Declining Resources: Selected Agencies Took Steps to Minimize Effects on Mission but Opportunities Exist for Additional Action
Published: 2016-12-20T00:00:00

Fast Facts:
How are agencies responding to smaller budgets?
Federal discretionary spending, which funds activities like law enforcement training and worker protection programs, declined by about 12% between fiscal years 2010 and 2015.
We looked at the efforts of three federal agencies to manage their declining resources by:
1) Leading from the top e.g., reorganizing staff to better deal with workloads,
2) Using data analytics to guide decisions e.g., making data-driven process improvements, and
3) Reducing costs e.g., consolidating real property.
We recommended three ways to enhance their efforts and developed a framework that other agencies can use.

Highlights:
section_title: Why GAO Did This Study
paragraphs: Federal discretionary appropriations declined by roughly 12 percent between FY 2010 and 2015. To better understand issues agencies face in an environment of declining resources and how agencies could address them, GAO developed a framework in 2012 for examining agencies' efforts to manage declining resources.
GAO was asked to examine the specific actions agencies are taking to manage declining resources and the effects on services to the public. This report examined (1) to what extent selected agencies' actions to manage in an environment of declining resources aligned with GAO's framework and (2) the effects, if any, declines in discretionary spending after 2009 had on services to the public at selected agencies.
GAO applied its framework to three agencies selected based on budget data from FY 2010 through 2014. For the larger agencies (EPA and ETA), GAO selected two programs within each agency for review. GAO reviewed agency documents; and interviewed agency officials, program partners, and external stakeholders.
section_title: What GAO Found
paragraphs: The three selected agencies GAO reviewed for this report—the Employment and Training Administration (ETA), Federal Law Enforcement Training Centers (FLETC), and the Environmental Protection Agency (EPA)—each took a number of different approaches to manage declining resources that aligned with the three key themes outlined in GAO's framework. For example:
Top Management Should Lead Efforts to Manage Declining Resources. ETA's Office of Foreign Labor Certification top management led efforts to ensure the agency maintains capacity to achieve its mission by taking steps to restructure its workforce to better use existing staff to address changes in workload. This includes cross-training its workforce to achieve greater interoperability of employees among its three processing centers.
Data Analytics Should Guide Decision Making. EPA used Lean Six Sigma, a data-driven process-improvement methodology, to evaluate agency processes and identify opportunities to make them more efficient. For example, EPA's Office of Pesticide Programs reported that it reduced the time it takes to post pesticide product labels, which provide critical information about proper use and handling of pesticides.
Agencies Should Develop Cost-Cutting and Cost-Avoidance Strategies. FLETC reported that in FY 2013 and 2014 the agency reviewed its service contracts to identity potential cost avoidance opportunities. As a result, FLETC reported avoiding roughly $8 million out of $81 million in service contracts by reducing or eliminating nonessential services, such as reducing hours for the information technology (IT) service desk support and consolidating security guard services.
However, opportunities exist for top management at selected agencies to take additional actions to ensure they maintain capacity to achieve their missions and avoid costs. For example, FLETC is working to develop an Online Campus initiative, which would provide distance-learning opportunities and represents a potential long-term cost avoidance strategy that could help the agency maintain capacity to provide necessary law enforcement training. However, FLETC has not yet finalized its plan for the Online Campus with steps and timeframes needed to ensure successful implementation. At ETA, the most recent recession tested the Unemployment Insurance (UI) program's capacity, but ETA has yet to systematically identify lessons learned to help ensure UI maintains capacity should workload increase again. Following through on these actions could help agencies better manage limited resources and maintain capacity to achieve their missions.
Some agency officials and stakeholders reported that actions taken by the selected agencies affected timeliness and service level for some programs. While some stakeholder organizations commended the agencies for their efforts to continue to achieve their missions with fewer resources, they also noted that some actions had negative effects on individuals, businesses, states, localities, and others. The effects they cited included delays in receiving unemployment benefits and disruptions to businesses resulting from delays in processing foreign labor applications and pesticide registration applications.
section_title: What GAO Recommends
paragraphs: GAO makes three recommendations, including that FLETC finalize its plan for the Online Campus and ETA systematically identify lessons learned by the UI program that could help it respond to future economic downturns. FLETC concurred. ETA did not state whether it concurred or not but stated it believed the recommendation does not fully recognize its existing efforts. GAO continues to believe the recommendation is valid as discussed in the report.

section_title: Letter
paragraphs: Discretionary appropriations are budgetary resources provided in and  controlled through appropriations acts. They fund many of the activities  commonly associated with the federal government. These include the  day-to-day operations of executive branch agencies as well as national  defense, federal law enforcement activities, food safety, environmental  protection, and investment-oriented spending on infrastructure and basic  research. Discretionary appropriations declined by roughly 12 percent  between fiscal years 2010 and 2015. In 2011, Congress enacted the  Budget Control Act of 2011 (BCA), which amended the Balanced Budget  and Emergency Deficit Control Act of 1985 (BBEDCA), to impose  spending limits (or caps) on discretionary appropriations for fiscal years  2012 through 2021. The Congressional Budget Office (CBO) projects  that under these limits, discretionary spending will continue to decline as  a share of the economy and within the next 5 years will be lower as a  share of gross domestic product (GDP) than any level seen in the last 50  years. In this budget environment, agencies may need to look for  opportunities to reconsider priorities, determine how and in what areas to  make tradeoffs, and evaluate the potential immediate and long-term  effects of these decisions. Declining discretionary resources can prompt  agencies to re-examine core missions, increase efficiency, and innovate.  Effectively managing the resources that agencies have available is vital to  ensuring that they can continue to effectively achieve their missions and  deliver services to the public.
Given the recent budget trends and anticipated future fiscal outlook, you  asked us to examine the specific actions agencies are taking to manage  with declining resources. This includes some of the specific activities that  agencies reduced and any effects on external stakeholders in terms of  service and program delivery. This report examined (1) to what extent  selected agencies’ actions aligned with our framework for managing in an  environment of declining resources and (2) the effects, if any, declines in  discretionary spending after 2009 had on services to the public at  selected agencies.
To address our first objective, we applied a framework that we first  developed in 2012 for examining agencies’ efforts to effectively manage  in an environment of declining resources. We developed this framework  to better understand the issues agencies face in an environment of  declining resources and how agencies could address them. This  framework is based on (1) an extensive review of relevant literature,  including our prior work; (2) interviews with high-level budget experts,  including academics, Office of Management and Budget (OMB) staff,  agency chief financial and budget officers, and former congressional staff  to discuss their experiences with budgeting in an environment of declining  resources; and (3) a forum of experienced budget practitioners who  discussed principles to guide agencies’ respective decision making while  managing in an environment of declining resources, as well as specific  actions that could be taken at federal agencies to implement funding  reductions while still achieving their mission. The forum’s participants  represented a cross-section of federal agencies including the  Departments of Agriculture, Commerce, Defense, and Homeland  Security; the Internal Revenue Service; and the U.S. Merit Systems  Protection Board.
Based on the methodology described above, we identified three key  themes for managing in an environment of declining resources. We also  identified subthemes with examples of activities that align with each of the  major themes. These examples offer approaches that agencies could  apply to manage their own limited resources. For the purposes of this  report, we also reviewed our relevant reports released since the  framework was first developed. We then discussed this framework with  the agencies selected for this review. After assessing this information, we  determined that the criteria established in the framework are still current,  valid, and relevant and applicable for answering the research objectives  of this report.
To accomplish our objectives, we made a purposeful selection of three  agencies. Each of the selected agencies experienced a decline between  11 and 25 percent in “gross discretionary budget authority” from fiscal  years 2010 through 2014 (the most recent year of actual data available at  the time of our agency selection). To understand the differential effects  of declines, we identified agencies that serve different national priorities  (as indicated by budget function data from the OMB Max database) and  also considered agencies’ appropriation account structures, information  technology (IT) investments, and other factors. The three agencies we  selected were:
Department of Homeland Security’s (DHS) Federal Law  Enforcement Training Centers (FLETC). FLETC’s mission is to  provide basic, advanced, specialized, and in-service requalification  training for law enforcement personnel in more than 90 federal law  enforcement agencies as well as international, state, local, and tribal  law enforcement agencies in areas such as the use of force,  defensive tactics, and constitutional law.
Department of Labor’s (Labor) Employment and Training  Administration (ETA). ETA’s mission is to provide job training,  employment, labor market information, and income maintenance  services primarily through state and local workforce development  systems.
Environmental Protection Agency (EPA). EPA’s mission is to  protect human health and the environment. This includes  administering programs that prevent air, water, and land pollution, as  well as developing and enforcing environmental regulations.
Given its relatively smaller size, we included all FLETC activities in the  scope of our review. Given the relatively larger size of ETA and EPA and  the scope of their work, we selected two programs within each of these  agencies for in-depth review. Programs were selected based on the  overall amount of discretionary resources (discretionary budget authority)  for the program or account, the magnitude of reductions in enacted  budget authority from 2010 to 2015 (the most recent year of actual data  available from the agency at the time of our program selection), input  from agency officials at selected agencies, and our experience with  programs and accounts from past and ongoing work. We also considered  types of service delivery mechanisms such as grants and direct services  represented across all selected programs. Overall, we selected:  1.  Federal Law Enforcement Training Centers (FLETC)  2.  ETA’s Office of Foreign Labor Certification (OFLC) Federal  3.  ETA’s Unemployment Insurance (UI) State Administration  4.  EPA’s Office of Pesticide Programs (OPP)  5.  EPA’s State and Tribal Assistance Grants – Categorical Grant:  Nonpoint Source (Section 319 program)
We reviewed budget and performance data, guidance from management,  and other agency documents for each of the programs. This included  documentation of the effects of resources on program outputs. However,  a number of factors including overall program management can affect  program outputs, making it difficult to isolate the specific effects of  declining resources on outputs. We traced budget data provided by  agencies to data from the President’s budget when possible. We  reviewed performance data from agencies’ annual performance reports  and compared it to other data sources for consistency. We assessed the  reliability of computer-processed data sources that we reviewed by using  electronic data testing, interviewing agency officials, and reviewing  related documentation. We found the data to be sufficiently reliable for the  purpose of our report.
We interviewed officials from budget offices as well as human capital, IT,  and procurement offices within each agency about actions taken to  manage declining resources and any related effects on internal  operations. We included these three functions because they are  performed widely by agencies across the federal government. We also  interviewed officials responsible for managing selected programs  regarding any effects of declining resources and actions to manage those  declines on program implementation and performance goals.
To further address our second objective, we interviewed a purposeful,  nongeneralizable selection of two to three partner organizations and other  external stakeholder organizations for each program. These stakeholders  provided additional information on how agencies’ efforts to manage  declining discretionary spending affected program recipients and  customers. Partner organizations and stakeholders were selected based  on our past work at selected programs and input from officials within  selected programs. The stakeholder organizations were the American  Immigration Lawyers Association, the Association of Clean Water  Administrators, BASF (a private sector chemical company), the  Consumer Specialty Products Association, Farmworker Justice, the  National Association of State Workforce Agencies, the National  Association of Conservation Districts, the National Employment Law  Project, the Small and Seasonal Business Legal Center, U.S. Customs  and Border Protection, U.S. Secret Service, and the Transportation  Security Administration. We corroborated information and data provided  by program partners and stakeholder organizations when possible. We  reviewed reports and other relevant information prepared by the  stakeholder organizations when available.
We conducted this performance audit from July 2015 to December 2016  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.
subsections: section_title: Background
paragraphs: In 2011, Congress enacted the Budget Control Act of 2011 (BCA), which  amended the Balanced Budget and Emergency Deficit Control Act of  1985 (BBEDCA), to impose spending limits (or caps) on discretionary  spending for fiscal years 2012 through 2021. These initial caps were  intended to reduce projected spending by about $1 trillion. Because  additional legislation to reduce the deficit by at least another $1.2 trillion  through fiscal year 2021 was not enacted, additional deficit reduction  procedures were triggered under BCA. This included further annual  downward adjustments to discretionary spending caps through fiscal year  2021. Congress and the President have since amended BBEDCA to  allow for increased discretionary appropriations in certain years. Looking  forward, nominal discretionary spending under the statutory caps grows in  future years. However, the Congressional Budget Office projects that  when measured as a share of the economy, discretionary spending is  projected to be lower in 2021 than at any point in the last 50 years (see  figure 1).
As we have previously reported, state and local governments continue to  face their own fiscal challenges. Our simulations of long-term fiscal trends  for state and local governments suggest that they could continue to face  gaps between revenue and spending during the next several decades  that would require substantial policy changes to address. This suggests  that the federal government’s fiscal challenges cannot be adequately met  over the long term by shifting spending to state and local governments.
subsections: section_title: Amount of Funding Reductions Varied by Agency and Program
paragraphs: Our analysis of federal budget data shows that the overall amount of new  discretionary resources (or budget authority) declined by roughly 12  percent from fiscal year 2010 to 2015. The amount of actual reductions or  increases in discretionary resources for individual agencies and programs  is determined through the annual appropriations process, in which  policymakers make choices between competing national priorities. The  agencies and programs we selected for review all experienced a decline  of at least 9 percent in newly appropriated discretionary resources from  fiscal year 2010 to 2015. Figure 2 compares declines at select agencies  with the changes in newly appropriated discretionary resources for large  cabinet-level departments and for the federal government overall during  this period.
A number of other factors beyond changes in the amount of budgetary  resources can also affect agencies’ ability to manage declining resources.  This includes the enactment of laws that impose new requirements on the  agency and changes in demand for services resulting from the expansion  or contraction of the broader economy. For example, the number of new  unemployment insurance claims increases during recessionary periods.  This increases state workload, which is funded through appropriations  from ETA’s State Unemployment Insurance and Employment Service  Operations account. The appropriation allows for additional funds to be  made available when workloads increase above those estimated in the  budget. However, according to ETA, during the 2007-2009 recession and  the slow recovery that followed, states faced challenges quickly  expanding capacity to process a record number of claims. In contrast,  ETA officials said that demand for foreign labor tends to increase during  periods when the economy is expanding, which affects the volume of  work at the Office of Foreign Labor Certification (OFLC). ETA reported  that OFLC’s overall application volumes were 84 percent higher in fiscal  year 2015 than in fiscal year 2010. Agency officials attributed this  increase in part to the recovering economy.
section_title: Missions of Selected ETA and EPA Programs
paragraphs: Table 1 provides an overview of the missions of selected programs at  EPA and ETA. As described above, given its relatively smaller size, we  included all FLETC activities in the scope of our review, and thus it is not  shown in the following table.
Appendixes I through III provide more detailed information on each  selected agency’s budget authority and certain performance measures.
section_title: Framework for Examining Agencies’ Efforts to Manage Declining Resources
paragraphs: The framework that we developed in 2012 for examining agencies’ efforts  to effectively manage in an environment of declining resources outlines  the following three key themes to guide agency officials in managing  declining resources:  1.  Top management should lead efforts to manage declining resources.  2.  Data analytics should guide decision making.  3.  Agencies should develop both short- and long-term, cost-cutting and  cost-avoidance strategies.
Figure 3 below provides illustrative examples of activities that address  each theme and subtheme. These themes are not mutually exclusive and  in many ways help reinforce one another. For example, robust and  reliable data analytics can inform top management’s efforts to lead  transformations within agencies that result in cost avoidance. Further, the  examples in this framework, while not exhaustive, can help guide  agencies through budget challenges by providing strategies for leading  from the top, using data analytics to guide decisions, and reducing costs  now and in the future.
section_title: Selected Agencies’ Approaches Aligned with Key Themes from the Framework but Additional Opportunities Exist to Manage Declining Resources
subsections: section_title: Selected Agencies’ Approaches to Managing Declining Resources Aligned with Key Themes from the Framework
subsections: section_title: Key Theme: Top Management Should Lead Efforts to Manage Declining Resources
paragraphs: Agencies must continue to achieve their missions with declining  resources. As outlined in our framework, to accomplish this, top  management should lead agencies’ efforts to manage declining  resources. For example, top management should take actions to ensure  the agency maintains the capacity—including the agency’s workforce and  physical capital such as infrastructure and IT—to achieve its mission. As  part of this, they could consider clearly defining and communicating the  key principles and priorities for guiding budget reductions. Top  management should also reexamine the agency’s core mission. For  example, they may want to reexamine programs and organizational  structures to determine if the current environment still warrants continuing  certain programs and activities. Top management should also consult  with Congress and involved stakeholders and take into consideration how  budget decisions align with congressional goals, constituent needs, and  industry concerns.
As shown in figure 4, top management at selected agencies led efforts to  achieve their respective missions with fewer resources in various ways at  both the agency and program level. For example, top management at  OFLC and EPA initiated comprehensive reviews of the workforce to  identify skills gaps and reshape the workforce to align with evolving  mission needs and budgetary limitations. FLETC’s Director and executive  team clearly defined key principles and priorities for guiding budget  reductions and communicated them to agency employees and  stakeholders.
As described in our framework, when deciding how to implement reduced  appropriations, data analytics should guide agency officials’ decision  making. Data analytics involves turning data into meaningful information  accessible to budget and program staff and agency leaders to help them  make informed decisions. This should include activities such as reviewing  operations to achieve additional efficiencies and assessing the availability  and quality of data. As a part of this, agencies may want to consider using  data analytics to set specific cost-savings goals and monitor progress  toward achieving those goals. Agencies should also connect performance  information to the budget. Linking strategic goals with related long-term  and annual performance goals and with the costs of specific activities that  contribute to those goals, for example, can help provide a basis for  informed tradeoff decisions. As shown in figure 5, selected agencies used  data analytics to help increase efficiency, manage workflow, or monitor  the effects of cost-avoidance efforts on their respective missions.
As described in our framework, when facing declining resources,  agencies should employ strategies that consider both short and long-term  cost cutting and cost avoidance strategies. Cost savings are a reduction  in actual expenditures below the projected level of costs to achieve a  specific objective. Cost avoidance is an action taken in the immediate  time frame that will decrease costs in the future. Cost-cutting and cost- avoidance strategies should encompass both short- and long-term  solutions. Agencies may want to consider (1) instituting an employee- input cost saving incentive program, (2) using capital funds and other  mechanisms to support upfront investments, (3) expanding the use of  shared services for functions that can be shared within or among  agencies, or (4) reducing the size and cost of real property through  consolidation. OMB has initiated a number of efforts to help agencies  cut and avoid costs.
Selected agencies reported implementing a broad range of short- and  long-term strategies to cut or avoid costs. Balancing these strategies can  provide agencies with the flexibility to weigh short-term needs and make  adjustments towards achieving their long-term goals. Selected agencies  reported taking short-term actions aimed at immediate cost savings. For  example, given the limited resources available to hire additional  permanent staff to process labor certification cases, ETA reported using  temporary seasonal contract staff during peak filing periods to help  address increases in filing volume in various temporary programs. In  doing so, ETA reported that it saved $1 million compared to the cost of  maintaining an equivalent staffing level year-round. Selected agencies  also reported implementing a broad range of long-term strategies to avoid  costs, such as reducing their real estate footprint and strategically  sourcing goods and services. Figure 6 provides illustrative examples of  selected agencies’ cost-cutting and cost-avoidance initiatives.
section_title: Opportunities Exist for Selected Agencies to Further Apply the Themes of the Framework to Manage Declining Resources
subsections: section_title: Opportunities Exist at Selected Agencies for Top Management to Take Additional Actions to Ensure Agencies Maintain Capacity to Achieve Their Missions
paragraphs: While top management at the selected agencies have taken some steps  to manage declining resources consistent with our framework, additional  actions could address anticipated future challenges and help ensure that  agencies continue to have the capacity to achieve their missions.
FLETC. Top management at FLETC identified long-term strategies for  better managing resources but have not developed or finalized plans  with specific goals and resources needed to implement some of these  strategies. Some actions could help ensure that the agency avoids  longer-term costs and maintains capacity to achieve its mission.  FLETC anticipates increased training requests for fiscal year 2017  and beyond but has not strategically planned for this surge. According  to FLETC officials, in the near term, the anticipated increase is in part  due to pent up demand following sequestration in fiscal year 2013 and  budget cuts from previous fiscal years. Partner organizations are  expected to increase law enforcement hiring and therefore demand  for training. Looking out further, according to FLETC officials, demand  for training is expected to increase to address the anticipated  retirement of the large cohort of law enforcement officers hired in the  wake of the September 11 terrorist attacks. However, FLETC has not  planned strategically for how it will address the anticipated surge. A  multi-year strategic plan that articulates the fundamental mission of  the agency and lays out its long-term goals for implementing that  mission, including the resources needed to reach these goals, for  example, could help FLETC continue to have the capacity to fulfill its  mission of providing law enforcement training and address increased  demand for training.
FLETC’s most recent strategic plan covered fiscal years 2008 through  2013. FLETC officials told us that its expired strategic plan, while  dated, was relevant and useful to the agency. Nonetheless, FLETC  reported that, in March 2016, the agency began revising this plan and  in August formed a Strategic Planning Working Group to complete a  strategic plan covering fiscal years 2016-2018 by December 31, 2016.  However, fiscal year 2016—which represents one-third of the  strategic plan—has already elapsed, and fiscal year 2017 is already  underway. Further, a strategic plan that extends through fiscal year  2018 can assist the agency in formulating its 2018 budget but will be  less useful for assessing longer-term resource needs. OMB’s  guidance for implementing the GPRA Modernization Act of 2010,  contained in Part 6 of its Circular No. A-11, states that strategic goals  and objectives should be established for a period of not less than 4  years forward from the fiscal year in which it is published. Although  the act’s requirements apply at the departmental levels, we have  previously reported that they can serve as leading practices at other  organizational levels, such as component agencies, offices, and  programs. Finally, it is unclear based on the excerpts that FLETC  provided to what extent the revised strategic plan addresses the  anticipated surge in training needs.
In addition, FLETC is in the process of developing an Online Campus  that can provide distance learning opportunities for federal law  enforcement officers and supplement the in-person training they  receive at FLETC campuses. Consistent with our framework, the  Online Campus represents a potential long-term cost avoidance  strategy that could help the agency maintain capacity to provide the  necessary law enforcement training, potentially at a reduced cost to  both FLETC and its partner organizations. FLETC officials noted that  when complete, the Online Campus could reduce the travel and  lodging costs associated with in-person training and help FLETC meet  growing demand for training in the future.
While the Online Campus initiative is included in the six overall priority  areas established by the FLETC Director and executive team, FLETC  has not finalized a plan for the Online Campus initiative that clearly  identifies the steps needed to achieve its goals. In October 2016,  FLETC provided us with a draft plan that outlines some activities and  milestones for the Online Campus initiative as well as some broad  cost savings goals. According to FLETC officials, the agency plans to  complete the plan by December 31, 2016, as part of its larger  strategic planning effort. The first year of this strategic plan has  passed, but FLETC did not provide evidence that the agency  achieved milestones, including the cost savings and enrollment goals,  established for that year. Furthermore, it is unclear where FLETC will  identify the necessary resources to fund the Online Campus initiative  within its existing budget. FLETC has funded the Online Campus  initiative with annual appropriations and has in the past used funding  from its other cost avoidance efforts to support this initiative. FLETC  officials reported that they are currently working on a funding model  for the Online Campus initiative. A final, up-to-date plan could allow  FLETC management to monitor progress toward these activities and  milestones and ensure that the Online Campus initiative helps FLETC  avoid longer-term costs and maintain capacity to achieve its mission.
ETA. Top management at ETA has begun to take actions to help  ensure that the UI program maintains capacity to achieve its mission  with reduced resources, such as reengineering the UI program’s  accountability and performance measurement process (as previously  described in figure 4). While ETA officials and stakeholder  organizations raised concerns about the Unemployment Insurance  program’s capacity to adequately respond to the next recession, ETA  reported that it routinely communicates with states through meetings  hosted by ETA's Regional Offices and participates in national  conferences and that these and other efforts helped inform a number  of cost-neutral proposed reforms to the UI program included in the  President’s Budget for fiscal year 2017. These reforms are intended in  part to make the UI program more responsive to economic downturns.  For example, the President’s Budget proposed a new Extended  Benefits program to provide up to 52 weeks of additional federally- funded benefits for states seeing increased and high unemployment,  with the number of weeks tied to the state's unemployment rate.
Although ETA has taken steps to communicate with states, ETA’s  data collection efforts have not focused on systematically identifying  lessons learned from the most recent recession to help ensure the UI  program maintains capacity in response to a future economic  downturn and related issues, such as the states’ ability to manage  changes in workload. In addition to regular communications with the  states, ETA officials said that they regularly monitor program activities  through a wide array of data collection, and that these efforts have  helped the agency identify lessons from the effects of the most recent  recession on the federal-state Ul system. Officials, however, also  noted that lack of capacity and competing priorities have prevented  the agency and state UI programs from systematically gathering  lessons learned by states from this recession. ETA officials said that  they intend to support states gathering and sharing lessons learned in  the future when their workload stabilizes.
Systematically evaluating the challenges that states faced in  administering the UI program during the recent recession—such as  rapidly ramping up staffing at the start of the recession and ramping  down as the economy recovered—and identifying and incorporating  any lessons learned from this experience into a longer-term strategy  could help further prepare the program for the next economic  downturn. ETA officials reported that as the economy recovered and  federal funding for state administration of the program declined  following the recession that began in 2007, states reduced the  number of employees, many with extensive knowledge and  experience that state offices will have difficulty replacing in the future.  ETA reports that many state employees with extensive knowledge  have already left state unemployment insurance offices. If actions are  not taken promptly, opportunities to gather key lessons from the most  recent recession may be missed to help ensure capacity is maintained  in the next economic downturn.
In addition to OFLC workforce efforts underway, ETA identified two  broad strategies for maintaining OFLC’s capacity over the longer- term. Both would require congressional action (see text box). While  these legislative proposals, if enacted, would provide OFLC with  additional funding, in an era of declining resources, agencies cannot  rely solely on increased funding to continue to achieve their mission.  ETA officials noted that efforts to reorganize and cross-train OFLC  workforce (described in figure 4) should help the agency maintain  capacity with existing resources.
Employment and Training Administration (ETA) Legislative Proposals for  Maintaining the Office of Foreign Labor Certification’s (OFLC) Capacity  Proposed legislative changes for new fee. As part of the President’s Fiscal Year 2017  budget request, ETA requested authority to collect user fees from employers in an  amount that would cover the costs of operating the H-2A, H-2B, permanent labor  certification, and prevailing wage programs. According to ETA, transitioning to a fee- based funding structure would improve case-processing services by creating a market-  structure that links the supply of resources with the demand for case-processing services.  ETA noted that the H-1B program administered by OFLC is already supported by user  fee collections and has experienced no backlogs despite a reported 76 percent increase  in applications between fiscal year 2010 and fiscal year 2015. ETA further noted that the  Citizenship and Immigration Services also already has the authority to collect user fees  for its operational role in each of the programs for which OFLC is requesting similar  authority. OFLC has developed a pricing structure conceptually similar to the existing  Citizenship and Immigration Services user fee system that, according to ETA, would  replace the need for annual appropriations into the future within several years of  receiving enabling authority. Congressional action would be needed to authorize OFLC to  collect and use (obligate) this new user fee. ETA officials said that they had received  technical inquiries from Congress about the proposal, but that they had not received  indication of congressional support from the current Congress to know whether the  proposed user fee proposal constituted a viable long-term plan.  Proposed one-time funding. ETA reported that another strategy for managing  resources over the longer-term is a proposal for an additional $20 million in one-time  funding to be made available for fiscal years 2017 and 2018 to process foreign labor  certifications. According to ETA, these funds would be used to support processing in the  H-2B and H-2A programs by investing in infrastructure and human capital to help meet  expanding service requirements in future filing cycles. ETA noted that in fiscal year 2016,  Congress responded to a backlog in another program—permanent foreign labor  certifications—by providing $13 million in additional budget authority specifically to  process these certifications. According to ETA, these additional resources helped the  OFLC reduce the backlog by 51 percent as of September 26, 2016.
EPA. Our work found that EPA top management also had  opportunities to better manage declining resources by further  addressing our prior recommendations. For example, in 2012 we  reported that the way EPA measures the effectiveness of states’ NPS  pollution programs has not consistently ensured that EPA select  projects likely to yield measurable water quality outcomes. We  recommended at the time that EPA emphasize measures that (1)  more accurately reflect the overall health of targeted water bodies  (e.g., the number, kind, and condition of living organisms) and (2)  demonstrate states’ focus on protecting high-quality water bodies,  where appropriate. In a July 2016 report, we noted that EPA officials  said that the agency is planning to add one of the measures we  recommended but has not yet had the time and resources to do so.  EPA officials said the agency plans to begin developing a new  measure for the protection of healthy water bodies this year and to  establish a workgroup focused on this measure in fiscal year 2017.
We found that funding for Section 319 NPS pollution grants declined  by more than 20 percent from 2010 to 2015. EPA officials said that it  would be difficult to isolate the effects of declining resources on  environmental outcomes using existing performance measures for the  Section 319 NPS pollution program. According to EPA officials, there  are many activities that contribute to the restoration of polluted  waterways and improve water quality. Some of these are EPA  programs, others are state programs, and yet others may be other  federal programs. In addition, EPA officials said that there is a time  lag between changes to funding for Section 319 NPS grants and  when effects from the changes take place. Implementing our prior  recommendation could provide top management with an opportunity  to better connect performance information to the budget, which could  help the agency understand how resource constraints affect program  outputs to guide decision making in the future.
We testified earlier this year that, as of May 23, 2016, we had  identified 51 open recommendations related to management and  operations that we made to EPA since 2006 that had not been fully  addressed and another 36 open recommendations related to water  issues such as nonpoint source pollution. Implementing these  recommendations could help EPA improve efficiency and avoid costs  to better manage their limited resources. For example, in 2008, we  identified an error in EPA’s calculation of reimbursable indirect costs  for hazardous waste cleanup. EPA acknowledged the error and  published revised indirect cost rates. As a result, we estimated, in  2010, that EPA had recovered or would recover $42.2 million.
section_title: Selected Agencies Have Ongoing Efforts to Expand Use of Data Analytics and Further Identify and Protect Upfront Investments
subsections: section_title: Data Analytics
paragraphs: Selected agencies reported using data analytics to some extent and have  identified additional opportunities to improve or expand their use of data  analytics to better manage resources. As outlined in our framework, to  use data analytics effectively, it is important for agencies to know what  data are available within the agency. Agencies then can determine if  those data are sufficiently granular, reliable, timely, accessible, and  transparent. For example, FLETC has made initial investments in data  analytics and is planning to further expand its use of data analytics. As  discussed above, one of the FLETC Director and executive team’s top  priorities is to enable FLETC to make data-driven decisions. FLETC  officials reported that as the amount of data available about FLETC  operations and training continues to grow, the skills required to process  and analyze those data become more critical. FLETC’s overall goals for  data analytics include unifying data sources to ensure data integrity,  standardizing registration processes to ensure consistent data,  establishing governance structures and processes to identify and share  business data, and expanding use of business analytics in organizational  decision making. FLETC’s data analytics team is in its early  developmental stage. Thus far, the agency has dedicated two positions to  begin both the strategic and operational work of understanding what  questions can realistically be answered with the agency’s data and how  those answers should be communicated. According to FLETC officials,  the team is focusing initially on training-related activities. FLETC plans to  use data analytics to assist in scheduling instructor leave and  professional development during periods of lower instructional workload.
These efforts could help the agency identify opportunities to better  manage its existing resources through further efficiencies and cost  avoidance.
section_title: IT Investments
paragraphs: Selected agencies also have ongoing efforts to further identify and protect  upfront investments in areas such as IT to increase efficiency and avoid  longer-term costs. We have previously reported that IT investments  across the federal government are becoming obsolete and the legacy  systems that many agencies still use may become increasingly more  expensive to maintain. Protecting investments in new IT systems can  help agencies avoid longer-term costs. For example:  ETA. ETA officials and stakeholders reported that OFLC could  achieve increased efficiencies and functionality through modernizing  IT investments. For example, stakeholders noted that OFLC does not  have a reliable system for tracking the status of visa and immigrant  applications as its other federal partner agencies do. According to  ETA, OFLC has used its existing funds to make incremental  improvements in existing systems while planning to replace its two  aging electronic case processing systems. For example, the  requirement to scan documents into OFLC’s integrated case  processing system (iCERT) significantly adds to workload and until  recently was the only way to ensure that analysts could work from  home without taking paper files to their residence in the current  telework environment. According to ETA, earlier this year, OFLC  enabled employer applicants to upload some documents into the  iCERT system directly, saving the time and effort required for OFLC  staff to scan those documents into the system.
OFLC is also in the early stages of an electronic case processing  transformation plan that it recently initiated with the long-term goal of  replacing the current antiquated and unreliable electronic case  processing applications with a single, integrated solution for all labor  certification programs. As an early step, ETA evaluated the current  state of OFLC’s case processing systems and developed  recommendations for how to reduce processing times, improve  processing efficiency, improve decision quality and consistency, and  increase ease of use. ETA acknowledged that creating and installing  a single replacement platform will require significant funding. OFLC  said that it has contingency plans that will enable the organization to  continue this IT development at a slower pace without substantial  additional funding but did not provide specific information on how this  would be accomplished.
EPA. In 2013, we reported that EPA’s Office of Pesticide Programs  (OPP) faced a challenge in managing and tracking key information  related to conditional registrations of pesticides, in part because  reviewing each pesticide registration file is time-consuming and,  depending on the pesticide, may take from a few hours to a few days  to complete. We recommended that EPA complete plans to  automate data related to conditional registrations to more readily track  the status of these registrations and related registrant and agency  actions and identify potential problems requiring management  attention. During our review, agency officials reported that EPA had  begun developing new IT infrastructure but more work is needed  before a functional tracking system is in place. Currently, most of the  work to review conditional registrations is done by employees who  review large volumes of printed materials that are tracked through  Excel spreadsheets. EPA expects that completing automation will  create efficiencies by decreasing the number of hours needed to  review applications.
section_title: The Timeliness and Level of Service to the Public for Some Programs at Selected Agencies Declined, According to Agency Officials and Stakeholders
subsections: section_title: Agency Officials and Stakeholders Reported that Declining Resources Affected the Timeliness of Services for Some Programs at Selected Agencies
paragraphs: Despite agencies’ ongoing efforts to manage declining resources through  cost avoidance initiatives, improved efficiency, and other strategies, some  agency officials and some stakeholder organizations told us that declining  resources and the actions that agencies took to manage them, among  other factors, affected the timeliness of some services. In some  instances, stakeholder organizations commended the selected agencies  for their efforts to continue to meet their missions with fewer resources.  However, they also noted that it took agencies longer to provide certain  services, which negatively affected individuals, businesses, state  operations, and other federal agencies.
ETA Office of Foreign Labor Certification. According to ETA,  OFLC’s overall application volumes were 84 percent higher in fiscal  year 2015 than in fiscal year 2010, while the amounts appropriated to  process these applications decreased by roughly 9 percent. ETA  officials said that this—along with other factors such as new  requirements and temporary court-ordered work stoppages—affected  OFLC’s ability to meet timeliness measures for processing  applications. For example, under an Interim Final Rule released in  April 2015, OFLC is required to issue either a Notice of Deficiency or,  if the application is complete and meets requirements, to issue a  Notice of Acceptance within 7 business days of receiving the H-2B  application. According to ETA data, as of September 2016, the  average processing time for H-2B applications with no deficiencies in  2016 thus far was roughly 69 days and even longer for applications  with deficiencies. One stakeholder organization representing  employers who use the H-2B program to meet seasonal employment  needs—including for landscaping, forestry, and housekeeping—  conducted an informal survey of its members. Members reported that  delays in processing H-2B applications resulted in companies:  turning away work that they normally would have accepted or  postponing their scheduled opening date; and delaying starting work, resulting in some instances in the loss of  business contracts or challenges in meeting agreed upon deadlines  on existing contracts.
Employers estimated that delays cost them thousands of dollars in  missed work or increased overtime and, in some instances, cost them  hundreds of thousands in missed contract opportunities.
EPA Office of Pesticide Programs. Annual appropriations for OPP  declined by more than 14 percent from fiscal year 2010 through 2015.  Despite these declines, according to EPA officials, there was no  decline in the program’s outputs and outcomes for pesticide programs  because Congress made collections from Pesticide Registration  Improvement Act of 2013 (PRIA) user fees available to supplement  OPP’s annual appropriations. Specifically, in 1988, Congress  enacted annual registration maintenance fees to support the review of  existing pesticide registrations. In 2004, Congress enacted pesticide  registration fees, which are paid by registrants for some registration  actions, such as registering new uses of pesticides, to help pay for  registration costs. According to EPA, these fees were established to  both create a more predictable evaluation process for affected  pesticide decisions and to couple the collection of individual fees with  specific deadlines for pesticide registration decisions. Further, as  noted earlier, OPP reported improving the efficiency of some  processes, such as through Lean Six Sigma process improvements.
We found that data for pesticide registration decisions from fiscal year  2011 through fiscal year 2015 show both increases and decreases in  registration decision times depending on the category. Overall, the  average annual percentage of decisions completed on time has  decreased slightly during the period of our review from 99.7 percent in  fiscal year 2010 to 98.4 percent in fiscal year 2015. In fiscal year  2014, the average annual percentage of decisions completed on time  did drop to 85 percent, which EPA attributed to the October 2013  government shutdown.
Stakeholders that we spoke with noted that annual appropriations for  OPP fell below a minimum appropriation threshold established by  statute. Pesticide registration service fees may not be assessed for a  fiscal year unless Congress provides at least a set amount of annual  appropriations for certain OPP functions for that year. Nonetheless,  Congress has at times authorized EPA to assess pesticide  registration service fees for a given fiscal year notwithstanding the  minimum appropriations provision. One stakeholder organization told  us EPA management has done an outstanding job implementing  PRIA despite funding challenges. Nonetheless, this stakeholder  organization told us that reductions in annual appropriations affected  overall staffing levels at OPP and that average processing times  increased for certain types of registration decisions. For example,  based on EPA data, the average decision time for an application that  proposes to use a new food use active ingredient increased 214 days  from an average of 703 days in fiscal year 2011 to an average of 917  days in fiscal year 2015. The average decision time for an application  for amendments for conventional agricultural products requiring  scientific review increased 67 days, from an average of 276 days in  fiscal year 2011 to an average of 343 days in fiscal year 2015.  According to one stakeholder organization we spoke with, the  pesticide industry relies heavily upon timely and predictable  registration decision time frames. This allows manufacturers to  effectively market their new products to growers before their  respective growing seasons. According to this stakeholder  organization, slower timelines have resulted in uncertainty and slowed  innovation and growth for industry and can ultimately result in lost  revenue for the manufacturers of particular products if they are not  ready to be released until after the growing season.
FLETC. According to FLETC officials, FLETC’s capacity to  accommodate the increased demand for training in recent years is  reaching its limit and could increase waitlists and delay training for  partner organizations. FLETC serves as an interagency law  enforcement training organization for more than 90 federal partner  organizations as well as international, state, local and tribal law  enforcement agencies. According to FLETC officials, an improved  budget outlook for partner organizations increased law enforcement  hiring and therefore demand for training in recent years. FLETC  expects that demand for training will further increase in future years to  address the anticipated retirement of the large cohort of law  enforcement officers hired in the wake of the September 11 terrorist  attack. According to FLETC officials, capacity constraints resulted in  longer waiting lists for training or some partner organizations being  given less flexibility to make changes in their training schedule later in  the fiscal year. FLETC officials said that the agency has used  unobligated balances carried forward from prior fiscal years in which  actual training enrollment fell short of partner organizations’  projections, to help manage increased demand.  Partner  organizations that we spoke with credited FLETC’s recent efforts to  accommodate the increased demand in training by, for example,  shifting the training from one campus to another or honoring short- notice training support requests for additional classes. However, if  budgetary trends persist, FLETC officials said that the agency will  have fewer unobligated balances and therefore less flexibility to  manage future surges in training given the depletion in balances.
section_title: Declining Resources Affected the Level of Services for Some Programs at Selected Agencies According to Some Agency Officials and Stakeholders
paragraphs: In part due to declining resources, selected agencies provided states with  less funding to administer and implement joint federal-state programs,  such as unemployment insurance (UI) and Section 319 nonpoint source  (NPS) pollution. While federal agencies are responsible for monitoring  and overseeing these programs, states generally have some discretion in  how they implement reductions. As a result, the actions taken by  individual states can vary and the effects of those actions are difficult to  isolate. In addition, some states may choose to use other sources of  funding to offset a decline in funding for federal programs such as  unemployment insurance and nonpoint source pollution. This includes  both state resources and other federal sources. However, according to  agency officials and stakeholder organizations, the use of state funding to  supplement federal funding varied considerably. Some states provided no  resources for these programs while others established dedicated revenue  streams. For example, based on an annual survey of state workforce  agencies by the National Association of State Workforce Agencies, states  have provided between roughly $100 million and $362 million in  supplemental funding for state administration of the UI program between  2010 and 2015.
EPA Section 319 NPS pollution grants. Declining resources for  Section 319 NPS pollution grants to states coincided with fewer  projects to improve water quality in impaired waters. As of August  2016, a total of 671 projects were funded by Section 319 NPS grants  awarded in fiscal year 2014, compared to 883 projects in 2010.  While EPA regional offices administer the Section 319 NPS grants to  states and are responsible for grant and programmatic oversight,  states set their overall program priorities and devise processes for  selecting projects. One stakeholder organization that represents local  water conservation districts told us that the decreased funding for  Section 319 NPS grants puts more pressure on local government  entities and conservation districts to implement the program. This  stakeholder expressed concerns that there has not been an overall  commitment to funding the Section 319 program and other programs  to reduce hypoxia in areas such as the Mississippi River/Gulf of  Mexico watershed. Hypoxia can cause harmful algal blooms. For  example, in August 2014, Lake Erie experienced a harmful algal  bloom near the intake to the drinking water treatment plant serving the  city of Toledo, Ohio. Toledo issued a “do not drink or boil advisory”  that affected nearly 500,000 customers due to the presence of the  harmful substance cyanotoxin that exceeded the safe drinking water  threshold recommended by the World Health Organization.
ETA’s Unemployment Insurance Program. The UI program is  under a statutory objective requiring states to have methods of  administration that ensure the full payment of unemployment  compensation when due. Although the number of new initial claims  filed has declined steadily since late 2009, according to ETA  performance data, the percentage of first payments made within the  first 21 days has remained below 87.5 percent—the target for fiscal  year 2015. It averaged roughly 82 percent from 2010 to 2015. ETA  attributed states’ inability to meet the performance goal partially to  staff layoffs associated with reduced administrative funding caused by  lower workloads. According to ETA, workloads were lower because  temporary federal programs expired and the economy improved.  Figure 7 shows the percentage of first unemployment benefits paid  within 21 days.
Two stakeholder groups that we spoke with said that declining federal  funding contributed to increased wait times to process UI claims,  which can lead to delays in claims being paid on time and lower  customer satisfaction. This is consistent with our prior work, which  indicates that states are experiencing customer service challenges  related to insufficient staff, outdated IT systems, and limited funding.
State UI programs rely extensively on IT systems funded through  annual appropriations to administer the UI program and to support  related administrative needs. As we have previously reported, states  face challenges modernizing their IT systems to operate more  efficiently. These challenges include limited funding for  modernization efforts and limited resources for operating legacy  systems while implementing modernized systems. The majority of the  states’ existing systems for UI operations were developed in the  1970s and 1980s. However, it can be difficult to isolate effects of  declining resources from other factors such as limited staff with the  technical and project management expertise to manage system  modernization efforts. According to ETA, current appropriations to  fund state administration do not provide sufficient funding to enable  states to modernize UI information technology infrastructure, which  can cost many millions of dollars for each state. To address this  challenge with limited additional funding, ETA has invested available  resources to support consortia of states to jointly modernize their  systems with the goal of sharing development and ongoing  maintenance costs.
FLETC. While the partner organizations that we spoke with reported  no decline in the overall quality of FLETC training, some did note that  the quality and availability of housing and other on-campus  accommodations declined somewhat during this period. Specifically,  two partner organizations that we spoke with noted that lodging  capacity issues had resulted in some of the trainees being housed  outside of the FLETC campus in Glynco, Georgia—sometimes over  30 miles away. One partner organization said that this increased their  portion of the cost of training. Another partner organization noted  that trainees housed off site may miss out on the added benefits— such as getting acclimated to the agency culture—that come with  trainees being located together in the dormitories. Agency officials at  this partner organization described these added benefits as an  important part of the training experience.
section_title: Activities without a Statutory Deadline or Dedicated Fees Were Disproportionately Affected, According to Agency Officials and Stakeholders
paragraphs: Management at selected agencies reported that they prioritized activities  with a statutory deadline or activities where the agency had the authority  to collect and obligate user fees. As a result, they said that activities  without statutory deadlines or dedicated fees were disproportionately  affected by declining resources at these agencies.
ETA’s Office of Foreign Labor Certification. Delays and backlogs  in processing applications have increased more for ETA’s permanent  labor certification program than other applications for temporary labor  programs. Unlike other programs administered by OFLC, the  permanent labor certification program does not have a statutory  deadline dictating how long OFLC has to process applications. Based  on ETA data, the average processing time for permanent labor  certification applications not selected for integrity review in fiscal year  2015 was 195 days. The number of permanent labor certification  applications remaining to be processed at the end of the fiscal year  2015 increased almost 100 percent from 29,553 applications in 2010  to 58,926 applications. In comparison, ETA reported that 100 percent  of H-1B applications were processed within the target goal of 7 days  from the filing date in fiscal year 2015. Meanwhile, the backlogs for  processing H-2A and H-2B applications in 2015 were considerably  less than the backlog for the permanent labor certification program at  180 and 341 applications, respectively. However, overall application  volumes for these temporary visa programs were also considerably  less. According to representatives from an organization comprised of  immigration attorneys who represent employers and permanent labor  applicants, delays and backlogs in the permanent labor certification  program delayed businesses from hiring workers and adversely  affected business operations.
EPA’s Office of Pesticide Programs. EPA officials said that those  activities beyond the core pesticide registration work that Congress  has not authorized the agency to fund through user fees are most  likely to be affected by declining discretionary resources.  Stakeholders that we spoke with also provided examples of activities  that are not funded through user fees and, as a result, they said were  significantly delayed. For instance, EPA has not updated 18-year-old  testing guidelines addressing public health pests, such as bed bugs,  which one of the stakeholders we spoke with identified as a significant  problem in the United States. These guidelines specify methods for  generating the necessary data to submit to EPA for registering a  pesticide or setting a tolerance level (i.e., the maximum pesticide  residue allowed) or tolerance exemption for pesticide residues. One  stakeholder who represents an industry trade group said that it is vital  for these efficacy guidelines to be finalized so that industry can know  how and what to test for to ensure EPA accepts the study the first  time it is submitted. The representative also said that uncertainty has  slowed innovation for developing new products and renewing  registrations of existing, effective products. This uncertainty also  affects the availability of products. The need for some pesticides is  seasonal, and if the product development timeline is slowed down by  the need to repeat a study, manufacturers may miss the target  window for a particular season.
section_title: Conclusions
paragraphs: In response to declines in discretionary resources since 2010, the  selected agencies that we reviewed took a number of actions to continue  carrying out their respective missions that aligned with our framework.  These actions mitigated service disruptions and offer illustrative examples  that may help other agencies address their own budget challenges. It is  difficult to isolate the effects of budget reductions on the programs from  other factors, including overall program management, and even more  difficult to know what the direct consequences are for individuals,  businesses, and states and localities. Reduced timeliness and service  levels for some programs indicate that agencies may need to take  additional actions to manage their budgetary resources.
Building and maintaining a longer-term focus on managing declining  resources can help agencies’ top management ensure that they continue  to maintain the capacity to address emerging challenges and achieve  their mission. FLETC has been relying on a strategic plan that expired in  fiscal year 2013. FLETC began efforts this year to draft a strategic plan  that covers fiscal years 2016-2018, which it plans to complete by  December 2016. However, fiscal year 2016—which represents one-third  of the strategic plan—has already elapsed and fiscal year 2017 is already  underway. A strategic plan that extends through fiscal 2018 can assist the  agency in formulating its 2018 budget but will be less useful for assessing  longer-term resource needs. Longer-term strategic planning could help  FLETC maintain capacity to accommodate the anticipated increase in  demand for law enforcement training in the coming years to avoid any  delays for partner organizations in hiring or training the new law  enforcement officers that they need to achieve their missions.
Consistent with our framework, FLETC’s Director and executive team  have led efforts to manage declining resources in part by clearly  communicating key priorities for managing the agency’s budget to both  internal and external stakeholders. Some of these priorities, such as  investing in data analytics and developing an Online Campus, also align  with other key themes from our framework. For example, the Online  Campus represents a potential long-term cost avoidance strategy that  could help the agency maintain capacity to provide the necessary law  enforcement training, potentially at a reduced cost to both FLETC and its  partner organizations. However, FLETC has not yet finalized its plan for  the Online Campus with steps and timeframes needed to ensure it  successfully implements this priority action. Moreover, it is unclear where  FLETC will find the necessary sources within its existing budget. Without  a final plan, it may be difficult for management to monitor progress toward  these activities and milestones and ensure that the Online Campus  initiative helps FLETC avoid longer-term costs and maintain capacity to  achieve its mission.
During the period of our review, the UI program was still addressing the  implications of the most recent recession, which tested the program’s  capacity to rapidly increase its workload. States experiences managing  through this recession and its aftermath may offer important lessons  learned for making the program more resilient and better managing its  workload with existing resources. ETA officials said that they would help  share such lessons when workloads stabilize. The recession officially  ended in 2009, and temporary emergency unemployment benefits  expired in 2013. Given that ETA reports that many state employees with  extensive knowledge have left state unemployment insurance offices,  ETA should move promptly to systematically identify any lessons learned  from this experience that could help the agency maintain the program’s  capacity to respond to changes in workload during a future economic  downturn.
While we are not making any new recommendations to EPA as part of  this report, our work found that EPA top management also had  opportunities to better manage declining resources by further addressing  our prior recommendations. These recommendations could help the  agency improve efficiency and avoid costs to better manage its limited  resources. For example, completing plans to automate data related to  conditional pesticide registrations could make the staff-intensive review  process more efficient.
section_title: Recommendations for Executive Action
paragraphs: We are making three recommendations to help FLETC and ETA better  manage declining resources.
To help ensure that FLETC builds and maintains capacity to achieve its  mission with existing levels of resources over the longer-term, we  recommend that the Secretary of Homeland Security direct the Director of  FLETC to  1.  complete a revised strategic plan that encompasses the agency’s  long-term goals and objectives to address emerging challenges; and  2.  as part of its strategic planning process, finalize the plan, including the  steps and time frames, needed to further implement its Online  Campus initiative.
To help ensure that ETA continues to have the capacity to achieve its  mission and manage changes in demand for services resulting from  changes in the broader economy, we recommend that the Secretary of  Labor direct the Administrator of ETA to systematically gather and  evaluate information on the challenges that states faced administering the  unemployment insurance program during the recession that began in  2007—such as rapidly ramping up staffing at the start of the recession  and ramping down as the economy recovered—and identify and build  upon any lessons learned from this experience that could be broadly  shared to help the program respond to any changes in workload during a  future economic downturn.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to DHS, Labor, and EPA for review and  comment.
In written comments reproduced in appendix IV, DHS concurred with our  two recommendations for FLETC to (1) complete a revised strategic plan  that encompasses the agency’s long-term goals and objectives to  address emerging challenges and (2) as part of its strategic planning  process, finalize the plan needed to further implement its Online Campus  initiative. DHS discussed FLETC’s commitment to strategically planning  how it will manage its resources to address emerging challenges such as  anticipated surges in federal law enforcement training needs. DHS  indicated that FLETC is on target to complete a multi-year strategic plan  by December 31, 2016, and then implement a quarterly review process to  monitor progress toward achieving the plan’s goals and objectives. DHS  also reported that as part of FLETC’s forthcoming strategic plan, FLETC  plans to finalize objectives, strategies, and milestones for its Online  Campus that align with its anticipated resources. If implemented as  described, DHS’s actions would meet the intent of our recommendations.
A draft of this report contained a recommendation to the Secretary of  Labor to direct the Administrator of ETA to develop alternative options to  ensure OFLC’s workload demands can be met with existing resources in  the absence of legislative changes. In an email response to the draft  report, ETA provided additional documentation that included specific  steps and timeframes for its ongoing and planned efforts to improve the  efficient use of OFLC’s current resources, such as the reorganization and  cross-training of staff and replacement of its current electronic case  processing applications. Moreover, in oral comments on the draft report, a  Deputy Assistant Secretary for ETA provided additional information about  how these efforts could potentially help OFLC meet its workload demands  with existing resources in the absence of legislative changes. We agree  that these steps and planned actions constitute alternative options.  Therefore, we removed the recommendation and revised the report  accordingly.
A draft of this report also contained a recommendation to the Secretary of  Labor to direct the Administrator of ETA to gather and evaluate  information on the challenges that states faced administering the  unemployment insurance program during the recession that began in  2007 and identify any lessons learned from this experience that could be  applied to help the program respond to any changes in workload during a  future economic downturn. In oral comments on the draft report, the  Administrator of the Office of Unemployment Insurance provided  additional information regarding how ETA uses its routine communication  with states to identify lessons learned from the most recent recession. We  revised the report to further acknowledge the routine communication that  ETA has with states through conferences and its program monitoring  activities, which ETA says has helped the agency identify lessons learned  and informed the proposal for UI included in the President’s Fiscal Year  2017 budget request. In addition, to better distinguish the purpose and  intent of our recommendation from the more routine communications and  data gathering that ETA performs, we revised our recommendation to (1)  emphasize the need for information to be gathered systematically, (2)  clarify the focus on challenges that states could face in maintaining  capacity as a result of an economic downturn, such as rapidly ramping up  staffing at the start of the recession and ramping down as the economy  recovered, and (3) emphasize the need for lessons to be shared broadly.  We provided ETA with revised wording of our recommendation, which  appears in this report.
In written comments, reproduced in appendix V, ETA did not state  whether it concurred or not with this recommendation. ETA stated that it  believed the recommendation does not fully recognize its work with states  to identify lessons learned from the most recent recession. However, as  ETA notes, previous data collection efforts have not focused specifically  on the states’ ability to manage changes in workload during an economic  downturn.  We continue to believe that a systematic approach to  gathering and sharing lessons learned from the most recent recession  would further help the program maintain capacity in response to a future  economic downturn.
EPA’s National Coordinator for the Clean Water Section 319 Grants  Reporting and Tracking System also provided us with comments in an e- mail regarding open recommendations from our May 2012 report on  Section 319 NPS grants, which we cite in this report.  The National  Coordinator stated that, since 2012, EPA has invested substantially in  reforming overall program guidance and oversight. According to the  National Coordinator, these reforms will serve to strengthen the strategic  use of Section 319 funds in NPS program management. In our July 2016  report, we noted that EPA has taken a number of actions since our 2012  report, in part to respond to our recommendations.  EPA has not made  changes to the program's measures of effectiveness, but Office of Water  officials confirmed in September 2016 that EPA is still planning to do so.  We will continue to monitor EPA's efforts on this and other  recommendations.
FLETC, ETA, and EPA also provided technical comments that we  incorporated, as appropriate.
We are sending copies of this report to the appropriate congressional  committees, the Secretaries of Homeland Security and Labor, the  Administrator of EPA, and other interested parties. In addition, the report  is available at no charge on our website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-6806 or krauseh@gao.gov. Contact points for our Office  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made major contributions to this report  are listed in appendix VI.
section_title: Appendix I: Overview of Employment and Training Administration and Select Programs’ Budget and Performance Measures
paragraphs: New discretionary appropriations for the Employment and Training  Administration (ETA) declined by roughly 14 percent from fiscal year 2010  to fiscal year 2015. Meanwhile, new discretionary appropriations for  selected programs declined by between 9 percent and 16 percent.
The Unemployment Insurance (UI) State Administration program  funds grants to states for the administration of UI programs in  accordance with Section 302(a) of the Social Security Act. ETA uses  a combination of national claims-related workload projections and  other factors to develop the request for UI administrative funding for  states. After Congress appropriates funds, the Department of Labor  uses a formula based in large part on workload estimates ETA  develops, as well as other information provided by states, such as  cost accounting information to allocate “base” funding to states. Base  resources attempt to provide 80 to 90 percent of total “need” for  workload processing with the remaining funding for workload related  activities provided after the conclusion of each quarter when states  report workload activity in excess of the “base” workload. This  approach is intended to address forecast error in the original  estimates. Since available funding is calculated in large part on  claims-related workloads, the federal funding available for states is  sensitive to changes in total claims, with more funding available when  claims increase and less when they decrease.
Foreign Labor Certification Federal Administration funds most of the  administrative costs of the immigration programs overseen by the  Office of Foreign Labor Certification (OFLC). This includes salaries  and expenses, IT systems development, case adjudication support,  rent, equipment, and supplies. OFLC is responsible for reviewing  employer requests for the certification of a foreign worker to work in  the United States to ensure that hiring a foreign worker will not  adversely affect the wages and working conditions of American  workers, and that no qualified American workers are willing or  available to fill a given vacancy. OFLC oversees the labor  certifications for a number of visa programs, including the Permanent  Labor Certification, H-2A, H-2B, and H-1B programs.
Table 3 highlights select agency performance measures, showing the  annual targets and results for each measure during the relevant  timeframe. Years where results fell below the agency’s target are  highlighted in gray. According to ETA budget and performance  documents, ETA was unable to reach its target for some performance  measures in part because of resource constraints. For example, ETA  cited state staff layoffs, high state staff turnover, and technology issues as  a few reasons for the states’ inability to achieve their target for the first  payment timeliness measure.
section_title: Appendix II: Overview of Environmental Protection Agency and Select Programs’ Budget and Performance Measures
paragraphs: New discretionary appropriations for the Environmental Protection  Agency (EPA) declined by roughly 21 percent from fiscal year 2010 to  fiscal year 2015, while new discretionary appropriations for selected  programs declined by between approximately 15 and 21 percent.
EPA awards Section 319 nonpoint source (NPS) pollution categorical  grants for implementing state NPS management programs. From  fiscal year 2010 through fiscal year 2014, the most recent years for  which complete data on awarded projects were available, states  awarded approximately 4,000 projects under the Section 319 NPS  program. The two most common categories of nonpoint source water  pollution targeted by these projects were agricultural runoff and urban  and stormwater runoff.
The Environmental Programs and Management (EPM) account  supports a broad range of activities involved in EPA developing  pollution control regulations and standards, and enforcement of these  requirements across multiple environmental media, such as air quality  and water quality. For the purposes of this report, we focused on three  of the EPM budget activities related to pesticides. These support the  Office of Pesticide Programs (OPP) activities that protect human  health and the environment from pesticide risk, as well as activities to  realize the value of pesticide availability. In addition to receiving  annual appropriations, OPP has the authority to collect and obligate  Pesticide Registration Improvement Act of 2003 (PRIA) fees.  Specifically, in 1988, Congress enacted annual registration  maintenance fees to support EPA reviewing existing pesticide  registrations. In 2004, Congress enacted pesticide registration fees,  which are paid by registrants for some registration actions, such as  registrations for new uses of pesticides, to help pay for registration  costs. According to EPA, the goals of the PRIA fee system are to both create a more predictable evaluation process for affected pesticide  decisions and to couple the collection of individual fees with specific  decision review periods. Pesticide registration service fees have a  minimum appropriation threshold established by statute. Pesticide  registration service fees may not be assessed for a fiscal year unless  Congress provides at least a set amount of annual appropriations for  certain OPP functions for that year. Nonetheless, Congress has at  times authorized EPA to assess pesticide registration service fees for  a given fiscal year notwithstanding the minimum appropriations  provision. PRIA fees, which include both discretionary budget  authority and mandatory budget authority from offsetting collections,  can supplement OPP’s annual appropriations. PRIA fees totaled  roughly $44 million in fiscal year 2015.
Table 5 highlights select agency performance measures, showing the  annual targets and results for each measure during the relevant  timeframe. Years where results fell below the agency’s targets are  highlighted in gray. Currently, EPA is unable to effectively track the  effects of declining resources on some performance measures. There are  many activities that contribute to restoring polluted waterways and  reducing nonpoint source pollution. Some of these are EPA programs,  others are state programs, and yet others may be other federal programs.  In addition, EPA officials said that there is a time lag between changes to  funding for Section 319 NPS pollution grants and when effects from the  changes take place. Further, we previously recommended that EPA  revise Section 319 guidelines to states to emphasize measures that more  accurately reflect the overall health of targeted water bodies (e.g., the  number, kind, and condition of living organisms) and demonstrate states’  focus on protecting high-quality water bodies, where appropriate. EPA  agreed that different measures would better represent Section 319 NPS  pollution program progress, and, according to EPA, the agency will  undertake work on a new measure for protecting unimpaired waters.
section_title: Appendix III: Overview of Federal Law Enforcement Training Centers’ Budget and Performance Measures
paragraphs: Newly enacted appropriations for FLETC declined by roughly 11 percent  from fiscal year 2010 to fiscal year 2015.
FLETC’s annual appropriation is available for necessary expenses for  Salaries and Expenses, including materials and support costs for  federal law enforcement basic training, and public awareness and  enhancement of community support of law enforcement training.  According to FLETC officials, the projected cost of partner  organizations’ basic training budgets is included in FLETC base  appropriations except for the cost of instructors. The cost of  instructors is split evenly between FLETC and partner organizations.  Partner organizations have 3 options to cover their portion of the  costs: provide 50 percent of the instructors from their own agency; provide the funding necessary for FLETC to hire instructors; or provide a combination of instructors and funding.
Amounts appropriated for Acquisitions, Construction, Improvements  and Related Expenses are available for the acquisition of necessary  additional real property and facilities; construction; and ongoing  maintenance, facility improvements, and related expenses of FLETC.
Table 7 shows one of FLETC’s primary performance measures for  monitoring the quality of its training programs and the annual targets and  results from fiscal years 2011 to 2015. Years where results fell below the  agency’s target are highlighted in gray.
section_title: Appendix IV: Comments from the Department of Homeland Security
section_title: Appendix V: Comments from the Employment and Training Administration
section_title: Appendix VI: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the contact named above, Carol M. Henn, Assistant  Director; Thomas J. McCabe, Analyst-In-Charge; Ulyana Panchishin;  Michelle Sager; and Elise Vaughan Winfrey made major contributions to  this report. Also contributing to this report were Ann L. Czapiewski, Hilary  R. Kelly, Julie Matta, Angie Nichols-Friedman, Michele Mackin, Diana  Maurer, Eleni Orphanides, Sabine Paul, Barbara Patterson, Amanda  Postiglione, Andrew Sherrill, Stewart W. Small, Anne Stevens, and  Cynthia Saunders.