Labor required states to implement major provisions of WIA by July 1, 2000, although some states began implementing provisions of WIA as early as July 1999. WIA replaced the Job Training Partnership Act (JTPA) program and requires that many federal programs provide employment and training services through one-stop centers. Services funded 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 than under previous law: it established new performance measures and a requirement to use Unemployment Insurance (UI) wage data to track and report on outcomes. 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—Adult, Dislocated Worker, and Youth—that provide a broad range of services to the general public, no longer using income to determine eligibility for all program services. The WIA adult and dislocated worker programs no longer focus exclusively on training, but provide for three tiers, or levels, of service: core, intensive, and training. Core services include basic services such as help with job searches and providing labor market information. These activities may either be self-service or require some staff assistance. Intensive services include such activities as comprehensive assessment of jobseekers’ skill levels and service needs and case management—activities that typically require greater staff involvement. Training services include such activities as occupational skills development or on-the-job training. Labor’s guidance specifies that monitoring and tracking for the adult and dislocated worker programs should begin when jobseekers receive core services that require significant staff assistance. Jobseekers who receive core services that are self-service or informational in nature are not counted in the performance measures. In addition to those services provided by the three WIA funded programs, WIA also requires that states and local areas use the one-stop center system to provide services for many other employment and training programs. Seventeen categories of programs funded through four federal agencies are now required to provide services through the one-stop center under WIA. Table 1 shows the programs that WIA requires to provide services through the one-stop centers (also known as mandatory programs) and the federal agencies that administer these programs. WIA is designed to provide for greater accountability than its predecessor program by establishing new performance measures, a new requirement to use UI wage data to track and report on outcomes, and a requirement for Labor to conduct at least one multi-site control group evaluation. 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. The performance measures also provide information to support Labor’s performance goals under the Government Performance and Results Act (GPRA), the budget formulation process using the Office of Management and Budget’s (OMB) Program Assessment Rating Tool (PART), and for program evaluation required under WIA. In contrast to JTPA, under which data on outcomes were obtained through follow-ups with job seekers, WIA requires states to use UI wage records to track employment-related outcomes. Each state maintains UI wage records to support the process of providing unemployment compensation to unemployed workers. The records are compiled from data submitted to the state each quarter by employers and primarily include information on the total amount of income earned during that quarter by each of their employees. Although UI wage records contain basic wage information for about 94 percent of workers, certain employment categories are excluded, such as self-employed persons, independent contractors, federal employees, and military personnel. According to Labor’s guidance, if a program participant does not appear in the UI wage records, states may then use supplemental data sources, such as follow-up with participants and employers, or other administrative databases, such as U.S. Office of Personnel Management or U.S. Department of Defense records, to track most of the employment-related measures. However, only UI wage records may be used to calculate the earnings change and earnings replacement performance measures. (See table 2 for a complete list of WIA performance measures.) Unlike JTPA, which established expected performance goals using a computer model that took into account varying economic and demographic factors, 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 generally range from $750,000 to $3 million. Nineteen states were eligible to apply for incentive grants in program year 2003. States that do not meet at least 80 percent of their WIA performance levels 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 meets its performance levels for 2 consecutive years, it may be subject to a 5 percent reduction in its annual WIA formula grant. No states received financial sanctions in program year 2003. Labor determines incentive grants or sanctions based on the performance data submitted by states each October in their annual reports. States also submit quarterly performance reports, which are due 45 days after the end of each quarter. In addition to the performance reports, states submit updates for their Workforce Investment Act Standardized Record Data (WIASRD) in mid-October. WIASRD is a national database of individual records containing characteristics, activities, and outcome information for all enrolled participants who receive services or benefits under WIA. All three submissions primarily represent participants who have exited the WIA programs within the previous program year. The process of collecting and reporting WIA data involves all three levels of government. Participant data are typically collected by frontline staff in local areas and entered into a state or local IT system. In some states, local area staff may enter data directly into a statewide IT system; in other states, local areas may use their own individualized IT system to enter data, from which staff can extract and compile the necessary information for state submission. After the state receives data from local areas, this information is compiled and formatted for various submissions to Labor, including the state’s WIASRD file, quarterly report, and annual report. During the data compilation process, state agencies administering WIA typically match participant records to their state’s UI wage record system to obtain wage records and employment status. In addition, states may use the Wage Record Interchange System (WRIS) to match participant records to other state’s UI wage records or use other databases such as that of the U.S. Office of Personnel Management to fill gaps in the UI wage records. States may also link participant records to partner programs’ IT systems to track activities across programs or to determine outcomes such as attaining high school diplomas, degrees, and certificates. For the quarterly and annual report, states use software to calculate their performance measures. States generate the required WIA performance reports and electronically submit them to Labor’s regional offices using the Enterprise Business Support System (see fig. 1). Internal controls comprise the plans, methods, and procedures an organization uses to meet its missions, goals, and objectives. Internal controls used by government agencies may include guidance that defines the specific data to be collected and any documentation needed to support the data and safeguards to ensure data are secure. Some key aspects of internal controls for collecting and reporting data include: Guidance: Guidance should clearly and consistently define all data elements required for reporting, and effectively communicate this information to states and local areas. If definitions are vague or inconsistent, then program staff may interpret them incorrectly, resulting in more errors to the data. Additionally, any guidance and documentation from the national office to states and local areas must be clear and free of any conflicting or contradictory instructions. If reporting instructions are misinterpreted by program staff, then the data may not be useful to assess program performance. Data entry procedures and edit check software: Data entry procedures and edit check software can help ensure data entering the designated reporting system are accurate and consistent. Written guides establishing who is responsible for each step in data creation and maintenance, and how data are transferred from initial to final formats can ensure data are consistently reported. Additionally, using electronic data management and processing software programs to conduct automated checks on data values and integrity can limit errors when data are reported at a later date. Monitoring: Monitoring can ensure reported data are accurate and complete. Common monitoring practices may include formal on-site reviews of individual case files and source documentation at both the state and local levels, and assessments of issued guidance to ensure that information collected nationwide is consistent with existing policies and in compliance with laws and regulations. Three key issues—flexibility in federal guidance, major changes to states’ information technology (IT) systems and limited monitoring efforts—have compromised states’ early efforts to collect and report WIA performance data. The guidance available to states at the time of implementation allowed flexibility in key definitions and contributed to inconsistency in the way the data are collected and reported. The transition from JTPA to WIA required states to make major changes to their IT systems and in some cases, the transition led to problems with the data. States used a variety of strategies to make the necessary system changes, some used the software they had used to report under JTPA, and others developed new software for WIA. More than three-fourths of the states told us that they had made major modifications to their WIA IT systems since implementation.