Labor and VA have had a long-standing relationship formalized by agreements acknowledging their mutual concern and responsibility for helping veterans with service-connected disabilities transition to the civilian workforce. Their past efforts to coordinate and collaborate have faced difficulties, however. In 2005, at the recommendation of a VA task force and encouragement of congressional staff, the two agencies forged a new memorandum of agreement. In this agreement, the agencies agreed to share information, including wage data, and establish and maintain management information systems to enable accurate yearly reporting. The agreement also called for three joint work groups to develop performance measures to assess partnership program results, design a training curriculum, and establish joint data collection, analysis, and reports. In addition, the agreement outlined means to promote cooperation and eliminate duplication of efforts between the agencies. These include developing an approach to serving veterans that involves both VA and state workforce agency staff from the early stages, advising all VA clients about the employment services offered by the state workforce agency, and establishing an effective process for referring VA clients who are seeking employment to the state workforce agency. While many of the specific elements of the agreement need to be implemented at a national level within Labor and VA, other activities, by their nature, would take place on the state or local level. The agreement provides for separate memorandums of agreement, containing common goals and measures, to be executed among Labor, VA, and the states. Table 1 summarizes the key elements of the national agreement, the specific actions to which Labor and VA agreed, and the level at which implementation generally would occur. Around the same time the national agreement was signed, VA rolled out the Five-Track employment program aimed at standardizing rehabilitation services for veterans with service-connected disabilities and providing a greater focus on employment options early in the rehabilitation process. The five employment tracks from which veterans can select are reemployment with their previous employer, rapid access to employment through job readiness preparation and training opportunities, self- employment, employment through long-term services that include education programs and formal training leading to employment, and independent living services for those who are currently unable to work due to their disabilities. These tracks were available prior to the rollout, but the program changed the way they were presented to veterans. The Five-Track program was piloted in four regional offices starting in October 2004, and a national rollout began in November 2005. Figure 1 describes the Five-Track model. As part of the Five-Track program, VA established the employment coordinator position and drew up plans to install job resource labs. The position description for the employment coordinator contains duties aimed at providing veterans with assistance preparing for and finding employment. These duties include helping veterans make informed choices about their employment track, assessing veterans’ readiness to seek employment, and assisting veterans with job networking, development, and placement. The position description also includes responsibilities for marketing the VA program to employers and developing partnerships with other agencies to assist veterans with employment services. Also as part of the Five-Track program, VA allocated funds for each location to install a job resource lab with computers, Internet access, and other materials for veterans to use in their career exploration and job search. VA made plans to have employment coordinators in most of its 57 regions, and a job resource lab in each regional office and in every satellite location. Although the missions of Labor’s VETS and VA’s VRE programs to provide employment assistance to disabled veterans are similar, the organizational structure of each is somewhat different. VA administers its VRE programs through regional offices—roughly one in each state, with multiple offices in larger states—and its staff are federal employees. The regional offices have some autonomy in deciding the operations of the office, including their working relationships with the Labor programs and the state workforce agency. Labor administers its programs through the Disabled Veterans’ Outreach Program (DVOP) and the Local Veterans’ Employment Representative (LVER) program, which are funded by a grant from Labor to the state workforce agencies. DVOP specialists and LVER staff are employees of the state and are typically housed in state employment service offices. Although there is evidence LVER staff and DVOP specialists often perform similar duties, the DVOP specialist’s role was designed to provide intensive services to veterans with employment barriers, including those with disabilities, while the LVER staff role was designed to market veterans to employers. Labor provides oversight and monitoring of the state grants through a state VETS program director (DVET) in each state. The Labor and VA programs serve similar clientele, but there are differences in eligibility requirements and the measure of successful completion. To participate in VA’s VRE program, the veteran must have disabilities that affect a minimum percentage of daily activities, as determined by VA, and must have an employment handicap related to the disability. In addition, there is a time limit for receiving services, generally 12 years following the date the veteran was discharged or separated from the military or received a disability percentage rating from VA. The primary outcome measured by VA’s VRE program is whether the veteran obtained and maintained suitable employment, that is, work that is within a veteran’s emotional and physical capabilities and consistent with the veteran’s abilities, aptitudes, and interests. By contrast, any veteran who was discharged because of a service-connected disability or who served more than 180 days and was not dishonorably discharged can receive services through Labor’s programs. The primary outcome measured by Labor is whether or not the veteran entered employment, without requiring determination of suitability. VA and the state workforce agencies—including DVOP specialists and LVER staff—work together on the local level. In many states, DVOP specialists work with veterans who have completed their VA training to help them find employment. The process by which these referrals are made is not determined nationally; it is left up to VA regional officials to develop local policies and procedures. In addition, some state workforce agencies provide VA staff with state unemployment insurance wage data to verify the employment status of their clients. Additionally, many VA regional offices have a DVOP specialist colocated in the office at least part of the time. However, cooperation between Labor and VA has historically been better in some states than in others, reportedly in part because of variation in the number and quality of services provided by DVOP specialists. As a result, VA’s VRE Task Force concluded in its 2004 report that VRE should consider using DVOP specialist services as one of many options to help its clients, and not view the DVOP specialist as the sole provider of employment services. Labor and VA have fulfilled some elements of their agreement to coordinate efforts, but the agencies face a variety of challenges to fully executing the agreement, including the lack of a comprehensive plan for implementing the agreement and measuring progress. The national offices of Labor and VA have implemented one of the elements of the agreement for which they are responsible, have begun to address four elements, and have not taken action on the others. All of the states we visited had taken action to implement some of the elements of the national agreement, but faced challenges implementing others due to state privacy laws, staffing limitations, and other obstacles. In addition, Labor and VA lack a long- term plan for implementing the agreement that includes timelines and benchmarks against which progress can be judged, as well as procedures for dealing with states that are not carrying out activities in which they have a role. Further, the agencies have provided states with limited guidance on implementation. As of July 2007, the extent of nationwide implementation was uncertain because the agencies had not thoroughly reviewed the implementation of the agreement at the state level. Labor and VA have fully implemented the element of their agreement that calls for the establishment of joint work groups composed of staff from both agencies. The agencies have formed three joint work groups to address issues related to shared performance measures, staff training, and joint data collection, with the goal of improving the quality of employment services and suitable job placements for veterans with disabilities. According to a Labor official, the implementation of the agencies’ agreement revolves around the efforts of these work groups. The work groups met for the first time in April 2006, 6 months after the agreement was signed. In January 2007, they conducted a survey of Labor and VA field staff in 24 states to gather preliminary information about the working relationship between the agencies at the local level and identify areas needing improvement. On the basis of the survey results, the work groups plan to launch a pilot project in eight regional offices in August or September of 2007 to explore new strategies to improve the partnership between Labor and VA. Labor and VA officials expect to complete the pilot project in January 2008, and plan to make recommendations thereafter regarding the implementation of these strategies nationwide, but the work groups have not yet made definitive recommendations for program changes. Four of the elements that Labor and VA are responsible for implementing—staff evaluations, yearly reporting, performance measures, and monitoring of state-level memorandums of agreement—are in process but not yet completed. The agreement between Labor and VA calls for agency managers to consider the effectiveness of partnership activities between VA and the state workforce agency when evaluating staff. Although Labor has implemented such standards for state VETS program directors, these provisions are not specifically outlined in the performance standards for other VETS program staff or for VA staff. The agreement also calls for the agencies to have yearly reports that include measures of the number of VA program participants referred to the VETS program who registered for state workforce agency services, the number of participants who entered suitable employment, and the number of participants who maintained suitable employment for 180 days or more. While the agencies are collecting data on most of these measures, they are not currently collecting data on the last measure. With regard to performance measures, one of the joint work groups has started to develop new shared measures to better assess partnership activities between the two agencies. For example, one proposed measure is the percentage of veterans referred from VA to VETS program DVOP specialists who receive an employment services assessment within 30 days.