VETS administers national programs to (1) ensure that veterans receive priority in employment and training opportunities from the employment service; (2) assist veterans, reservists, and National Guard members in securing employment; and (3) protect veterans’ employment rights and benefits. VETS carries out its responsibilities through a nationwide network that includes representation in each of Labor’s 10 regions and staff in each state. The Office of the Assistant Secretary for VETS administers the agency’s activities through regional administrators and a VETS director in each state. The state VETS directors are the link between VETS and the states’ employment service system, to whom the DVOP and LVER staff--as state employees--directly report, and which is overseen by Labor’s ETA. In fiscal year 2005, VETS requested $220.6 million for all its programs, including $162.4 million for the DVOP and LVER programs. States plan to use this funding to support more than 2,100 DVOP and LVER positions. In September 2001, we identified some key areas in which VETS could better serve its clients by providing more flexibility and accountability in its programs. With its passage in November 2002, JVA amended the legislation that governs the DVOP and LVER programs by addressing many of the concerns we raised in our prior work. For example, JVA clarified the roles of DVOP and LVER staff, and gave states greater flexibility in determining how the staff are used. Under VETS guidance, the DVOP staff’s duties now focus on providing intensive services--with priority given to disabled veterans--including assessing the veterans’ special needs and skills, developing a plan of action, and coordinating any needed supportive services, such as training and job referrals. The DVOP staff also provide outreach activities to locate candidates who could benefit from intensive services, such as homeless veterans. As stated in VETS guidance, the LVER staff’s duties now include developing regular contact with employers to promote employment and training for veterans, developing relationships with community leaders to further promote veterans’ employment, and promoting and monitoring the participation of veterans in federally funded programs. The JVA legislation required states to develop plans that include details of the specific duties required of the DVOP and LVER positions and the strategy for their integration into the one-stop system. The legislation also required the establishment of a comprehensive performance accountability system to measure performance of the DVOP and LVER staff, using performance measures consistent with those of WIA. In addition, JVA established an incentive program to recognize eligible employees for excellence in providing veterans services and to encourage the improvement of services, with 1 percent of each state’s annual grant allocation to be designated for incentive funding. In addition, JVA required VETS to establish a minimum standard for the rate at which veterans enter employment, a standard which all states are required to meet. The JVA legislation further required annual performance reviews of veterans’ services, which VETS uses to monitor the DVOP and LVER programs to ensure proper accountability. VETS has taken action to implement the changes to the DVOP and LVER programs. VETS has issued policy guidance and conducted training on the DVOP and LVER staff’s new roles and responsibilities. In addition, nearly half the states are taking advantage of JVA’s flexibility to employ part-time DVOP staff. Although VETS has issued guidance on the performance incentive program to recognize exemplary staff as required by JVA, states have implemented this program differently, and 11 states do not plan to implement the incentive program because sometimes it conflicts with the state’s policy if awards are given to individuals. In addition, integrating DVOP and LVER staff into one-stop centers continues to be challenging. Through its policy guidance letters, VETS has clarified the DVOP and LVER staff’s new functions, along with new staffing and reporting requirements, including the use of part-time positions for DVOPs. In addition, shortly after JVA was enacted, NVTI held a series of implementation seminars covering DVOP and LVER staff’s new roles and responsibilities that were attended by representatives from all states. NVTI also conducts case management training aimed at DVOP staff. At the end of its first training year in October 2004 following passage of JVA, NVTI reported training 282 DVOPs and estimated that an additional 144 would be trained each year in the future. Similarly, NVTI conducts employer outreach training focused on LVERs. Because this class is new, NVTI estimates that it will train 264 LVERs by October 2005, and projects that an additional 240 LVERs would be trained each year. One of the key changes in the new law gives states the flexibility to establish part-time DVOP and LVER positions, though this was already permitted to some extent for LVERs. According to their fiscal year 2005 state plans, 23 states planned to use the new flexibility under JVA to employ both full- and part-time DVOPs, while 34 states planned to use the long-standing authority to employ both full- and part-time LVERs. As shown in table 1, part-time DVOP positions would comprise about 18 percent of the total DVOP staff and about 44 percent of the total LVER staff. Some states plan to use part-time DVOPs and LVERs extensively. For example, two states, Maine and Washington, planned to use part-time LVERs exclusively. In addition, South Dakota plans on having 87 percent of its DVOPs be part-time, and Vermont plans to have 91 percent of LVERs be part-time. By contrast, in New Jersey, only 5 percent of DVOPs are to be part-time and, in Indiana, 6 percent of LVERs are to be part-time. VETS has implemented JVA’s requirement to establish a performance incentive awards program by issuing policy guidance that lays out criteria and monetary as well as nonmonetary awards for states to consider in developing an awards program. According to fiscal year 2005 state plans, 11 states did not plan to use the incentive program due to reasons such as conflicts with state law or other policies if the awards are given to individuals. The remaining 40 states planned to implement the incentive program in various ways. For example, in one state, two DVOPs were awarded a one-time maximum award of $1,000. In another state, however, top performing DVOP and LVER staff were given a one-time cash award for as little as $16. Regardless of their current approach to implementing incentives, some VETS officials said they would like to see award eligibility criteria expanded beyond individuals to include entire units. Labor officials acknowledge that integration of DVOP and LVER staff into the one-stop centers has been a persistent challenge. The extent that implementing changes under JVA will assist in breaking down the barriers and entrenched cultures that have precluded integration in the one-stop centers will likely take years. According to the DVOP and LVER staff we interviewed, integration still varied widely among local areas, depending on the level of support provided by the one-stop manager for the DVOP and LVER programs. For example, one DVOP staff told us that the veterans program is highly integrated with the WIA program in her local one-stop, with both sharing case management responsibilities. In addition, she participates in regular meetings with the one-stop partners and attributed this cohesion to the commitment by her one-stop manager to work cooperatively with all the partners. In contrast, a DVOP from another state told us that he was assigned to tasks that prevented him from serving as many veterans as he would have liked. In cases where there was poor integration, several reasons were cited by DVOP and LVER staff we interviewed from various states. One reason was that other one-stop staff were not educated or trained on serving veterans. An NVTI official told us that the institute has provided training to states that have requested it, but was concerned that the states that were struggling with providing veterans’ services were the very ones that did not request training. Other reasons included the perception among DVOP and LVER staff we interviewed that there is little coordination between VETS and ETA to ensure integration among all partner programs, adopt uniform definitions of eligible veterans, and consistently give veterans priority of service regardless of program. VETS has implemented some JVA changes to the accountability system related to the measures used for assessing DVOP and LVER performance, but it estimates that it will be at least 2007 before it can implement a minimum standard for veterans entering employment that all states will be expected to meet. Until the standard becomes available, VETS has used historically based outcomes in negotiating performance goals with states. In addition, Labor has established an entered-employment goal of 58 percent for veterans served through the DVOP and LVER programs. While VETS reported that the DVOP and LVER programs met Labor’s program year 2003 goals for some measures, concerns about data reliability remain, preventing an accurate assessment of how well DVOP and LVER staff are performing. The performance measurement system for the DVOP and LVER programs has been in transition over the last several years. Prior to JVA, performance measures placed more emphasis on process-oriented measures—measures that simply tracked services provided to veterans, not on the employment outcomes veterans achieved. In addition, states used different data sources to report employment-related outcomes, resulting in performance that was not comparable across states. According to VETS officials, VETS adopted performance measures, beginning July 1, 2003, that are consistent with those of WIA, but has not yet specified when it will implement a system for weighting the measures to provide special consideration for such groups as disabled veterans, in accordance with JVA’s requirements. Another fundamental change was the use of Unemployment Insurance (UI) wage records to identify veterans who get jobs rather than the use of time-consuming follow-up procedures.