Congress passed WIA partly in response to concerns about fragmentation and inefficiencies in federal employment and training programs. WIA authorized several employment and training programs—including Job Corps and programs for Native Americans, migrant and seasonal farmworkers, and veterans—as well as the Adult Education and Literacy program. WIA replaced the Job Training Partnership Act (JTPA) programs for economically disadvantaged adults and youths and dislocated workers with three new programs—WIA Adult, WIA Dislocated Worker, and WIA Youth. These programs provide a range of services, including occupational training and job search assistance. Beyond authorizing these programs, WIA also required the establishment of one- stop centers in all local areas and mandated that many federal employment and training programs, including the ES and WIA Adult programs, provide services through the centers. Under WIA, sixteen different categories of programs, administered by four federal agencies, must provide services through the one-stop system, according to Labor officials. Thirteen of these categories include programs that meet our definition of an employment and training program, and three categories do not, but offer other services to jobseekers who need them (see fig. 1). These 13 program categories represent about 40 percent of the federal appropriations for employment and training programs in fiscal year 2010. One-stop centers serve as the key access point for a range of services that help unemployed workers re-enter the workforce—including job search assistance, skill assessment and case management, occupational skills and on-the-job training, basic education and literacy training, as well as access to Unemployment Insurance (UI) benefits and other supportive services— and they also assist employers in finding workers. Any person visiting a one-stop center may look for a job, receive career development services, and gain access to a range of vocational education programs. In our 2007 study, we found that a typical one-stop center in many states offered services for eight or nine required programs on-site. In addition to required programs, one-stop centers have the flexibility to include other, optional programs in the one-stop system, such as the Temporary Assistance for Needy Families (TANF) Program, the Supplemental Nutrition Assistance Program (SNAP) Employment and Training Program, or other community-based programs, which help them better meet specific state and local workforce development needs. The Dayton, Ohio, one-stop center, for example, boasts over 40 programs on- site at the 8-1/2 acre facility, including an organization that provides free business attire to job seekers who need it, an alternative high school program that assists students in obtaining a diploma, and organizations providing parenting and self-sufficiency classes. Nationwide, services may also be provided at affiliated sites—designated locations that provide access to at least one employment and training program. While WIA requires certain programs to provide services through the one- stop system, it does not provide additional funds to operate one-stop systems and support one-stop infrastructure. As a result, required programs are expected to share the costs of developing and operating one- stop centers. In 2007, we reported that WIA programs and the ES program were the largest funding sources states used to support the infrastructure—or nonpersonnel costs—of their comprehensive one-stop centers. To help cover operational costs and expand services, some one- stop centers that we visited for a study of promising practices raised additional funds to support the infrastructure through fee-based services, grants, or contributions from partner programs and state or local governments. For example, one-stop operators in Clarksville, Tennessee, reported that they raised $750,000 in one year through a combination of business consulting, drug testing, and drivers’ education services. In addition, the one-stop center in Kansas City, Missouri, had a full-time staff person dedicated to researching and applying for grants. The one-stop generated two-thirds of an entire program year’s operating budget of $21 million through competitive grants available from the federal government as well as from private foundations. One-stop centers required under WIA provide an opportunity for a broad array of federal employment and training programs—both required and optional programs—to coordinate their services and avoid duplication. Although WIA does not require that programs be colocated within the one- stop center, this is one option that programs may use to provide services within the one-stop structure. Labor’s policy is to encourage colocation of all required programs to the extent possible; however, officials acknowledged that colocation is one of multiple means for achieving service integration. We have previously reported that colocating services can result in improved communication among programs, improved delivery of services for clients, and elimination of duplication. While colocating services does not guarantee efficiency improvements, it affords the potential for sharing resources and cross-training staff, and may lead, in some cases, to the consolidation of administrative systems, such as information technology systems. Our early study of promising one-stop practices found that the centers nominated as exemplary did just that— they cross-trained program staff, consolidated case management and intake procedures across multiple programs, and developed shared data systems. More broadly, these promising practices streamline services for job seekers, engage the employer community, and build a solid one-stop infrastructure. Other types of linkages between programs, such as electronic linkages or referrals, may not result in the same types of efficiency improvements, but they may still present opportunities to streamline services. Although the potential benefits of colocation are recognized, implementation may pose challenges. WIA Adult and the Employment Service are generally colocated in one-stop centers, but TANF employment and training services are colocated in one-stops to a lesser extent. In our 2007 report, we found that 30 states provided the TANF program on site at a typical comprehensive one-stop center. These states accounted for 57 percent of the comprehensive one-stop centers nationwide. Some previous efforts to reauthorize WIA have included proposals to make TANF a mandatory one-stop partner. Increasing colocation, however, could prove difficult due to issues such as limited available office space, differences in client needs and the programs’ client service philosophies, and the need for programs to help fund the operating costs of the one-stop centers. HHS officials noted, that when TANF employment and training services are not colocated in one-stop centers, they are typically colocated with other services for low-income families, such as SNAP, formerly known as the Food Stamp Program, and Medicaid. Officials acknowledged that colocating TANF employment and training services in one-stop centers may mean that they are no longer colocated with these other services, although Florida, Texas, and Utah provide SNAP services through one-stops along with TANF services, and Utah also provides Medicaid through one-stops. Officials said that in states where this is not the case, the potential trade-off would need to be considered. Given that the purpose of WIA, in part, was to transform the fragmented employment and training system into a coherent one, our work suggests that greater efficiencies could be achieved. Three of the largest employment and training programs, the TANF, ES, and WIA Adult programs, provide some of the same employment and training services to low-income individuals, despite differences between the programs (see fig. 2). While the TANF program serves low-income families with children, the ES and WIA Adult programs serve all adults, including low-income individuals. Specifically, the WIA Adult program gives priority for intensive and training services to recipients of public assistance and other low- income individuals when program funds are limited. All three programs share a common goal of helping individuals secure employment, and the TANF and WIA Adult programs also aim to reduce welfare dependency. However, employment is only one aspect of the TANF program, which has other broad social service goals, and as a result, TANF provides a wide range of other services beyond employment and training, including cash assistance. Jo search workshops. Susidized employment. The TANF, ES, and WIA Adult programs maintain separate administrative structures to provide some of the same services to low-income individuals. At the federal level, the TANF program is administered by HHS, and the ES and WIA Adult programs are administered by Labor. At the state level, the TANF program is typically administered by the state human services or welfare agency, and the ES and WIA Adult programs are typically administered by the state workforce agency. By regulation, ES services must be provided by state employees. At the local level, WIA regulations require at least one comprehensive one-stop center to be located in every local workforce investment area. These areas may have the same boundaries as counties, may be multicounty, or may be within or across county lines. Similarly, every county typically has a TANF office. TANF employment and training services may be delivered at TANF offices, in one-stop centers, or through contracts with for-profit or nonprofit organizations, according to HHS officials. In one-stop centers, ES staff provide job search and other services to ES customers, while WIA staff provide job search and other services to WIA Adult customers. Florida, Texas, and Utah have consolidated the state workforce and welfare agencies that administer the TANF, ES, and WIA Adult programs, among other programs. In Utah, the workforce agency administers the TANF program in its entirety. In Florida and Texas, the workforce agencies administer only that part of TANF related to employment and training services. In all three states, the one-stop centers serve as portals to a range of social services, including TANF. Officials from these three states told us that consolidating agencies led to cost savings through the reduction of staff and facilities. For example, a Utah official said that the state reduced the number of buildings in which employment and training services were provided from 104 to 34. According to a Texas official, Texas also privatized 3,000 full-time staff equivalents (FTE) at the local level, which reduced the pension, retirement, and insurance costs that had previously been associated with these state positions. Officials in the three states, however, could not provide a dollar figure for the cost savings that resulted from consolidation. State officials also told us that consolidation improved the quality of services for participants in the WIA Adult and TANF programs. An official in Utah noted the consolidation allowed job seekers to apply for assistance they had not considered in the past, allowed employment counselors to cluster services that made sense for the client, and allowed clients to experience seamless service delivery. These benefits reflected what the official said was one of the visions of consolidation: having one employment plan per client, rather than multiple employment plans for clients served by multiple programs. While Florida officials acknowledged that a subset of TANF clients have significant barriers to employment— such as mental health issues—that one-stop centers may not be well equipped to address, officials said that the one-stops in their state are able to address the employment and training needs of the majority of TANF clients. When asked about the quality of the TANF and workforce programs in Florida, Texas, and Utah, Labor officials were not aware of any performance problems in these programs and added that they view all three states as forerunners in program improvement efforts. That said, they noted that Utah may not be representative of other states, due to its relatively small and homogenous population. In addition, officials from the Center for Law and Social Policy (CLASP) said that Texas and Florida may place more of an emphasis on quickly finding work for TANF clients than other states. Even with the benefits identified by state officials, consolidation may have its challenges. An official in Utah noted that the reorganization of state agencies and staff was time-consuming and costly, and it took several years before any cost savings were realized. For example, developing a shared database across programs increased costs temporarily. In addition, when states consolidate their agencies, they must still adhere to separate program requirements for TANF and WIA. A 2004 article on service integration by authors from CLASP and the Hudson Institute concluded that options were available for states to make significant progress in integrating TANF and WIA services, but it also noted the difficulty in administering separate programs with different requirements. The article specifically noted differences in work requirements, program performance measures, and reporting requirements, among others. A Utah official said that it was important for program administrators to be knowledgeable about these separate reporting requirements and processes across the multiple federal agencies that oversee these programs. Similarly, this official said that direct service staff needed to be knowledgeable about multiple programs and how to allocate costs across these programs. For states that have not consolidated their workforce and welfare agencies, not knowing what actions are allowable under the law may present a challenge to consolidation. According to the article on service integration, states face some legal barriers to fully integrating TANF and WIA services, but if they do not know what is allowable under the law, they may not always exercise the full range of options available to them. In conclusion, understanding how well the one-stop system is reducing fragmentation through coordinated service delivery would be useful in deciding where efficiencies could be achieved, but no study has been undertaken to evaluate the effectiveness of the one-stop system approach. While a few program impact studies have been done or are underway, these studies largely take a program-by-program approach rather than focusing on understanding which approaches are most effective in streamlining service delivery and improving one-stop efficiency. In addition, Labor’s efforts to collaborate with other agencies to assess the effects of different strategies to integrate job-seeker services have been limited. We previously recommended that Labor collaborate with Education, HHS, and the Department of Housing and Urban Development (HUD) to develop a research agenda that examines the impacts of various approaches to program integration on job seeker and employer satisfaction and outcomes. Labor has committed to collaborating with other agencies and has involved them in developing inter-agency initiatives for certain targeted activities, but has not yet evaluated the effectiveness of the one-stop system. While states and localities have undertaken some potentially promising initiatives to achieve greater administrative efficiencies, little information is available about the strategies and results of these initiatives; therefore, it is unclear the extent to which practices in these states could serve as models for others. Moreover, little is known about the incentives states and localities have to undertake such initiatives and whether additional incentives may be needed. We recently recommended that the Secretaries of Labor and HHS work together to develop and disseminate information that could inform such efforts, including information on state initiatives to consolidate program administrative structures and state and local efforts to colocate additional programs at one-stop centers. As part of this effort, we recommended that Labor and HHS examine the incentives for states and localities to undertake such initiatives and, as warranted, identify options for increasing them. In their responses, Labor and HHS agreed with our recommendations. However, HHS noted that it lacks legal authority to mandate increased TANF-WIA coordination or to create incentives for such efforts. Increasing efficiencies among federal employment and training programs is clearly challenging. These are difficult issues to address because they may require agencies and Congress to re-examine within and across various mission areas the fundamental structure, operation, funding, and performance of a number of long-standing federal programs and activities. As the nation rises to meet its current fiscal challenges, GAO will continue to assist Congress and federal agencies in identifying actions needed to address these issues. Chairwoman Foxx, Ranking Member Hinojosa, and Members of the Subcommittee, this completes my prepared statement. I would be happy to respond to any questions you may have at this time. For further information regarding this testimony, please contact me at (202) 512-7215 or sherrilla@gao.gov. Individuals making key contributions to this testimony include Dianne Blank, Pamela Davidson, Patrick Dibattista, Alex Galuten, Jennifer Gregory, Isabella Johnson, and Sheila McCoy. Employment and Training Programs: Opportunities Exist for Improving Efficiency. GAO-11-506T. Washington, D.C.: April 7, 2011. Opportunities to Reduce Fragmentation, Overlap, and Potential Duplication in Federal Teacher Quality and Employment and Training Programs. GAO-11-509T. Washington, D.C.: April 6, 2011. Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue. GAO-11-441T. Washington, D.C.: March 3, 2011. Opportunities to Reduce Potential Duplication in Government Programs, Save Tax Dollars, and Enhance Revenue. GAO-11-318SP. Washington, D.C.: March 1, 2011. Multiple Employment and Training Programs: Providing Information on Colocating Services and Consolidating Administrative Structures Could Promote Efficiencies. GAO-11-92. Washington, D.C.: January 13, 2011. Workforce Investment Act: Labor Has Made Progress in Addressing Areas of Concern, but More Focus Needed on Understanding What Works and What Doesn’t. GAO-09-396T. Washington, D.C.: February 26, 2009. Workforce Development: Community Colleges and One-Stop Centers Collaborate to Meet 21st Century Workforce Needs. GAO-08-547. Washington, D.C.: May 15, 2008. Workforce Investment Act: One-Stop System Infrastructure Continues to Evolve, but Labor Should Take Action to Require That All Employment Service Offices Are Part of the System. GAO-07-1096. Washington, D.C.: September 4, 2007. Workforce Investment Act: Additional Actions Would Further Improve the Workforce System. GAO-07-1051T. Washington, D.C.: June 28, 2007. Workforce Investment Act: Substantial Funds Are Used for Training, but Little Is Known Nationally about Training Outcomes. GAO-05-650. Washington, D.C.: June 29, 2005. Workforce Investment Act: States and Local Areas Have Developed Strategies to Assess Performance, but Labor Could Do More to Help. GAO-04-657. Washington, D.C.: June 1, 2004. 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 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. Multiple Employment and Training Programs: Funding and Performance Measures for Major Programs. GAO-03-589. Washington, D.C.: April 18, 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: Better Guidance and Revised Funding Formula Would Enhance Dislocated Worker Program. GAO-02-274. Washington, D.C.: February 11, 2002. Multiple Employment and Training Programs: Overlapping Programs Indicate Need for Closer Examination of Structure. GAO-01-71. Washington, D.C.: October 13, 2000. Workforce Investment Act: Implementation Status and the Integration of TANF Services. GAO/T-HEHS-00-145. Washington, D.C.: June 29, 2000. Multiple Employment Training Programs: Information Crosswalk on 163 Employment Training Programs. GAO/HEHS-95-85FS. Washington, D.C.: February 14, 1995. Multiple Employment Training Programs: Major Overhaul Needed to Reduce Costs, Streamline the Bureaucracy, and Improve Results. GAO/T-HEHS-95-53. Washington, D.C.: January 10, 1995. Multiple Employment Training Programs: Overlap Among Programs Raises Questions About Efficiency. GAO/HEHS-94-193. Washington, D.C.: July 11, 1994. Multiple Employment Training Programs: Conflicting Requirements Underscore Need for Change. GAO/T-HEHS-94-120. Washington, D.C.: March 10, 1994. Multiple Employment and Training Programs: Major Overhaul is Needed. GAO/T-HEHS-94-109. Washington, D.C.: March 3, 1994. Multiple Employment Training Programs: Overlapping Programs Can Add Unnecessary Administrative Costs. GAO/HEHS-94-80. Washington, D.C.: January 28, 1994. Multiple Employment Training Programs: Conflicting Requirements Hamper Delivery of Services. This is a work of the U.S. government and is not subject to copyright protection in the United States. The published product may be reproduced and distributed in its entirety without further permission from GAO. However, because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately.

Summary: This testimony discusses the findings from our recent work on federal employment and training programs and our prior work on the Workforce Investment Act of 1998 (WIA). GAO has recently identified 47 federally-funded employment and training programs for fiscal year 2009, defining them as programs that are specifically designed to enhance the job skills of individuals in order to increase their employability, identify job opportunities, and/or help job seekers obtain employment. These programs, which are administered by nine separate federal agencies--including the Departments of Labor, Education, and Health and Human Services (HHS)--spent about $18 billion dollars in fiscal year 2009 to provide services such as job search assistance and job counseling to program participants. Seven programs accounted for about three-fourths of this spending, and two--Wagner- Peyser funded Employment Service (ES) and WIA Adult--together reported serving over 18 million individuals, or about 77 percent of the total number of participants served across all programs. Forty-four of the 47 programs we identified, including those with broader missions such as multipurpose block grants, overlap with at least one other program in that they provide at least one similar service to a similar population. However, differences may exist in eligibility, objectives, and service delivery. Almost all of the 47 programs tracked multiple outcome measures related to employment and training, and the most frequently tracked outcome measure was "entered employment." However, little is known about the effectiveness of employment and training programs because, since 2004, only 5 reported conducting an impact study, and about half of all the remaining programs have not had a performance review of any kind. The multiplicity of employment and training programs combined with the limited information regarding impact raise concerns about the extent to which the federally-funded employment and training system is performing as efficiently and effectively as it should. As early as the 1990s we issued a series of reports that raised questions about the efficiency and effectiveness of the federally-funded employment and training system, and we concluded that a structural overhaul and consolidation of these programs was needed. Partly in response to such concerns, 13 years ago Congress passed WIA. This testimony focuses on two areas where we have identified opportunities to promote greater efficiencies: colocating services and consolidating administrative structures Increasing colocation of services at a single site, as well as consolidating state workforce and welfare administrative agencies, could increase efficiencies, and several states and localities have undertaken such initiatives. However, implementation may pose challenges and little information is available about the strategies and results of these initiatives. To facilitate further progress in increasing administrative efficiencies, we have previously recommended that the Secretaries of Labor and HHS work together to develop and disseminate information about such efforts. Sustained congressional oversight is pivotal in promoting further efficiencies. Specifically, Congress could explore opportunities to foster state and local innovation in integrating services and consolidating administrative structures.