Labor required states to implement major provisions of WIA Title I by July 1, 2000, although some states began implementing provisions of WIA as early as July 1999. Services provided under WIA represent a marked change from those provided under the previous program, allowing for a greater array of services to the general public. WIA is designed to provide for greater accountability over what existed previously: it established new performance measures and a new requirement to use UI data to track and report on the achievements of the three WIA-funded programs. WIA also requires that many federal programs work together to provide employment and training services through the one-stop system. Program services provided under WIA represent a marked change from those provided under JTPA. When WIA was enacted in 1998, it replaced the JTPA programs for economically disadvantaged adults and youth and for dislocated workers with three new programs—WIA Adult, Dislocated Worker, and Youth—that provide a broader range of services to the general public, no longer using income to determine eligibility for all program services. The newly authorized WIA programs no longer focus exclusively on training but provide for three tiers, or levels, of service for adults and dislocated workers: core, intensive, and training. Core services include basic services such as job searches and labor market information. These activities may be self-service or require some staff assistance. Intensive services include such activities as comprehensive assessment and case management—activities that require greater staff involvement. Training services include such activities as occupational skills or on-the- job training. These tiers of WIA-funded services are provided sequentially. That is, in order to receive intensive services, job seekers must first receive at least one core service; to receive training services, a job seeker must first receive at least one core service and then at least one intensive service. Key to moving from core to a higher level of services is that the services are needed to help job seekers become self-sufficient. Labor’s guidance provides for monitoring and tracking to begin when job seekers receive core services that require significant staff assistance. Job seekers who receive core services that are self-service in nature are not included in the performance measures. WIA is designed to provide for greater accountability than the accountability provided for under JTPA. It does so by establishing new performance measures and a new requirement to use UI data to track and report on the achievements of the three WIA-funded programs. According to Labor, performance data collected from the states in support of the measures are intended to be comparable across states in order to maintain objectivity in determining incentives and sanctions. They are also intended to provide information to support Labor’s performance goals under the Government Performance and Results Act (GPRA) and for program evaluation. Some of the measures that relate to adults, dislocated workers, and older youth are similar to those used under JTPA, including job placement, job retention, and wage gains or replacement. Attainment of a credential—a degree or certification of skills or training completed—and customer satisfaction for both job seekers and employers are new under WIA. (See table 1 for a complete list of the WIA performance measures and appendix I for a more complete explanation of the performance measures discussed in this report.) In contrast to JTPA, for which data on outcomes were obtained through follow-ups with job seekers, WIA requires states to use UI wage records to track outcomes. According to Labor’s guidance, if a program participant does not appear in the UI wage records, states may use supplemental data sources, such as follow-ups with participants and employers, to track entered employment, retention, and credential attainment. However, only UI wage records may be used to calculate earnings change and replacement. Unlike JTPA, which established expected performance levels using a computer model, WIA requires states to negotiate with Labor to establish expected performance levels for each measure. States, in turn, must negotiate performance levels with each local area. The law requires that these negotiations take into account differences in economic conditions, participant characteristics, and services provided. To derive equitable performance levels, Labor and the states use historical data to develop their estimates of expected performance levels. These estimates provide the basis for negotiations. WIA holds states accountable for achieving their performance levels by tying those levels to financial sanctions and incentive funding. States that meet their performance levels under WIA are eligible to receive incentive grants that may generally range from $750,000 to $3 million. To be eligible for an incentive grant, states must also meet levels established under the Department of Education’s Vocational Education (Perkins Act) and Adult Education and Literacy programs. States that do not meet their performance levels under WIA are subject to sanctions.If a state fails to meet its performance levels for 1 year, Labor provides technical assistance, if requested. If a state fails to meet its performance levels for 2 consecutive years, it may be subject to up to a 5-percent reduction in its annual WIA formula grant. Under JTPA, the most stringent sanction was the possible reorganization of the local service delivery organization. In addition to establishing the three new programs, WIA requires that states use the one-stop center system to provide services for these and many other employment and training programs. This system was developed by states prior to WIA through One-Stop Planning and Implementation Grants from Labor. About 17 programs funded through four federal agencies are now required to provide services through the one-stop center under WIA. Table 2 shows the programs that WIA requires to provide services through the one-stop centers (termed mandatory programs) and the related federal agency. Department of Health and Human Services Department of Housing and Urban Development (HUD) Under WIA, employers are expected to play a key role in establishing regional workforce development policies, deciding how services should be provided in the one-stop, and overseeing one-stop operations. Employers, who are encouraged to use the one-stop system to fill their job vacancies, are also seen as key one-stop customers under WIA. States and localities are taking action to implement performance measures for the three WIA-funded programs, but they have confronted several challenges in doing so. To implement these measures, states and localities had to change the way they collected and reported performance data. Most states we surveyed had to create new automated data systems to collect and report WIA data. Many state systems, however, are still not completely in place. The lack of final guidance from Labor on how to report the data slowed the development of these systems. States and localities also faced challenges in implementing the measures due to their complexity and the resource demands they created, and some had to develop new procedures to obtain UI wage records. In addition, states faced a new negotiation process with Labor to set performance levels for each measure. Many states believe these levels are too high because little or no baseline data were used, and the negotiations did not sufficiently account for differences in economic conditions and populations served. Under WIA, performance levels are now tied to incentives and sanctions so that states can be financially rewarded if they meet them or penalized if they do not. States reported that the need to meet these performance levels may lead local staff to focus WIA-funded services on job seekers who are most likely to succeed in their job search or who are most able to make wage gains. As part of implementing WIA performance measures, states had to develop automated data systems to track the activities of individual WIA participants and report on performance. Based on our survey, most states developed a new automated data system, or management information system (MIS), to collect and report WIA performance data at the state level. The remaining states adapted their previous data collection systems used under JTPA. However, 15 states, regardless of whether they were developing a new system or adapting their existing system, reported that, as of August 2001, they did not have their system completely in place. All states expect to have completed their systems by July 2002. In some states, local areas do not use the state MIS to collect local WIA performance information. In these states, local areas must develop their own systems, taking time and resources to do so. The lack of timely reporting guidance slowed the development of the data systems. Final guidance on how states must report their performance to Labor was issued to the states in March 2001—8 months after the states were required to implement major provisions of WIA and begin collecting data. Lack of final guidance resulted in delays and costly program changes as states and local areas developed and adjusted their final systems. For example, one local area we visited decided to continue using its old system and delayed the development of a new system pending final guidance because it would be too costly and time-consuming to develop a system that might need to be changed. All states, regardless of whether or not they had implemented a new system, had to make changes in their automated MIS systems to accommodate the final guidance. States and localities reported that the complexity of WIA’s new performance measures made them difficult and time-consuming to implement. Many of the states that we surveyed commented that the measures were hard to follow because the calculations for the measures are complex and sometimes confusing, specifically who to include in the measures, when to collect the data for the measures, and how to calculate the measures. Knowing who to include in the measures. It is difficult to know whether or not a job seeker should be counted in the measure for a program, even if he or she is served by the program. For example, a participant in the adult program who is already employed must be included in the retention and wage gain measures but cannot be counted in the entered employment measure. Yet, for the dislocated worker program, the entered employment measure can include those who may be employed when they enter the program. Knowing when to measure performance for participants. The data for different performance measures can be collected in different quarters of the program year.