Workforce Investment Act
States' Spending Is on Track, but Better Guidance Would Improve Financial Reporting Gao ID: GAO-03-239 November 22, 2002The administration has twice proposed reducing the Workforce Investment Act's (WIA) budget, citing large amounts of states' unspent funds carried over from the prior year. However, in light of current economic conditions, state and local workforce officials have expressed a need for more funds, not less. GAO was asked to assess whether the Department of Labor's spending information is a true reflection of states' available funds. GAO examined the spending rate for states, what Labor does to determine how states are managing their spending, and what factors affect states' WIA expenditure rates.
States are spending their WIA funds much faster than required under the law, according to GAO's analysis of Labor's data. By the end of program year 2001, states had spent virtually all funds allocated in 1999 as well as 90 percent of 2000 funds and 56 percent of 2001 funds. By contrast, Labor's estimate suggests a slower pace of spending because it is based on all available funds, including those only recently distributed. Even though 44 percent of program year 2001 funds are being carried over into program year 2002, many of these funds may have already been committed at the point of service delivery. Furthermore, because of reporting inconsistencies, Labor's data do not accurately reflect funds that have been obligated long-term commitments made by states and local areas on behalf of WIA customers. For a truer picture of available funding, both expenditures and obligations must be considered. But, because Labor lacks consistent data on obligations, it focuses only on expenditures to gauge budgetary need and overestimates funds states have available to spend. Labor compares state expenditures against its benchmarks to determine how states manage their spending, to target guidance and assistance efforts, and to formulate next year's budget request. But Labor does not often communicate these benchmarks to states. Despite active monitoring and additional guidance, state and local officials remain confused by some of Labor's financial reporting requirements. They seek more definitive guidance and the opportunity to share promising strategies to help them better manage spending. Financial reporting delays result from lengthy spending approval and contract procurement procedures lasting as long as 8 months and untimely service provider billing. Also, yearly funding fluctuations affect states' and local areas' willingness to commit resources in the long term and inhibit workforce system planning. Some states and localities have implemented strategies to overcome these factors and better manage their WIA spending.
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Director: Team: Phone:GAO-03-239, Workforce Investment Act: States' Spending Is on Track, but Better Guidance Would Improve Financial Reporting
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Report to Congressional Requesters:
United States General Accounting Office:
GAO:
November 2002:
Workforce Investment Act:
States‘ Spending Is on Track, but Better Guidance Would Improve
Financial Reporting:
GAO-03-239:
GAO Highlights:
Highlights of GAO-03-239, a report to Congressional Requesters:
Why GAO Did This Study:
The administration has twice proposed reducing the Workforce Investment
Act‘s (WIA) budget, citing large amounts of states‘ unspent funds
carried over from the prior year. However, in light of current
economic conditions, state and local workforce officials have expressed
a need for more funds, not less. GAO was asked to assess whether the
Department of Labor‘s spending information is a true reflection of
states‘ available funds. GAO examined the spending rate for states,
what Labor does to determine how states are managing their spending,
and what factors affect states‘ WIA expenditure rates.
What GAO Found:
States are spending their WIA funds much faster than required under the
law, according to GAO‘s analysis of Labor‘s data. By the end of program
year 2001, states had spent virtually all funds allocated in 1999 as
well as 90 percent of 2000 funds and 56 percent of 2001 funds. By
contrast, Labor‘s estimate suggests a slower pace of spending because
it is based on all available funds, including those only recently
distributed. Even though 44 percent of program year 2001 funds are
being carried over into program year 2002, many of these funds may have
already been committed at the point of service delivery. Furthermore,
because of reporting inconsistencies, Labor‘s data do not accurately
reflect funds that have been obligated”long-term commitments made by
states and local areas on behalf of WIA customers. For a truer picture
of available funding, both expenditures and obligations must be
considered. But, because Labor lacks consistent data on obligations, it
focuses only on expenditures to gauge budgetary need and overestimates
funds states have available to spend.
Labor compares state expenditures against its benchmarks to determine
how states manage their spending, to target guidance and assistance
efforts, and to formulate next year‘s budget request. But Labor does
not often communicate these benchmarks to states. Despite active
monitoring and additional guidance, state and local officials remain
confused by some of Labor‘s financial reporting requirements. They seek
more definitive guidance and the opportunity to share promising
strategies to help them better manage spending.
Financial reporting delays result from lengthy spending approval and
contract procurement procedures”lasting as long as 8 months”and
untimely service provider billing. Also, yearly funding fluctuations
affect states‘ and local areas‘ willingness to commit resources in the
long term and inhibit workforce system planning. Some states and
localities have implemented strategies to overcome these factors and
better manage their WIA spending.
Highlight Figure: Percentage of WIA Funds Expended as of June 30, 2002:
[See PDF for image]
Source: GAO‘s analysis of Labor‘s financial data files for program
years 1999, 2000, 2001.
[End of figure]
Contents:
Letter:
Results in Brief:
Background:
States Have Spent Most of Their WIA Funds, Labor‘s Estimate Overstates
Funds Available to Spend:
Labor Monitors Spending, Provides Guidance, but Concerns Remain:
A Variety of Factors Affects States‘ WIA Expenditure Rates:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendix I: Sample Financial Status Report Form:
Appendix II: State Expenditure Rates, by Year, for Funds
Allocated in Program Years 2000 and 2001:
Appendix III: Comparison of States‘ Expenditure Rates with
Labor‘s Benchmarks and Projections:
Appendix IV: Comments from the Department of Labor:
Appendix V: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Staff Acknowledgments:
Related GAO Products:
Tables:
Table 1: Funds Appropriated for WIA in Fiscal Years 2000-2003:
Table 2: Allocation of WIA Funds to States and Local Areas:
Table 3: WIA‘s Quarterly Financial Reporting Requirements:
Table 4: Elements of Labor‘s Definition of Total Federal Obligations:
Figures:
Figure 1: WIA‘s Annual Funding Cycle:
Figure 2: WIA Quarterly Financial Reporting Process:
Figure 3: WIA Fund Recapture Process:
Figure 4: Expenditure Rates by Year Spent:
Figure 5: Range of States‘ Cumulative Expenditure Rates for First 2
Years That Program Year 2000 Funds Were Available:
Figure 6: Range of States‘ Expenditure Rates for First Year That
Program Year 2001 Funds Were Available:
Figure 7: Breakout of $5 Billion Available for Program Year 2001:
Figure 8: Percentage of Program Year 2001 Allocation Available for
Three Selected States:
Figure 9: WIA Expenditure Rates for First Year That Program Year 2001
Funds Were Available, by Funding Category:
Abbreviations:
JTPA: Job Training Partnership Act:
TANF: Temporary Assistance for Needy Families:
WIA: Workforce Investment Act of 1998:
November 22, 2002:
The Honorable Edward M. Kennedy
Chairman, Committee on Health, Education,
Labor and Pensions
United States Senate:
The Honorable Howard P. ’Buck“ McKeon
Chairman, Subcommittee on 21st Century Competitiveness
Committee on Education and the Workforce
House of Representatives:
With the enactment of the Workforce Investment Act (WIA) of 1998, the
Congress repealed the Job Training Partnership Act (JTPA) and
overhauled federal employment and training programs. WIA created a more
comprehensive workforce investment system and streamlined services for
at least 17 federally funded employment and training programs into a
single service delivery structure known as the one-stop system. In
fiscal year 2002, WIA‘s three funding streams--adults, dislocated
workers, and youth--were appropriated about $3.9 billion. In July 2002,
most states had just completed their second full year of
implementation. Under WIA, the federal government allocates funds to
states each year, and states have three years to spend those funds--
that is, funds received in 1999 may be spent through 2001; similarly,
those received in 2000 may be spent through 2002. Twice, the
administration has proposed reducing the program‘s budget, recommending
a $359 million reduction for fiscal year 2002 and another $343 million
in 2003. In both cases, the administration has cited states‘ large
amounts of unexpended funds carried over from the prior year, saying
that states could readily absorb funding cuts without affecting service
levels. Labor estimates that nearly 40 percent of states‘ WIA funds
remain available to spend at the end of program year 2001. However,
state and local workforce officials challenge this position, and in
light of current economic conditions, have expressed a need for more
program funding, not less.
To more fully assess whether the Department of Labor‘s spending
information is a true reflection of states‘ available funds, you asked
us to determine: (1) to what extent states are spending their WIA funds
and whether Labor‘s data accurately reflect states‘ available funds,
(2) what Labor does to assess how states are managing their WIA
spending, and (3) what affects states‘ WIA expenditure rates.
To answer these questions, we analyzed the most recent available
nationwide[Footnote 1] spending data from Labor--as of June 30, 2002--
and compared them with financial reports collected from selected
states. In analyzing Labor‘s reports, we disaggregated data by program
year and analyzed them with and without unexpended funds carried over
from prior years. To gain a better understanding of WIA spending
issues, we met with workforce officials in two states--Colorado and
Washington--and conducted in-depth structured telephone interviews
with state officials in 7 others: California, Florida, Illinois, New
York, Ohio, Texas, and Vermont. We also contacted officials
representing local areas in 7 of the states. In selecting the states,
we focused primarily on those with the larger WIA allocations.
Collectively, the 9 states we selected accounted for about half of the
total WIA allocation in program years 2000 and 2001. Besides being
geographically dispersed, the states we selected included those with
single and multiple local workforce areas and represented a range of
expenditure rates and experience levels in implementing WIA. In
selecting local areas, we chose from among the largest ones. We also
interviewed officials at Labor headquarters and five of its regional
offices, as well as four national associations. We conducted our work
from April to October 2002 in accordance with generally accepted
government auditing standards.
Results in Brief:
States are spending WIA funds much faster than required under the law,
according to our analysis of Labor‘s data. As of June 30, 2002, states
had spent essentially all of their program year 1999 funds within the 3
years allowed. In addition, they had spent 90 percent of their program
year 2000 funds within 2 years and 56 percent of their program year
2001 funds in 1 year--in fact, 16 states spent 70 percent or more of
their program year 2001 funds in the first year. By contrast, Labor‘s
estimate of expenditure rates suggests a slower pace for spending
because the estimate is based on all funds states currently have
available--from older funds carried in from prior program years to
those only recently distributed, assessed in the aggregate, not
year-by-year. Moreover, the newest funds, which states have 2 more
years
to spend, comprised two-thirds of all funds states had available for
program year 2001. Further, even though 44 percent of program year 2001
funds are being carried over into program year 2002, many of these
funds
may already be committed--or obligated. However, states do not have a
clear, uniform definition of obligations and what they report to Labor
on obligations differs--some report obligations made only by the state,
others report those made at the local level. Of the 9 states we
reviewed,
all collected information on obligations made at the local level but
only
4 reported them to Labor. When local obligations are included, the
amount
of funds that could be considered available decreases markedly. For
example, the percentage of California‘s program year 2001 funds that
are available decreased from 40 percent to 7 percent. Without
consistent information from states on funds that have been committed,
Labor relies on expenditures and overestimates the funds states have
available to spend.
Labor collects quarterly financial reports from each state and compares
state spending against internally established benchmarks to determine
how states manage their spending. Labor uses the results of the
comparison to target guidance and technical assistance and to formulate
the following year‘s budget request. For example in program year 2001,
Labor expected states to spend 69 percent of all their available WIA
funds. While half the states met or exceeded this expenditure rate,
Labor‘s benchmarks were often not communicated to the states. Despite
additional financial reporting guidance provided by Labor, some state
and local officials remained confused by some of Labor‘s requirements
because the guidance and assistance on obligations had not been clear
and definitive. State and local officials expressed a need for clearer
guidance and the opportunity to share promising practices for
effectively managing spending.
Several factors affect states‘ WIA expenditure rates. State and local
officials told us that cumbersome processes to get approval to spend
funds, lengthy contract procurement procedures, and untimely billing by
key service providers, especially community colleges, all delayed
expenditures, sometimes by as much as 3 to 8 months. Also, funds held
at the state level for statewide and other activities were spent more
slowly--at less than two-thirds the rate of funds spent by local areas-
-causing overall expenditures to initially appear lower. Annual
fluctuations in funding levels also affected many states‘ and local
areas‘ willingness to commit funds for the long term and inhibited
their ability to plan comprehensive workforce investment systems. To
overcome some of these factors, some states and local areas are
implementing such strategies as frequently monitoring and recapturing
unspent and uncommitted funds from one local area and redistributing
them to another, coordinating the procurement process before the
receipt of funds so that contracts are in place by the time funds
become available, and requiring expedited billing as part of contract
specifications.
To improve the accuracy and consistency of financial reporting, we are
recommending that Labor clarify its guidance on reporting obligations
to address concerns identified by state and local officials. In
addition, we are recommending that Labor collect information on funds
committed at the point of service delivery and include such information
in determining states‘ available funds. We are also recommending that
Labor share its spending benchmarks with states along with strategies
for managing spending effectively. In its comments, Labor generally
agreed with our findings and recommendations related to providing
clearer definitions, guidance, and technical assistance to states to
help them manage their WIA spending. However, Labor disagreed with our
findings and recommendations related to the importance of considering
obligations in addition to expenditures.
Background:
The Department of Labor required states to implement WIA‘s major
provisions by July 1, 2000, although six states began implementation a
year earlier in July 1999. The act authorizes three separate funding
streams for adults, dislocated workers, and youth. WIA‘s appropriation
for fiscal year 2002 was $950 million for adult, $1.1 billion for
youth, and $1.5 billion for dislocated worker programs, for a total of
$3.9 billion (see table 1).
Table 1: Funds Appropriated for WIA in Fiscal Years 2000-2003:
Category: Adult; Fiscal year 2000: $950 million; Fiscal year 2001: $950
million; Fiscal year 2002: $950 million; Fiscal year 2003 (request):
$900 million.
Category: Youth; Fiscal year 2000: 1.3 billion; Fiscal year 2001: 1.4
billion; Fiscal year 2002: 1.4 billion; Fiscal year 2003 (request): 1.0
billion.
Category: Dislocated worker; Fiscal year 2000: 1.6 billion; Fiscal year
2001: 1.4 billion; Fiscal year 2002: 1.5 billion[A]; Fiscal year 2003
(request): 1.4 billion.
Category: Total; Fiscal year 2000: $3.9 billion; Fiscal year 2001: $3.8
billion; Fiscal year 2002: $3.9 billion; Fiscal year 2003 (request):
$3.3 billion.
[A] This amount includes a rescission of $177.5 million.
Source: GAO‘s analysis of agency budget documents.
[End of table]
WIA encourages collaboration and partnerships in making a wide array of
services universally accessible to these three populations and allows
states broad discretion in designing their workforce investment
systems. WIA requires most federally funded employment and training
services to be delivered through a one-stop system overseen by newly
created state and local workforce investment boards, although the
services themselves may be provided by partner agencies and locally
contracted service providers. In fact, WIA encourages client referrals
to programs offered by one-stop partners.
WIA‘s Funding Cycle Is Complex:
Once Congress appropriates WIA funds, the amount of money that flows to
states and localities depends on a specific formula that takes into
account unemployment. Thus, any changes in the annual appropriation or
elements of the allocation formula will result in year-to-year funding
fluctuations. Once the Congress appropriates funds for a given fiscal
year, Labor notifies states of their annual allocation--usually in the
February to March timeframe. The funds are made available to states and
localities at three separate times during the year, depending on the
program (see fig. 1). For youth services, all funds for the year are
made available on April 1,
3 months before the beginning of the program year on July 1. This once-
a-year youth allocation is designed to help states and local areas gear
up for summer youth activities. The adult and dislocated worker funding
allocations are distributed twice a year from two different years‘
appropriations--on July 1 (1/4 of the allotment) and on October 1
(3/4 of the allotment)--with the October allocation funded from a new
fiscal year‘s appropriation. States and localities are required to
manage their WIA programs, including spending, on a program-year basis,
regardless of when funds are made available. In addition, WIA allows
states 3 program years to spend their funds while local areas have
2 program years.
Figure 1: WIA‘s Annual Funding Cycle:
[See PDF for image]
[End of figure]
Once WIA funds are made available, they flow from Labor to states,
states to local areas, and local areas to service providers. For
dislocated worker funds, the Secretary of Labor retains 20 percent of
the funds in a national reserve account to be used for emergency
grants, demonstrations, and technical assistance and allocates the
remaining funds to the states according to a specified formula. Once
states receive their allocation, the governor can reserve up to 25
percent of dislocated worker funds for rapid response activities
intended to help workers faced with plant closures and layoffs to
quickly transition to new employment. In addition to funds set aside
for rapid response, WIA allows states to set aside up to 15 percent of
the dislocated worker allotment and permits them to combine the
dislocated worker set-aside with similar set-asides from their adult
and youth allotments. States use the set-asides to support a variety of
statewide activities such as helping establish one-stop centers,
providing incentive grants to local areas, operating management
information systems, and disseminating lists of organizations that can
provide training. After funds are set aside for rapid response and
statewide activities, the remainder--at least 60 percent for dislocated
workers and 85 percent for adult and youth--is then allocated to local
workforce areas, also according to a specified formula. In addition,
local areas may reserve up to 10 percent from each of the three funding
streams for local administrative activities (see table 2).
Table 2: Allocation of WIA Funds to States and Local Areas:
Distributed to states: Reserved by governor for rapid response
activities; Adult: N/A[B]; Youth: N/A[B]; Dislocated worker[A]: 25%.
Distributed to states: Reserved by governor for statewide activities;
Adult: 15%; Youth: 15%; Dislocated worker[A]: 15%.
Distributed to states: Allocated to local areas[C]; Adult: 85%; Youth:
85%; Dislocated worker[A]: 60%.
[A] The Secretary of Labor reserves 20 percent of dislocated worker
funds for national emergency grants, demonstrations, and technical
assistance before distributing the remaining 80 percent to states for
their use.
[B] Rapid response funds are not applicable to the adult and youth
programs.
[C] A maximum of 10 percent of local area funds may be used for local
administration.
Source: GAO‘s analysis of the Workforce Investment Act.
[End of table]
States Report to Labor on Six Funding Categories:
Labor collects quarterly financial status reports from states,
detailing expenditures separately for the six funding categories under
WIA--two categories at the state level (governor‘s set-aside and rapid
response) and four at the local level (adult, dislocated worker, youth,
and local administration). Appendix I depicts a sample form that states
complete and submit to Labor. Because adult and dislocated worker funds
for each program year are provided from two separate appropriations,
Labor requires states to track financial information separately by the
year in which funds are appropriated. As a result, states submit a
total of 11 reports each quarter for activities funded by the current
program year‘s allocation, as shown in table 3. In addition, WIA gives
states 3 years within which to spend their grant; consequently, states
may be tracking activities that are funded by 3 different program
years, thus submitting up to 33 reports each quarter (11 reports
multiplied by the 3 program years in which funds are available).
Table 3: WIA‘s Quarterly Financial Reporting Requirements:
Statewide category; Number of reports: [Empty].
Governor‘s set-aside (15 percent); Number of reports: 2.
Rapid response; Number of reports: 2.
Local category; Number of reports: [Empty].
Adult; Number of reports: 2.
Dislocated workers; Number of reports: 2.
Youth; Number of reports: 1[A].
Administration (10 percent cap); Number of reports: 2.
Total; Number of reports: 11.
[A] All youth funds are allocated at a single point during the program
year; therefore, only one report is required to be submitted.
Source: GAO‘s analysis of Labor‘s Training and Employment Guidance
Letter 16-99, (Washington, D.C.: 2000).
[End of table]
In completing their financial status reports, states are required to
follow Labor‘s guidance that identifies and defines the data elements
to be reported. Labor collects ’total federal obligations“--which it
defines as the sum of expenditures, accruals, and unliquidated
obligations--for determining how much states have already spent and how
much is still available for spending. Table 4 shows the definitions of
each of these terms. In addition, WIA regulations require expenditures
to be reported on an accrual basis. This means states should report all
cash outlays and all accruals as expenditures on their reports. As of
July 2002, all states we contacted told us that they were reporting
expenditures on an accrual basis.
Table 4: Elements of Labor‘s Definition of Total Federal Obligations:
Element: Expenditures; Definition: Actual cash disbursements or
outlays..
Element: Accruals; Definition: Amounts owed for goods and services that
have been received but for which cash has not yet been disbursed. For
example, an accrual would occur if a job seeker completed a training
class, but the training provider had not yet been paid..
Element: Unliquidated obligations[A]; Definition: Obligations
incurred, but for which an outlay has not yet been recorded; should
include unliquidated obligations to subgrantees and contractors. This
amount is different from accruals in that services have not been
provided and costs have not been incurred. For example, an unliquidated
obligation would be incurred when the state or local area enters into a
commitment or contract with a service provider for training, but
training has not yet been completed or the service provider paid..
[A] Hereafter, we refer to unliquidated obligations as obligations.
Source: Labor‘s Training and Employment Guidance Letter 16-99,
(Washington, D.C.: 2000). Text in italics added by GAO.
[End of table]
Financial reporting begins at the local service provider level and
progresses through the local, state, and national levels. Figure 2
shows how WIA financial reports flow from one level to the next and the
data elements that are reported. After reconciling any discrepancies,
states aggregate the local reports and are required to submit a
financial status report to their regional Labor office 45 days after
the quarter‘s end, according to Labor officials. Ten days later, after
performing edit checks, regional officials told us that they certify
and forward states‘ reports to Labor‘s national headquarters. The
national office then merges information for the six funding categories
into the three funding streams--adults, dislocated workers, and youth-
-and combines the program and fiscal year data into a single program
year. Within 5 days of receiving reports from its regional offices,
Labor is required to present the Congress with a single report 60 days
after the end of the quarter.
Figure 2: WIA Quarterly Financial Reporting Process:
[See PDF for image]
[End of figure]
WIA Provides for Recapturing Unspent Funds:
Labor uses states‘ financial reports to determine whether there are any
unspent funds that may need to be redistributed among states. Local
areas have 2 years within which to spend their annual allocations while
states have 3 program years. Thus, program year 2000 funds must be
spent by the end of program year 2001 for localities and by the end of
program year 2002 for states. If funds are not spent, WIA directs both
states and Labor to recapture and, if appropriate, redistribute unspent
funds according to specific criteria (see fig. 3). The recapture
processes are similar at both the state and federal level. States have
a two-tiered process by which they recapture available funds. First, at
the end of the initial program year, states may reclaim funding from
local areas with total obligations less than 80 percent of their annual
allocation and redistribute these recaptured funds to those local areas
that have met the criterion for total obligations. Second, at the close
of local areas‘ 2-year grant period, states may recapture any
unexpended local funds and may reallocate the funds to other local
areas that have fully expended their allocation or to statewide
activities, but only in the third year the grant is available.
Like local areas, states are also subject to having their funds
recaptured. At the federal level, Labor may recapture funds from states
with total obligations less than 80 percent of their annual allotment
at the end of the first program year. Labor applies the same recapture
process to the end of the second program year. At both intervals, Labor
may redistribute these funds to other states that have met the
requisite total obligation rate. By the end of the 3-year grant period,
Labor may recapture any state funds that have not been fully expended.
Because states‘ WIA grants expire after 3 years, funds recaptured by
Labor at the end of the third year may not be redistributed to other
states. Rather, Labor must return the funds to the U.S. Treasury.
Figure 3: WIA Fund Recapture Process:
[See PDF fodr image]
[End of figure]
States Have Spent Most of Their WIA Funds, Labor‘s Estimate Overstates
Funds Available to Spend:
Our analysis of Labor‘s data shows that states are spending their WIA
funds within the authorized 3-year timeframe--virtually all funds
allocated for program year 1999 have been spent within the requisite 3
years and 90 percent of program year 2000 funds have been spent within
2 years. In addition, states have spent just over half of their program
year 2001 allocation within the first year funds were available. By
contrast, Labor‘s estimate of expenditure rates suggests that states
are not spending their funds as quickly because the estimate is based
on all funds states currently have available--from older funds carried
in from prior program years to those only recently distributed. The
newest funds, which states have 2 more years to spend, comprised
two-thirds of all funds states had available for program year 2001.
Moreover, many of the remaining funds carried over may have already
been obligated. However, states do not use the same definition for
obligations and what they report to Labor on obligations differs.
Lacking consistent information on how much states and local areas
have committed to spend, Labor relies on expenditure data and
overestimates the funds states have available to spend.
Labor‘s Expenditure Data Show That WIA Funds Are Being Spent within
Authorized Timeframes:
Our analysis of Labor‘s expenditure data shows that states are spending
their WIA funds within the allowed 3-year period. Nationwide, Labor‘s
data show that states expended essentially all of their program year
1999 funds within the authorized 3-year period that ended with program
year 2001. In addition, states have expended 90 percent of program year
2000 funds within the first two years funds were available--55 percent
in the first year and another 35 percent in the second year. States
have one more year to spend the remaining 10 percent of their program
year 2000 funds. In addition, states had expended 56 percent of program
year 2001 funds, with 2 years still remaining (see fig. 4).
Figure 4: Expenditure Rates by Year Spent:
[See PDF for Image]
[End fo figure]
While nationwide data show that funds are being spent within the
required time period, state-by-state expenditure rates vary widely. For
example, Vermont spent 92 percent of its program year 2000 allocation
in the first year and 8 percent in the next, while Kentucky spent 29
percent in the first year and 63 percent in the next. When program year
2000 expenditure rates were combined for the first and second years
that funds were available, all states had spent over 70 percent. Forty-
four states had spent 90 percent or more of their program year 2000
funds, with 9 of those 44 states--Delaware, Idaho, Maine, Michigan,
Montana, North Dakota, Rhode Island, Utah, and Vermont--achieving a 100
-percent expenditure rate. (See fig. 5.):
Figure 5: Range of States‘ Cumulative Expenditure Rates for First 2
Years That Program Year 2000 Funds Were Available:
[See PDF for image]
[End of figure]
Expenditure rates for first year spending of program year 2001 funds
were similar to those of program year 2000, and state-to-state spending
rates also varied widely, as shown in figure 6, ranging from 19 percent
for New Mexico to 92 percent for Vermont. For program year 2001, the
majority of states spent at least 55 percent of their funds and 16
states spent at least 70 percent. (See app. II for state-by-state
expenditure rates listed for program years 2000 and 2001.):
Figure 6: Range of States‘ Expenditure Rates for First Year That
Program Year 2001 Funds Were Available:
[See PDF for image]
[End of figure]
Expenditure rates increased for many states from program year 2000 to
program year 2001. Thirty-one states spent funds at the same or faster
pace in program year 2001 than they did during the same period in the
prior year. However, for 21 states, spending occurred at a slower pace
in 2001 compared with 2000. Nevertheless, 9 of the 21 states still
spent at or above the nationwide rate of 56 percent in program year
2001.
Labor‘s Calculation of Expenditure Rates Aggregates Data Over
3 Years:
In contrast to our expenditure rate estimate, Labor‘s estimated
expenditure rate of 65 percent at the end of program year 2001
aggregates data over 3 years and considers all funds states have
available. Labor based its calculation on older unexpended funds
carried in from prior years as well as the newest funds represented by
the program year 2001 allocation, even though that allocation made up
the largest share of all available funds. For example, of the total $5
billion[Footnote 2] available at the beginning of program year 2001,
about two-thirds (65 percent) represented the program year 2001
allocation, and about another one-third represented amounts carried in
from program years 2000 and 1999 (29 percent and 6 percent,
respectively) as shown in figure 7. By basing its calculation of an
expenditure rate--65 percent at the end of program year 2001--on the
sum of all available funds, Labor did not take into account the 2
years that remain for states to spend the majority of their funds.
Figure 7: Breakout of $5 Billion Available for Program Year 2001:
[See PDF for image]
[End of figure]
Labor‘s Information on States‘ WIA Spending Is Not Accurate Due to
Reporting Inconsistencies:
Differences in how states report expenditures result in data
inaccuracies and reporting inconsistencies. WIA regulations require
states to include accruals--or amounts owed for goods and services
received that have not yet been paid---when reporting expenditures, but
a few states reported only cash outlays in program year 2001. As a
result, reported expenditures may have been understated. Some states
and local areas may still be using a cash-based accounting system,
usually tied to the state‘s or local area‘s existing accounting system
and often used to report expenditures for other programs, such as
welfare. State and local workforce officials we spoke with in areas
that are reporting cash outlays told us they are modifying their
accounting systems and will soon begin reporting accruals. In fact, as
of program year 2002, all states we spoke with told us they are
beginning to collect and report expenditures on an accrual basis as
required under WIA regulations. Excluding accruals may understate
expenditures primarily in the short term because invoices for goods and
services received in one month are often converted into cash outlays in
the next month. However, if this conversion takes a long time to occur
and if expenditures are uneven from month-to-month and year-to-year,
the effect of accruals for a year may be longer term and expenditures
for a given year may be understated. For example, a jobseeker may have
completed a training class in June of one program year, but the school
does not submit an invoice to the local area until September of the
next program year. If the local area captures the cost of training as
an expenditure only after paying the invoice, it will wait until the
new program year to report it and will understate its prior program
year expenditures. Eventually, accruals may catch up with expenditures
over the life of the grant---2 years for local areas and 3 years for
states.
In addition to reporting expenditures each quarter, states also report
obligations--funds committed through contracts for goods and services
for which a payment has not yet been made. However, not all of the
9 states we contacted reported obligations in the same way and
differences in reporting resulted in data inconsistencies. Labor‘s
guidance requires that states report obligations but does not specify
whether obligations made at the local level--the point at which
services are delivered--should be included. States interpret Labor‘s
definition of obligations in several ways. Some states we contacted
include as obligations the amount of the WIA grant they allocate to
their local areas. By contrast, other states included funds that their
local areas have committed in contracts for individual training
accounts, staff salaries, and one-stop operating costs. Officials in
these states told us they tracked locally committed funds because they
more accurately reflect total spending activity. Of the 9 states we
contacted, all collect information on local obligations. However, 4 of
them report these data to Labor while the other 5 do not. These
differences result in data that are not comparable across states.
Lacking Consistent Information on Obligations, Labor Overstates
Available Funds by Considering Only Expenditures:
Labor‘s data on obligations do not consistently reflect local
commitments; therefore, Labor relies on expenditure data to estimate
available funds. In doing so, Labor overestimates the amount states
have available to spend. For 3 of the 4 states that report local
obligations, the amount of funds the state has available is much
smaller when local obligations are taken into account along with
expenditures. For example, for New York, available funds are cut almost
by a third, and in California and Washington, available funds
essentially disappear---decreasing from 40 percent to
7 percent, and 33 percent to 2 percent, respectively (see fig. 8). For
Vermont, the fourth state that collects and reports local obligations,
obligations and expenditures were very similar, with about 8 percent of
program year 2001 funds available.
Figure 8: Percentage of Program Year 2001 Allocation Available for
Three Selected States:
[See PDF for image]
[End of figure]
Labor Monitors Spending, Provides Guidance, but Concerns Remain:
A key role for Labor under WIA is to monitor state spending; it does so
by comparing the expenditure information it receives from states with
benchmarks Labor has developed. However, these benchmarks are often not
communicated to the states. Labor uses the benchmarks to formulate
budget requests and identify which states need monitoring and
additional guidance. While Labor has provided additional financial
reporting guidance and technical assistance, some state officials told
us that they remain concerned about WIA spending and financial
reporting and would like further help in developing strategies to
effectively manage expenditures.
Labor Monitors State‘s WIA Spending Using Benchmarks That Are Not
Always Communicated to States:
Labor has established several national expenditure rates used as
benchmarks against which to judge each state‘s spending rate. In
program year 2000, for example, Labor set its benchmark at 25 percent
of states‘ allocations during the first half of the year and 50 percent
of their allocation three-quarters of the way through the year, based
on its comparison of state expenditure reports. However, Labor‘s data
show that most states--40 in all--did not meet the 50-percent benchmark
stipulated for March 31, 2001. The remaining 12 states either met or
exceeded this benchmark. In program year 2001, Labor assumed higher
expenditures and projected an expenditure rate of 69 percent, which 26
states met or exceeded. Labor uses its projection to formulate the
following year‘s budget request and bases it on total WIA funds
available, which include the current year allocation and prior years‘
unexpended balances carried into the current year. (See app. III for
states that met, exceeded, or were below benchmarks.):
Labor intended the program year 2000 benchmarks to serve as internal
guidelines for targeting oversight efforts and has not always
communicated them to states. Some state officials told us that lacking
information on benchmarks has created frustration in managing their WIA
spending because Labor notified these states that they were
underspending their funds but did not specify the goal they had to
achieve. Moreover, state and local officials said that it was unclear
how the benchmarks take into account states‘ 3-year and localities‘ 2-
year spending windows.
Labor established protocols in April 2001 to address WIA spending
issues, requiring its appropriate regional offices to contact states
whose expenditures appeared low. States whose expenditure rates fell
below program year 2000 benchmarks were subject to immediate regional
office examination. In addition to reviewing state spending patterns
and determining the magnitude of underspending, regional offices were
required to work with state staff to determine specific reasons for
underspending, help develop corrective action plans, and submit weekly
and monthly progress reports on implementation status to Labor
headquarters.
Labor‘s regional offices have taken various approaches to monitoring
states‘ WIA spending. As of July 2002, six of seven regional offices
had sent monitoring letters to 26 states. Three states received letters
because spending was below the benchmarks,[Footnote 3] and these states
were required to submit a corrective action plan. The other 23
states[Footnote 4] received letters as part of ongoing regional
oversight, regardless of spending level. The seventh region elected to
hold meetings and used other modes of direct communication with state
officials instead of sending them formal letters. In addition to
sending letters, four regions conducted monitoring site visits to
states with low expenditure rates.
Labor Has Provided Additional Guidance and Assistance, but States
Remain Confused about How to Report and Manage Spending:
At the national level, Labor has issued guidance[Footnote 5] containing
financial reporting instructions and definitions as well as a technical
assistance guide on financial management.[Footnote 6] At the regional
level, guidance and assistance efforts vary. For example, the Dallas
Regional Office issued a memorandum suggesting steps states and local
areas could take to address low enrollment and expenditures.
Suggestions included modifying policies and procedures to quickly move
one-stop clients who are on waiting lists to intensive or training
activities and reporting Individual Training Account expenditures on an
accrual basis regardless of whether the provider has submitted a bill.
The New York Regional Office has developed a quarterly WIA expenditure
tracking system and uses the information to conduct extensive
briefings, correspondence, and discussions with its states in addition
to providing guidance and technical assistance through training
sessions.
Despite Labor‘s guidance and assistance efforts, some state and local
officials cited several concerns about financial reporting. As we
noted, states are reporting obligations inconsistently because Labor‘s
definition of obligations is ambiguous. A recent report by Labor‘s
Inspector General confirms that the definition is unclear and that
Labor provided conflicting instructions to Ohio State officials on how
to report obligations.[Footnote 7] Obligations are especially important
because WIA requires that recapture decisions be based on amounts
expended and obligated. According to state and local officials, three
aspects of Labor‘s definition were problematic:
* First, Labor‘s definition of obligations does not specify whether
local obligations to service providers should be included when states
report to Labor or whether obligation data should simply reflect state
obligations to local boards. For example, Florida counts as obligations
any funds it passes through to local areas, whereas Washington includes
obligations made at the local level.
* Second, even when the issue of reporting local obligations is
clarified, what constitutes an obligation is open to interpretation.
Officials at a local area in Ohio, for example, said that some local
areas report an obligation only when there is a legally binding
contract while others include amounts that have been reserved in
anticipation of a contract.
* Third, confusion exists on the timeframe used to define obligations.
Colorado state officials noted that some local areas report commitments
as obligations if the funds are committed no more than 3 months into
the future, others consider obligations only within the current program
year, while still others count obligations as any future commitments
regardless of the length of the contract period. Ohio officials
questioned whether obligations should be recorded for only 1 year given
that WIA gives local areas 2 years in which to spend their funds. In
addition, officials in several local areas told us that Individual
Training Account vouchers,[Footnote 8] posed a particular financial
reporting challenge. It is unclear what portion of the training voucher
is to be reported as an obligation given that the vouchers may cover a
2 to 3 year period.
Several state and local officials also cited the need for more
information on strategies to better manage WIA spending. They told us
that they would benefit from sharing these strategies. While they
acknowledged that Labor had provided financial reporting guidance, they
desired a mechanism or forum for exchanging ideas, questions, and
answers on spending issues. Officials at both the state and local level
expressed a need for greater clarity in the definition of obligations,
more specific and frequent guidance and technical assistance, and
systematic sharing of promising practices to effectively manage WIA
spending. Labor officials acknowledged that states are misinterpreting
the financial reporting guidance and that the guidance could be further
clarified.
To ensure uniform reporting procedures, a few states have developed
their own policy guidance. For example, Colorado recently issued a
directive on reporting obligations and accrued expenditures.[Footnote
9] The directive allows the costs of Individual Training Accounts to be
reported as obligations when an order is placed or a contract is
awarded for the procurement of goods and services. Furthermore, voucher
agreements may be obligated up to
12 months.
A Variety of Factors Affects States‘ WIA Expenditure Rates:
State and local officials told us that a variety of factors affects WIA
expenditure rates. Delays in reporting expenditures result from lengthy
spending approval processes and cumbersome contract procurement
procedures as well as from a lack of timely provider billing. In
addition, fluctuating funding levels affect their willingness to make
long-term commitments and inhibit their ability to do long-range
planning. Some states and local officials we spoke with said that they
use strategies to mitigate these factors and better manage spending.
Lengthy Expenditure Processes Delay Spending:
Officials at some states and localities told us that lengthy processes
to obtain approval to spend the funds, WIA‘s emphasis on contracting
for services, and lags in service provider billing all contributed to
delays in spending WIA funds. After the state allocates the WIA grant
to the local areas, the local areas may go through time-consuming
internal procedures to obtain approval to spend the funds before they
can disburse or obligate the money:
* Officials in Cleveland told us that the city council has to approve
the grant allocation from the state for each funding stream. This
process includes approval of the grant‘s receipt as well as its
expenditure, taking anywhere from several weeks to 8 months.
* Local area officials in Colorado told us that county commissioners
have to approve the release of funds from the state to the local area.
This process takes anywhere from 2 weeks to 3 months, depending on the
number of counties comprising a local area.
WIA‘s emphasis on contracting for services may also delay spending for
states and localities, especially for those whose procurement process
is lengthy:
* New York officials told us that contracts must go through a
competitive bidding process and many layers of review, including the
state‘s department of labor, comptroller, and attorney general,
resulting in a procurement process lasting an average of 3 months.
* Illinois state officials attributed slow statewide expenditure rates
to the state‘s lengthy procurement process, in which it took 8 months
to procure a vendor to redesign the state‘s case management system.
Performance-based contracts also result in financial reporting delays
where contractors get paid as they meet agreed-upon performance goals.
Officials in 4 of the states we contacted told us that they rely on
these types of contracts in at least some of their local areas. As a
result, they record expenditures later in the program year than those
entities that reimburse contractors whenever costs are incurred:
* According to Florida State officials, all contracts are performance
based, by state law. Contractors are paid at certain intervals during
the contract period depending on when they have met stipulated outcomes
such as job retention. However, an outcome such as job retention may
not be known until as long as 6 months after the contract terminates.
* Suffolk County in New York pays its contractors at intervals. For
example, 50 percent of the contract is paid when 50 percent of the
training has been completed.
Some key service providers often bill late, sometimes months after
providing services. Both state and local officials told us that public
institutions--particularly community and technical colleges--are
primary providers of training, often delivering such services through
Individual Training Accounts. The 4 to 6 month lag in school billing in
Miami, for example, not only causes delays in reporting expenditures,
but public schools--not accustomed to billing monthly--may also have
little financial incentive to expedite billing because they do not rely
on WIA funds as a major source of their tuition revenue.
Statewide Funds Are Spent at a Slower Rate:
Slower spending of statewide funds compared to local funds also affects
expenditure rates. Labor‘s data for program year 2001 show that states
are spending their statewide funds at less than two-thirds the rate of
local funds. For example, the governor‘s statewide 15 percent set-aside
was 37 percent expended compared to 70 percent expended for local adult
programs (see fig. 9). The difference in expenditure rates is due, in
part, to WIA‘s requirement that some of the statewide funds be used for
end-of-year incentive grants to local areas for exemplary performance
on the local performance measures. In addition, Washington, for
example, uses statewide funds for long-term projects and for activities
such as program evaluations. Likewise, rapid response funds are held at
the state level to enable response to mass layoffs or plant closures.
Florida State officials told us that, by state law, the state board
must retain 30 percent of its rapid response funds until the latter
part of the program year.
Figure 9: WIA Expenditure Rates for First Year That Program Year 2001
Funds Were Available, by Funding Category:
[See PDF for image]
[End of figure]
Although these factors affect when expenditures are incurred and
reported, other factors may influence states‘ decision on whether to
spend their WIA funds.
Three Factors Affect States‘ Overall Level of Spending:
Three key factors affect the extent to which states spend their WIA
funds. First, fluctuations in funding levels due to funding formulas or
budget decisions affect states‘ and localities‘ willingness to make
long-term commitments and their ability to plan comprehensive workforce
systems. Second, WIA‘s emphasis on referrals to other one-stop
partners‘ programs may result in non-WIA funds being spent first.
Third, implementation issues, particularly during the early stages of
the program, may have resulted in lower expenditures while one-stop
centers were still being established.
Funding Fluctuations:
Year-to-year fluctuations in funding, whether due to the allocation
formulas or appropriation decisions, make localities reluctant to
commit funds for long-term training and education, affecting overall
WIA spending. How much states and localities receive can vary
dramatically from year to year as a result of WIA‘s funding formula
allocations for the adult, youth, and dislocated worker programs. The
dislocated worker funding formula, which distributes a third of its
funds based upon the amount of ’excess unemployment“ (unemployment
exceeding 4.5 percent), is especially volatile.[Footnote 10] In
addition, funds appropriated for WIA programs vary according to annual
budget decisions. For program year 2001, for example,
$177.5 million was rescinded from the dislocated worker program. State
and local area officials told us that they were uncertain whether the
rescission would be restored and that the uncertainty contributed to
their sense of funding instability. Local area funding levels can also
fluctuate when they receive an infusion of unanticipated, unspent
statewide funds, as was the case in Seattle and Tacoma. Washington‘s
governor held back some rapid response funds in anticipation of
aluminum plant closings and mass layoffs stemming from the energy
shortage along the West Coast. However, when plant closings did not
materialize, the state no longer needed the funds for rapid response
activities and allocated them to these two cities midway through the
program year, with the expectation that the funds would be spent by the
end of the program year.
Year-to-year fluctuations in funding also hinder states‘ and
localities‘ ability to plan comprehensive workforce investment systems.
For example, in New York, funds for dislocated workers decreased by
about 40 percent from program year 1999 to program year 2000, a
fluctuation that state officials said would inhibit its local areas
from committing funds beyond the current program year because future
funding levels are uncertain. Similarly, state officials in Ohio told
us that their local areas have adopted a cautious approach to current
year spending and plan to carry over unspent funds due to funding
uncertainty.
Referrals to Other Partners:
WIA‘s emphasis on referrals to other sources of assistance makes WIA a
funding source of last resort. As part of the core services under WIA,
adults and dislocated workers can get help in establishing financial
aid eligibility for training and education programs that are available
in the community but are not funded under WIA. In addition, to qualify
for training services under the adult and dislocated worker programs,
individuals must be unable to obtain other grant assistance, such as
Pell Grants, or must require assistance beyond that provided by other
grant aid programs. Sometimes, states make it a priority for local
areas to spend other grant funds. For example, in Ohio, WIA spending
was delayed because of the large amount of funds to be spent from the
Temporary Assistance for Needy Families (TANF) grant.[Footnote 11]
Start-up Issues:
Start-up issues may have also affected expenditures in the initial
stages of WIA‘s implementation, especially during program years 1999
and 2000. Expenditures during this period may have been lower--many
one-stop centers were not fully up and running while states and
localities were developing or substantially retooling existing
employment and training systems. For example, while Texas got a head
start in establishing one-stops under WIA because it was an early
implementer, state workforce officials struggled with other issues such
as implementing individual training accounts and developing data
collection systems for WIA‘s performance measures. In addition, some
states and local areas initially took a ’work-first“ approach,
emphasizing job placement services that were less expensive compared to
long-term training and education services, especially given the
positive economic and employment conditions at the time of WIA‘s
enactment. Workforce officials told us that most of these issues have
been resolved since the transition from JTPA.
Some States and Localities Have Mitigated Factors Affecting Spending
Rates:
To manage spending more effectively, some states and local areas have
developed strategies to mitigate factors affecting spending levels or
delays in reporting expenditures.
* Most states we contacted have a process in place to recapture funds
from local areas that have not met their target spending rates and
reallocate them to those areas that have done so, although only a few
had used it or planned to use it for program year 2000 funds, in part
because they were transitioning from JTPA. Florida, however, actively
monitors expenditures and requires its local areas to meet a minimum 25
percent expenditure rate after 6 months, 50 percent after 12 months, 75
percent after 18 months, and 100 percent at the end of 24 months when
local grants expire.
* To address lengthy contracting processes, Chicago coordinates the
timing of the procurement process with the availability of funds.
* Florida has addressed delayed school billing by mandating expedited
billing in the contract and Vermont pays tuition expenses at the time
of participant registration rather than at course completion.
* To facilitate the spending of statewide funds, Texas‘ state WIA plan
identifies statewide initiatives at the beginning of the program year
so that statewide funds can be allocated more expeditiously.
Conclusions:
In past reports, we have found that states and local areas have stepped
up to the challenge of fundamentally reconfiguring their workforce
investment systems to serve the nation‘s jobseekers and
employers.[Footnote 12] Though spending was initially sluggish as state
and local boards ramped up their workforce systems, the pace of
spending picked up as the second full year of implementation under WIA
came to a close. Our analysis of Labor‘s data shows that states are
rapidly spending their funds--in fact, nationwide, states have spent 90
percent within 2 years, much of it often within the first year the
funds were available. This pace of spending has occurred even though
the law allows states 3 years to spend the funds.
But, expenditures by themselves do not provide a complete picture of
spending activity. Obligations--funds that have been committed on
behalf of WIA customers--must also be considered to accurately gauge
how much is truly available for spending. Moreover, the law requires
Labor to use obligations in its recapture decision. Taken together,
expenditures and obligations are important tools for effective grant
management and prudent oversight of the program. Labor has begun taking
an active role in monitoring program spending. But, state officials
have told us that it is not enough; they need more clear and consistent
guidance from Labor on how to manage and report their WIA spending and
how to collect and report obligations, particularly those commitments
made at the local level. Failing this, states will continue struggling
to understand what information is needed, and Labor‘s data will
continue to be incomplete and inaccurate. Perhaps most problematic,
though, is that, lacking consistent, reliable data on obligations,
Labor uses only expenditure data to gauge budgetary need. In so doing,
Labor does not take into account longer-term commitments made to
customers and service providers and, as a result, overestimates
available funds. Budget decisions based on underestimated spending
levels contribute to funding instability in the system and impair the
ability of state and local officials to plan workforce systems that
provide the nation‘s jobseekers and employers with critically needed
services.
To build their workforce investment systems, states must carefully plan
and use their limited resources in a way that best meets the growing
demand for employment and training services, in the current uncertain
economic environment. State officials told us that they seek more
guidance and assistance in managing their WIA funds wisely and some
states have implemented strategies to do so. But states will not be
able to effectively manage their spending and sustain service levels
without knowing what spending goals they must achieve and without a
forum for sharing promising practices to help them succeed.
Recommendations for Executive Action:
To enhance Labor‘s ability to manage its WIA grants and to improve the
accuracy and consistency of financial reporting, we are making several
recommendations to Labor.
Through collaboration with states, Labor should clarify the definition
of unliquidated obligations to:
* include funds committed at the point of service delivery in addition
to those funds obligated at the state level for statewide WIA
activities and not funds that states merely allocate to their local
areas,
* specify what constitutes an obligation to address state and local
area concerns regarding contracts, and:
* specify the timeframe for recording an obligation particularly when
it covers time periods that are longer than a program year.
To provide a more complete picture of spending activity and to obtain
accurate information for its recapture decision, Labor should:
* require states to collect and report information on obligations at
the point of service delivery and:
* include such obligations in determining states‘ available funds.
To help states and local areas manage their spending more judiciously,
Labor should:
* proactively provide states and local areas with guidance and
technical assistance focused on reporting financial information,
* communicate spending benchmarks that states should meet, and:
* systematically share promising practices and effective spending
management strategies.
Agency Comments and Our Evaluation:
We provided a draft of this report to officials at Labor for their
review and comment. Labor‘s comments are in appendix IV. In its
comments, Labor noted that the report contained a number of findings
that will be very helpful during WIA‘s reauthorization. In general,
Labor agreed with our findings and recommendations related to providing
clearer definitions, guidance, and technical assistance to states to
help them manage their WIA spending. However, Labor disagreed with our
findings and recommendations related to the importance of considering
obligations in addition to expenditures as it assesses WIA‘s financial
position.
In response to our finding that states are spending their WIA funds
faster than the authorized 3-year period, Labor said that states were
exceeding the law‘s minimum spending requirements, but that it must
look beyond minimum expectations when investing limited resources. We
agree with this point. In fact we found an expenditure rate of 90
percent of program year 2000 funds within 2 years, indicating that
states are going well beyond minimum expectations. Labor also
acknowledged that its spending estimate included all funds available at
the start of the program year, without which an analysis of expenditure
rates would be misleading. We do not contest Labor‘s methodology, but
think it is important to note that most of the funds available to
states were allocated within the past year, and states have not had
long to spend the funds. We continue to assert that a better way to
look at expenditure rates is not in the aggregate, but on a year-by-
year basis.
Regarding our conclusion that Labor‘s data do not accurately reflect
state spending because they exclude obligations, Labor commented that,
while it collects information on obligations due to statutory
requirements, obligations are unimportant in formulating the budget
because they represent future commitments to provide services, not
actual service delivery. We continue to believe that obligations play a
significant role in light of WIA‘s greater emphasis on contracting for
services and are recommending that Labor establish a clearer definition
of obligations that states can follow so that they can report more
meaningful data to Labor.
While agreeing with our recommendation to clarify its definition of
obligations, Labor took exception to the recommendation to collect and
report obligations made at the point of service delivery. Labor was
concerned that a new reporting requirement would be extremely
burdensome and costly to implement nationwide, in part because it did
not believe that service providers always collected this information.
We believe that assessing both obligations and expenditures is an
important tool for sound financial management at any level--state,
local area, or service provider--and a number of states are already
collecting local obligations. We are pleased to note that Labor said it
plans to work with states on this recommendation during WIA
reauthorization.
Labor also concurred with our recommendations to provide additional
financial reporting guidance and technical assistance as well as to
share promising practices for effectively managing spending. Labor
agreed that it would be a priority for the coming year to ensure that
all states are aware of requirements for the accounting of WIA funds.
Regarding our recommendation that Labor communicate spending benchmarks
that states should meet, Labor disagreed with our characterization of
the expenditure rates as benchmarks, saying instead that they were
projections of spending used to formulate a budget. Labor also
commented that expenditure rates used to monitor spending were based on
actual financial reports submitted by states, not on Labor‘s
expectations. Labor has used these expenditure rates as benchmarks to
identify states that were underspending their WIA funds and to
prioritize oversight efforts. We agree that using benchmarks to
prioritize monitoring helps manage limited resources; however, if
spending targets are established, they should be disclosed.
Finally, Labor was concerned about the unprecedented level of unspent
balances carried over from prior years, citing these excess funds as
justification for the dislocated worker rescission and for seeking
additional budget reductions. While unspent balances under WIA may be
larger than those experienced under JTPA, it may not be reasonable to
expect comparable spending levels between the two programs. WIA‘s
requirements represent a significant shift from prior workforce
programs, including its emphasis on contracting for services,
streamlining services through one-stop centers, and establishing
training vouchers on behalf of customers. In addition, we contend that
these unspent balances may have already been committed and may be
unavailable for spending. We agree that the nation will face many
challenges in financing its priorities in the coming years. However, in
order to make funding choices, decisionmakers will need comprehensive
information that considers expenditures, obligations, and how long the
funds have been available for states to spend. We reiterate that
additional clarification and guidance from Labor as well as effective
management strategies would help states judiciously manage their WIA
funds.
We will send copies of this report to the Secretary of Labor, relevant
congressional committees, other interested parties, and will make
copies available to others upon request. In addition, the report will
be available at no charge on the GAO Web site at MACROBUTTON
HtmlResAnchor http://www.gao.gov. Please contact me at (202) 512-7215
if you or your staff have any questions about this report. Other major
contributors to this report are listed in appendix V.
Signed by Sigurd R. Nilsen:
Sigurd R. Nilsen
Director, Education, Workforce,
and Income Security Issues:
[End of section]
Appendix I: Sample Financial Status Report Form:
[See PDF for image]
Source: Department of Labor.
[End of figure]
[End of section]
Appendix II: State Expenditure Rates, by Year, for Funds Allocated in
Program Years 2000 and 2001:
State: Nationwide Total; Program year 2000: Allocation: $3,194,853,459;
Program year 2000: First year expenditures: 55%; Program year 2000:
Second year expenditures: 35%; Program year 2000: Cumulative
expenditures: 90%; [Empty]; Program year 2001: Allocation:
$3,209,860,440; Program year 2001: First year expenditures: 56%.
State: Alabama; Program year 2000: Allocation: $40,004,934; Program
year 2000: First year expenditures: 65%; Program year 2000: Second year
expenditures: 31%; Program year 2000: Cumulative expenditures: 96%;
[Empty]; Program year 2001: Allocation: $50,899,142; Program year 2001:
First year expenditures: 43%.
State: Alaska; Program year 2000: Allocation: $13,025,382; Program year
2000: First year expenditures: 50%; Program year 2000: Second year
expenditures: 40%; Program year 2000: Cumulative expenditures: 89%;
[Empty]; Program year 2001: Allocation: $18,770,901; Program year 2001:
First year expenditures: 31%.
State: Arizona; Program year 2000: Allocation: $40,316,492; Program
year 2000: First year expenditures: 68%; Program year 2000: Second year
expenditures: 25%; Program year 2000: Cumulative expenditures: 93%;
[Empty]; Program year 2001: Allocation: $45,780,561; Program year 2001:
First year expenditures: 63%.
State: Arkansas; Program year 2000: Allocation: $32,873,554; Program
year 2000: First year expenditures: 42%; Program year 2000: Second year
expenditures: 45%; Program year 2000: Cumulative expenditures: 87%;
[Empty]; Program year 2001: Allocation: $26,623,830; Program year 2001:
First year expenditures: 46%.
State: California; Program year 2000: Allocation: $629,891,146; Program
year 2000: First year expenditures: 53%; Program year 2000: Second year
expenditures: 39%; Program year 2000: Cumulative expenditures: 92%;
[Empty]; Program year 2001: Allocation: $588,310,299; Program year
2001: First year expenditures: 60%.
State: Colorado; Program year 2000: Allocation: $21,927,432; Program
year 2000: First year expenditures: 53%; Program year 2000: Second year
expenditures: 43%; Program year 2000: Cumulative expenditures: 96%;
[Empty]; Program year 2001: Allocation: $20,505,485; Program year 2001:
First year expenditures: 50%.
State: Connecticut; Program year 2000: Allocation: $23,667,536; Program
year 2000: First year expenditures: 68%; Program year 2000: Second year
expenditures: 29%; Program year 2000: Cumulative expenditures: 97%;
[Empty]; Program year 2001: Allocation: $23,219,420; Program year 2001:
First year expenditures: 80%.
State: Delaware; Program year 2000: Allocation: $6,490,578; Program
year 2000: First year expenditures: 73%; Program year 2000: Second year
expenditures: 27%; Program year 2000: Cumulative expenditures: 100%;
[Empty]; Program year 2001: Allocation: $7,914,898; Program year 2001:
First year expenditures: 76%.
State: District of Columbia; Program year 2000: Allocation:
$19,115,547; Program year 2000: First year expenditures: 59%; Program
year 2000: Second year expenditures: 36%; Program year 2000: Cumulative
expenditures: 95%; [Empty]; Program year 2001: Allocation: $16,441,608;
Program year 2001: First year expenditures: 62%.
State: Florida; Program year 2000: Allocation: $119,379,909; Program
year 2000: First year expenditures: 67%; Program year 2000: Second year
expenditures: 30%; Program year 2000: Cumulative expenditures: 96%;
[Empty]; Program year 2001: Allocation: $115,400,934; Program year
2001: First year expenditures: 71%.
State: Georgia; Program year 2000: Allocation: $61,986,095; Program
year 2000: First year expenditures: 39%; Program year 2000: Second year
expenditures: 49%; Program year 2000: Cumulative expenditures: 88%;
[Empty]; Program year 2001: Allocation: $62,065,406; Program year 2001:
First year expenditures: 35%.
State: Hawaii; Program year 2000: Allocation: $25,017,294; Program year
2000: First year expenditures: 36%; Program year 2000: Second year
expenditures: 53%; Program year 2000: Cumulative expenditures: 90%;
[Empty]; Program year 2001: Allocation: $16,824,216; Program year 2001:
First year expenditures: 50%.
State: Idaho; Program year 2000: Allocation: $14,001,554; Program year
2000: First year expenditures: 59%; Program year 2000: Second year
expenditures: 41%; Program year 2000: Cumulative expenditures: 100%;
[Empty]; Program year 2001: Allocation: $11,649,917; Program year 2001:
First year expenditures: 73%.
State: Illinois; Program year 2000: Allocation: $117,156,561; Program
year 2000: First year expenditures: 73%; Program year 2000: Second year
expenditures: 21%; Program year 2000: Cumulative expenditures: 94%;
[Empty]; Program year 2001: Allocation: $133,535,368; Program year
2001: First year expenditures: 77%.
State: Indiana; Program year 2000: Allocation: $32,074,354; Program
year 2000: First year expenditures: 72%; Program year 2000: Second year
expenditures: 22%; Program year 2000: Cumulative expenditures: 94%;
[Empty]; Program year 2001: Allocation: $34,472,916; Program year 2001:
First year expenditures: 73%.
State: Iowa; Program year 2000: Allocation: $11,453,324; Program year
2000: First year expenditures: 53%; Program year 2000: Second year
expenditures: 42%; Program year 2000: Cumulative expenditures: 94%;
[Empty]; Program year 2001: Allocation: $12,050,045; Program year 2001:
First year expenditures: 54%.
State: Kansas; Program year 2000: Allocation: $12,647,819; Program year
2000: First year expenditures: 53%; Program year 2000: Second year
expenditures: 45%; Program year 2000: Cumulative expenditures: 98%;
[Empty]; Program year 2001: Allocation: $14,070,055; Program year 2001:
First year expenditures: 48%.
State: Kentucky; Program year 2000: Allocation: $42,450,709; Program
year 2000: First year expenditures: 29%; Program year 2000: Second year
expenditures: 63%; Program year 2000: Cumulative expenditures: 91%;
[Empty]; Program year 2001: Allocation: $42,461,995; Program year 2001:
First year expenditures: 46%.
State: Louisiana; Program year 2000: Allocation: $66,600,837; Program
year 2000: First year expenditures: 37%; Program year 2000: Second year
expenditures: 53%; Program year 2000: Cumulative expenditures: 90%;
[Empty]; Program year 2001: Allocation: $64,237,072; Program year 2001:
First year expenditures: 38%.
State: Maine; Program year 2000: Allocation: $11,241,748; Program year
2000: First year expenditures: 76%; Program year 2000: Second year
expenditures: 24%; Program year 2000: Cumulative expenditures: 100%;
[Empty]; Program year 2001: Allocation: $10,172,785; Program year 2001:
First year expenditures: 78%.
State: Maryland; Program year 2000: Allocation: $44,146,044; Program
year 2000: First year expenditures: 58%; Program year 2000: Second year
expenditures: 40%; Program year 2000: Cumulative expenditures: 98%;
[Empty]; Program year 2001: Allocation: $42,362,811; Program year 2001:
First year expenditures: 56%.
State: Massachusetts; Program year 2000: Allocation: $39,029,852;
Program year 2000: First year expenditures: 80%; Program year 2000:
Second year expenditures: 18%; Program year 2000: Cumulative
expenditures: 99%; [Empty]; Program year 2001: Allocation: $41,910,884;
Program year 2001: First year expenditures: 77%.
State: Michigan; Program year 2000: Allocation: $78,378,398; Program
year 2000: First year expenditures: 80%; Program year 2000: Second year
expenditures: 20%; Program year 2000: Cumulative expenditures: 100%;
[Empty]; Program year 2001: Allocation: $75,484,574; Program year 2001:
First year expenditures: 83%.
State: Minnesota; Program year 2000: Allocation: $23,854,258; Program
year 2000: First year expenditures: 76%; Program year 2000: Second year
expenditures: 19%; Program year 2000: Cumulative expenditures: 94%;
[Empty]; Program year 2001: Allocation: $27,896,710; Program year 2001:
First year expenditures: 86%.
State: Mississippi; Program year 2000: Allocation: $37,295,042; Program
year 2000: First year expenditures: 41%; Program year 2000: Second year
expenditures: 52%; Program year 2000: Cumulative expenditures: 92%;
[Empty]; Program year 2001: Allocation: $61,839,776; Program year 2001:
First year expenditures: 35%.
State: Missouri; Program year 2000: Allocation: $43,068,225; Program
year 2000: First year expenditures: 59%; Program year 2000: Second year
expenditures: 39%; Program year 2000: Cumulative expenditures: 97%;
[Empty]; Program year 2001: Allocation: $38,428,485; Program year 2001:
First year expenditures: 70%.
State: Montana; Program year 2000: Allocation: $14,759,397; Program
year 2000: First year expenditures: 77%; Program year 2000: Second year
expenditures: 23%; Program year 2000: Cumulative expenditures: 100%;
[Empty]; Program year 2001: Allocation: $15,106,415; Program year 2001:
First year expenditures: 76%.
State: Nebraska; Program year 2000: Allocation: $7,214,382; Program
year 2000: First year expenditures: 45%; Program year 2000: Second year
expenditures: 45%; Program year 2000: Cumulative expenditures: 90%;
[Empty]; Program year 2001: Allocation: $8,654,537; Program year 2001:
First year expenditures: 43%.
State: Nevada; Program year 2000: Allocation: $12,288,634; Program year
2000: First year expenditures: 60%; Program year 2000: Second year
expenditures: 36%; Program year 2000: Cumulative expenditures: 96%;
[Empty]; Program year 2001: Allocation: $13,454,458; Program year 2001:
First year expenditures: 61%.
State: New Hampshire; Program year 2000: Allocation: $7,073,563;
Program year 2000: First year expenditures: 69%; Program year 2000:
Second year expenditures: 20%; Program year 2000: Cumulative
expenditures: 89%; [Empty]; Program year 2001: Allocation: $7,564,315;
Program year 2001: First year expenditures: 64%.
State: New Jersey; Program year 2000: Allocation: $77,798,291; Program
year 2000: First year expenditures: 52%; Program year 2000: Second year
expenditures: 44%; Program year 2000: Cumulative expenditures: 96%;
[Empty]; Program year 2001: Allocation: $78,201,993; Program year 2001:
First year expenditures: 56%.
State: New Mexico; Program year 2000: Allocation: $37,825,812; Program
year 2000: First year expenditures: 52%; Program year 2000: Second year
expenditures: 46%; Program year 2000: Cumulative expenditures: 98%;
[Empty]; Program year 2001: Allocation: $36,512,180; Program year 2001:
First year expenditures: 19%.
State: New York; Program year 2000: Allocation: $304,953,605; Program
year 2000: First year expenditures: 42%; Program year 2000: Second year
expenditures: 37%; Program year 2000: Cumulative expenditures: 79%;
[Empty]; Program year 2001: Allocation: $256,067,646; Program year
2001: First year expenditures: 26%.
State: North Carolina; Program year 2000: Allocation: $45,496,846;
Program year 2000: First year expenditures: 46%; Program year 2000:
Second year expenditures: 49%; Program year 2000: Cumulative
expenditures: 95%; [Empty]; Program year 2001: Allocation: $49,711,078;
Program year 2001: First year expenditures: 52%.
State: North Dakota; Program year 2000: Allocation: $6,248,030; Program
year 2000: First year expenditures: 71%; Program year 2000: Second year
expenditures: 29%; Program year 2000: Cumulative expenditures: 100%;
[Empty]; Program year 2001: Allocation: $6,989,492; Program year 2001:
First year expenditures: 73%.
State: Ohio; Program year 2000: Allocation: $112,830,662; Program year
2000: First year expenditures: 36%; Program year 2000: Second year
expenditures: 52%; Program year 2000: Cumulative expenditures: 88%;
[Empty]; Program year 2001: Allocation: $127,098,298; Program year
2001: First year expenditures: 45%.
State: Oklahoma; Program year 2000: Allocation: $28,674,596; Program
year 2000: First year expenditures: 51%; Program year 2000: Second year
expenditures: 43%; Program year 2000: Cumulative expenditures: 94%;
[Empty]; Program year 2001: Allocation: $25,554,550; Program year 2001:
First year expenditures: 58%.
State: Oregon; Program year 2000: Allocation: $59,267,052; Program year
2000: First year expenditures: 70%; Program year 2000: Second year
expenditures: 27%; Program year 2000: Cumulative expenditures: 97%;
[Empty]; Program year 2001: Allocation: $55,829,680; Program year 2001:
First year expenditures: 74%.
State: Pennsylvania; Program year 2000: Allocation: $106,721,228;
Program year 2000: First year expenditures: 54%; Program year 2000:
Second year expenditures: 38%; Program year 2000: Cumulative
expenditures: 92%; [Empty]; Program year 2001: Allocation:
$104,011,102; Program year 2001: First year expenditures: 58%.
State: Puerto Rico; Program year 2000: Allocation: $215,497,257;
Program year 2000: First year expenditures: 50%; Program year 2000:
Second year expenditures: 21%; Program year 2000: Cumulative
expenditures: 71%; [Empty]; Program year 2001: Allocation:
$261,614,631; Program year 2001: First year expenditures: 53%.
State: Rhode Island; Program year 2000: Allocation: $7,894,331; Program
year 2000: First year expenditures: 60%; Program year 2000: Second year
expenditures: 40%; Program year 2000: Cumulative expenditures: 100%;
[Empty]; Program year 2001: Allocation: $8,552,097; Program year 2001:
First year expenditures: 58%.
State: South Carolina; Program year 2000: Allocation: $33,482,113;
Program year 2000: First year expenditures: 41%; Program year 2000:
Second year expenditures: 48%; Program year 2000: Cumulative
expenditures: 89%; [Empty]; Program year 2001: Allocation: $38,681,909;
Program year 2001: First year expenditures: 45%.
State: South Dakota; Program year 2000: Allocation: $6,303,992; Program
year 2000: First year expenditures: 63%; Program year 2000: Second year
expenditures: 31%; Program year 2000: Cumulative expenditures: 94%;
[Empty]; Program year 2001: Allocation: $7,037,319; Program year 2001:
First year expenditures: 59%.
State: Tennessee; Program year 2000: Allocation: $50,778,981; Program
year 2000: First year expenditures: 48%; Program year 2000: Second year
expenditures: 47%; Program year 2000: Cumulative expenditures: 94%;
[Empty]; Program year 2001: Allocation: $47,600,914; Program year 2001:
First year expenditures: 49%.
State: Texas; Program year 2000: Allocation: $245,828,151; Program year
2000: First year expenditures: 64%; Program year 2000: Second year
expenditures: 27%; Program year 2000: Cumulative expenditures: 90%;
[Empty]; Program year 2001: Allocation: $246,407,786; Program year
2001: First year expenditures: 73%.
State: Utah; Program year 2000: Allocation: $10,398,799; Program year
2000: First year expenditures: 91%; Program year 2000: Second year
expenditures: 9%; Program year 2000: Cumulative expenditures: 100%;
[Empty]; Program year 2001: Allocation: $10,171,265; Program year 2001:
First year expenditures: 58%.
State: Vermont; Program year 2000: Allocation: $6,046,589; Program year
2000: First year expenditures: 92%; Program year 2000: Second year
expenditures: 8%; Program year 2000: Cumulative expenditures: 100%;
[Empty]; Program year 2001: Allocation: $7,021,752; Program year 2001:
First year expenditures: 92%.
State: Virginia; Program year 2000: Allocation: $38,738,232; Program
year 2000: First year expenditures: 54%; Program year 2000: Second year
expenditures: 40%; Program year 2000: Cumulative expenditures: 95%;
[Empty]; Program year 2001: Allocation: $40,448,149; Program year 2001:
First year expenditures: 43%.
State: Washington; Program year 2000: Allocation: $70,046,805; Program
year 2000: First year expenditures: 64%; Program year 2000: Second year
expenditures: 31%; Program year 2000: Cumulative expenditures: 96%;
[Empty]; Program year 2001: Allocation: $70,184,034; Program year 2001:
First year expenditures: 67%.
State: West Virginia; Program year 2000: Allocation: $44,218,809;
Program year 2000: First year expenditures: 52%; Program year 2000:
Second year expenditures: 41%; Program year 2000: Cumulative
expenditures: 93%; [Empty]; Program year 2001: Allocation: $45,451,308;
Program year 2001: First year expenditures: 35%.
State: Wisconsin; Program year 2000: Allocation: $30,506,817; Program
year 2000: First year expenditures: 71%; Program year 2000: Second year
expenditures: 24%; Program year 2000: Cumulative expenditures: 95%;
[Empty]; Program year 2001: Allocation: $31,253,858; Program year 2001:
First year expenditures: 66%.
State: Wyoming; Program year 2000: Allocation: $6,747,843; Program year
2000: First year expenditures: 78%; Program year 2000: Second year
expenditures: 20%; Program year 2000: Cumulative expenditures: 98%;
[Empty]; Program year 2001: Allocation: $7,349,581; Program year 2001:
First year expenditures: 53%.
Note: Cumulative expenditure rates for program year 2000 do not add to
100 percent due to rounding.
Source: GAO‘s analysis of Labor‘s financial data files for program
years 2000 and 2001.
[End of table]
[End of section]
Appendix III: Comparison of States‘ Expenditure Rates with Labor‘s
Benchmarks and Projections:
State: Total number of states; Program year 2000 benchmark: 50 percent
as of March 31, 2001: Met or exceeded: 12; Program year 2000 benchmark:
50 percent as of March 31, 2001: Below: 40; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: 26;
Program year 2001 projection: 69 percent as of June 30, 2002: Below:
26.
State: Alabama; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent
as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: [Empty]; Program year
2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Alaska; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent
as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: [Empty]; Program year
2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Arizona; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent
as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001
projection: 69 percent as of June 30, 2002: Below: X.
State: Arkansas; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty];
Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: California; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program
year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Colorado; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty];
Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Connecticut; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program
year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].
State: Delaware; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent
as of March 31, 2001: Below: [Empty]; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program
year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].
State: District of Columbia; Program year 2000 benchmark: 50 percent as
of March 31, 2001: Met or exceeded: X; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: [Empty]; [Empty]; Program year
2001 projection: 69 percent as of June 30, 2002: Met or exceeded: X;
Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Florida; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent as of
March 31, 2001: Below: [Empty]; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001
projection: 69 percent as of June 30, 2002: Below: [Empty].
State: Georgia; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent
as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001
projection: 69 percent as of June 30, 2002: Below: X.
State: Hawaii; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent
as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: [Empty]; Program year
2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Idaho; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent
as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001
projection: 69 percent as of June 30, 2002: Below: [Empty].
State: Illinois; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program
year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].
State: Indiana; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent as of
March 31, 2001: Below: [Empty]; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001
projection: 69 percent as of June 30, 2002: Below: [Empty].
State: Iowa; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent as of
March 31, 2001: Below: [Empty]; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: [Empty]; Program year
2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Kansas; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent
as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: [Empty]; Program year
2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Kentucky; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty];
Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Louisiana; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty];
Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Maine; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent as of
March 31, 2001: Below: [Empty]; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001
projection: 69 percent as of June 30, 2002: Below: [Empty].
State: Maryland; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program
year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].
State: Massachusetts; Program year 2000 benchmark: 50 percent as of
March 31, 2001: Met or exceeded: X; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: [Empty]; [Empty]; Program year
2001 projection: 69 percent as of June 30, 2002: Met or exceeded: X;
Program year 2001 projection: 69 percent as of June 30, 2002: Below:
[Empty].
State: Michigan; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program
year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].
State: Minnesota; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent
as of March 31, 2001: Below: [Empty]; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program
year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].
State: Mississippi; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty];
Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Missouri; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program
year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].
State: Montana; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent as of
March 31, 2001: Below: [Empty]; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001
projection: 69 percent as of June 30, 2002: Below: [Empty].
State: Nebraska; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty];
Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Nevada; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent
as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001
projection: 69 percent as of June 30, 2002: Below: [Empty].
State: New Hampshire; Program year 2000 benchmark: 50 percent as of
March 31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark:
50 percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty];
Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: New Jersey; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty];
Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: New Mexico; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty];
Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: New York; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty];
Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: North Carolina; Program year 2000 benchmark: 50 percent as of
March 31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark:
50 percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty];
Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: North Dakota; Program year 2000 benchmark: 50 percent as of
March 31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark:
50 percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program
year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].
State: Ohio; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent
as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: [Empty]; Program year
2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Oklahoma; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program
year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].
State: Oregon; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent
as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001
projection: 69 percent as of June 30, 2002: Below: [Empty].
State: Pennsylvania; Program year 2000 benchmark: 50 percent as of
March 31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark:
50 percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program
year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].
State: Puerto Rico; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty];
Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Rhode Island; Program year 2000 benchmark: 50 percent as of
March 31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark:
50 percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program
year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].
State: South Carolina; Program year 2000 benchmark: 50 percent as of
March 31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark:
50 percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty];
Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: South Dakota; Program year 2000 benchmark: 50 percent as of
March 31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark:
50 percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty];
Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Tennessee; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty];
Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Texas; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent
as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001
projection: 69 percent as of June 30, 2002: Below: [Empty].
State: Utah; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent as of
March 31, 2001: Below: [Empty]; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: [Empty]; Program year
2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Vermont; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent as of
March 31, 2001: Below: [Empty]; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001
projection: 69 percent as of June 30, 2002: Below: [Empty].
State: Virginia; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty];
Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Washington; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program
year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].
State: West Virginia; Program year 2000 benchmark: 50 percent as of
March 31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark:
50 percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty];
Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.
State: Wisconsin; Program year 2000 benchmark: 50 percent as of March
31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50
percent as of March 31, 2001: Below: X; [Empty]; Program year 2001
projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program
year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].
State: Wyoming; Program year 2000 benchmark: 50 percent as of March 31,
2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent as of
March 31, 2001: Below: [Empty]; [Empty]; Program year 2001 projection:
69 percent as of June 30, 2002: Met or exceeded: [Empty]; Program year
2001 projection: 69 percent as of June 30, 2002: Below: X.
Note: The benchmark for program year 2000 is based on percent of
allocation spent. The projection for program year 2001 is based on the
current year allocation and unexpended funds carried in from prior
years.
Source: GAO‘s analysis of Labor‘s financial data files for program
years 2000 and 2001.
[End of table]
[End of section]
Appendix IV: Comments from the Department of Labor:
U.S. Department of Labor:
Assistant Secretary for
Employment and Training
Washington, D.C. 20210:
Mr. Sigurd R. Nilsen
Director
Education, Workforce, and Income Security Issues
U.S. General Accounting Office
Washington, D.C. 20548:
Dear Mr. Nilsen:
We have reviewed the draft report entitled, ’Workforce Investment Act:
States‘ Spending Is on Track, but Better Guidance Would Improve
Financial Reporting.“ A number of findings, including the
identification of factors that have contributed to low spending rates,
will be very helpful as we proceed with the reauthorization of the
Workforce Investment Act. However, we must respectfully disagree with a
number of conclusions and recommendations presented.
This report summary begins with GAO statements that ’(s)tates are
spending their WIA funds, often faster than the authorized 3-year
period.“ It goes on to indicate that ’... Labor‘s estimate suggests a
slower pace of spending because it is based on available funds,
including those most recently distributed.“ The Department cannot
dispute that states are exceeding the minimum requirements for spending
contained in the law. However, as responsible public officials, we
believe that we must look beyond minimum expectations when making
investment decisions given the many competing priorities our nation
faces. We also acknowledge that in spending projections and reports on
spending shared with the Congress and others, funds that were
appropriated and allocated at the start of the year were included. We
believe that any analysis that did not include all formula funds
provided to a state would be misleading and irresponsible.
The report further concludes that our reports do not accurately portray
spending in Workforce Investment Act (WIA) state programs because they
only reflect information on program costs and not unliquidated
obligations at the state and local levels. DOL does collect information
on obligations because of statutory requirements but, admittedly, this
is not an important consideration when formulating the Administration‘s
budget. Our focus is on the levels of services to be provided and the
actual program costs of providing them. We believe costs rather than
measures of commitments and future spending provide the strengthened
accountability and performance that is demanded. Unliquidated
obligations represent legal commitments to spend funds in a specific
way at some future time. It is a budgetary account that is used to
control and not measure spending, and is intended to assure that funds
are available for a subsequent period‘s expenditure. For example, funds
to pay a service provider for services that have not yet been provided
would be included, whether the service is to be provided immediately
or in a subsequent year. While of interest, this information rolled up
on a national basis is of questionable value.
The Department has drafted reporting instructions recommended by the
GAO and the Inspector General to clarify an easily correctable problem
relating to reporting of local obligations and plans to send this
guidance out soon. GAO also suggests that the DOL concerns regarding
reliability of obligation data can be addressed by new requirements to
report obligations made at the point of service delivery rather than
the current reports that require that states report obligations
reflected in the accounting records at the state or local level. This
would address shortcomings expressed to GAO reviewers. However, we are
concerned that such a requirement would be extremely burdensome and
expensive to implement nationwide. Not-for-profit service providers do
not routinely collect this information and neither do service providers
that operate for profit. We will follow the suggestion made by GAO that
we consult with the states on this recommendation when financial
reporting requirements are next reconsidered, but we remain skeptical
that the recommendation is doable. Consultation on revised reporting
requirements will most likely occur as part of discussions about WIA
reauthorization. We are reluctant to make interim changes that may be
major.
DOL concurs with the recommendations to provide guidance and technical
assistance focused on accounting and reporting requirements and to
share information on effective practices. To date, our concerns have
been to identify the causes of low spending and related low service
levels and to address them. Additionally, GAO noted a number of
accounting practices relating to the recording of obligations. A number
of these are not in conformance with Generally Accepted Accounting
Principles. Ensuring that all states are aware of requirements relating
to the accounting of WIA funds will be a priority for the coming year.
GAO recommends that DOL communicate spending benchmarks with states. As
indicated previously, the numbers referenced are national projections
of spending used to formulate a budget. They were not target spending
rates and were never intended as benchmarks. The report also identified
states that received letters or other communications from our Regional
Offices because of these spending rates. During the fiscal year we did
identify spending rates below which further inquiry would be required.
However, these rates were determined after comparing the actual reports
submitted by all the states. They were not based on some projection or
expectation. We continue to believe that this is an effective means to
prioritize oversight needs. As for benchmarks for spending in the
future, we believe that benchmarks should be included in
reauthorization through the inclusion of a reallotment based on actual
spending rather than obligations. The dislocated worker program
authorized by the Job Training Partnership Act (JTPA) contained such a
benchmark. We believe the more timely spending under JTPA can be
attributed, in part, to this requirement. DOL is also reviewing state
waiver requests from Governors that request authority to move from an
obligations-based reallotment policy to one based on expenditures. A
reallotment policy based on spending is necessary to ensure that those
states and communities that are spending timely are not adversely
impacted because others are not.
GAO is correct that carrying unspent balances from one year to another
and obligating funds for training to be provided one or two years out
are not violations of WIA law. In fact, GAO uses this information to
conclude that spending is on track and, we presume, should not be a
concern. DOL has never indicated that the funds would not be spent.
What we did indicate is that the levels of unspent carryover from one
year to another are unprecedented and of concern. This same conclusion
was reached by the Congress which in July 2001 rescinded WIA dislocated
worker funding because of concerns expressed in the Conference Report
107-148 ’...that there is excess funding available in the program and
the rescission is necessary to meet other needs in fiscal year 2001.“:
The Administration faced the same question in formulating its 2002 and
2003 requests and similarly concluded that because of the availability
of these large balances, reductions in new budget authority could be
taken without reductions nationwide in the numbers of individuals
served. This is because of excess unspent funds that could easily
absorb what is a relatively small one-time reduction.
We welcome further dialogue on these and other issues as we continue
efforts to reauthorize WIA over the next year.
Sincerely,
Signed by Emily Stover DeRocco:
Emily Stover DeRocco
[End of section]
Appendix V: GAO Contacts and Staff Acknowledgments:
GAO Contacts:
Dianne Blank (202) 512-5654
Meeta Sharma (206) 287-4806:
Staff Acknowledgments:
Kim Reniero, Rebecca Woiwode, Bill Keller, and Elizabeth Kaufman made
significant contributions to this report. In addition, Jessica Botsford
and Richard Burkard provided legal support, Patrick DiBattista provided
writing assistance.
[End of section]
Related GAO Products:
Workforce Investment Act: Interim Report on Status of Spending and
States‘ Available Funds GAO-02-1074. Washington, D.C.: September 5,
2002.
Workforce Investment Act: States and Localities Increasingly Coordinate
Services for TANF Clients, but Better Information Needed on Effective
Approaches GAO-02-696. Washington, D.C.: July 3, 2002.
Workforce Investment Act: Coordination of TANF Services through One-
Stops Has Increased Despite Challenges GAO-02-739T. Washington, D.C.:
May 16, 2002.
Workforce Investment Act: Youth Provisions Promote New Service
Strategies, but Additional Guidance Would Enhance Program Development
GAO-02-413. Washington, D.C.: April 5, 2002.
Workforce Investment Act: Coordination between TANF Programs and One-
Stop Centers Is Increasing, but Challenges Remain GAO-02-500T.
Washington, D.C.: March 12, 2002.
Workforce Investment Act: Better Guidance and Revised Funding Formula
Would Enhance Dislocated Worker Program
GAO-02-274.Washington, D.C.: February 11, 2002.
Workforce Investment Act: Improvements Needed in Performance Measures
to Provide a More Accurate Picture of WIA‘s Effectiveness
GAO-02-275. Washington, D.C.: February 1, 2002.
Workforce Investment Act: New Requirements Create Need for More
Guidance GAO-02-94T. Washington, D.C.: October 4, 2001.
Workforce Investment Act: Better Guidance Needed to Address Concerns
Over New Requirements GAO-02-72. Washington, D.C.: October 4, 2001.
FOOTNOTES
[1] Our nationwide review focused on the fifty states, District of
Columbia, and Puerto Rico. Hereafter, we refer to them collectively as
states.
[2] This includes a rescission of $177.5 million from the dislocated
worker program for program year 2001.
[3] New York, Ohio, and Puerto Rico received monitoring letters because
their program year 2000 expenditure rate was below the 25-percent
benchmark that states had to meet by December 31, 2000.
[4] Alaska, Arizona, California, Connecticut, Hawaii, Idaho, Illinois,
Indiana, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota,
Missouri, Nebraska, Nevada, New Hampshire, Oregon, Rhode Island,
Vermont, Washington, and Wisconsin.
[5] Department of Labor, Training and Employment Guidance Letter 16-99
(Washington, D.C.: 2000).
[6] Department of Labor, One-Stop Comprehensive Financial Management
Technical Assistance Guide (Washington, D.C.: 2002.)
[7] Department of Labor, State of Ohio, Evaluation of Grant
Obligations, Expenditures and Payments, Workforce Investment Act Grants
and Job Training Partnership Act Transition Funds, Independent
Accountants‘ Report on Applying Agreed-Upon Procedures, Grants and
Transition Funds Awarded to the State of Ohio, July 1, 2000 Through
December 31, 2001 (Washington, D.C.: 2002).
[8] Under WIA, Individual Training Accounts are established for
eligible adults and dislocated workers to finance training services.
Participants then use these vouchers to purchase training services from
eligible providers of their choice.
[9] State of Colorado Department of Labor and Employment, Office of
Employment and Training Programs, Colorado One-Stop System Policy
Guidance Letter # 02-20-WIA (Denver, Colo.: 2002.)
[10] For more information on the dislocated worker funding formula, see
our prior report, Workforce Investment Act: Better Guidance and Revised
Funding Formula Would Enhance Dislocated Worker Program, GAO-02-274
(Washington, D.C.: Feb. 11, 2002).
[11] Welfare reform legislation created the TANF block grant in1996,
providing states with flexibility to focus on helping needy adults with
children secure and maintain employment. TANF is administered and
funded at the federal level through the Department of Health and Human
Services. In prior reports we have said that states have been under
considerable scrutiny for not spending their TANF funds more quickly.
For more information, see, for example, U.S. General Accounting Office,
Welfare Reform: Challenges in Maintaining a Federal-State Fiscal
Partnership, GAO-01-828 (Washington, D.C.:
Aug. 10, 2001).
[12] Our prior work on WIA concluded that states had made significant
progress in developing new processes and designing new workforce
systems given the scope of WIA‘s reforms. See, for example, U.S.
General Accounting Office, Workforce Investment Act: Youth Provisions
Promote New Service Strategies, but Additional Guidance Would Enhance
Program Development, GAO-02-413 (Washington, D.C.: Apr. 5, 2002) and
Workforce Investment Act: Improvements Needed in Performance Measures
to Provide a More Accurate Picture of WIA‘s Effectiveness, GAO-02-275
(Washington, D.C.: Feb. 1, 2002).
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