Federal Disability Assistance
Stronger Federal Oversight Could Help Assure Multiple Programs' Accountability Gao ID: GAO-07-236 January 26, 2007Congress has created 20 federal employment-related programs that are aimed at helping people with disabilities obtain jobs. Little is known about the effectiveness and the management of some of these programs. GAO was asked to review four of these programs; the Department of Education (Education) oversees three--Projects with Industry (PWI), Supported Employment State Grants, and Randolph-Sheppard. An independent federal agency, the Committee for Purchase, oversees the fourth, Javits-Wagner-O'Day (JWOD). Specifically, GAO assessed the extent to which (1) performance goals and measures have been established for these programs and (2) the agencies responsible have established adequate oversight procedures. We reviewed program planning and performance information, interviewed agency officials, and visited each of the four programs in four states.
Three of the four programs have federal performance goals. No federal performance goals or measures currently exist for the Randolph-Sheppard program, which provides opportunities for individuals who are blind to operate vending facilities on federal properties. Without goals, it is difficult to assess the program's performance, but Education officials told GAO they are developing them. Education has a goal and a measure for the Supported Employment State Grants program--a federal grant program that provides job coaching and other support to help individuals with severe disabilities secure jobs. The goal indirectly measures the program's performance because grant funds are mixed with other funding sources to provide supported employment services. Education has also developed one goal for the PWI program--a federal grant program that helps individuals with disabilities obtain competitive employment--that is consistent with the mission of the program. The goal is to create and expand job opportunities for individuals with disabilities in the competitive labor market by engaging business and industry, and one of the measures tracks the percentage of individuals placed in employment in work settings making at least minimum wage. The Committee for Purchase, which oversees the JWOD program--a program that helps to create jobs through the federal property management and procurement systems--first developed federal goals and measures for its fiscal year 2005-2007 strategic plan and has since revised them. The revised measures still have limitations, such as not being clearly defined or being difficult to measure. Education's and the Committee for Purchase's oversight of the four programs has been uneven. Education has established procedures, such as on-site reviews, for the PWI and Supported Employment State Grants programs that, if consistently followed, would provide reasonable assurance that the programs are in compliance with applicable laws and regulations. However, Education conducts limited oversight of the Randolph-Sheppard program. For example, Education does not routinely analyze or report the data it collects from states and has provided little guidance to ensure states comply with laws or consistently interpret program requirements. One area in which Education has not provided sufficient guidance is the circumstances under which federal agencies may charge fees to licensed vendors operating vending facilities on their properties. As a result, vendors in some locations were paying commissions or fees but those in other locationswere not. Finally, the Committee for Purchase delegates most of its oversight responsibilities to two central nonprofit agencies that also represent the interests of the JWOD nonprofit agencies they oversee. This arrangement, as well as the fact that they receive a percentage of the total value of the contracts from the JWOD nonprofit agencies, raises questions about their independence and gives them little incentive to identify instances of noncompliance that could result in the JWOD nonprofit agency losing its federal contract.
RecommendationsOur recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.
Director: Team: Phone:GAO-07-236, Federal Disability Assistance: Stronger Federal Oversight Could Help Assure Multiple Programs' Accountability
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Report to Congressional Requesters:
United States Government Accountability Office:
GAO:
January 2007:
Federal Disability Assistance:
Stronger Federal Oversight Could Help Assure Multiple Programs'
Accountability:
GAO-07-236:
GAO Highlights:
Highlights of GAO-07-236, a report to congressional requesters
Why GAO Did This Study:
Congress has created 20 federal employment-related programs that are
aimed at helping people with disabilities obtain jobs. Little is known
about the effectiveness and the management of some of these programs.
GAO was asked to review four of these programs; the Department of
Education (Education) oversees three”Projects with Industry (PWI),
Supported Employment State Grants, and Randolph-Sheppard. An
independent federal agency, the Committee for Purchase, oversees the
fourth, Javits-Wagner-O‘Day (JWOD). Specifically, GAO assessed the
extent to which (1) performance goals and measures have been
established for these programs and (2) the agencies responsible have
established adequate oversight procedures. We reviewed program planning
and performance information, interviewed agency officials, and visited
each of the four programs in four states.
What GAO Found:
Three of the four programs have federal performance goals. No federal
performance goals or measures currently exist for the Randolph-Sheppard
program, which provides opportunities for individuals who are blind to
operate vending facilities on federal properties. Without goals, it is
difficult to assess the program‘s performance, but Education officials
told GAO they are developing them. Education has a goal and a measure
for the Supported Employment State Grants program”a federal grant
program that provides job coaching and other support to help
individuals with severe disabilities secure jobs. The goal indirectly
measures the program‘s performance because grant funds are mixed with
other funding sources to provide supported employment services.
Education has also developed one goal for the PWI program--a federal
grant program that helps individuals with disabilities obtain
competitive employment--that is consistent with the mission of the
program. The goal is to create and expand job opportunities for
individuals with disabilities in the competitive labor market by
engaging business and industry, and one of the measures tracks the
percentage of individuals placed in employment in work settings making
at least minimum wage. The Committee for Purchase, which oversees the
JWOD program”a program that helps to create jobs through the federal
property management and procurement systems”first developed federal
goals and measures for its fiscal year 2005-2007 strategic plan and has
since revised them. The revised measures still have limitations, such
as not being clearly defined or being difficult to measure.
Education‘s and the Committee for Purchase‘s oversight of the four
programs has been uneven. Education has established procedures, such as
on-site reviews, for the PWI and Supported Employment State Grants
programs that, if consistently followed, would provide reasonable
assurance that the programs are in compliance with applicable laws and
regulations. However, Education conducts limited oversight of the
Randolph-Sheppard program. For example, Education does not routinely
analyze or report the data it collects from states and has provided
little guidance to ensure states comply with laws or consistently
interpret program requirements. One area in which Education has not
provided sufficient guidance is the circumstances under which federal
agencies may charge fees to licensed vendors operating vending
facilities on their properties. As a result, vendors in some locations
were paying commissions or fees but those in other locations were not.
Finally, the Committee for Purchase delegates most of its oversight
responsibilities to two central nonprofit agencies that also represent
the interests of the JWOD nonprofit agencies they oversee. This
arrangement, as well as the fact that they receive a percentage of the
total value of the contracts from the JWOD nonprofit agencies, raises
questions about their independence and gives them little incentive to
identify instances of noncompliance that could result in the JWOD
nonprofit agency losing its federal contract.
What GAO Recommends:
GAO recommends that Education establish goals for the Randolph-Sheppard
program and strengthen program monitoring and guidance. GAO also
recommends that the Committee for Purchase ensure JWOD goals and
measures are clear and measurable and strengthen its procedures for
overseeing the JWOD nonprofit agencies. In their comments, Education
and the Committee for Purchase generally agreed with GAO‘s
recommendations.
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-236].
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Robert E. Robertson at
(202) 512-7215 or robertsonr@gao.gov.
[End of Section]
Contents:
Letter:
Results in Brief:
Background:
Three of the Four Programs Have Established Goals and Measures:
Uneven Federal Oversight Provides Little Assurance of Accountability
for Two Programs:
Conclusions:
Recommendations:
Agency Comments and Our Evaluation:
Appendix I: Objectives, Scope, and Methodology:
Appendix II: Performance Goals and Measures for the Javits-Wagner-O'Day
(JWOD) Program:
Appendix III: Comments from the Department of Education:
Appendix IV: Comments from the Committee for Purchase from People Who
Are Blind or Severely Disabled:
Appendix V: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: Federal and State Funds, Other Funding Sources, Total Funds,
and Funds per Vendor for Four State Randolph-Sheppard Programs in
Fiscal Year 2005:
Table 2: Supported Employment State Grants Program Goal and Actual
Performance, Fiscal Years 2003 through 2005:
Table 3: PWI Performance Goal and Actual Performance, Fiscal Years 2003
through 2005:
Table 4: JWOD Performance Goals and Examples of Performance Measures,
Fiscal Years 2007-2009:
Table 5: JWOD Performance Goals and Measures:
Figure:
Figure 1: Number of Vendors in Program, Fiscal Years 2001-2005:
Abbreviations:
BAC: Business Advisory Councils:
ETS: Committee for Purchase's Essentially The Same:
GPRA: Government Performance and Results Act of 1993:
JWOD: Javits- Wagner-O'Day:
NCED: National Center for the Employment of the Disabled:
NIB: National Industries for the Blind:
NISH: National Industries for the Severely Handicapped:
PWI: Projects with Industry:
RSA: Rehabilitation Services Administration:
SLA: State Licensing Agency:
VR: Vocational Rehabilitation:
United States Government Accountability Office:
Washington, DC 20548:
January 26, 2007:
The Honorable Edward M. Kennedy:
Chairman:
Committee on Health, Education, Labor, and Pensions:
United States Senate:
The Honorable Henry A. Waxman:
Chairman:
Committee on Oversight and Government Reform:
House of Representatives:
The employment rate for working-age people with disabilities is about
half of the employment rate for working-age people without
disabilities.[Footnote 1] In fiscal year 2003, at least $2.4 billion
was spent on 20 federal programs that are aimed to improve employment
opportunities for people who have disabilities, but little is known
about how effectively some of these programs are achieving their
intended outcomes. You asked us to review four of these programs:
Projects with Industry (PWI), Supported Employment State Grants,
Randolph-Sheppard Vending Facility Program (hereafter known as Randolph-
Sheppard), and Javits-Wagner-O'Day (JWOD). PWI and Supported Employment
State Grants are federal grant programs that fund services that help
individuals with disabilities to obtain competitive employment. The
other two programs, Randolph-Sheppard and JWOD, help create jobs for
individuals with disabilities through the federal property management
and procurement systems. Randolph-Sheppard licenses people who are
blind to operate vending facilities on federal or other properties, and
JWOD gives preference to nonprofit agencies who employ people with
disabilities to produce goods and services for the federal government.
The Department of Education (Education) is responsible for
administering the Projects with Industry, Supported Employment State
Grants, and Randolph-Sheppard programs. By law, Randolph-Sheppard is a
state-operated program with limited federal responsibilities. The
Committee for Purchase from People Who Are Blind or Severely Disabled
(Committee for Purchase), a small independent federal agency, is
responsible for administering the JWOD program. The Committee for
Purchase utilizes two central nonprofit agencies--National Industries
for the Blind (NIB) and NISH[Footnote 2]--to help carry out its
responsibilities.
You asked us to determine to what extent (1) performance goals and
measures have been established for these programs and (2) the agencies
responsible for these programs have established adequate procedures for
overseeing program implementation and assuring laws and regulations are
followed.
To determine the extent to which performance goals have been
established for these programs, we conducted a review of program laws,
guidance, and performance documents.[Footnote 3] To obtain additional
information about the performance goals and measures and determine the
extent that the agencies responsible for these programs have
established adequate procedures for overseeing program implementation
and assuring that laws and regulations are followed, we reviewed agency
policies and guidance, and interviewed agency officials at Education
and the Committee for Purchase. We also met with officials of the two
central nonprofit agencies (NIB and NISH) that assist the Committee for
Purchase in performing its oversight responsibilities for JWOD. To
supplement the overall program information, we reviewed each of these
programs at the local level in four states--Arizona, Kansas, New York,
and North Carolina--and analyzed documentation (e.g., program guidance,
monitoring protocols, etc.) to ascertain how these programs were
administered and monitored. We selected these four states based on
factors such as whether they had all four programs operating in the
state, geographic diversity, and whether the states' Vocational
Rehabilitation (VR) programs had a separate blind program (about half
of all states have two agencies; one for the general VR program and one
for the blind program).[Footnote 4] We visited a total of 4 PWI
projects, 4 Supported Employment State Grants recipients, 7 Randolph-
Sheppard vendors, and 13 JWOD nonprofit agencies. We reviewed available
audit reports on the state-operated Randolph-Sheppard program for the
states we visited and for other states. We also reviewed other
available audit reports for JWOD nonprofit agencies and PWI grantees.
Finally, we interviewed officials of agencies engaged in disability
research and advocacy at the national level including the Council of
State Administrators of Vocational Rehabilitation, National Council on
Disability, and the National Council of State Agencies for the Blind.
(App. I contains a more detailed discussion of our scope and
methodology.) We conducted our work between March 2006 and December
2006 in accordance with generally accepted government auditing
standards.
Results in Brief:
Three of the four programs we reviewed had federal goals. Currently, no
formal federal performance goals exist for the Randolph-Sheppard
program, but two of the four states we visited had established their
own performance goals, such as increasing the number of participating
licensed vendors and vending facilities. Education officials told us
they are developing federal goals and should complete them by April
2007. Education has a goal for the Supported Employment State Grants
program, which is for individuals who have significant disabilities to
achieve high quality employment, but it cannot fully assess this
program's performance because these grant funds are mixed with other
funding sources to provide supported employment services; which is
common in such situations. The Projects with Industry program has a
performance goal that is consistent with the mission of the program.
The program's goal is to create and expand job opportunities for
individuals with disabilities in the competitive labor market by
engaging business and industry. The program has had mixed success in
meeting its targets for this goal. For example, the program did not
meet one target with regard to the percentage of individuals served who
were placed into competitive employment between fiscal years 2003 and
2005. However, it consistently exceeded its target for the average
increase in weekly earnings during the same period. For the JWOD
program, the Committee for Purchase first developed performance goals
and measures as part of its fiscal year 2005-2007 strategic plan, but
did not include a key component--performance targets--necessary for
assessing performance. The Committee for Purchase has since revised its
performance management system and established some performance targets,
but cannot yet report progress toward its goals. Measures under the
revised system have some limitations, such as not being clearly defined
or being difficult to measure.
Education and the Committee for Purchase's oversight for the programs
they are responsible for has been uneven. Education has established
procedures for the PWI and the Supported Employment State Grants
programs that, if consistently followed, should provide reasonable
assurance that the programs are in compliance with applicable laws and
regulations. For example, Education told us they conduct quarterly
monitoring calls with all PWI grantees, require grantees to submit
annual reports on project activities and performance, and conduct some
on-site reviews. Oversight of the Supported Employment State Grants
program is accomplished as part of the ongoing monitoring of state
Vocational Rehabilitation programs and includes examining state VR
program plans and required data reports. In the four states visited, we
found that each of these states had its own accountability procedures
for ensuring that VR grant funds, including Supported Employment State
Grants funds, were being used in accordance with federal laws and
regulations. Concerning the Randolph-Sheppard program, however,
Education relies heavily on self-reported data for its monitoring and
does not routinely analyze or report the data it collects. The agency
has also provided little guidance to states to ensure compliance with
laws or consistent interpretation of program requirements. For example,
Education has not provided clear guidance or policies regarding when
federal agencies may charge commissions or fees to licensed vendors as
a condition of operating a vending machine on federal property. We
found that licensed vendors are paying commissions or fees in some
locations but not in others and the federal agency had not obtained
approval from Education. With regard to JWOD, the Committee for
Purchase does perform some compliance monitoring for its participating
nonprofit agencies. However, the majority of the compliance visits are
performed by the two central nonprofit agencies that must also
represent the interests of the JWOD nonprofit agencies they oversee.
This arrangement, as well as the fact that they receive a percentage of
the total value of contracts from the JWOD nonprofit agencies, raises
questions about their independence and gives them little incentive to
identify instances of noncompliance that could result in the member
JWOD nonprofit losing its contract.
We are making recommendations to the Secretary of Education and to the
Chairperson of the Committee for Purchase aimed at improving
performance management and oversight of the Randolph-Sheppard and JWOD
programs, respectively. In its comments on a draft of this report, both
Education and the Committee for Purchase generally agreed with our
recommendations and provided information on actions they were taking or
planning to take to enhance performance management and oversight of
their respective programs.
Background:
Over the years, Congress has established many employment-related
programs to help people with disabilities obtain jobs. Four of these
programs, PWI, Supported Employment State Grants, Randolph-Sheppard,
and JWOD, illustrate several different approaches taken by Congress to
create more employment opportunities for people with severe
disabilities--from providing job training and support to enabling
individuals to run businesses. Congress created two of the four
programs (PWI and Supported Employment State Grants) in the 1970s and
the other two (Randolph-Sheppard and JWOD) in the 1930s.
Projects with Industry:
PWI was established in 1978,[Footnote 5] and is a discretionary grant
program that provides financial assistance for up to 5 years to
organizations to assist individuals with disabilities in obtaining
competitive employment.[Footnote 6] However, according to Education
officials, recent grants have been awarded for 3-year periods. Grantees
of the PWI program include community rehabilitation program providers,
employers, labor unions, nonprofit agencies or organizations, trade
associations, and others. The purposes of the PWI program are to (1)
create and expand job and career opportunities for individuals with
disabilities in the competitive labor market by engaging private
industry as partners in the rehabilitation process, (2) identify
competitive job and career opportunities and the skills needed to
perform these jobs, (3) create practical settings for job readiness and
job training programs, and (4) provide job placements and career
advancements. PWI grantees must establish business advisory councils
(BAC) comprised of representatives of private industry, organized
labor, and individuals with disabilities and their representatives, and
others. BACs are required, among other things, to identify jobs and
careers available in the community, the skills necessary to perform
them, and prescribe appropriate training and job placement programs.
Seventy-nine grantees received about $22 million in fiscal year 2005
and served more than 10,000 individuals with significant disabilities.
The Department of Education is responsible for administering and
overseeing PWI and is required to:
* Conduct annual on-site compliance reviews--Education's primary means
of verifying the accuracy of the information grantees submit--of at
least 15 percent of grant recipients, chosen at random.
* Submit an annual report to Congress that analyzes the extent to which
the individual grant recipients have complied with the evaluation
standards. For example, the project must serve individuals with
disabilities that impair their capacity to obtain competitive
employment. In selecting persons to receive services, priority must be
given to individuals with significant disabilities.
* Have a performance reporting system that grantees can use to
routinely submit program data that evaluates the grantees' progress in
achieving the stated objectives, the effectiveness of the project in
meeting the purposes of the program, and the effect of the project on
its participants.
Supported Employment State Grants:
Established in 1978,[Footnote 7] the Supported Employment State Grants
program provides funds to states and is designed to assist states in
developing collaborative programs with appropriate organizations to
provide supported employment services to individuals with the most
severe disabilities who require these services to enter or retain
competitive employment. Supported Employment State Grants funded
services include a wide array of employment-related activities ranging
from intensive on-the-job skills training to discrete post-employment
services such as job station redesign or repair and maintenance of
technology to help them perform job functions, generally for up to 18
months after job placement. In fiscal year 2005, the grant program was
funded at approximately $37 million.[Footnote 8]
The Supported Employment State Grants program is an integrated
component of state VR programs, which are also overseen by
Education.[Footnote 9] Title I of the Rehabilitation Act of 1973
authorizes a federal-state VR program to provide services to persons
with disabilities so that they may prepare and engage in meaningful
employment.[Footnote 10] Education provided $2.6 billion in fiscal year
2005 in VR grants to the states and territories based on a formula that
considers the state's population and per capita income.[Footnote 11]
Each state and territory designates a single VR agency to administer
the VR program, except where state law authorizes a separate agency to
administer VR services for individuals who are blind. State VR agencies
provide services to individuals in 22 service categories, such as
vocational counseling and guidance, job placement assistance, on-the-
job supports, college or university training, rehabilitation
technology, and interpreter services. State VR agencies that determine
they will not be able to serve all eligible individuals who apply for
services must develop criteria for prioritizing services to individuals
with the most significant disabilities. Education reported that, as of
fiscal year 2006, 40 of the 80 state VR agencies had such an order of
selection.
Oversight for Supported Employment State Grants is conducted as part of
oversight of state VR programs, and Education is required to:
* conduct annual reviews of state VR programs that include collecting
and reporting information on budget and financial management data, and
an analysis of program performance, including relative state
performance, based on the standards and indicators; and:
* conduct periodic on-site monitoring of state VR programs.
Randolph-Sheppard:
The Randolph-Sheppard program[Footnote 12] was created in 1936 to
provide blind persons with gainful employment, enlarge their economic
opportunities, and encourage their self-support.[Footnote 13] While
Randolph-Sheppard is under the authority of Education, the states are
primarily responsible for operating their programs, and every state
except Wyoming has established a vendor program. Each state that has a
Randolph-Sheppard program is required to have a state licensing agency
(SLA), under the auspices of the state VR program and approved by
Education, to operate the program, including the authority to
promulgate rules and regulations that govern the program. The SLAs are
responsible for training, licensing, and placing people who are blind
as operators of vending facilities (machines, snack bars, and
cafeterias) located on federal and other properties. In addition, SLAs
must annually submit information about their Randolph-Sheppard programs
to Education, including information on the number of applicants and the
number accepted, the number of vending facilities and vendors, and the
total amount of vendor earnings.
In fiscal year 2005, SLAs spent about $37 million in federal and state
VR grant funds to help operate and support the program. In addition to
VR funds, some states fund the program through optional set-asides from
licensed vendors, which are a percentage of their revenues, and through
the profits from vending machines located on federal properties that
are not operated by licensed vendors. State funds are also used to
operate the program. In total, more than $76 million were used to
operate and support the Randolph-Sheppard program nationwide in fiscal
year 2005.
In fiscal year 2005, the Randolph-Sheppard program generated $661.3
million in total gross income and the average annual earnings of
vendors was $43,584. Over a 5-year period (fiscal year 2001 through
fiscal year 2005), the number of vending facilities have been in
decline nationwide, decreasing from 3,193 to 3,080. Over the same
period, the number of vendors decreased annually except in fiscal year
2005, as shown in figure 1.
Figure 1: Number of Vendors in Program, Fiscal Years 2001-2005:
[See PDF for image]
Source: Department of Education.
[End of figure]
While states are responsible for operating their programs, among other
things, Education is required to:
* approve applications from a state's VR agency to serve as the SLA,
and approve the rules and regulations the SLA promulgates to implement
the Randolph-Sheppard Act;
* conduct periodic evaluations of the program to determine whether the
program is being used to its maximum potential; and:
* convene arbitration panels and pay for arbitration to resolve vendor
and SLA disputes.
Javits-Wagner-O'Day:
Established in 1938,[Footnote 14] JWOD is a federal procurement set-
aside program designed to increase employment and training
opportunities for persons who are blind or have other severe
disabilities.[Footnote 15] Through this program, the government
purchases commodities and services from nonprofit agencies employing
workers who are blind or have severe disabilities. According to
Committee for Purchase officials, in fiscal year 2006, federal
procurement expenditures for goods and services provided by JWOD
program suppliers totaled about $2.3 billion, and provided employment
for about 48,000 people who are blind or have severe disabilities at
more than 600 participating JWOD nonprofit agencies. The types of
employment opportunities range from working in food service or
providing janitorial services in federal office buildings to producing
and/or assembling boxes and office supplies such as pens, notepads,
file folders, and other goods. For fiscal year 2005, Committee for
Purchase officials reported that JWOD workers earned an average of
$9.49 per hour.
The Committee for Purchase, which administers the program, received
about $5 million in federal funds in fiscal year 2005 to support the
activities of a 15-member, presidentially appointed board and 29 full-
time program staff, including managing the JWOD procurement
list.[Footnote 16] The Committee for Purchase is required by law to
designate one or more central nonprofit agencies to facilitate the
distribution of federal procurement contracts among qualified nonprofit
agencies, and has designated two agencies for this purpose: NIB, which
represents member nonprofit agencies employing individuals who are
blind, and NISH, which represents its member nonprofit agencies that
employ individuals with other severe disabilities.
In addition to its duties related to establishing and maintaining a
procurement list of goods and services that must be purchased through
qualified JWOD suppliers, the Committee for Purchase is required to:
* establish rules, regulations, and policies to carry out the purposes
of the JWOD program, and to provide that nonprofit agencies employing
individuals who are blind have priority in obtaining JWOD contracts;
* monitor nonprofit agency compliance with Committee for Purchase
regulations and procedures;
* inform federal agencies about the JWOD program and encourage their
participation, and, to the extent possible, monitor federal agencies'
compliance with JWOD requirements; and:
* study and evaluate its activities on a continual basis to ensure the
effective and efficient administration of the JWOD Act.
The Committee for Purchase has also established regulations that
require the two central nonprofit agencies (NIB and NISH) to evaluate
the qualifications and capabilities of nonprofit agencies that apply
for contracts and provide pertinent data concerning the JWOD nonprofit
agencies, such as their status as qualified nonprofit agencies, and
their manufacturing or service capabilities. Additionally, NIB and NISH
are to monitor and inspect the activities of participating nonprofit
agencies to ensure compliance with the JWOD Act and appropriate
regulations. For example, to maintain its status as a qualified
nonprofit agency organized for the purposes of the JWOD program, an
agency must employ persons who are blind or have severe disabilities to
perform at least 75 percent of the work-hours of direct labor during
the fiscal year to furnish such commodities or services (whether or not
the commodities or services are procured under the JWOD Act).
The Committee for Purchase's regulations require that each nonprofit
agency maintain employment files for persons with severe disabilities
participating in the JWOD Program. Each file must contain either a
certification by a state or local government entity or a written report
signed by a licensed physician, psychiatrist, or qualified
psychologist, reflecting the nature and extent of a participant's
disability or disabilities that qualify as severe. These reports must
also state whether an individual with severe disabilities is capable of
engaging in normal competitive employment and be signed by persons
qualified to evaluate their work potential, interests, aptitudes, and
abilities.[Footnote 17]
Three of the Four Programs Have Established Goals and Measures:
Federal performance goals and measures have been established for three
of the four programs we reviewed. Education has not established
performance goals and measures for the Randolph-Sheppard program,
although two of the four states that we visited had their own goals and
measures. Education has one goal for the Supported Employment State
Grants program, but the goal only provides an indirect measure of the
program's performance because the data also include individuals with
significant disabilities who receive supported employment services
funded under state VR programs. Education has established a performance
goal for PWI, which is consistent with the purpose of the program.
Finally, for the JWOD program, the Committee for Purchase recently
revised its performance goals and established some targets.
Education Has Not Established Federal Goals for Randolph-Sheppard:
Education does not have GPRA performance goals for the Randolph-
Sheppard program, and neither the Randolph-Sheppard Act nor its
implementing regulations require them. According to Education
officials, no formal federal performance goals or measures currently
exist for the Randolph-Sheppard program, but they are under development
and expected to be completed by April 2007. Although not specifically
required by law, Education does collect some information related to
program performance from the states. For example, Education collects
information on total vendor income, number of facilities, and vendors.
Education also collects information on the numbers of individuals who
are blind or have disabilities who are employed by vendors, although
there is no requirement for vendors to employ workers who have
disabilities.
States may develop performance goals for their Randolph-Sheppard
programs, and two (Arizona and Kansas) of the four states we visited
had established performance goals. Arizona's goals were to increase the
number of licensed vendors and vending facilities. In fiscal year 2005,
the state set a target of 32 vendors and five new facilities. However,
Arizona did not meet these targets and had 30 licensed vendors and
added one new facility. Kansas' fiscal year 2005 goal was that at least
90 percent of the licensed vendors maintain or increase their level of
income from the prior year, and the state reported that this goal had
been exceeded in each of the past 3 fiscal years. According to program
officials in New York and North Carolina, no state goals were
established for their Randolph-Sheppard programs. In the four states we
visited, nearly $10 million, including more than $7 million in federal
and state funds, were used to support operations for about 215 licensed
vendors, as shown in table 1.
Table 1: Federal and State Funds, Other Funding Sources, Total Funds,
and Funds per Vendor for Four State Randolph-Sheppard Programs in
Fiscal Year 2005:
State: Arizona;
Federal and state funds: $1,681,418;
Other funding sources[A]: $ 790,531;
Total funds: $2,471,949;
Vendors (staff years): 29.7;
Funds per vendor: $83,231.
State: Kansas;
Federal and state funds: 517,202;
Other funding sources[A]: 165,732;
Total funds: 682,934;
Vendors (staff years): 15;
Funds per vendor: 45,529.
State: New York;
Federal and state funds: 2,705,026;
Other funding sources[A]: 848,736;
Total funds: 3,553,762;
Vendors (staff years): 86.5;
Funds per vendor: 41,084.
State: North Carolina;
Federal and state funds: 2,478,909;
Other funding sources[A]: 711,558;
Total funds: 3,190,467;
Vendors (staff years): 82.3;
Funds per vendor: 38,766.
State: Total;
Federal and state funds: $7,382,555;
Other funding sources[A]: $ 2,516,557;
Total funds: $9,899,112;
Vendors (staff years): 213.5;
Funds per vendor: $46,366.
Sources: RSA-15 reports submitted by officials of the Arizona, Kansas,
New York, and North Carolina Business Enterprise Programs.
[A] Other funding sources are vending machine income (federal and non-
federal), and a percentage of net proceeds from licensed vendors.
[End of table]
In these four states, we also interviewed seven licensed vendors who
operated businesses that ranged from full-service cafeterias to small
convenience stores or canteens. We found that all of the licensed
vendors we met with worked full-time and most earned incomes that
provided an income that made them relatively self-sufficient. However,
not all licensed vendors nationwide receive incomes that allow them to
support themselves and their incomes may be subsidized through program
revenues generated by other vendors. Two states we visited were taking
steps to increase vendors' income by consolidating facilities.
Regardless of their financial status, three of the seven licensed
vendors we interviewed continued to receive financial benefits from
other federal disability assistance programs, such as Social Security
Disability Insurance. In addition, at least 6 of the 7 vendors employed
fewer than 10 workers, most of whom were not blind or did not have
severe disabilities. However, some of the vendors we interviewed told
us that they are interested in ways to reach out to and employ more
workers who are blind or have severe disabilities. Further, states we
visited told us about other program challenges, such as a decline in
customers as a result of increased security in federal buildings and
consolidation of unprofitable facilities that reduced the number of
opportunities available to vendors.
Education Has a Supported Employment State Grants Program Goal That
Indirectly Measures Performance:
Education has a GPRA goal for the Supported Employment State Grants
program that the department uses to indirectly measure the program's
performance. According to program officials, Education has not sought
information that isolates the performance of federally-funded Supported
Employment State Grants because they are used together with state and
other federal funds to provide supported employment services, as is
often the case when funds from different sources are used to achieve an
outcome. Officials told us a separate measure for the Supported
Employment State Grants program would be an artificial distinction. The
performance goal is for individuals who have significant disabilities
to achieve high quality employment. For this goal, Education only
includes individuals with significant disabilities who have a goal of
supported employment, that is, achieving competitive employment with
support services such as rehabilitation technology or on-the-job
supports. The measure is the percentage of individuals who achieve
competitive employment, which they define as making minimum wage or
higher, but not less than the wages paid to workers without
disabilities performing similar work, and working alongside workers
without disabilities in an integrated setting.
During fiscal years 2003 and 2004, Education exceeded its performance
target for placing Supported Employment State Grants program
participants in competitive employment. For fiscal year 2005, Education
increased the performance target to 93 percent and achieved 92.6
percent, as shown in table 2.
Table 2: Supported Employment State Grants Program Goal and Actual
Performance, Fiscal Years 2003 through 2005:
Goal: Individuals with significant disabilities with a supported
employment goal will achieve high-quality employment: Performance
measure: Percentage of individuals with a supported employment goal who
achieve a competitive employment outcome;
Performance: 2003: Target: 77.8%;
Performance: 2003: Actual: 92.7%;
Performance: 2004: Target: 78%;
Performance: 2004: Actual: 92.8%;
Performance: 2005: Target: 93%;
Performance: 2005: Actual: 92.6%.
Source: Department of Education.
[End of table]
Education Has Established One Federal Performance Goal for the PWI
Program:
Education has established a GPRA performance goal that includes four
measures for the PWI program. The goal of the PWI program is to create
and expand job opportunities for people with disabilities in the
competitive labor market by engaging business and industry in the
rehabilitation process. The four performance measures are consistent
with the program's goal. For example, one measure is the percentage of
individuals served by the program who were placed into competitive
employment. Another measure, cost per placement, was only recently
established for fiscal year 2006 and performance data are not yet
available. In recent years, Education has had mixed success in meeting
the GPRA targets. For example, in fiscal years 2003 to 2005, the PWI
program did not meet its target of increasing the percentage of
individuals who were placed into competitive employment. However, it
consistently exceeded its target for increased earnings over the same
period, as shown in table 3.
Table 3: PWI Performance Goal and Actual Performance, Fiscal Years 2003
through 2005:
Goal: Create and expand job opportunities in the competitive labor
market by engaging the participation of business and industry in the
rehabilitation process: Performance measures: Percentage of individuals
served by the program who were placed into competitive employment[A];
Performance: 2003: Target: 62.4%;
Performance: 2003: Actual: 54.2%;
Performance: 2004: Target: 62.7%;
Performance: 2004: Actual: 61.5%;
Performance: 2005: Target: 63%;
Performance: 2005: Actual: 51.9%.
Goal: Create and expand job opportunities in the competitive labor
market by engaging the participation of business and industry in the
rehabilitation process: Performance measures: Percentage of previously
unemployed individuals served who were placed into competitive
employment[A];
Performance: 2003: Target: 63%;
Performance: 2003: Actual: 54%;
Performance: 2004: Target: 64%;
Performance: 2004: Actual: 65.5%;
Performance: 2005: Target: 65%;
Performance: 2005: Actual: 62.4%.
Goal: Create and expand job opportunities in the competitive labor
market by engaging the participation of business and industry in the
rehabilitation process: Performance measures: Average increase in
weekly earnings;
Performance: 2003: Target: $231;
Performance: 2003: Actual: $242;
Performance: 2004: Target: $233;
Performance: 2004: Actual: $247;
Performance: 2005: Target: $238;
Performance: 2005: Actual: $253.
Goal: Create and expand job opportunities in the competitive labor
market by engaging the participation of business and industry in the
rehabilitation process: Performance measures: Cost per placement
(federal grant funds only)[B];
Performance: 2003: Target: NA[C];
Performance: 2003: Actual: NA[C];
Performance: 2004: Target: NA[C];
Performance: 2004: Actual: $3,139[D];
Performance: 2005: Target: NA[C];
Performance: 2005: Actual: $3,014[D].
Source: Department of Education.
[A] An evaluation of the PWI program, published in 2003, raised some
doubts about the reporting on the percentage of individuals placed in
competitive employment.
[B] Cost per placement will become a GPRA indicator in fiscal year
2006.
[C] Not available.
[D] Data are being used to develop a baseline for fiscal year 2006
performance.
[End of table]
Education has revised its GPRA performance measures for the PWI program
for fiscal year 2006. Specifically, Education will begin to measure the
percentage of PWI projects whose cost per placement is within a
specified range, which has yet to be determined. The agency will also
measure the percentage of all individuals who exit the program and are
placed in competitive employment. According to Education officials,
this measure was added in response to recommendations by the Office of
Management and Budget and will allow more accurate comparisons with
other job training programs throughout the government.
We visited four PWI grantees in the four states and found that these
projects set goals that are consistent with the goals of the PWI
program, such as placing people in competitive employment. For example,
one PWI grantee in Kansas is serving individuals with all types of
disabilities ages 16 and older. One goal of the project is to place 75
percent of the people they serve each year in competitive employment,
which is higher than the GPRA target set by Education. According to
agency officials, clients are being placed in jobs such as call centers
and other customer service positions, earning average salaries of $9.25
to $10.00 per hour. In another example, one PWI grantee in New York has
a goal to transition youth from school to work and targets its services
to individuals ages 16 to 25 with a mental, physical, or emotional
disability. One of the goals of the project is to place about 67
percent of the people served in jobs over 3 years. According to the
grantee, a successful outcome in the program is competitive employment
in at least a part-time position paying at least the federal minimum
wage, and continued employment for at least 6 months. The PWI projects
in Kansas and New York just completed the first year of operations.
The Committee for Purchase Recently Updated Its Strategic Plan for the
JWOD Program; Progress toward Goals Is Not Yet Known:
For the first time, the Committee for Purchase developed performance
goals and measures for the JWOD program in its fiscal year 2005-2007
strategic plan and updated this plan in October 2006, but it has not
yet reported progress toward meeting these goals. While JWOD's enabling
legislation and regulations do not require goals, the strategic plan
includes five performance goals and a number of measures for each of
these goals.[Footnote 18] The current strategic plan includes some
performance measures and targets, but some of the measures that are
more qualitative in nature do not include targets, and it is unclear
how JWOD will measure progress in these areas. In keeping with the
overall mission of the JWOD program, the goals are aimed at increasing
the number of job opportunities for people who are blind or have severe
disabilities. One of the plan's five goals is to expand employment
opportunities. The other four goals include increasing customer
satisfaction (JWOD customers are federal agencies), improving
efficiency of operations, expanding program support and developing new
markets for its products and services. However, these goals do not
specifically address one part of the program's mission, which is to
increase training opportunities.[Footnote 19]
Furthermore, some of the performance measures are not clearly defined
or may be difficult to measure, thus making it difficult to assess
performance. For example, there are several measures that involve using
"milestone tracking" although the milestones are not provided. One of
these measures will track progress toward annually updating and
implementing a plan to address communication and information sharing
with and among stakeholders. Further, JWOD has over 30 performance
measures, which may make it difficult to identify performance problems.
As we discussed in our June 1996 guide on implementing GPRA,[Footnote
20] performance measures should be limited to the vital few. Limiting
measures to core program activities enables managers and other
stakeholders to assess accomplishments and make decisions without
having an excess of data that could obscure rather than clarify
performance issues.[Footnote 21] The JWOD performance goals and
examples of measures are shown in table 4. All of the JWOD performance
measures are listed in appendix II.
Table 4: JWOD Performance Goals and Examples of Performance Measures,
Fiscal Years 2007-2009:
Performance goals: Continue to expand employment opportunities for
people who are blind or have other severe disabilities under the JWOD
program, including wage progression, benefits, upward mobility, and
personal job satisfaction;
Examples of performance measures:
* Percentage increase in direct labor hours performed by people who are
blind or have other severe disabilities on JWOD products and services;
* Percentage increase in the number of people who are blind or have
other severe disabilities employed in direct labor positions on JWOD
products/services.
Performance goals: Partner with federal customers to increase customer
satisfaction and loyalty, so that the JWOD program becomes their
preferred source for products and services;
Examples of performance measures:
* Federal agency scorecard that evaluates the level of satisfaction
with JWOD products, services, and/or customer experience among key
federal agencies, using a stoplight or similar summary format;
* Increased customer satisfaction with quality, timeliness, and price,
based on customer surveys and/or alternative qualitative research
(e.g., focus groups).
Performance goals: Improve efficiency and effectiveness of the JWOD
program by streamlining and automating processes and procedures, and
improving communication, while continuing to ensure program integrity;
Examples of performance measures:
* Reduction in the cycle time for the addition of a new JWOD product or
service to the procurement list;
* Milestone tracking of evaluation of commercial distribution
processes, including staff resources and financial resources.
Performance goals: Expand awareness, understanding, and preference for
the JWOD program within the public, Congress, federal agencies, the
disability community, and other JWOD stakeholders through effective
communication and information sharing;
Examples of performance measures:
* Milestone tracking of annual update and implementation of a plan that
addresses communication and information sharing with and among both
internal and external stakeholders;
* Among members of congressional committees or subcommittees with
oversight or other significance for the JWOD program, number who have
been educated about the JWOD program and/or are actively engaged with
their local JWOD- participating nonprofit agency(ies).
Performance goals: Strategically develop new markets and expand
existing markets in which the JWOD program can provide best value
products and services to federal customers in order to expand
employment opportunities that meet the needs of people who are blind or
have other severe disabilities;
Examples of performance measures:
* Milestone tracking of establishment and implementation of a program
market development plan that addresses existing customers, existing
products/services, new customers, and new products/services;
* Percent increase in the employment of people who are blind or have
other severe disabilities under the JWOD program, measured in (1)
actual direct labor hours, (2) actual jobs, (3) projected direct labor
hours on procurement list additions, and (4) projected jobs on
procurement list additions by key market segment.
Source: Final FY 2007-2009 Strategic Plan for the Javits-Wagner-O'Day
(JWOD) Program, Committee for Purchase from People Who Are Blind or
Severely Disabled, October 16, 2006.
[End of table]
Uneven Federal Oversight Provides Little Assurance of Accountability
for Two Programs:
Education and the Committee for Purchase engage in a number of
oversight activities for the programs they are responsible for, but
their efforts to ensure compliance with applicable laws and regulations
have been uneven, and overall have provided little assurance of program
accountability for two of the four programs reviewed. Specifically,
Education has established oversight procedures for the PWI and the
Supported Employment State Grants programs that, if consistently
followed, should provide reasonable assurance of compliance with
relevant laws and regulations. The agency is just beginning to conduct
on-site monitoring of PWI grantees that may be sufficient for testing
the accuracy of the information used to monitor compliance. Education's
oversight of these two programs has generally been more active than its
oversight of the Randolph-Sheppard program. Education relies primarily
on self-reported data for its monitoring of the Randolph-Sheppard
program and does not routinely analyze or report the data it collects.
Finally, the Committee for Purchase has established procedures for
monitoring and overseeing the JWOD program, but has prescribed
regulations that delegate most of the responsibility for carrying out
these procedures to two central nonprofit agencies that are also
responsible for representing the interests of the JWOD nonprofit
agencies they monitor, raising questions about independence.
Furthermore, there are no procedures in place for the Committee for
Purchase to address instances where the central nonprofit agencies fail
to carry out their oversight responsibilities.
Education Performs Various PWI Oversight Activities, and On-site
Monitoring Is Improving:
Education regularly performs a number of oversight activities to ensure
that PWI grantees are making progress toward project goals and
complying with applicable laws and regulations. Specifically, program
specialists told us they conduct quarterly monitoring calls with all
PWI grantees in which they ask a series of 30 questions that help them
to identify and proactively resolve problems with individual projects.
The questions address several areas, including progress toward meeting
goals, activities of the BACs, interaction with the state VR agency,
and fiscal management. Further, Education requires that PWI grantees
submit annual reports that include detailed information about project
activities and performance, and informs grantees of this requirement as
part of the application process. Education uses the project information
it receives from grantees to identify those grantees that may be at
risk of being out of compliance with program requirements and to target
these grantees for additional assistance or for on-site reviews.
Education also relies on the data it receives from grantees to provide
information about grantees' performance in its annual reports to
Congress.[Footnote 22]
Although grantees are responsible for monitoring their own projects,
Education is required to conduct random on-site reviews of 15 percent
of PWI grantees annually.[Footnote 23] On-site reviews are the primary
means by which Education can assess the accuracy of the performance
data submitted by grantees. Education conducted 11 of the 12 required
on-site reviews in fiscal year 2006 and had scheduled the remaining
review for November 2006. However, it conducted only 3 of the 12
required for 2005, and 0 in 2004, and therefore did not have enough
information to provide reasonable assurance of the accuracy of the data
submitted by grantees in those years. Although each of the PWI grantees
that we visited had procedures in place to review the data they
submitted to Education, a research organization conducted an evaluation
of the program that raised doubts about the accuracy of PWI data
submitted by grantees in general.[Footnote 24] Specifically, reviewers
found that about one-fifth of PWI grantees surveyed (19 out of 92)
provided information on the number of persons placed in fiscal year
2001 that was inconsistent with the information they had submitted to
Education.
Education is also required to submit an annual report to Congress
analyzing the extent to which the individual grant recipients have
complied with program evaluation standards.[Footnote 25] In fiscal
years 2003, 2004, and 2005, Education has met this requirement by
providing summaries of the extent to which grantees have met program
performance targets in its Performance and Accountability Report to
Congress.
Education's Oversight of Supported Employment Is Part of Overall VR
Program Monitoring Efforts:
Education's oversight of the Supported Employment State Grants program
is integrated into its ongoing efforts to review and monitor state VR
programs.[Footnote 26] During fiscal year 2006, Education revised its
annual state plan review protocols and prepared a draft on-site
monitoring plan for the VR program.[Footnote 27] Annual reviews include
examining each state's VR program plans and other documentation, such
as required annual data reports on VR customers, services, and
outcomes; caseloads; and financial accountability and data reporting
procedures. Education's October 2006 draft on-site monitoring protocols
call for on-site reviews once every 3 years and are designed to verify
and supplement the information it receives from the states regarding
program performance and compliance, and include reviewing case files
and holding public hearings or other discussions with VR program
consumers and advocates, as needed. Education has not yet conducted any
on-site reviews using the revised protocols, but plans to conduct its
first reviews beginning in fiscal year 2007. Once fully implemented,
the annual reviews and on-site monitoring, along with state-level
activities, should offer reasonable assurance that the Supported
Employment State Grants program is in compliance with applicable laws
and regulations and the data that states submit to Education annually
are accurate.
In addition, we found that all four states we visited had their own
accountability procedures for ensuring that VR grant funds, including
Supported Employment State Grants funds, were being used in accordance
with federal laws and regulations. For example, the New York state VR
agency has configured its automated information management system in a
way that only authorizes payment for supported employment services to
providers that have a contract to provide these services, at the
contracted rates. In addition, three of the four states had adopted
performance-based contracting systems, whereby vendors providing
supported employment services, such as job coaching or training, are
required to demonstrate progress toward required milestones in order to
receive payment from the state agencies, and VR counselors monitor
their progress on a weekly, biweekly, or monthly basis.
Education Provides Little Oversight of the Randolph-Sheppard Program:
Education provides little oversight of the Randolph-Sheppard program.
Despite being required to conduct periodic evaluations of the program
and being responsible for approving states' rules and regulations for
implementing the Randolph-Sheppard Act,[Footnote 28] Education has no
formal procedures for evaluating state programs. In addition to lacking
procedures, Education has performed few on-site monitoring reviews of
SLAs in recent years. According to agency officials, Education has
performed five on-site monitoring reviews since the beginning of fiscal
year 2005 and had performed no recent site visits in the four states
that we visited. Education's oversight activities primarily consist of
collecting data from states through annual reports from the SLAs that
administer the program and providing requested technical assistance.
Although the states report considerable information including earnings
data; the number of vendors, facilities, individuals employed by
vendors; types of facilities; costs; and sources of funding, Education
does not test the accuracy of data that it requires states to report,
nor does the agency routinely analyze the data to assess program
performance and management. As a result, Education cannot assess trends
in performance, identify possible best practices, or help states that
may need assistance. Upon request, Education also provides technical
assistance to SLAs. According to Education officials, technical
assistance and guidance is regularly provided to SLAs through telephone
calls and written correspondence, including e-mails, with staff on
specific questions.
In its oversight role, Education has not provided clear guidance to
states on emerging issues that could have nationwide implications.
Instead, Education responds to individual state concerns and convenes
panels to arbitrate disputes that SLAs are unable to resolve. As a
result, states have different policies regarding the permissibility of
teaming agreements, which partner licensed vendors with commercial food
operators in order to help manage larger food service operations at
dining facilities at military bases. SLAs may have such agreements for
various reasons, such as state program officials' lack of expertise or
licensed vendors' inexperience running such facilities. In these cases,
the licensed vendor generally does not operate the food service
facilities, but rather manages some aspects of food service operations.
For example, one of the states we visited (Kansas) had a teaming
agreement. One of the states we visited (New York) does not currently
allow teaming agreements, while another (Arizona) has no policy
regarding teaming agreements. The fourth state, North Carolina, permits
teaming agreements but does not currently have any as of June 2006.
Although Education has noted the increasing use of teaming agreements,
it has not issued guidance to the SLAs directly addressing whether
these are in keeping with the spirit of the Randolph-Sheppard Act, or
whether they should be subject to limitations, despite concerns
expressed by states and others. For example, the California State
Auditor found that by allowing teaming agreements, the SLA had
inadequately protected the interests of the state and licensed vendors.
The SLA had not (1) ensured that written contracts existed before
beginning operations, (2) analyzed the investment and return on
investment of the teaming agreement to the program and licensed
vendors, (3) adequately reviewed the teaming agreements, or (4) ensured
that the commercial food service operators were paying their fair share
of program costs. In addition, the Georgia State Auditor identified
some concerns about teaming agreements, including the failure to define
the duties for participating licensed vendors, resulting in these
vendors having little, if any, responsibility for the overall operation
and success of subcontracted food services. Further, the auditor noted
that the program is not ensuring that the commercial food service
operators are making progress toward the program's goal that licensed
vendors eventually assume responsibility for operating the facility.
Additionally, Education has not provided clear guidance or policies
regarding when federal agencies may charge fees or commissions to
licensed vendors as a condition of operating a vending facility on
federal property. The Randolph-Sheppard Act has been interpreted to
prohibit commissions unless federal agencies obtain written approval
from the Secretary of Education.[Footnote 29] We found that licensed
vendors have paid commissions or fees in some locations but not in
others and the federal agencies had not obtained approval from
Education. For example, in one state we visited (Kansas), at least one
licensed vendor was required to pay 1.5 percent of total revenues to
the U.S. Postal Service in exchange for permission to operate vending
facilities on the agency's properties. However, Education has not
prohibited such practices or required the Postal Service or other
federal agencies charging commissions to obtain written approval.
Furthermore, officials in Kansas have chosen not to dispute it.
According to agency officials, Education has never approved such a
limitation and cannot routinely monitor state-level or vendor-specific
business negotiations, but would intervene to bring the parties
together in an attempt to resolve disputes or make clear the
requirements of the Randolph-Sheppard Act.
Although Education has exercised little oversight for this program, the
four SLAs that we visited had certain procedures in place that should,
if consistently operated along with other certain complementary
processes and procedures such as management's monitoring of performance
over time, help safeguard program assets. SLA officials obtained cash
register receipts, daily reports on business activities, or monthly
reports submitted by the vendors to review the financial operations for
these programs. However, audits of programs in other states have
reported certain issues relating to the accountability of state-
operated programs under the Randolph-Sheppard Act. For example, the
Michigan Auditor General reported that SLA staff did not comply with
established equipment inventory control procedures for program
equipment and could not account for equipment inventory, placing
inventory at risk of misappropriation.[Footnote 30] Further, the
California State Auditor reported that, among other things, the SLA has
not followed up on missing financial reports from licensed vendors and
has not been able to monitor licensed vendors' financial problems
properly. In addition, the auditor found that the SLA was not
adequately pursuing past-due commissions owed to the program by private
businesses operating vending machines on federal properties.[Footnote
31]
Committee for Purchase Delegates Most Oversight Responsibilities for
JWOD to Two Organizations That Represent the Interests of the Agencies
They Oversee:
The Committee for Purchase has established procedures for monitoring
and overseeing the JWOD program, but has delegated most of the
responsibility for monitoring participating JWOD nonprofit agencies to
two central nonprofit agencies. As of April 2006, NIB officials
reported that they worked with 81 participating JWOD nonprofit agencies
that employed individuals who are blind, and NISH officials reported
that they worked with 552 JWOD nonprofit agencies that employed
individuals with other severe disabilities.[Footnote 32] In particular,
although the Committee for Purchase must approve the nonprofit
agencies' participation in the program, it relies on the central
nonprofit agencies to certify that:
* 75 percent or more of the direct labor hours under JWOD contracts are
performed by individuals who are blind or have severe disabilities, and
if not, that there is a suitable plan in place to bring this percentage
up to the required level;
* agencies maintain required documentation for each of these
individuals;
* agencies function as nonprofit entities serving individuals who are
blind or have severe disabilities;
* agencies have a required job placement program; and:
* agencies comply with applicable occupational safety and health
standards.
The Committee for Purchase requires that the JWOD nonprofit agencies
certify annually that they are in compliance with program requirements
but does not routinely verify this information, relying instead on the
central nonprofit agencies to do so. According to agency officials, the
Committee for Purchase performs about 20 field visits annually,
visiting up to 3 agencies per visit, or about 60 of the more than 600
participating nonprofit agencies. At this rate, the Committee for
Purchase is unable to satisfy its own requirements to perform on-site
compliance reviews at each fully compliant participating nonprofit
agency every 5 years.
The Committee for Purchase's regulations create at least two problems
for NIB and NISH: the potential for a conflict of interest resulting
from a lack of organizational independence as well as disincentives to
perform their monitoring duties effectively. Specifically, these
regulations require that NIB and NISH, on behalf of the Committee for
Purchase, monitor the compliance of JWOD nonprofit agencies, but, at
the same time, represent them in their dealings with the Committee for
Purchase. Moreover, the regulations also permit NIB and NISH to charge
a fee based on JWOD nonprofit agencies' sales to the government that
does not exceed the limit set by the Committee for Purchase, and
require the nonprofit agencies to pay that fee in order to remain in
good standing in the program. This system of compensation may create a
disincentive for NIB and NISH to identify instances of noncompliance
that could result in the JWOD nonprofit agency losing its contract,
especially for those JWOD nonprofit agencies that are generating large
volumes of JWOD sales. Finally, although the regulations and procedures
provide for a number of duties that the central nonprofit agencies must
perform, they do not specify actions the Committee for Purchase can
take if the central nonprofit agencies fail to execute these duties.
NIB and NISH officials reported that they monitor JWOD nonprofit
agencies' compliance with relevant laws and regulations by conducting
on-site reviews of nonprofit agencies every 3 years,[Footnote 33] and
require quarterly statistical reports from the agencies they oversee.
The Committee for Purchase has established procedures for these reviews
that require each central nonprofit agency to use a standardized review
sheet to assess whether the JWOD nonprofit agency is compliant in 11
different program areas, including the percentage of direct labor hours
performed by individuals who are blind or have severe disabilities,
documentation of an employee's disability, and an evaluation of whether
or not the individual is capable of competitive employment.[Footnote
34] The on-site reviews are the primary means for NIB and NISH to test
the accuracy of the data that the JWOD nonprofit agencies submit, but
the scope of the reviews may not be sufficient to provide reasonable
assurance of the accuracy of all of the data. For example, NIB and NISH
officials reported that they test the accuracy of the data for
percentage of direct labor hours by reviewing a sample of case files,
but they do not verify other data, such as job placement and upward
mobility statistics. Further, they do not always report instances of
noncompliance they find to the Committee for Purchase.
In the states we visited, reports from NIB's and NISH's on-site reviews
generally showed that the JWOD nonprofit agencies were in compliance
with program requirements, and most files contained the required
documentation. Eleven of 13 agencies that we visited provided
documentation of the results of their most recent on-site reviews
showing they were in compliance. However, in our limited reviews of 137
case files at these 13 agencies, we found that 5 of 8 NISH agencies had
at least 1 file that lacked the required medical documentation of a
worker's disability, and that 3 of these 8 NISH agencies had at least 1
file that lacked the required documentation on competitive employment.
We also found that one of the five NIB agencies we visited had one case
file that lacked the required medical documentation. In sum, 11 percent
of the files we reviewed at the NIB and NISH agencies we visited lacked
the required medical or competitive employment documentation.
A serious instance of noncompliance escaped detection by the
responsible central nonprofit agency (NISH) and the Committee for
Purchase. In this case, the National Center for the Employment of the
Disabled (NCED) in El Paso, Texas, failed to use workers with severe
disabilities to perform the required percentage of direct labor hours
on its JWOD contracts, which were valued at over $200 million. Instead,
NCED inflated its reported percentage by improperly including
economically disadvantaged workers. The problems at NCED were detected
not through routine monitoring, but rather through an anonymous tip to
the Committee for Purchase, and resulted in as many as 1,144 JWOD jobs
being lost to individuals who did not have severe disabilities during
fiscal years 2004 and 2005. The JWOD nonprofit agency took actions
prescribed by the Committee for Purchase to come into compliance,
including dividing the agency's operations into two different units--
one for JWOD work and one for commercial activities--and the Committee
for Purchase is satisfied with the actions taken.
The definition of a severe disability in the law allows for differing
interpretations, which may complicate efforts to ensure compliance for
agencies that serve individuals who have severe disabilities. The
statutory definition of blindness is fairly straightforward: a lack of
visual acuity of not more than 20/200 in the better eye with correcting
lenses or a limited field of vision of not more than 20 degrees. In
contrast, the definition of a severe disability requires a diagnosis of
a residual, physical or mental impairment that limits functioning in
one of five areas (mobility, communication, self-care, self-direction,
and work tolerance or work skills), and a determination that the
impairment has rendered the individual unable to engage in normal
competitive employment over an extended period of time. Despite the
fact that the definition is subject to interpretation, the Committee
for Purchase has offered little additional guidance that would clarify
when disabilities that may not normally be considered severe could be,
such as the conditions under which a recovering alcoholic or a person
with diabetes could be considered to have a severe disability. During
our review of case files at 13 JWOD nonprofit agencies, we noted
instances where it was unclear in the medical documentation that the
disability was severe, such as a case in which the individual was
diabetic, with no indicated symptoms, and another in which the
individual was diagnosed as having an aggressive personality.
Conclusions:
All four of these programs generally provide training and employment
opportunities that might not otherwise be available for individuals who
are blind or have severe disabilities. However, two are hampered by
weaknesses in performance management and program oversight that signal
a need for stronger federal leadership. Absent federal goals for the
Randolph-Sheppard program and routine analyses and reports from
Education on states' program operations and performance, little is
known about how this program is improving the lives of participants.
Having such information about outcomes is an important component of any
program, and essential during times of fiscal austerity. Further, by
not exercising more oversight and issuing clear guidance to all states
on emerging issues that could affect program participants, Education
may be missing an important opportunity to help states improve program
operations or proactively respond to these issues. While recognizing
that there may be increased costs for improved oversight, these costs
could be minimized by, for example, monitoring Randolph-Sheppard
activities as part of Education's oversight for the VR program.
Although the Committee for Purchase has made significant progress in
developing goals for the JWOD program, some of the goals lack key
elements--clear measures and performance targets. Also, the current
approach for overseeing nonprofit agencies operating under the JWOD
program poses difficult challenges for the two central nonprofit
agencies in managing the conflicts of interest that may exist because
of their lack of organizational independence, and therefore demands
strong and effective oversight from the Committee for Purchase.
Ensuring program integrity is particularly important for JWOD since
nonprofit agencies are given a competitive advantage over private
business and industry in the federal procurement system to ensure that
opportunities are provided to individuals with severe disabilities.
Recommendations:
1. To improve program performance management and oversight, we
recommend that the Secretary of Education provide more effective
leadership of the Randolph-Sheppard program by:
* establishing performance goals to identify desired programwide
outcomes that assess states' licensed vendor programs' performance as a
whole in achieving established goals;
* being more proactive in disseminating clear, consistent and routine
guidance about program requirements and prohibited practices to federal
agencies and states; and:
* strengthening their monitoring of SLA and Randolph-Sheppard program
performance in a cost-effective manner.
2. To improve program performance management, we recommend that the
Chairperson for the Committee for Purchase assess goals and measures
for JWOD to ensure that they are clear, measurable and continue to
capture key aspects of program performance as the Committee for
Purchase continues to develop its performance management system.
3. To help ensure that JWOD nonprofit agencies comply with program laws
and regulations, we recommend that the Chairperson of the Committee for
Purchase improve procedures for overseeing these agencies. This could
include requiring the central nonprofit agencies to enter into written
contracts with the Committee for Purchase that clearly lay out their
oversight responsibilities and the consequences for failing to fulfill
them, providing a means of compensating the central nonprofit agencies
for their services that provides an incentive for effective
enforcement, or having the Committee for Purchase assume greater
responsibility for oversight of JWOD nonprofit agencies, by performing
more on-site compliance reviews.
Agency Comments and Our Evaluation:
We received written comments on a draft of this report from the
Department of Education and the Committee for Purchase. Education and
the Committee for Purchase generally agreed with our recommendations
and provided information on activities they had underway or planned.
Education agreed that it should provide more effective leadership of
the Randolph Sheppard program and commented that the actions we
recommended were consistent with the steps the program is taking to
improve program administration. Some of the steps Education cited
included developing appropriate performance goals, enhancing its
efforts to provide clear and consistent guidance, and improving program
monitoring. We believe these efforts will help to improve program
performance management and oversight.
The Committee for Purchase agreed that its performance goals and
measures for the JWOD program should be assessed to ensure that they
are clear and quantifiable. However, the Committee for Purchase
commented that its regulations did not intend for "training" to be
taken literally as a mission output and, therefore, the agency did not
establish a separate goal for training activities. Rather, the
Committee for Purchase stated that it viewed training as an important,
but incremental activity that equips persons who are blind or have
severe disabilities with the knowledge and skills necessary for
employment, which it considers the paramount goal of the program. Also,
the Committee for Purchase believes the reporting requirements for
establishing a separate goal for training would burden the nonprofit
agencies. To avoid confusion over the Committee for Purchase's goals in
the future, the agency plans to clarify its regulations. While we
believe that training is key to preparing persons who are blind or have
severe disabilities for employment, we can understand the Committee for
Purchase's view that the paramount program goal is employment.
Clarifying the regulations regarding the Committee for Purchase's
intent with respect to the role of training may make it clear that a
separate goal for training is not essential.
With respect to ensuring effective monitoring and oversight, the
Committee for Purchase agreed that more guidance was needed to help
ensure that JWOD nonprofit agencies comply with program laws and
regulations. Additionally, the Committee for Purchase commented that it
has recently begun taking steps to address possible conflicts of
interest between the two roles played by the central nonprofit
agencies. The Committee for Purchase also commented that it is
considering establishing other oversight and compliance mechanisms and
in its proposed fiscal year 2007 budget included three new positions
and additional funding for oversight, compliance monitoring, and
program review. We believe the Committee for Purchase's proposed
actions are positive steps toward helping to ensure that JWOD nonprofit
agencies comply with program laws and regulations.
Education and The Committee's comments appear in appendixes III and IV,
respectively. Both agencies also provided technical comments, which we
have incorporated into the report as appropriate.
We are sending copies of this report to the Secretary of Education,
Chairperson of the Committee for Purchase, relevant congressional
committees, and others who are interested. Copies will also be made
available at no charge on GAO's Web site at [Hyperlink,
http://www.gao.gov].
Please contact me on (202) 512-7215 if you or your staff have any
questions about this report. Contact points for our Offices of
Congressional Relations and Public Affairs can be found on the last
page of this report. Other major contributors to this report are listed
in appendix V.
Signed by:
Robert E. Robertson:
Director:
Education, Workforce, and Income Security:
[End of section]
Appendix I: Objectives, Scope, and Methodology:
The objectives of our study were to assess to what extent (1)
performance goals and measures have been established for these programs
and (2) the agencies responsible for these programs have established
adequate procedures for overseeing program implementation and assuring
laws and regulations are followed.
To determine what performance goals and measures have been established
for these programs, we reviewed program laws, guidance, and performance-
related documents. To obtain additional information about the
performance goals and measures, and determine the extent that the
agencies responsible for these programs have established adequate
procedures for overseeing program implementation and assuring that laws
and regulations are followed, we (1) reviewed federal laws,
regulations, and guidance to determine the programs' requirements; and
(2) interviewed agency officials at the Rehabilitation Services
Administration (RSA) within the Department of Education, and the
Committee for Purchase from People Who Are Blind or Severely Disabled
(Committee for Purchase). In addition, we interviewed officials of the
two central nonprofit agencies--the National Industries for the Blind
(NIB) and NISH--that have been delegated certain oversight
responsibilities for Javits-Wagner-O'Day (JWOD) member nonprofit
agencies by the Committee for Purchase.
To obtain additional information about program goals and measures and
oversight for the four programs, we conducted site visits to four
states (Arizona, Kansas, New York, and North Carolina). During these
visits, we met with state VR agency officials to discuss the Supported
Employment, Projects with Industry (PWI), JWOD, and Randolph-Sheppard
programs. In addition, we visited 4 PWI grantees, 13 JWOD nonprofit
agencies, and 7 Randolph-Sheppard vendors. Several criteria were used
in selecting the states to visit. States that were considered had all
four of the employment-related disability programs currently present
and operating in them. States varied in the administration of their VR
programs with about half of all states having two separate programs--
one for the general VR and a separate one for the blind--and the
remaining states having only one VR program. We selected two states
(New York and North Carolina) that had both general and blind VR
programs, and two states (Arizona and Kansas) that had one VR program
that served all people with disabilities seeking employment-related
assistance. In addition, we selected states based on a review of
information about the characteristics of NIB and NISH member nonprofit
agencies to include both large and small, urban and rural, and
different kinds of work performed (products and services). States were
also selected to include geographic diversity.
During the state visits, we met with officials representing each of the
four programs. For Education's programs, we interviewed local officials
of nonprofit agencies with PWI grants, state program administrators for
the state-operated Randolph-Sheppard programs as well as licensed
vendors, and state VR officials responsible for administering the
Supported Employment State Grants program. For JWOD, we interviewed
chief executive officers or their representatives of the JWOD nonprofit
agencies with current federal contracts to provide goods and/or
services. In addition, during these meetings, we collected
documentation to ascertain how the federal and two central nonprofit
agencies were monitoring their respective programs. We also reviewed
the records of 137 workers who were blind or had severe disabilities,
selecting some records at each of the 13 JWOD nonprofit agencies we
visited. The records were randomly selected from lists of current JWOD
workers. A random number generator was used to assign a number to each
name on the active roster and records were selected on the basis of the
number--starting with the lowest number. During the record review, we
assessed whether the agencies' files of workers who were blind or had
severe disabilities contained required medical documentation and
assessment of ability to work in competitive employment.
We determined that the fiscal and program data we used in this report
was reliable for our purposes. To make this determination, we assessed
the reliability of fiscal and programmatic data by interviewing
officials knowledgeable about the data and the steps they take to
ensure accuracy. For Supported Employment, prior GAO work had
systematically tested relevant variables, including all 22 variables of
the services provided. In addition, for this engagement we obtained
documentation from two states (Kansas and New York) that described the
states' procedures for checking the reliability of their data.
Programmatic data collected by the Committee for Purchase for the JWOD
program, and Education for the PWI and Randolph-Sheppard programs were
self-reported by local program officials. For example, reviews of the
information reported by officials for the PWI program were generally
performed by project managers. For fiscal reporting, however, we found
that JWOD nonprofit agencies, PWI grantees, and licensed vendors
generally had systems and procedures for stronger accounting of
financial data. For example, state licensing agency (SLA) officials
used cash register receipts and routine reports on business activities
submitted by the licensed vendors to the SLAs to review the financial
information for these programs. In addition, licensed vendors were also
required to complete merchandise inventories at least once each year.
We also reviewed other available reports on the Randolph-Sheppard
program of the states visited, and reviewed the findings and
recommendations of state audit reports from four other states--
California, Georgia, Michigan, and South Carolina--that had evaluated
all or certain aspects of their state-operated Randolph-Sheppard
programs in recent years. In addition, we interviewed officials of
agencies engaged in disability research and advocacy at the national
level to learn more about each of the objectives. These organizations
were the Council of State Administrators of Vocational Rehabilitation,
Disability Policy Collaboration, Easter Seals, Goodwill Industries
International, National Council on Disability, and the National Council
of State Agencies for the Blind. We also met with officials of the
General Services Administration, a federal procurement agency and
partner of the JWOD program.
We conducted our work between March 2006 and December 2006 in
accordance with generally accepted government auditing standards.
[End of section]
Appendix II: Performance Goals and Measures for the Javits-Wagner-O'Day
(JWOD) Program:
Table 5: JWOD Performance Goals and Measures:
Performance goals: Continue to expand employment opportunities for
people who are blind or have other severe disabilities under the JWOD
program, including wage progression, benefits, upward mobility, and
personal job satisfaction;
Performance measures:
* Percentage increase in direct labor hours performed by people who are
blind or have other severe disabilities on JWOD products and services;
* Percentage increase in the number of people who are blind or have
other severe disabilities employed in direct labor positions on JWOD
products/ services;
* Percentage increase in the number of people receiving benefits versus
not receiving benefits;
* Percentage decrease in the number of people receiving less than the
federally-mandated minimum wage or Service Contract Act wage rate,
segmented by disability;
* The number of employees who are blind or have other severe
disabilities who are promoted into a direct labor job, other than
supervisory or management positions, which includes increased wages
and/or fringe benefits, not attributed to cost of living or
productivity increases of less than 20 percent. Promotions can be
movement between JWOD and non- JWOD jobs;
* The number of employees who are blind or have other severe
disabilities who are promoted into an indirect labor job requiring
supervisory, management, or technical skills, that included increased
wages and/or fringe benefits, not attributed to cost of living raises;
* The number of employees who are blind or have other severe
disabilities who leave the nonprofit agency through competitive or
supported employment placements.
Performance goals: Partner with federal customers to increase customer
satisfaction and loyalty, so that the JWOD program becomes their
preferred source for products and services;
Performance measures:
* Federal agency scorecard that evaluates the level of satisfaction
with JWOD products, services and/or customer experience among key
federal agencies, using a stoplight or similar summary format;
* Time to resolve customer questions or complaints received via the
central customer feedback mechanism(s) or other means of communication;
* Increased customer satisfaction with quality, timeliness, and price,
based on customer surveys and/or alternative qualitative research
(e.g., focus groups).
Performance goals: Improve efficiency and effectiveness of the JWOD
program by streamlining and automating processes and procedures, and
improving communication, while continuing to ensure program integrity;
Performance measures:
* Overhead cost as a percentage of JWOD program direct labor hours,
calculated as total Committee for Purchase budget plus central
nonprofit agencies' operating and supporting costs (excluding capital
expenditures), divided by total number of direct labor hours, segmented
by overall program (Committee for Purchase plus central nonprofit
agencies' overhead), National Industries for the Blind (NIB) and NISH;
* Reduction in the cycle time for the addition of a new JWOD product or
service to the procurement list;
* Percentage increase in sales of products through commercial
distribution channels, segmented by product category; * Ranking of
commercial distributors, evaluated against consistent program
performance expectations, including compliance with the Committee for
Purchase's Essentially The Same (ETS) requirements, segmented by
product category;
* Milestone tracking of evaluation of commercial distribution
processes, including staff resources and financial resources.
* Percent of information technology projects on which the Committee for
Purchase, central nonprofit agencies, and nonprofit agencies
collaborated to increase efficiency and exchange of information;
* Decrease in the percentage of JWOD nonprofit agencies found out of
compliance, segmented by reason;
* Consider a future measure linked to the results of governance and
executive compensation actions.
Performance goals: Expand awareness, understanding, and preference for
the JWOD program within the public, Congress, federal agencies, the
disability community, and other JWOD stakeholders through effective
communication and information sharing;
Performance measures:
* Effectiveness of communication and information sharing measured by
increased percentages in awareness, familiarity (understanding) and
preference, segmented by key stakeholders;
* Milestone tracking of annual update and implementation of a plan that
addresses communication and information sharing with and among both
internal and external stakeholders;
* Analysis of program-level communications execution to ensure that
program resources are used in support of the strategic communications
plan; * Analysis of program-level publications, events, and other
communications tools to evaluate message alignment;
* Facilitate nonprofit agency adoption of program messaging and
branding;
* Awareness, understanding, preference among federal customers,
segmented by Department of Defense and civilian agencies;
* Awareness, understanding, preference for "the disability community,"
comprised of government policy makers, academia, and private membership
or advocacy organizations for people who are blind or have other severe
disabilities;
* Among members of congressional committees or subcommittees with
oversight or other significance for the JWOD program, number who have
been educated about the JWOD program and/or actively engaged with their
local JWOD-participating nonprofit agency(ies).
Performance goals: Strategically develop new markets and expand
existing markets in which the JWOD program can provide best value
products and services to federal customers in order to expand
employment opportunities that meet the needs of people who are blind or
have other severe disabilities;
Performance measures:
* Milestone tracking of establishment and implementation of a program
market development plan that addresses existing customers, existing
products/ services, new customers, and new products/services;
* Percent increase in the employment of people who are blind or have
other severe disabilities under the JWOD program, measured in (1)
actual direct labor hours, (2) actual jobs, (3) projected direct labor
hours on procurement list additions, and (4) projected jobs on
procurement list additions by key market segment;
* JWOD goal achievement, by agency and overall federal government;
* Milestone tracking of establishment and implementation of a strategy
for greater cooperation between JWOD and the small business community,
which may explore counting appropriate JWOD awards toward the annual
Small Business procurement goals and/or the federal government's
inclusion of disability-owned businesses within the small business
measure categories (relates to leveraging the JWOD program to create
additional jobs in the commercial sector);
* Milestone tracking of implementation of a strategy for greater
cooperation between JWOD and Randolph-Sheppard programs;
* Milestone tracking of establishment and implementation of a strategy
for greater cooperation with service-disabled veterans' businesses.
Source: Final FY 2007-2009 Strategic Plan for the Javits-Wagner-O'Day
(JWOD) Program, Committee for Purchase From People Who Are Blind or
Severely Disabled, October 16, 2006.
[End of table]
[End of section]
Appendix III: Comments from the Department of Education:
United States Department Of Education:
Office Of Special Education And Rehabilitative Services:
The Assistant Secretary:
Jan 10 2007:
Robert E. Robertson, Director:
Education, Workforce, and Income Security Issues:
United States Government Accountability Office:
441 G Street N.W.
Washington, D.C. 20548:
Dear Mr. Robertson:
Thank you for the opportunity to review the draft report to
Congressional Requesters: Federal Disability Assistance-Stronger
Federal Oversight Could Help Assure Multiple Programs' Accountability,
GAO-07-236. The Government Accountability Office (GAO) reviewed four
employment programs in this study, including three programs
administered by this Department (Projects With Industry, the Supported
Employment State Grant program, and the Randolph-Sheppard Act program).
The draft report includes a recommendation on one Department program,
the Randolph-Sheppard Act program. This Department does not administer
the fourth program reviewed by GAO, the Javits-Wagner-O'Day (JWOD)
program, and thus, we are not providing comments on the report as it
pertains to that program.
We generally agree with the recommendation in the report, and discuss
below the steps the Department is already taking to improve program
administration and performance. We have also enclosed some technical
comments on several specific matters discussed in the draft report in
an effort to make the report clearer and more accurate.
The first program discussed in the report, Projects With Industry
(PWI), is a discretionary grant program assisting individuals with
disabilities to obtain competitive employment. You found PWI to have an
appropriate performance goal with four measures, including a new
efficiency measure established in fiscal year 2006. You noted that the
Department performed appropriate monitoring and oversight activities,
and that on-site monitoring is improving. GAO made no recommendations
to the Secretary on this program. The Department will continue its
efforts to improve data quality, and monitoring to help improve the
performance of PAT grantees.
The Supported Employment State Grant program was the second program
reviewed for which GAO made no recommendations to the Secretary. You
noted that the Department has a goal to measure (at least, indirectly),
program performance in placing participants into competitive
employment. For fiscal years (FY) 2003-04 the performance targets set
were greatly exceeded. For FY 2005, the target was missed by 0.4
percent after having been raised 15 percent from the preceding year. As
you have noted, the program is closely aligned with the far larger
state vocational rehabilitation formula grant program closely aligned
with the far larger state vocational rehabilitation formula grant
program that also provides services to individuals who may obtain
employment in the specialized supported employment outcome. As noted in
the report, because of the relationship of the Supported Employment
State Grant program to the larger program, it is somewhat difficult to
isolate the effects of the smaller program and measure those effects
directly.
The Randolph-Sheppard (R-S) Act program was the third Department
program reviewed. GAO made a recommendation to the Secretary that
includes establishing performance goals, being more proactive in
disseminating clear and consistent guidance, and strengthening
monitoring. The Department agrees with the recommendation, and note
that it is consistent with steps the Department is already taking to
improve program administration.
Prior to the GAO study, the Department initiated a number of
administrative activities and steps to improve the management,
performance and accountability of the R-S program, and we are building
on those activities and steps. The Department is in the process of
developing appropriate performance goals, is enhancing its efforts to
provide clear and consistent guidance, and has taken steps to improve
and enhance its program monitoring. For example, the Department
completed compliance reviews pertaining to state regulations and set-
aside schedules in fiscal year 2006 for eight states: Iowa, Texas,
Maine, Alabama, Oklahoma, Wisconsin, Nevada and Hawaii, and we are
completing final reports for monitoring in South Carolina, Hawaii, West
Virginia, Wisconsin and the District of Columbia. These initiatives are
substantially aligned with and are addressing the recommendations in
the draft report.
We have attached a summary of several more specific and technical
comments and suggestions to help make the report clearer and more
accurate. We look forward to working with the Government Accountability
Office in your new study of military food service and the role of R-S
agencies and JWOD as contractors to the Department of Defense. Please
let me know if you have any questions about our comments. We appreciate
the opportunity to review the draft report and provide comments.
Sincerely:
Signed by:
John H. Hager
Enclosure:
[End of section]
Appendix IV: Comments from the Committee for Purchase from People Who
Are Blind or Severely Disabled:
Committee For Purchase From People Who Are Blind Or Severely Disabled:
Jefferson Plaza 2, Suite 10800:
1421 Jefferson Davis Highway:
Arlington, Virginia:
22202-3259:
703-603-7740:
Fax 703-603-0655:
January 5, 2007:
Mr. Robert E. Robertson:
Director:
Education, Workforce, and Income Security Issues:
U.S. Government Accountability Office:
441 G Street, NW:
Washington, DC 20548:
RE: Comment on Draft Report GAO-07-236:
Dear Mr. Robertson:
As you requested in your note of December 14, 2006, here are the agency
comments of the Committee for Purchase From People Who Are Blind or
Severely Disabled (the Committee) on the subject report. The report
reflects the efforts of your staff to learn and understand our somewhat
obscure program. We are generally satisfied with the findings and
recommendations. However, there are a few areas where we believe
improvements can be made. For example:
(a) The report states under Results in Brief on pages 3: "For the JWOD
program, the Committee for Purchase first developed performance goals
and measures as part of their fiscal year strategic plan, but did not
include a key component -performance targets-necessary for assessing
performance. The Committee for Purchase has since revised its
performance management system and established some performance targets,
but cannot yet report progress toward its goal. Measures under the
revised system have some limitations, such as not being clearly defined
or being difficult to measure."
We believe that a more accurate statement would be: "That while the
strategic plan as adopted by the Committee for the Javits-Wagner-O'Day
(JWOD) Program for FY 2007-2008 does have some strategic goals and
objectives that are readily quantifiable, and thus have specific
targets identified, other goals and objectives which are more
qualitative in nature still require benchmarking in order to develop
appropriate measures or targets. The Committee has revised its
performance management system and agrees that over the next few years,
milestone-tracking and "to-be-determined" targets will be converted to
more objective, quantifiable targets. As benchmark data is collected in
several areas during FY 2007, an update of the strategic plan will
include more specific targets by FY 2008."
(b) The report states under Results in Brief on page 4: "With regard to
JWOD, the Committee for Purchase delegates most of its responsibilities
for monitoring compliance to two central nonprofit agencies that must
represent the interests of the JWOD nonprofit agencies they oversee."
We believe that a more accurate statement would be: "With regard to
JWOD, the Committee for Purchase does perform some compliance
monitoring for its participating nonprofit agencies. However, the
majority of the compliance visits made to the over 600 participating
nonprofit agencies are delegated to be performed by the Committee's two
designated central nonprofit agencies, which also must represent the
interests of the JWOD nonprofit agencies they oversee."
(c) The report states under Javits-Wagner-O'Day on page 10 that: "the
total program sales for 2006 are estimated at $3 billion." Our most
recent estimates indicate that this figure is closer to $2.3. billion.
Additionally, the report states: "that the JWOD program provides
employment for over 45,000 people who are blind or have severe
disabilities." Our most recent estimates indicate that this figure is
closer to 48,000.
(d) The report states under Javits-Wagner-O'Day on page 11 that: " .for
the purposes of the JWOD program, an agency must employ persons who are
blind or have severe disabilities to perform at least 75 percent of the
work-hours of direct labor during the fiscal year to furnish such
commodities or services."
We believe that a more accurate statement would be: ".for the purposes
of the JWOD program, an agency must employ persons who are blind or
have severe disabilities to perform at least 75 percent of the work-
hours of direct labor during the fiscal year to furnish such
commodities or services (whether or not the commodities or services are
procured under the JWOD Act)."
(e) The report states under "The Committee for Purchase Recently
Updated its Strategic Plan" on page 16 that: "However, these goals do
not address one part of the program's mission, which is to increase
training opportunities."
It is our opinion that the term "training" as it appears at 41 C.F.R.
51-1.1(a) is not intended to be taken literally as a mission output. We
view training as an important but incremental activity that equips
persons who are blind or severely disabled with the knowledge and
skills necessary for employment, which we consider the paramount goal
of our program. Accordingly, we have not established a separate goal
for training activities, nor do we believe it appropriate to burden our
nonprofit agencies with an additional reporting requirement for
training. The Committee will clarify the policy statement in 41 CFR 51-
1.1(a) to avoid confusion over the Committee's goals in the future.
(f) The report states under "Uneven Federal Oversight Provides Little
Assurance" on page 19 that: "while the Committee has established
procedures for monitoring and overseeing the JWOD program, it has
delegated responsibility for these functions to the central nonprofit
agencies, raising questions about those agencies' independence, as they
are also charged with representing the producing nonprofit agencies."
We would like it to be noted that the Committee has recently begun
taking steps to eliminate any possible conflict of interest between the
two roles. At its December 14, 2006 meeting, the Committee's Governance
Subcommittee considered establishing other mechanisms for performing
the program's oversight and compliance monitoring functions. The
Subcommittee plans to continue this consideration at its next meeting,
and to recommend to the Committee shortly an alternative to continued
performance of these functions by the two existing central nonprofit
agencies. As for the Committee's own efforts in this area, the
Administration's budget for Fiscal Year 2007 included three new
positions and additional funding which the Committee will use for
oversight, compliance monitoring, and program review, if this part of
the budget is enacted.
(g) The report states under "Committee for Purchase Delegates Most
Oversight" on page 25 that the level of central nonprofit agency
compensation by the producing nonprofit agencies is negotiated by those
parties is not accurate.
The Committee's regulations, at 41 CFR 51-3.5 and 51-4.3(b)(9), permit
the central nonprofit agencies to charge a fee based on nonprofit
agency sales to the Government that does not exceed the limit set by
the Committee, and require the nonprofit agencies to pay that fee in
order to remain in good standing in the program. To our knowledge,
individual fees are not usually negotiated.
(h) The report states under "Committee for Purchase Delegates Most
Oversight" on page 27 "that the Committee has offered little guidance
on when a disability may be considered severe."
The Committee would like it to be noted that the Committee's
regulations at 41 C.F.R. § 51-4.3. require that each nonprofit agency
employing persons with severe disabilities participating in the JWOD
Program shall maintain in each individual with a severe disability's
file a written report signed by a licensed physician, psychiatrist, or
qualified psychologist, reflecting the nature and extent of the
disability or disabilities that cause such persons to qualify as a
person with a severe disability, or a certification of the disability
or disabilities by a State or local governmental entity. It also states
that reports must state whether that individual is capable of engaging
in normal competitive employment. These reports shall be signed by a
person or persons qualified by training and experience to evaluate the
work potential, interests, aptitudes, and abilities of persons with
disabilities and shall normally consist of preadmission evaluations and
reevaluations prepared at least annually. The file on individuals who
have been in the nonprofit agency for less than two years shall contain
the preadmission report and, where appropriate, the next annual
reevaluation. The file on individuals who have been in the nonprofit
agency for two or more years shall contain, as a minimum, the reports
of the two most recent annual reevaluations.
However, the Committee realizes that more guidance is needed. We are
currently in the final stages of creating a new staff manual providing
detailed guidance on disability definitions, interpretations, and
documentation requirements. This manual will be made available to our
community and interested persons through the Committee website by March
2007.
Thank you for the opportunity to review and comment on your draft
report. We look forward to receiving the final report.
Sincerely,
Signed by:
Leon A. Wilson, Jr.
Executive Director:
[End of section]
Appendix V: GAO Contact and Staff Acknowledgments:
GAO Contact:
Robert E. Robertson (202) 512-7215:
Acknowledgments:
The following individuals made important contributions to this report:
Shelia D. Drake, Timothy Hall, Regina Santucci, Don Allison, Rachael
Valliere, Daniel Schwimer, Walter Vance, and Robert Owens.
FOOTNOTES
[1] Cornell University Institute for Policy Research, Policy Brief,
Dismantling the Poverty Trap: Disability Policy for the 21st Century
(Washington, D.C.: July 2005).
[2] NISH was formerly known as the National Industries for the Severely
Handicapped.
[3] The Government Performance and Results Act of 1993 (GPRA) requires
federal executive branch agencies such as the Department of Education
to set goals, measure their performance, and report on their
accomplishments. Agencies are required to develop annual performance
plans that use performance measurement to reinforce the connection
between the long-term strategic goals outlined in their strategic plans
and the day-to-day activities of their managers and staff.
[4] State VR programs provide assistance to individuals with
disabilities and are overseen by the Department of Education.
[5] Pub. L. No. 95-602 (1978); 29 U.S.C. § 795.
[6] Competitive employment is any full-or part-time job that pays at
least the federal minimum hourly wage and provides a work setting
typically found in the community in which individuals with disabilities
interact with non-disabled individuals, other than non-disabled
individuals who are providing services to them, to the same extent that
non-disabled individuals in comparable positions interact with other
persons.
[7] Pub. L. No. 95-602 (1978); 29 U.S.C. §§ 795g-795n.
[8] States do not have a matching requirement for federal funds to
receive this grant.
[9] In this report, the term state VR programs refers to programs or
agencies in the 50 states, the District of Columbia, and the
territories of American Samoa, Guam, Northern Marianas Islands, Puerto
Rico, and the Virgin Islands.
[10] This program was most recently reauthorized as part of the
Workforce Investment Act of 1998.
[11] The act generally requires states to match federal funds at a
ratio of 78.7 percent federal to 21.3 percent state dollars.
[12] In the four states we visited, Randolph-Sheppard is called the
Business Enterprise Program.
[13] Randolph-Sheppard Act, ch. 638, 49 Stat. 1559 (1936) (codified at
20 U.S.C. §§ 107, 107a-107f).
[14] Wagner-O'Day Act, ch. 697, 52 Stat. 1196 (1938) (codified at 41
U.S.C. §§ 46-48).
[15] A blind person is defined as a person who has been determined to
have (1) not more than 20/200 central visual acuity in the better eye
with correcting lenses or (2) an equally disabling loss of the visual
field as evidenced by a limitation to the field vision in the better
eye to such a degree that its widest diameter subtends an angle of no
greater than 20 degrees. A person with a severe disability, other than
a blind person, is any person who has a severe physical or mental
impairment (a residual, limiting condition resulting from an injury,
disease, or congenital defect) that so limits the person's functional
capabilities (mobility, communication, self-care, self-direction, work
tolerance or work skills) that the individual is currently unable to
engage in normal competitive employment. 41 C.F.R. § 51-1.3.
[16] The Committee for Purchase is responsible for publishing a
procurement list of the commodities produced by any qualified nonprofit
agency for the blind or by any qualified nonprofit agency for the
severely disabled and the services provided by any such agency, which
the Committee for Purchase determines are suitable for procurement by
the government under JWOD. The Committee for Purchase determines the
fair market price of commodities and services that are contained on the
procurement list and offered for sale to the government by any
qualified JWOD agency.
[17] 41 C.F.R. § 51-4.3.
[18] Although the JWOD Act does not require GPRA performance goals and
measures, the Committee for Purchase has determined that the JWOD
program is covered by federal strategic planning requirements.
[19] 41 C.F.R. § 51-1.1(a).
[20] GAO, Executive Guide: Effectively Implementing the Government
Performance and Results Act, GAO/GGD-96-118 (Washington, D.C.: June
1996).
[21] GAO, Tax Administration: IRS Needs to Further Refine Its Tax
Filing Season Performance Measures, GAO-03-143 (Washington, D.C.: Nov.
22, 2002).
[22] By law, Education is required to develop standards for the annual
review and evaluation of a grant recipient's project, which include a
number of compliance indicators. These include, for example, the number
of applicants and individuals eligible for a program, and the number of
significantly disabled people who ended their participation in the
program, became employed, and were still employed after 6 and 12
months.
[23] 29 U.S.C. § 795(f)(3)(A).
[24] RTI International, Evaluation of the Projects with Industry
Program, Final Report (Research Triangle Park, N.C.: 2003).
[25] 29 U.S.C. § 795(f)(5).
[26] For more information on Education's oversight of state VR
programs, see GAO, Vocational Rehabilitation: Better Measures and
Monitoring Could Improve the Performance of the VR Program, GAO-05-865
(Washington, D.C.: September 2005).
[27] The procedures were developed with input from national experts,
state VR agency officials, State Rehabilitation Council members, VR
consumer and advocacy groups, community partners and provider
organizations and other key stakeholders.
[28] 20 U.S.C. § 107a and 34 C.F.R. §§ 395.4 - .5.
[29] Under 20 U.S.C. § 107(b), any limitation on the placement or
operation of a vending facility shall be fully justified in writing to
the Secretary, who shall determine whether such limitation is
justified. In 2005, an arbitration panel ruled that a 10-percent
commission charged by the U.S. Postal Service to licensed vendors
without authorization of the Secretary of Education was a limitation
not allowed under the law. The panel was convened by Education after it
received a complaint and, as required by law, Education published a
synopsis of the decision in the Federal Register. 70 Fed. Reg. 60803-
04.
[30] Michigan Office of the Auditor General, Performance Audit,
Michigan Commission for the Blind, Department of Labor and Economic
Growth and Family Independence Agency, Report Number: 43-231-03
(October 2004).
[31] California State Auditor, Department of Rehabilitation: Its Delay
in Correcting Known Weaknesses Has Limited the Success of the Business
Enterprise Program for the Blind, Report No. 2002-031 (September 2002).
[32] NISH was formerly called National Industries for the Severely
Handicapped.
[33] In 2005, NIB performed about 27 on-site reviews in 2005 and NISH
performed about 180, according to agency officials.
[34] For individuals employed at NISH associated agencies, any
individual who is capable of competitive employment is not considered
severely disabled, according to program regulations. See the Committee
for Purchase's Compliance Memorandum No. 7, "On-Site Compliance
Reviews," dated May 6, 1998.
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