretary of Labor's annual certification of internal controls in the PAR.  The Department 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.  

The Employment and Training Administration (ETA) is responsible for Federal oversight of state unemployment

insurance (UI) programs, including oversight of state activities to reduce and recover improper UI benefit payments.  

ETA has taken/continues to take the following steps to hold Federal managers accountable for reduction and

recovery of improper UI payments by states.  In FY 2010, ETA will continue to focus on the following integrity

related activities and ensure the annual performance standards for managers include the completion of significant

milestones for the projects listed below.
Improper Payment Information Act Reporting Details

FY 2009 Performance and Accountability Report     303   

 ETA requires states to measure and report the percent, dollar amount, and reasons for improper payments.  

These data are derived from investigations of a statistically valid sample of payments using Federally

prescribed procedures. ETA reviews these data for validity, analyzes data for each state, and makes the

data available publicly on the ETA Web site ‐‐ 

http://workforcesecurity.doleta.gov/unemploy/bam/2008/bam‐cy2008.pdf.  Data review, analysis and

publication are included in the performance plan of the Administrator of ETA’s Office of Unemployment

Insurance (OUI) and in the elements and standards of numerous staff in that office.  

 ETA has implemented a core performance measure for detection of overpayments by state UI programs.  

States that fail to meet the performance criterion submit corrective action plans.  Analysis of state

performance and monitoring of states’ corrective actions continue to be an evaluation factor in OUI

managers’ performance plans.

 ETA has promoted and continues to promote cost effective methods for states to prevent, detect, and

recover improper UI benefit payments.  Development, delivery, and/or successful implementation of these

initiatives by states have been and continue to be factors on which the OUI administrator and managers are

evaluated.  A few of the most noteworthy are:

 National Directory of New Hires: The Department’s activities with respect to facilitating state

implementation of the NDNH crossmatch to address the largest cause of UI improper payments ‐‐ 

earnings while benefits are being paid ‐‐ are discussed in Section III (Corrective Actions).

 National Integrity Conference:  In order to provide a forum for disseminating successful practices for

preventing, detecting and recovering UI overpayments, the Department plans to host a National

Unemployment Insurance Integrity Professional Development Conference in April 2010.

 Adjudication Training Sessions:  In order to improve the quality and accuracy of initial UI eligibility

determinations, ten training sessions were held during FY 2008 and 2009 with over 400 state staff

trained.

 Separation Information Data Exchange System: This initiative will improve the accuracy of claimant

eligibility determinations, which is the second largest cause of improper payments by enabling state

agencies to obtain more timely and complete information regarding the reasons that UI applicants

were separated from work.  The Department’s activities are discussed in Section III (Corrective

Actions).  

 Treasury Offset Program (TOP):  The “SSI Extension for Elderly and Disabled Refugees Act” (P.L. 110‐

328) included provisions to permit states to recover certain Unemployment Compensation debts due

to fraud from Federal income tax refunds under TOP.  In November 2008, DOL informed states of the

provisions in this law and outlined the process for implementation.  DOL is in the process of meeting

with other Federal agencies to discuss technical issues related to the implementation of an

automated system to administer TOP for UI.

As part of its monitoring and oversight responsibilities of the State's UI operations, the Department takes an

active role in facilitating and promoting strategies to reduce improper payments and meet the payment

accuracy and recovery targets set by the Office of Management and Budget.  However, it should be noted that

these strategies require the cooperation and implementation by individual states, including changes to state

laws and regulations.  The Department has no explicit authority over how states establish priorities in

administering their UI programs and, therefore, can only make recommendations and provide technical

assistance in the use of these strategies.

ETA has revised and expanded its training for grant managers and is currently implementing an expansion of

GEMS to include all WIA grants.  GEMS tracks the grant managers’ grant review actions and provides the grant

manager financial and other information useful in managing the grants.  The ETA Division of Policy Review and

Resolution hasrequirementsin its closeout grant officer performance standardsrelating to the requirement to

follow‐up on Single Audit Act, OIG or GAO audit findings and questioned costsrelating to WIA grants, and the
Other Accompanying Information

304     United States Department of Labor

Director of the Office of Grant and Contract Management has overall responsibility for ensuring that these

procedures are followed.

VII. Information Systems and Infrastructure

Unemployment Insurance

State and Federal information systems and infrastructure were upgraded to accommodate the additional Federal

compensation programs and extensions to other unemployment compensation programs included in the Recovery

Act.   

As a result of ETA monitoring, states modified computer matching procedures to improve the productivity of NDNH

as a resource to detect improper payments.  ETA is also working closely with the six‐state consortium to develop

the information systems and infrastructure to support SIDES, which is discussed in Section III, Corrective Actions.

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 GEMS.  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‐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.  

DOL and OMB are working on a legislative proposal that would relax the barriers posed by the "immediate deposit"

requirement and the "withdrawal standard" to allow states to use a portion of recovered overpayments to support

recovery and other integrity activities, such as collecting delinquent taxes from employers and assuring that

employers properly classify employees.  It would also mandate that states require all employers to report the date

of first earnings or "start work" date to the NDNH, which will facilitate state identification of claimants who have

returned to work and continue to claim UI benefits.  

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.
FY 2009 Performance and Accountability Report     305   

Acronyms

ACSI American Customer Satisfaction Index

BLS   Bureau of Labor Statistics

CAM Cost Analysis Manager

CFO   Chief Financial Officer

CY   Calendar Year

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

IDCF Internet Data Collection Facility

ILAB   Bureau of International Labor Affairs

IPIA Improper Payments Information Act

IRS   Internal Revenue Service

IT   Information Technology

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

OFLC Office of Foreign Labor Certification

OIG   Office of Inspector General

OLMS   Office of Labor‐Management Standards

OMB Office of Management and Budget

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

RAPIDS Registered Apprenticeship Partners

Information Data System

RECA Radiation Exposure Compensation Act

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

WISPR Workforce Investment Streamlined

Performance Reporting
Other Accompanying Information

306     United States Department of Labor

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.dol.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/

Employer Assistance & Recruiting Network (EARN) http://www.earnworks.com/

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/contacts/state_of.htm

Minimum Wage Q&A http://www.dol.gov/esa/minwage/q‐a.htm

Fair Labor Standards Act http://www.dol.gov/compliance/laws/comp‐flsa.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 (SIC) 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

MSHA's National Hazard Reporting Page 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