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. 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 requires that many federal programs provide employment and training services through one-stop centers. WIA is designed to provide for greater accountability than under previous law: it established new performance measures, a requirement to use Unemployment Insurance (UI) wage data to track and report on outcomes, and a requirement to conduct at least one multi-site control group evaluation. When WIA was enacted in 1998, it replaced the Job Training Partnership Act (JTPA) programs for economically disadvantaged adults and youth and for dislocated workers with three 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. WIA programs 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. Labor’s guidance provides for monitoring and tracking for the adult and dislocated worker programs to begin when job seekers receive core services that require significant staff assistance. WIA excludes job seekers who receive core services that are self-service and informational in nature from being included in the performance measures. WIA’s youth program does not have three tiers of services, but instead requires that 10 youth services, referred to as program elements, be made available to all eligible youth. All youth who are determined eligible and receive WIA services are included in the performance measures. 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, for 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 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 earnings change and earnings replacement. (See table 1 for a complete list of the WIA performance measures and data sources used for tracking the measures.) 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 primarily rely on 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. 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 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. At the end of program year 2001, four states received financial sanctions. Labor determines incentive grants or sanctions based on the performance data that states must submit each December 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 their updates for the Workforce Investment Act Standardized Record Data (WIASRD) every January. All three submissions primarily represent participants who have exited the WIA programs within the previous program year (July 1 – June 30). WIA also requires Labor to conduct at least one multi-site control group evaluation by the end of fiscal year 2005. WIA requires that evaluations address the general effectiveness of programs and activities in relation to costs and the impact of these services on the community and participants involved. WIA requires that states use the one-stop center system to provide services for many employment and training programs. Seventeen 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 agencies. Table 2. WIA’s Mandatory One-Stop Partner Programs and Related Federal Agencies Employment Service (Wagner-Peyser) Veterans ‘employment and training programs Senior Community Service Employment Program Employment and training for migrant and seasonal farm workers Employment and training for Native Americans Vocational Education (Perkins Act) 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. WIA performance data are useful for providing a long-term national picture of program outcomes; however, these data are less useful for providing information about current performance, and represent only a small portion of job seekers that received WIA services. UI wage recordsthe primary data source for tracking WIA performance—provide a fairly consistent national view of WIA performance and allow for tracking outcomes over time. At the same time, the UI wage records have some shortcomings—they cannot be used to track job seekers who get jobs in other states unless states share data; they do not cover certain categories of workers, such as self-employed persons; and they are not available on a timely basis. States are making progress in overcoming some of these shortcomings by sharing wage data with other states and supplementing information on participants not covered by the wage data. Despite this progress, time lags and other factors affect the timing of states’ reports on their annual performance to Labor and, subsequently, Labor’s reports to Congress. Most of the outcomes data reported in a given program year actually reflect participants who left the program during the prior year, limiting usefulness for gauging current program performance. In addition, the states’ annual reports reflect only a small portion of job seekers who receive WIA services because, under the law and Labor’s guidance, not all job seekers who utilize one-stop services are required to be included in the performance reports. WIA annual performance reportswhich provide a summary of states’ performance on the 17 core measuresare useful for providing a national perspective of outcomes achieved over time. The information presented in the annual reports compares states’ negotiated performance levels with their actual performance levels. (See table 3 for an example of national performance levels for WIA’s job placement ratecalled the entered employment ratein program year 2002.) These reports provide Congress with an annual picture of how well the WIA program is meeting its long- range goals to increase the employment, retention, and earnings of participants. The WIA performance data are also useful to help Labor assess quantitative, outcomes-oriented goals for its strategic plans, annual performance plans, and annual performance reports required by the Government Performance and Results Act (GPRA). In its annual performance report for program year 2002, Labor used the WIA outcome measures to assess its progress in meeting its strategic goals to increase employment, earnings, and assistance to adults and increase the number of youth in education or making a successful transition to work. Most of the performance outcomes in the annual reports are measured using UI wage records13 of the 17 WIA performance measures rely on UI wage records as the primary data source for tracking employment outcomes. (See table 4.) States maintain UI wage records to determine whether unemployed workers qualify for unemployment compensation. The records are compiled from data submitted to the state each quarter by employers and primarily include information on the total amount of wages paid to employees in the quarter.