National Emergency Grants: Labor Is Instituting Changes to Improve Award Process, but Further Actions Are Required to Expedite Grant Awards and Improve Data
Published: 2004-04-16T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: The Department of Labor (Labor) awards national emergency grants to states and local areas to provide assistance to workers who lose their jobs because of major economic dislocations or disasters. Most grants awarded are regular grants to assist workers affected by plant closings or mass layoffs. Questions have been raised about whether grant funds are getting to states and local areas quickly enough. GAO was asked to assess the effectiveness of the process for awarding national emergency grants, whether Labor is planning changes that will improve the grant award process, and what is known about how grant funds are used.
section_title: What GAO Found
paragraphs: Labor does not award most national emergency grants in a timely manner, and as a result, services to workers have been delayed, interrupted, or denied. Labor's goal is to make award decisions within 30 calendar days of receiving a complete application. However, nearly 90 percent of regular grants took longer than 30 days to award. On average, Labor took 92 days to award regular grants. For grants disbursed in more than one payment, Labor took on average 83 days to award the additional increments. Twenty-five of 38 states responding to our survey reported that because of grant award delays, local areas had to delay or deny services to workers. Labor is taking some steps, such as implementing an electronic system to better manage its award process and incorporating its 30-day goal in new guidelines, that may improve the timeliness of grant awards. However, some weaknesses still remain in Labor's planned changes that could prevent Labor from accurately assessing how long it takes to make grant awards and incremental payments. For example, Labor plans to stop counting the days elapsed if it finds problems with an application, and Labor's proposed guidelines do not establish a timeliness goal for incremental payments. Little is known on a national level about how national emergency grant funds are used because of weaknesses in two primary data sources. Because of the lack of clear guidance, states report inconsistent data in progress reports, and some states have not reported data on national emergency grants to a national database covering Workforce Investment Act (WIA) programs. To address these problems, Labor is implementing a standardized electronic form for grantees to submit progress reports, issued guidance requiring states to submit data on national emergency grant participants to the national WIA database, and checked states' latest submissions to identify if data were missing. However, Labor's guidance still is not sufficiently clear to ensure that states will report data in progress reports consistently, and Labor does not have specific plans to continue checking states' data submissions to ensure that data are complete.

section_title: Letter
paragraphs: Between 2000 and 2002, almost 60,000 mass layoffs of 50 or more workers  occurred, resulting in nearly 7 million workers losing their jobs. The  Workforce Investment Act (WIA) of 1998 authorizes the Department of  Labor (Labor) to award national emergency grants to states and local  areas to provide employment and training assistance to workers whose  jobs were lost because of major economic dislocations, such as plant  closures, or major disasters, such as floods and hurricanes. Grantees,  typically the state or local agency responsible for administering WIA, apply  for national emergency grants when their dislocated worker formula funds  are insufficient to assist the affected workers. Between July 1, 2000, and  June 30, 2003, Labor awarded about $600 million in national emergency  grants. The majority of these funds were used for grants to provide  assistance, called regular grants, to workers who lost their jobs because of  layoffs or plant closures. National emergency grants can be funded in  whole or in increments. For grants that are funded incrementally, grantees  are required to submit supplemental information to request additional  payments. Although national emergency grants are intended to be a timely  response to unexpected events, questions arose during congressional  hearings in April 2003 about whether national emergency grant funds were  getting to states and local areas quickly enough to help workers when they  needed them the most.
In November 2003, we reported that services to dislocated workers were  being affected because of delays in Labor’s awarding of national  emergency grants. We also found that Labor was initiating actions to  improve the grant award process. Because of your continued interest in  Labor’s process for awarding national emergency grants, you asked us to  determine (1) the effectiveness of the overall process for awarding  national emergency grant funds, (2) whether the changes being  implemented by Labor will improve the grant award process, and (3) what  is known about how grant funds are being used. To respond to these  questions, we interviewed Labor officials at both headquarters and  regional offices, reviewed Labor files for all grants awarded during  program years 2000 through 2002, and surveyed officials in the 39 states  that had received at least one regular national emergency grant during that  period. We received responses from 38 states. We also reviewed Labor’s  two data sources that contain information on use of national emergency  grants. We conducted our work from March 2003 to March 2004 in  accordance with generally accepted government auditing standards (see  app. I for a detailed discussion of our scope and methodology).
subsections: section_title: Background
paragraphs: WIA specifies separate funding streams for each of the act’s main client  groups—adults, youths, and dislocated workers. A dislocated worker is an  individual who (1) has been terminated or laid off, or who has received a  notice of termination or layoff, from employment; is eligible for or has  exhausted entitlement to unemployment insurance; or who is not eligible  for unemployment insurance but has been employed for a sufficient  duration to demonstrate attachment to the workforce and who is unlikely  to return to his or her previous industry or occupation; (2) has been  terminated or laid off, or who has received a notice of termination or  layoff, from employment as a result of any permanent plant closure of, or  substantial layoff at, a plant, facility, or enterprise; (3) was self-employed  but is unemployed as a result of general economic conditions in the  community in which the individual resides or because of natural disasters;  or (4) is a displaced homemaker.
Under WIA, dislocated workers can receive three levels of service—core,  intensive, and training. Core services include job search and placement  assistance, the provision of labor market information, and preliminary  assessment of skills and needs. These services are available to anyone  seeking such assistance, whether or not that person is a dislocated  worker. Intensive services are provided to dislocated workers needing  additional services to find a job. Intensive services include comprehensive  assessments, development of an individual employment plan, case  management, and short-term prevocational services. Dislocated workers  can also receive training services, including occupational skills training,  on-the-job training, skill upgrading, and entrepreneurial training.
The Secretary of Labor retains 20 percent of dislocated worker funds in a  national reserve account to be used for national emergency grants,  demonstrations, and technical assistance and allots the remaining funds to  each of the 50 states, the District of Columbia, and Puerto Rico according  to a specific formula. In a previous report, GAO identified several issues  with the formula to allocate dislocated worker funds that limit Labor’s  ability to allocate funds to states according to their need.  For example,  one problem we identified is that the formula allocates funds based on  factors, such as the number of long-term unemployed in each state, that  are not clearly aligned with the program’s target population. During  program years 2000-2002, Labor was allotted about $4.7 billion for  dislocated worker activities. For program year 2003, approximately   $1.4 billion was allotted for dislocated worker activities, of which about  $272 million was reserved by the Secretary of Labor. Of the amount  reserved by the Secretary in any program year, not more than 10 percent  can be used for demonstrations and pilot projects relating to the  employment and training needs of dislocated workers. Such projects can  include those that promote self-employment, promote job creation, and  avert dislocations. In addition, not more than 5 percent can be used for  technical assistance to states that do not meet performance measures  established for dislocated worker activities. At least 85 percent of the  Secretary’s 20 percent funds must be used for national emergency grants  (see fig.1).
National emergency grant funds are used for several different types of  grants, including    Regular grants. These provide employment and training assistance to  workers who lost their jobs because of layoffs and plant closings.
Disaster grants. These provide temporary employment to workers  affected by natural disasters and other catastrophic events.
Dual enrollment grants. These provide supplemental assistance to  workers who have been certified by Labor to receive services under the  Trade Adjustment Assistance Reform Act of 2002. Workers eligible  under dual enrollment grants are typically workers who have lost their  jobs because of increased imports from, or shifts in production to,  foreign countries.
Grantees apply for national emergency grants when their dislocated  worker formula funds are insufficient to meet the needs of affected  workers. Entities that are eligible to receive regular national emergency  grants are:  the designated state WIA program agency,    a local workforce investment area agency,    a consortium of local workforce investment boards for adjoining areas,    a designated organization receiving funds through the Native American  program provision of WIA.
For regular national emergency grants covering more than one state,  eligible grantees are limited to a consortium of local workforce investment  boards for adjoining local areas or a consortium of states. For disaster and  dual enrollment grants, eligible grantees are limited to states. For national  emergency grants awarded from program years 2000 to 2002, 241 grants  were awarded to states and 6 grants were awarded to local areas.
National emergency grants are discretionary awards by the Secretary of  Labor that are intended to temporarily expand service capacity at the state  and local levels by providing time-limited funding assistance in response  to major layoffs. National emergency grant funds may be used to provide  core, intensive, and training services.  For disaster-related projects, funds  may be used for temporary employment assistance on projects that  provide food, clothing, and shelter, as well as on projects that perform  demolition, cleaning, repair, renovation, and reconstruction. According to  Labor, projects funded by national emergency grants must be designed to  achieve performance outcomes that support the performance goal  commitments by the Secretary under the Government Performance and  Results Act. Labor will provide target performance levels for national  emergency grant projects through separate policy guidance. Beginning  July 1, 2004, national emergency grant projects will be subject to the  common measures for employment and training programs, including  entered employment, job retention, and earnings increase. Participants in  temporary disaster projects are expected to receive necessary assistance  to return to the workforce.
Between July 1, 2000, and June 30, 2003 (covering program years 2000,  2001, and 2002), Labor distributed about $600 million from the dislocated  worker reserved funds for national emergency grants to 46 states, the  District of Columbia, Guam, and the Federated States of Micronesia (see  fig. 2). California, Massachusetts, Ohio, Oregon, Pennsylvania, Texas,  Virginia, Washington, and Wisconsin received the largest amount of grant  funds, at least $20 million each.
Appendix II lists the amount of funds Labor distributed to each state for  regular, disaster, and dual enrollment national emergency grants between  July 1, 2000, and June 30, 2003. Nearly two-thirds of the 247 grants  awarded and about 60 percent of the funds awarded were for regular  grants (see fig. 3). According to Labor officials, no grant applications  received between July 1, 2000, and June 30, 2003 are still pending.
In any program year, the Secretary can only award national emergency  grants from funds available for that program year. That is, funds reserved  for national emergency grants in program year 2002 must be awarded by  June 30, 2003—the last day of program year 2002.
The current system for submission and review of grant applications is  manual and paper-based. States and local areas submit an application via  mail or fax. Each national emergency grant application generally contains  information on key aspects of the proposed project, such as amount of  funds requested, planned number of participants, planned starting and end  dates, planned expenditures by type of program activity, and expected  performance outcomes, including how many participants they believe will  become employed and what they believe their new wages will be. Labor  officials review the application and draft a decision memorandum that  contains their recommendation as to whether the grant should be awarded  and, if so, at what amount. The decision memorandum is forwarded to the  Secretary, who makes the final award decision. After the Secretary’s  award decision, Labor notifies the appropriate congressional office and  issues the award letter to the grantee. National emergency grant awards  can be disbursed in a single payment or in increments. In most cases, the  initial increment will be for 6 months to enable a project to achieve full  enrollment. For grants disbursed in more than one payment, grantees are  required to submit supplemental information along with their requests for  future incremental payments. This information generally includes the  actual number of participants, performance outcomes, and expenditures.
Grantees provide information to Labor on their use of grant funds through  periodic progress reports. Grantees submit periodic progress reports on  their use of national emergency grant funds to Labor regional offices that  monitor and oversee the grants. Grantees are required to submit the  reports on a quarterly basis for regular and dual enrollment grants and on  a biweekly basis for disaster grants. Progress reports generally contain  information on the number of participants who registered for the program  and received various services. They also contain the number of  participants who entered employment, which Labor uses to assess  grantees’ performance.
States are required annually to submit to a national database, called the  Workforce Investment Act Standardized Record Data (WIASRD),  information on WIA participants who have left the program, including  those who have left national emergency grant–funded programs. The  WIASRD contains information on the types of services that each WIA  participant receives, such as intensive or training services. For  participants that received training, the WIASRD also contains information  on the types of training activities they participated in, such as on-the-job  training, adult education or basic literacy activities, or occupational skills  training.
section_title: Delays in Grant Awards Hampered Services to Dislocated Workers
paragraphs: Labor’s grant process is not as effective as it could be because most grants  are not awarded in a timely manner, and as a result, services to workers in  some states have been delayed, interrupted, or denied. During program  years 2000-2002, Labor’s goal was to approve national emergency grants  within 30 calendar days of receiving a complete application. On average,  92 days elapsed between the date Labor received a regular national  emergency grant application and the date the award letter was signed.  Labor was more likely to award grants toward the end of the program  year, with nearly 40 percent of the grant awards made in the final month.  Twenty-five of the 38 states responding to our survey reported that as a  result of delays in receiving grant funds, services to dislocated workers  were delayed, interrupted, or denied.
subsections: section_title: Labor’s Counting toward Timeliness Goal Does Not Reflect the Full Grant Award Process
paragraphs: The way Labor measures its progress toward meeting its timeliness goal  does not reflect the full process for awarding national emergency grants.  During program years 2000-2002, Labor’s goal was to approve national  emergency grants within 30 calendar days of receiving a “complete”  application. Labor contends that states, in their haste, often submit  applications that require additional work and that the requests for funds  cannot be processed until shortcomings are addressed. As a result, states  may turn in their applications several times before Labor starts counting  the days elapsed toward meeting its timeliness goal. Labor ends its  counting once the Secretary approves the grant, although additional time  is required to notify the appropriate congressional office and issue the  award letter. For our analysis, we began counting on the first day Labor  received a state’s application and continued even if states had to make  revisions for the application to be considered complete by Labor. We did  not stop counting until award letters were sent. Our counting more  accurately reflects the grantee’s perspective: It begins at the first request  for funds and ends at the point that funds can be obligated. Figure 4  compares the points at which Labor starts and stops counting the days  elapsed toward meeting its 30-day goal and the points at which GAO  started and stopped counting the days in our analysis.
section_title: Most Grant Awards Took Longer than 30 Days
paragraphs: We found that, on average, Labor took 92 days from the time an  application was received to send a grant award letter. Nearly 90 percent of  the regular grants awarded from July 1, 2000, to June 30, 2003 took more  than 30 days to award. Approximately 11 percent of the regular grants  awarded during program years 2000-2002 took 30 or fewer days to award,  whereas nearly half took more than 90 days (see fig. 5).
Labor took less time to award disaster and dual enrollment grants than it  did to award regular grants. Dual enrollment grants, which represent  about a third of the funds awarded during program years 2000-2002, took  an average of 20 days to award, and disaster grants, which represent less  than 10 percent of the funds awarded, took an average of 48 days.
section_title: Grant Applications Submitted Early in the Program Year Took Longer to Award, and Most Grants Were Awarded Later in the Year
paragraphs: The amount of time Labor took to award regular grants appeared to be  related to the quarter in which the application was received. For example,  regular grant applications received in the first quarter of a program year  took longer to award than applications received in the second, third, and  fourth quarters (see table 1).
Labor awards most of the regular grants later in the year. Nearly   60 percent of all regular grants were awarded in the fourth quarter of the  program year, representing nearly two-thirds of the regular grant funds  awarded. This trend exists despite the fact that about the same proportion  of applications are received in the second, third, and fourth quarters of the  program year: Over 30 percent of the applications were submitted during  the second quarter of the program year, and about 27 percent were  submitted in the third and fourth quarters (see fig. 6).
Although applications were received at a steady rate throughout the last  three quarters of the program year, about 40 percent of the regular grants  were awarded in June, the final month of the program year, representing  about one-half of the regular grant funds awarded. Moreover, the  percentage of applications submitted by month during the program year  did not significantly increase as the year went on, with October (the fourth  month of the program year), being the month when the largest percentage  of applications was submitted (see fig. 7).
June was the most prevalent month for awarding other types of grants as  well. About 42 percent of the disaster grants and 90 percent of the dual  enrollment grants were awarded in the last month of the program year.  Award dates were more closely linked to application dates for dual  enrollment grants because, according to Labor officials, grantees apply for  these grants near the end of the program year, when Trade Act funds  become exhausted. The vast majority (92 percent) of the dual enrollment  applications were submitted in the last 2 months of the program year.
section_title: Incremental Payments Also Took Longer than 30 Days to Award
paragraphs: Approximately 80 percent of the incremental payments made during  program years 2000-2002 took longer than 30 days for Labor to award (see  fig. 8). On average, Labor took 83 days to award incremental payments,  which is 9 days quicker than the average number of days Labor took to  make initial regular grant awards. Labor officials attributed delays to  grantees submitting incomplete requests that require additional work. On  the other hand, some state officials said that they were unclear about the  requirements for requesting an incremental payment because of lack of  guidelines on how to submit a request. During program years 2000-2002,  Labor awarded 43 incremental payments totaling about $84 million.  According to Labor, grantees should expect that all grant awards will be  funded incrementally.
section_title: Delays Hindered States’ Abilities to Serve Workers
paragraphs: Thirty-three of the 38 states that responded to our survey said that the  amount of time it took to receive regular grant funds was a major problem.  Eight of these states were awarded five or more regular grants during  program years 2000-2002, and Labor averaged between 51 and 103 days to  award grants to these states (see fig. 9).
Twenty-five states said that because of the delays in receiving grant funds,  local areas had to delay or deny services to dislocated workers. In most of  these states, the delays affected local areas’ ability to place dislocated  workers in training. Twenty of these states reported that local areas had to  delay or cancel training for dislocated workers because, while waiting for  national emergency grant funds, they did not have funds available to enroll  workers in training. For example, Massachusetts officials noted that  workers in one local area were placed on waiting lists for 3 to 4 months  before they received training. Similarly, Nevada officials reported that a  local area cancelled training for more than 300 workers because of a delay  in receiving grant funds. Six states also reported that local areas could not  provide intensive services, such as case management, to workers because  of delays in receiving grant funds. For example, Kentucky reported that  while waiting to receive national emergency grant funds, local areas could  only provide workers with core services and could not provide workers  with job training, career counseling, case management, or supportive  services, such as assistance with transportation and child care.
section_title: Labor Has Taken Steps to Improve the Grant Award Process, but Additional Actions are Needed
paragraphs: Labor has taken steps that may improve the process for awarding national  emergency grants, but additional actions are needed to better manage the  grant award process. Labor is moving from a paper-based system for  reviewing grant applications to an electronic system that will enable states  or local areas to apply for grants online. Labor has also documented its  goal to make an award decision within 30 business days of receiving a  complete application. However, some weaknesses still remain in Labor’s  planned changes that could prevent Labor from accurately assessing how  long it takes to make grant awards and incremental payments.
subsections: section_title: Labor’s Actions Are a Step in the Right Direction
paragraphs: Labor has made a number of changes intended to improve the efficiency of  the application process by helping applicants submit applications that are  as close to being complete as possible. Labor has clarified its application  requirements in guidance issued on January 26, 2004. In addition, Labor  has conducted training for states on providing an integrated service  response for dislocated workers, including training on the requirements  for receiving national emergency grants. Labor also plans to provide  technical assistance and work with states on an individual basis to help  them fully integrate services available to dislocated workers through the  one-stop service delivery system.  Furthermore, Labor plans to implement  a new electronic system by July 1, 2004, that would allow applicants to  submit applications electronically. The new system will automatically  check applications for missing or inconsistent information, such as blanks  that should be filled in or numbers that do not add up correctly. If any  problems are found, the system notifies applicants. Only when the system  no longer finds problems with the application will it allow the application  to go forward. In doing so, the system ensures that each required field  contains information and that information in different fields is consistent,  but it cannot check the quality of the information submitted.
The electronic system will also replace Labor’s paper-based system for  managing the application review process. The electronic system will count  how many days have elapsed since the application was submitted and  track the progress of various steps of the review. Specifically, the system    automatically assigns applications to staff for review within a day of  submission,  reassigns an application to another staff person if the staff originally  assigned is not available,    gives each staff person a deadline for completing his or her part of the  review,  tracks the date that staff complete their responsibilities,    automatically transfers information from the application into the    enables managers to check on the progress of the review, including  how long specific parts of the review are taking.
As part of a reengineering project, Labor contracted with IBM to review  Labor’s grant award process. IBM reviewed Labor’s current grant award  process as well as the new electronic system to determine whether any  further improvements would be needed. In addition, IBM is planning to  conduct further review of other areas such as staffing levels, skills, and  workflow patterns.
Finally, Labor is planning to issue guidelines that document its timeliness  goal. As stated in the proposed guidelines, the goal will be to make a grant  award decision within 30 business days of receiving a complete  application.  These guidelines had not been issued as of April 6, 2004.
section_title: Additional Actions Needed to Better Manage Grant Award Process
paragraphs: Some weaknesses still remain in Labor’s planned changes that could  prevent Labor from accurately assessing how long it takes to make grant  awards and incremental payments. First, the way Labor has defined its 30- day goal allows the agency to stop counting the number of days elapsed if  it finds problems with the grant application. For example, if Labor finds a  major problem, such as with a planned expenditure for a program activity,  it will stop the electronic system’s counting of days elapsed and ask the  state or local area to revise the application. After the state or local area  submits a revised application, Labor will start the counting at day one (see  fig. 10). However, if Labor finds a minor problem with the application,  such as insufficient justification in the narrative explanation for the  proposed number of dislocated workers to be enrolled, it will stop the  counting and, once the state or local area submits a revised application,  will restart the counting from the day it left off. Because of Labor’s ability  to stop its counting of days elapsed, its tracking system may not accurately  reflect the number of days it takes Labor to award grants or allow Labor to  identify how long particular steps in the process contribute to the amount  of time it takes to award grants.
A second problem is that Labor’s timeliness goal still only includes the  days up to the Secretary’s award decision, leaving the agency unable to  identify delays that occur after the award decision. Labor’s proposed  guidelines specify a goal to approve or disapprove applications within   30 business days from receipt of a complete and responsive application.   As stated, the goal would not include the steps between the Secretary’s  approval and the issuance of the award letter, such as the notification of  congressional offices of the award, the preparation of the award letter, and  the preparation for the disbursement of funds. With some grants awarded  in program years 2000 to 2002, 20 or more calendar days passed between  the date the Secretary approved the grant by signing the decision  memorandum and the date Labor issued the award letter to the grantee.  For example, for a grant awarded to Missouri, 34 days passed between the  date the Secretary signed the decision memorandum and the date the  award letter was sent. Such delays can interfere with a state or local area’s  ability to take steps necessary to begin to provide services such as  entering into contracts with training providers or hiring staff.
A third weakness is that Labor’s proposed guidelines do not establish a  timeliness goal for awarding incremental payments, despite stating that  most grants will be awarded incrementally. Labor has stated that the  amount of time to approve incremental payments should be no longer than  the time required to review the original application—30 business days.  However, this goal has not been formally documented in the proposed  guidelines. In addition, the electronic system does not allow grantees to  apply for incremental payments online, and it will not track the progress of  the review of requests for incremental payments. Labor plans to use a  manual process to track its progress toward meeting its 30-day goal for  incremental payments.
section_title: Little Is Known about How Grant Funds Are Used because of Weaknesses in Data Collection
paragraphs: Little is known on a national level about how national emergency grant  funds are used because of weaknesses in two data sources, and although  Labor is taking steps to improve the data collected, these steps may not go  far enough to ensure the data’s reliability. Data in progress reports  submitted by grantees to Labor could not be analyzed on a national level  because the reports’ data elements vary from grantee to grantee and the  information is not available electronically. Furthermore, the reliability of  information contained in Labor’s national database on participants served  by WIA funds, including national emergency grants, cannot be ensured  because the data are incomplete and unverified. Labor’s steps to address  some of these issues may not go far enough to rectify data problems. For  progress reports, Labor has not issued detailed guidance to ensure that  data elements are defined consistently. In addition, although Labor has  checked states’ most recent submissions to the national participant  database to identify whether data are missing, Labor does not have  specific plans to check states’ future submissions to ensure that data are  complete.
subsections: section_title: Data Collected Is Inconsistent and Unreliable
paragraphs: Neither of the two primary data sources on the national emergency grant  program—progress reports and WIASRD—can be used to provide  accurate national-level information on the use of national emergency grant  funds. Largely because of a lack of clear guidance, grantees are not  submitting reliable information to both data sources.
Data in progress reports cannot be summarized to provide a national  picture of how grant funds are used because not all states reported the  same data. Labor has not issued guidance under WIA on the submission of  national emergency grant progress reports, and as a result, the data  submitted in reports vary from grantee to grantee. For example, while  most of the 13 states that we obtained sample reports from provided  information on the number of people enrolled in training, only about half  reported the number enrolled in core and intensive services, and just one  reported expenditures by type of service (see table 2).
In addition, grantees may interpret the data elements in different ways.  For example, according to Labor regional officials, states vary in how they  define “entered employment.” Some states use the WIA definition, which  calculates entered employment using quarterly unemployment insurance  wage reports that may not be available until several months after the  person has started a job. Other states use the definition under the Job  Training Partnership Act (JTPA) program that WIA replaced, which  calculates the number using information gathered by the caseworker at  the time the person is placed in employment. A grantee that uses the WIA  definition may appear to place workers in employment less effectively  than a grantee that uses the JTPA definition because the grantee using the  WIA definition must wait several months before reporting that a  participant entered employment. Furthermore, the data in progress  reports are not electronically available or stored in a central location  because Labor does not have an electronic system through which grantees  can submit the reports. Instead, grantees submit the reports to the  appropriate regional office by e-mail or as paper documents, making  analysis of the data cumbersome.
Labor’s guidance is not as clear as it could be about whether states are  required to submit to WIASRD data on participants served with national  emergency grant funds. One part of the WIASRD reporting instructions  says that states are required to provide data for participants who exited  WIA Title I-B services, which are services offered by the adult, dislocated  worker, and youth formula funds programs. A Labor official and a  manager of the WIASRD database stated that this part of the guidance  could be interpreted by states to mean that they are not required to submit  data to WIASRD for other programs, such as national emergency grants. In  addition, some Labor officials we spoke with believed that states were not  required to submit WIASRD data on all national emergency grant  participants.
Either because the data were not submitted or were submitted incorrectly,  WIASRD does not contain data for all states that received national  emergency grants. The program year 2001 WIASRD contained no data for  five states that collectively received 16 grants in program year 2000,  constituting 23 percent of the grants awarded in that year (see table 3). In  addition, it contained few data for Rhode Island, although a Rhode Island  official said that 210 participants exited national emergency grant  programs in program year 2001.
However, even if the data submitted to WIASRD on national emergency  grants were complete, questions about their accuracy would persist. In its  review of state-reported WIA performance data, Labor’s Office of  Inspector General (OIG) concluded that little assurance exists that the  data are accurate or verifiable because of inadequate oversight of data  collection and management at the federal, state, and local levels. A recent  GAO report confirmed the OIG’s findings.
section_title: Labor Is Taking Actions to Improve Data
paragraphs: Labor has developed a standard reporting form and electronic system for  national emergency grant progress reports and plans to implement these  changes in July 2004. Labor’s proposed guidelines require grantees to use a  particular reporting form to submit information on a quarterly basis on the  number of participants receiving intensive services, training, and other  services, as well as expenditures on these various services, the number of  participants who exited the program, and the number of participants who  entered employment. A standard reporting form is likely to increase the  consistency of grantee-reported data by ensuring that grantees submit  information on the same data elements. However, Labor has not yet issued  guidance informing grantees how to define data elements such as the  number of participants who have entered employment. Without common  definitions, grantees may submit inconsistent data based on their different  interpretations of data elements. In addition, Labor’s electronic system for  managing the grant application process will enable grantees to submit  their progress reports electronically. The system will compile the data into  an electronic dataset, facilitating analysis of the data.
Labor is also taking steps to improve the completeness and accuracy of  WIASRD data on national emergency grant participants. In guidance  issued on November 13, 2003, for the submission of program year 2002  data, Labor specified that states are required to include participants who  exited from national emergency grant programs. According to Labor  officials, the agency also plans to clarify the WIASRD reporting  requirements for national emergency grants in new guidance on  performance measures to be issued by July 2004. In addition, for the  program year 2002 WIASRD, Labor checked states’ submissions to  determine whether data had been submitted for all grants awarded. For  states whose submissions were missing data, Labor requested that they  send in a revised submission that included data on national emergency  grants. However, managers of the WIASRD database said that some states  were not able to send in data on national emergency grant participants,  and as a result, the program year 2002 WIASRD will not have complete  data. Although Labor does not have specific, written plans to check states’  future WIASRD submissions to identify missing data, a Labor official  believes the agency will continue to check submissions. Labor is also  planning to implement a data validation program to ensure the accuracy of  state-reported data on national emergency grant participants. According to  Labor officials, this program is in the early planning stages and no date has  been set for its implementation.
section_title: Conclusions
paragraphs: With nearly 7 million workers losing their jobs in the few years since the  turn of the century, increasing importance has been placed on programs  intended to help dislocated workers. When major layoffs and disasters  occur, states and local areas need to respond quickly to ensure that  workers facing unemployment receive the services they need to re-enter  the workforce at a comparable wage. Unfortunately, their dislocated  worker formula funds are often insufficient to adequately meet the needs  of the large number of workers losing their jobs. In previous work, we  found that the formula used to allocate dislocated worker funds does not  always result in states receiving the amount of funds they need.  Accordingly, states and local areas turn to Labor for additional funds, such  as those reserved by Labor for national emergency grants.
Timely awarding of national emergency grants is imperative for states and  local areas to provide services when they are most needed. Therefore, it is  important that Labor consider the length of time it takes to complete the  full process for awarding grants. Although Labor is making changes to the  award process, some concerns remain. Labor does not have a timeliness  goal for the full award process or for incremental payments. In addition,  the proposed guidelines do not require the continuous counting of days  from the time the application is received until the grant is awarded—Labor  can stop the clock if officials feel the application is incomplete. As a result,  Labor may appear to meet its timeliness goal even though, from a grantee’s  perspective, the grant funds were received months after the application  was filed.
Neither of the two primary data sources on the national emergency grants  provides reliable national-level information on how these funds are used.  Reliable information on how national emergency grant funds are used is  essential for Labor to effectively manage the program and report on a  national level how grant funds are being used.
section_title: Recommendations for Executive Action
paragraphs: In order for Labor to better manage the grant award process and to  accurately assess how long it takes to make grant awards and incremental  payments, we recommend that the Secretary of Labor take additional  actions. In particular, Labor should    set timeliness goals for the full process—from the receipt of the  application until the award letter is sent—for initial grant awards and  incremental payments; and    continuously track the number of days that have passed, beginning  when applications are first submitted and until the award letter is sent,  including days grantees spend revising their applications.
In addition, to ensure that information relating to national emergency  grants is accurate and complete, we recommend that Labor    develop specific reporting guidance on progress reports to ensure that  grantees define data elements consistently, and    ensure that all states submit WIASRD data on participants exiting from  services provided with national emergency grants (for grantees that are  not states, ensure that they submit WIASRD data on national  emergency grants to states for submission to Labor).
section_title: Agency Comments
paragraphs: We provided a draft of this report to officials at Labor for their review and  comment. In its comments, Labor took issue with the report’s  methodology, said it believes that the report makes assertions not  supported by empirical evidence, and disagreed with our conclusions.  Labor stated that timeliness of national emergency grants has been a  concern dating back to JTPA and that the current administration set a goal  of 30 working days to provide states with an answer to a complete  application. Labor also contends that the weaknesses in the improvements  being undertaken in the grant award process that we cite in the report are  subjective and inaccurate. Finally, Labor listed reforms that are under way  or have been implemented, including business process mapping, an  electronic application tool, policy guidance, regional forums, and technical  assistance to states.
We disagree with Labor’s characterization of the report’s methodology and  conclusions.  As stated in the report, our analysis looked at the complete  application process from a grantee’s perspective. We reviewed files for  every regular grant that was awarded between July 1, 2000, and June 30,  2003, for which complete information was available and compared the  date that Labor received the application with the date Labor issued an  award letter to the grantee. States and local areas apply for national  emergency grants when a major layoff occurs, and it is imperative that  grantees receive funds in a timely manner to provide assistance when it is  most needed. Accordingly, we believe that the date the application is  received is an appropriate starting point for the grant award process.  If  applications are incomplete, then this issue should be addressed and the  application moved forward in a timely manner. We recognize a shared  responsibility to ensure that grant applications are complete and accurate,  and as pointed out in our report, Labor has taken steps to assist grantees  in submitting applications that are as close to being complete as possible.  We also believe that the ending date should be when the grantee is notified  of the award rather than at an interim departmental approval point. As we  reported, the final steps after Labor has stopped the clock on the award  process have taken an additional 20 or more days in some cases. Delays in  grant awards have had effects on the ability of local areas to provide  services to workers who have lost their jobs, as reported by 25 states that  responded to our survey on national emergency grants. For Labor to have  set a goal for the award process is commendable, but the emphasis needs  to be on awarding national emergency grants as quickly as possible to  allow local areas to meet the needs of dislocated workers.
We also disagree that the stated weaknesses in the improvements being  undertaken in the grant award process are subjective and inaccurate.   Rather these weaknesses are based upon Labor’s proposed guidelines and  discussions with Labor officials. First, Labor’s proposed guidelines state  that Labor is committed to making a decision to approve or disapprove an  application within 30 working days of receiving a complete application.   As pointed out in our report, there are steps that follow this decision that  have taken another 20 days in some cases, and Labor’s counting of days  elapsed may not always be continuous.  We believe the 30-day goal should  include the entire process.  Second, the proposed guidelines do not relate  the 30-day goal to incremental payments, and Labor officials confirmed  that incremental payments are not yet included in the new electronic  system. Third, while the proposed guidelines provide a form for progress  reports, Labor officials acknowledged that data element definitions have  not yet been developed. Finally, while a Labor official speculated that  checking the completeness of states’ submissions to the WIASRD database  would continue, no such plans have been documented.  We believe that to  better manage the national emergency grant award process, these  additional actions should be implemented.
In regard to the reforms cited by Labor in its comments, our report  identified all of these efforts except for the proposed technical assistance.   We have added a statement to the report to indicate that Labor plans to  provide technical assistance and work with states on an individual basis to  help them fully integrate services available to dislocated workers through  the one-stop service delivery system. Labor’s comments are in appendix  IV.
As arranged with your offices, unless you publicly announce its contents  earlier, we plan no further distribution of this report until 14 days from its  issue date. At that time, we will send copies of this report to relevant  congressional committees and other interested parties and will make  copies available to others upon request. In addition, the report will be  available at no charge on GAO’s Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please contact me  at (202) 512-7215. Other major contributors to this report are listed in  appendix V.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: We were asked to determine (1) the effectiveness of the overall process  for awarding national emergency grant funds, (2) whether Labor’s  proposed changes will improve the grant award process, and (3) what is  known about how grant funds are being used. To respond to these issues,  we interviewed Labor officials at both headquarters and regional offices,  reviewed Labor files for all grants awarded during program years 2000  through 2002, and surveyed officials in the 39 states that had received at  least one regular national emergency grant during that period. We also  reviewed Labor’s two data sources that contain information on the use of  national emergency grants. We conducted our work from March 2003 to  March 2004 in accordance with generally accepted government auditing  standards.
subsections: section_title: File Review
paragraphs: We obtained from Labor a listing of all national emergency grants awarded  between July 1, 2000, and June 30, 2003. We then reviewed files maintained  by Labor to identify when the original application was submitted and  received and the date the award letter was signed. For those grants funded  incrementally, we also identified when the incremental funding request  was submitted and received and the date the incremental award letter was  sent. We limited our analysis to those grants funded with the Secretary’s  reserve from the dislocated worker funds under the Workforce Investment  Act (WIA). For some grants, documentation on when the application was  received was not in the files (see table 4).
Using information contained in the files, for each grant we calculated the  number of calendar days between the date Labor received the original  grant application and the date of the grant award letter.
For 16 grants for which 150 or more calendar days elapsed between the  date the original grant application was received and the date the award  letter was sent, we conducted a detailed review of the grant files to  determine how long various steps of the review process took. We  identified dates that applicants submitted additional information, dates  that Labor received the additional information, dates of the decision  memorandum, dates that the Secretary signed the decision memorandum,  and dates that various Labor staff approved the award letter. We then  calculated the number of calendar days that elapsed between each of  these dates.
section_title: Survey of States That Received Regular Grants
paragraphs: To obtain information on states’ experiences with the process for  receiving national emergency grants, we conducted an e-mail survey of  officials in 39 states that received at least one regular grant in program  years 2000 to 2002 (see figure 11).
We received responses from 38 states (a 97 percent response rate). We  limited the survey to regular grants because they constituted about   60 percent of the grants awarded, representing about 64 percent of the  funds, in that time period. Although Labor also awarded four regular  grants to local areas in program years 2000 to 2002, we limited our survey  to state officials because the number of local grantees was too small to be  meaningful.
We identified the states that received regular grants from a list that Labor  provided of grants awarded in program years 2000 to 2002 and the state in  which they were awarded.
In developing our survey, we conducted pretests with three states. We  contacted respondents to clarify information when needed. We analyzed  the survey data by calculating descriptive statistics, as well as performing  content analysis of the responses to open-ended survey questions.
section_title: Assessment of Data Quality
paragraphs: To determine whether progress reports might be a viable source of data to  determine how national emergency grant funds are used at the national  level, we obtained progress reports from 1 to 3 states from each of the  Labor regional offices. We analyzed the reports to determine how  consistent the data elements were from state to state.
To determine whether the Workforce Investment Act Standardized Record  Data (WIASRD) might be a viable source of data to determine how  national emergency grant funds are used at the national level, we reviewed  guidance issued by Labor and reports issued by Labor’s Office of Inspector  General (OIG), state agencies, and Labor contractors. We also interviewed  the OIG official responsible for an audit of WIA’s performance data and  the officials from Social Policy Research Associates, the Labor contractor  responsible for compiling the WIASRD. In addition, we performed  electronic tests of the program year 2001 WIASRD data, including  conducting frequencies and cross-tabulations, comparing results with  those in published reports and identifying missing or incorrect values.
To determine the completeness of data on national emergency grants in  the WIASRD, we compared states’ data in the program year 2001 WIASRD  against a list of states that had received one or more regular, dual  enrollment, or disaster grants at least one year prior to the end of the  reporting period for the 2001 WIASRD or by June 30, 2001. This analysis  assumes that some participants in a grant program begun in program year  2000 would have exited during program year 2001. For states for which the  2001 WIASRD did not contain data on grant participants although they had  received grants in program year 2000, we contacted the states to confirm  that participants served with grants had exited in program year 2001.
We determined that the WIASRD data elements pertinent to this report  were not sufficiently reliable for our purposes. We have discussed the data  reliability issues throughout the body of the report.
section_title: Interviews with Labor Officials
paragraphs: To obtain information on the process for awarding national emergency  grants, we conducted interviews with Labor officials in the Office of  National Response and Office of Grants and Contracts Management. We  also interviewed officials in the Employment and Training  Administration’s (ETA) Office of Technology to obtain information on the  electronic system for managing the grant process. To obtain information  on reporting requirements and monitoring and oversight practices for the  national emergency grant program, we interviewed officials in the Office  of Field Operations. We also interviewed officials in all six Labor regions  who are responsible for monitoring and oversight of national emergency  grants. In Region 1, we interviewed both the Boston office and the New  York office.
To obtain information on Labor’s data validation initiative for national  emergency grants, we interviewed an official in ETA’s Performance and  Results Office and a contractor developing the technical components of  the initiative. We also attended a training session on the WIA data  validation initiative held in Labor’s San Francisco office for states and  local areas in Region 6.
section_title: Appendix II: Summary of Funds Awarded for Regular, Disaster, and Dual Enrollment Grants for Program Years 2000–2002
paragraphs: The amounts shown include national emergency grant funds awarded  during program years 2000-2002. This includes all initial grant awards and  incremental payments made during this time, including incremental  payments made for grants initially awarded prior to July 1, 2000. For  example, Arizona and North Dakota each received an incremental  payment for a regular grant awarded under the Job Training Partnership  Act (JTPA).
Alaska, Delaware, Hawaii, and Wyoming did not receive any regular,  disaster, or dual enrollment national emergency grants during program  years 2000-2002.
section_title: Appendix III: Average Number of Days Regular Grants Were Awarded, by State
section_title: Appendix IV: Comments from the Department of Labor
section_title: Appendix V: GAO Contacts and Staff Acknowledgments
subsections: section_title: GAO Contacts
section_title: Staff Acknowledgments
paragraphs: Yunsian Tai made significant contributions to this report in all aspects of  the work. In addition, Angela Anderson collected financial and program  oversight information from Labor headquarters and regional offices; John  Smale, Stuart Kaufman, and William Bates assisted in designing and  analyzing the national survey; Barbara Johnson and Paula Bonin assisted  in data reliability assessments; Jessica Botsford and Richard Burkard  provided legal support; and Corinna Nicolaou provided writing assistance.
section_title: Related GAO Products
paragraphs: Workforce Investment Act: Labor Actions Can Help States Improve  Quality of Performance Outcome Data and Delivery of Youth Services.  GAO-04-308. Washington, D.C.: February 23, 2004.
Workforce Training: Almost Half of States Fund Employment Placement  and Training through Employer Taxes and Most Coordinate with  Federally Funded Programs. GAO-04-282. Washington, D.C.: February   13, 2004.
National Emergency Grants: Services to Dislocated Workers Hampered  by Delays in Grant Awards, but Labor Is Initiating Actions to Improve  Grant Award Process. GAO-04-222. Washington, D.C.: November 14, 2003.
Workforce Investment Act: Potential Effects of Alternative Formulas on  State Allocations. GAO-03-1043. Washington, D.C.: August 28, 2003.
Workforce Investment Act: One-Stop Centers Implemented Strategies to  Strengthen Services and Partnerships, but More Research and  Information Sharing is Needed. GAO-03-725. Washington, D.C.: June   18, 2003.
Workforce Investment Act: Exemplary One-Stops Devised Strategies to  Strengthen Services, but Challenges Remain for Reauthorization.  GAO-03-884T. Washington, D.C.: June 18, 2003.
Workforce Investment Act: Issues Related to Allocation Formulas for  Youth, Adults, and Dislocated Workers. GAO-03-636. Washington, D.C.:  April 25, 2003.
Multiple Employment and Training Programs: Funding and  Performance Measures for Major Programs. GAO-03-589. Washington,  D.C.: April 18, 2003.
Workforce Training: Employed Worker Programs Focus on Business  Needs, but Revised Performance Measures Could Improve Access for  Some Workers. GAO-03-353. Washington, D.C.: February 14, 2003.
Older Workers: Employment Assistance Focuses on Subsidized Jobs and  Job Search, but Revised Performance Measures Could Improve Access to  Other Services. GAO-03-350. Washington, D.C.: January 24, 2003.
Workforce Investment Act: States’ Spending Is on Track, but Better  Guidance Would Improve Financial Reporting. GAO-03-239. Washington,  D.C.: November 22, 2002.
Workforce Investment Act: Interim Report on Status of Spending and  States’ Available Funds. GAO-02-1074. Washington, D.C.: September 5,  2002.
Workforce Investment Act: Better Guidance and Revised Funding  Formula Would Enhance Dislocated Worker Program. GAO-02-274.  Washington, D.C.: February 11, 2002.