Major Management Challenges and Program Risks
Department of Labor Gao ID: GAO-03-106 January 1, 2003In its 2001 performance and accountability report on the Department of Labor, GAO identified major management challenges in increasing the employment and earnings of America's workforce, protecting the benefits of workers, and fostering safe and healthy workplaces. The information GAO presents in this report is intended to help sustain congressional attention and a departmental focus on continuing to make progress in addressing these challenges and ultimately overcoming them. This report is part of a special series of reports on governmentwide and agency-specific issues.
The Department of Labor has made progress in implementing actions to address its management challenges, such as by improving some of its performance measurement systems. However, future improvements will increasingly demand more strategic management, more proactive support for state and local entities, additional improvements in performance measurement systems, and greater attention to human capital issues. Manage employment and training programs to meet the demands for the workforce of the 21st century: Labor has taken actions to resolve some of the performance measurement problems that constrain its ability to determine the success of employment and training programs--such as by establishing a new Office of Performance and Results. However, Labor must continue this progress in improving its performance measurement systems and also address other areas. To develop effective strategies for addressing the worker and skills shortages the nation is projected to face in coming decades, Labor must take a more strategic, cross-program perspective, and work more closely with other agencies. In addition, Labor needs to be more proactive in facilitating state and local implementation of employment and training programs under the nation's new workforce development system, such as by providing additional guidance and sharing information on promising practices. Protect the pensions and benefits of workers: The financial collapse of Enron and other companies has highlighted Labor's critical role in protecting pensions and other employee benefit plans estimated to have assets in excess of $5 trillion. Labor agencies have begun to address human capital issues that could constrain their efforts to protect these assets as the agencies face a surge in expected retirements within their workforces. However, weaknesses in Labor's strategic targeting of its compliance efforts for protecting workers' benefits and wages limit Labor's ability to maximize the impact of its limited resources. Foster safe and healthy workplaces: Labor's enforcement agencies lack management information on the impacts of their various compliance activities that is essential for determining how to best allocate compliance resources in protecting vulnerable populations, such as children who work and day laborers. Furthermore, Labor has not always leveraged the impact of its limited resources by coordinating effectively with other agencies that also share responsibilities for protecting workers, such as in enforcing safety regulations at hazardous material facilities.
GAO-03-106, Major Management Challenges and Program Risks: Department of Labor
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Performance and Accountability Series:
January 2003:
Major Management Challenges and Program Risks:
Department of Labor:
GAO-03-106:
A Glance at the Agency Covered in This Report
The Department of Labor‘s mission is to foster and promote the welfare
of job seekers, wage earners, and retirees of the United States by
* improving their working conditions;
* advancing their opportunities for profitable employment;
* protecting their retirement and health care benefits;
* helping employers find workers;
* strengthening free collective bargaining; and
* tracking changes in employment, prices, and other national economic
measurements.
The Department of Labor‘s Budgetary and Staff Resources.
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[End of Figure]
This Series
This report is part of a special GAO series, first issued in 1999 and
updated in 2001, entitled the Performance and Accountability Series:
Major Management Challenges and Program Risks. The 2003 Performance and
Accountability Series contains separate reports covering each cabinet
department, most major independent agencies, and the U.S. Postal
Service.
The series also includes a governmentwide perspective on transforming
the way the government does business in order to meet 21st century
challenges and address long-term fiscal needs. The companion 2003
High-Risk Series: An Update identifies areas at high risk due to either
their greater vulnerabilities to waste, fraud, abuse, and mismanagement
or major challenges associated with their economy, efficiency, or
effectiveness. A list of all of the reports in this series is included
at the end of this report.
GAO Highlights:
Highlights of GAO-03-106, a report to Congress included as part of
GAO‘s Performance and Accountability Series.
PERFORMANCE AND ACCOUNTABILITY SERIES
Department of Labor
Why GAO Did This Report:
In its 2001 performance and accountability report on the Department of
Labor, GAO identified major management challenges in increasing the
employment and earnings of America‘s workforce, protecting the benefits
of workers, and fostering safe and healthy workplaces. The information
GAO presents in this report is intended to help sustain congressional
attention and a departmental focus on continuing to make progress in
addressing these challenges and ultimately overcoming them. This
report is part of a special series of reports on governmentwide and
agency-specific issues.
What GAO Found:
The Department of Labor has made progress in implementing actions to
address its management challenges, such as by improving some of its
performance measurement systems. However, future improvements will
increasingly demand more strategic management, more proactive support
for state and local entities, additional improvements in performance
measurement systems, and greater attention to human capital issues.
* Manage employment and training programs to meet the demands for the
workforce of the 21st century. Labor has taken actions to resolve
some of the performance measurement problems that constrain its ability
to determine the success of employment and training programs”such as by
establishing a new Office of Performance and Results. However, Labor
must continue this progress in improving its performance measurement
systems and also address other areas. To develop effective strategies
for addressing the worker and skills shortages the nation is projected
to face in coming decades, Labor must take a more strategic,
cross-program perspective, and work more closely with other agencies.
In addition, Labor needs to be more proactive in facilitating state
and local implementation of employment and training programs under the
nation‘s new workforce development system, such as by providing
additional guidance and sharing information on promising practices.
* Protect the pensions and benefits of workers. The financial collapse
of Enron and other companies has highlighted Labor‘s critical role in
protecting pensions and other employee benefit plans estimated to have
assets in excess of $5 trillion. Labor agencies have begun to address
human capital issues that could constrain their efforts to protect
these assets as the agencies face a surge in expected retirements
within their workforces. However, weaknesses in Labor‘s strategic
targeting of its compliance efforts for protecting workers‘ benefits
and wages limit Labor‘s ability to maximize the impact of its limited
resources.
* Foster safe and healthy workplaces. Labor‘s enforcement agencies lack
management information on the impacts of their various compliance
activities that is essential for determining how to best allocate
compliance resources in protecting vulnerable populations, such as
children who work and day laborers. Furthermore, Labor has not always
leveraged the impact of its limited resources by coordinating
effectively
with other agencies that also share responsibilities for protecting
workers, such as in enforcing safety regulations at hazardous material
facilities.
What Remains to Be Done:
GAO believes that Labor should
* foster strategic management in addressing workforce issues and
targeting efforts to protect workers‘ pensions and benefits, and be
more proactive in helping states and localities integrate workforce
development programs;
* continue to better position itself to measure program impact in both
training and worker safety programs; and
* continue taking steps to comprehensively address its human capital
issues.
To view the full report, click on the link above.
For more information, contact Cynthia M. Fagnoni at (202) 512-7215 or
fagnonic@gao.gov.
Contents:
Transmittal Letter:
Major Performance and Accountability Challenges:
GAO Contacts:
Related GAO Products:
Performance and Accountability and High-Risk Series:
This is a work of the U.S. Government and is not subject to copyright
protection in the United States. It may be reproduced and distributed
in its entirety without further permission from GAO. It may contain
copyrighted graphics, images or other materials. Permission from the
copyright holder may be necessary should you wish to reproduce
copyrighted materials separately from GAO‘s product.
[End of Section]
Transmittal Letter January 2003:
The President of the Senate
The Speaker of the House of Representatives:
This report addresses the major management challenges and program risks
facing the U.S. Department of Labor (Labor) as it works to promote the
welfare and economic security of the nation‘s workforce and ensure that
workplaces are safe and healthy. The report discusses the actions that
Labor has taken and that are under way to address the challenges GAO
identified in its Performance and Accountability Series 2 years ago,
and major events that have occurred that significantly influence the
environment in which the department carries out its mission. Also, GAO
summarizes the challenges that remain and further actions that GAO
believes are needed.
This analysis should help the new Congress and the administration carry
out their responsibilities and improve government for the benefit of
the American people. For additional information about this report,
please contact Cynthia M. Fagnoni, Managing Director, Education,
Workforce, and Income Security issues, at (202) 512-7215 or at
fagnonic@gao.gov.
David M. Walker
Comptroller General
of the United States:
Signed by David M. Walker:
[End of section]
Major Performance and Accountability Challenges:
In our 2001 management challenges report, we identified the following
specific performance and management challenges that the U.S. Department
of Labor faced: (1) increase the employment and earnings of America‘s
workforce, (2) protect the benefits of workers, and (3) foster safe and
healthy workplaces. To meet these challenges, we reported that Labor
needed to improve its performance measurement, strategic planning, and
organizational alignment.
Since our January 2001 report, several events have altered the
environment in which Labor carries out its missions. First, the
September 11, 2001, attacks that claimed thousands of lives also helped
exacerbate a recession that resulted in many workers being displaced
from their jobs. While Americans responded swiftly and compassionately,
the attacks showed the vulnerability of the economy to terrorist acts.
Second, the financial collapse of Enron and other large corporations
resulted in job displacement and the loss of retirement savings for
workers in these corporations, which suggests certain vulnerabilities
in private pension and savings plans that can affect the nation‘s
workers.
Labor has taken steps to address some of the specific performance and
management challenges that were identified in our January 2001 report,
such as those related to improving performance measurement. For
example, Labor is establishing a new unit within its Employment and
Training Administration--the Office of Performance and Results--whose
function will include coordinating efforts to identify and share
promising approaches for resolving performance measurement issues.
Labor‘s Veterans‘ Employment and Training Service implemented parts of
its new performance management system in 2002, which includes new
outcome measures to evaluate state performance. To improve customer
service, Labor‘s Office of Workers‘ Compensation Programs opened a
toll-free call center in June 2001 and arranged for a contractor to
report extensive performance data on various service indicators.
However, Labor continues to face important performance and
accountability challenges in each of the three broad areas we
identified in our 2001 report. We have revised the first challenge to
more clearly highlight our focus on the challenges associated with
managing employment and training programs to meet the demands for the
workforce of the 21ST century. Specifically, the major performance and
accountability challenges that Labor continues to face are as follows.
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Manage Employment and Training Programs to Meet the Demands for the
Workforce of the 21ST Century:
Labor faces the challenge of being the principal agency responsible for
employment and training assistance to the nation‘s workers and helping
to meet employers‘ demands for skilled workers. However, Labor has not
strategically managed its own programs nor effectively integrated its
assistance with efforts carried out by other agencies to help meet the
demands for the workforce of the 21ST century. Work by us and Labor‘s
Inspector General has highlighted strategic management weaknesses,
limited support for state and local implementation of worker training
programs, performance measurement problems, and information security
weaknesses. Addressing these problems is critical to responding
effectively to the tremendous changes that are occurring in the U.S.
economy and population, such as the continuing growth of the high-tech
service economy that requires more high-skilled workers, the
competitive pressures of global markets, and the aging workforce
together with slower labor force growth. As the baby boomers age, the
share of the population age 65 and older is projected to grow from 12
percent in 2000 to about
20 percent in 2030. With the impending retirements of individuals in
the large baby boom generation, the growth of the labor force is
expected to slow considerably, becoming negligible by 2050. Thus, the
United States is projected to face growing shortages in both the
overall number of available workers and the number of workers with
certain high skills, which could threaten continued increases in our
standard of living.
Addressing Emerging Workforce Issues More Strategically:
To develop effective strategies for addressing the emerging issues
related to potential labor and skills shortages, Labor needs to take a
broader, cross-program perspective. In some cases this requires
coordinating more closely with other federal agencies. Our work has
highlighted two areas in which Labor could be more strategic in
addressing emerging workforce issues--enhancing training programs for
developing skilled workers and developing approaches to retain older
workers in the workforce.
While several federal agencies--Labor, Commerce, the National Science
Foundation, and others--have independent programs to address the need
for high-skill workers, coordination across agencies is limited. Our
September 2002 report on high-skill training recommended that Labor be
proactive in building a comprehensive approach within the department
and across federal agencies to address high-skill workforce needs
across the country.[Footnote 1] Labor agreed with this recommendation.
In other cases, Labor needs to be more strategic in managing its own
programs. Indicative of Labor‘s narrow focus and need to act more
strategically is how it has dealt with the apprenticeship program.
Labor could help address emerging needs for skilled workers by working
to enhance the potential of its registered apprenticeship program.
While more than 360,000 apprentices are enrolled in the program,
Labor‘s efforts to identify new occupations for apprenticeship have
been largely reactive, and, as a result, Labor has not influenced the
expansion of apprenticeships to industries in need of skilled
training.[Footnote 2] In our September 2001 report, we recommended that
to expand the apprenticeship program, particularly into occupations not
traditionally apprenticed, Labor must take the lead in coordinating and
promoting the development of such programs.[Footnote 3] Labor agreed
with our recommendation and has taken some actions. For example, Labor
conducted national forums with stakeholders and employers in new and
emerging occupations to gain feedback on how to expand the
apprenticeship program, enhance program quality, increase diversity,
and develop stronger linkages. In July 2002, Labor held a conference to
publicly discuss the results from these forums and obtain feedback from
participants.
Another example of where Labor needs to be more strategic in helping
meet the demands for the workforce of the 21ST century is developing
approaches to retain older workers in the workforce. With the impending
retirements of members of the large ’baby boom“ generation, the
possible loss of many experienced workers could create shortages in
skilled worker and managerial occupations, with adverse effects on
productivity and economic growth. The challenge is to develop the
policies, programs, and employment arrangements necessary to extend the
work life of the growing number of older workers in a manner that
balances the competitive imperative of business with the life realities
of older workers. While Labor has a central role in this area, many of
the attendant issues are beyond the range of Labor‘s authority and
therefore a collaborative approach is needed. In our November 2001
report, we recommended that the Secretary of Labor convene an
interagency task force to develop legislative and regulatory proposals
addressing the issues raised by the aging of the labor force.[Footnote
4] Labor is continuing to study the issues raised by our report and has
not implemented our recommendation.
Proactively Facilitating Implementation of Worker Training Programs by
State and Local Entities:
To help establish a workforce development system better able to meet
the needs of job seekers and employers, Labor needs to be more
proactive in helping to implement employment and training programs
under the Workforce Investment Act of 1998 (WIA). This can be
accomplished by providing additional guidance and by sharing
information on promising practices. WIA represents a major change in
the nation‘s workforce development system and state and local entities
have encountered many obstacles in working to integrate their
employment and training services. In the past, the job training system
was fragmented, consisting of overlapping programs that did not serve
job seekers or employers well. Congress passed WIA, in part, to create
a system connecting employment, education, and training services to
better match workers to labor market needs. Among other things, WIA
requires state and local entities who carry out a number of specified
federal programs to participate in local one-stop centers that offer
job training and placement assistance for workers and opportunities for
employers to find workers. While WIA gave state and local entities more
flexibility in administering employment and training programs, Labor
has struggled to define its new role under WIA.
To help this system better meet the workforce demands of the 21ST
century, Labor needs to be more proactive in disseminating information
to help state and local agencies implement employment and training
programs. For example, state and local one-stop partners have
encountered various programmatic and financial concerns that have
affected their level of participation, as well as their ability to
better coordinate their services at the one-stops. These concerns
included fears that participation in one-stop centers could lead them
to serve individuals otherwise ineligible for their services, and
resource constraints, such as having a lease on an existing facility
that they could not break. Our October 2001 report recommended that
Labor, along with other federal agencies, explore the concerns
identified by state and local agencies and identify specific ways in
which these concerns could be addressed.[Footnote 5] Our February 2002
report on WIA-funded services for dislocated workers found that
guidance concerning basic program requirements had been limited,
resulting in some confusion for state and local workforce officials
responsible for implementing the program.[Footnote 6] We recommended
that Labor provide additional guidance on implementation issues and
information on best practices to facilitate implementation of the
program and assist local officials in using the greater flexibility
afforded by WIA to design programs and services. State and local
agencies have also encountered problems coordinating WIA services for
serving low-income families receiving Temporary Assistance for Needy:
Families (TANF). Program differences between TANF and WIA, and
different information systems used by welfare and workforce agencies,
have inhibited state and local coordination efforts. Our July 2002
report recommended that Labor and the Department of Health and Human
Services (HHS) work together to jointly develop information on
promising practices for coordinating services for TANF clients through
one-stops to help states more effectively address some of these
obstacles to coordination.[Footnote 7]
While Labor did not respond directly to any of the recommendations made
in our October 2001 report on the implementation of WIA, the department
generally agreed with the recommendations we made in the reports on
serving dislocated workers and TANF clients. Moreover, Labor has taken
some actions to implement our recommendations. For example, Labor
convened a one-stop readiness workgroup that included representatives
from Education, HHS, and the Department of Housing and Urban
Development. This group has developed a set of suggested strategies for
addressing major WIA implementation issues and plans to disseminate a
national issuance, signed by the heads of all the federal partner
agencies, that would emphasize the commitment of these federal partners
to the one-stop system. In addition, Labor has awarded a grant to the
state of Illinois to create and maintain an on-line database of
promising one-stop practices. Regarding the issues we raised about
serving dislocated workers, Labor is currently finalizing guidance for
state and local areas on services for dislocated workers.
Our work has also highlighted the need for Labor to be more proactive
in helping to implement the H-1B skill grant program that prepares
workers for high-skill jobs.[Footnote 8] U.S. employers who use foreign
workers that enter the United States with H-1B visas to work in
specialty occupations must pay a fee for each worker they employ under
the program.[Footnote 9] Fifty-five percent of the funds are provided
to Labor for technical skill grants to increase the number of workers
in occupations identified as needing more workers and Labor awards
these grants to local workforce investment boards. While these skill
grant programs have increased coordination, grantees have had limited
opportunities for sharing information on best practices or how they
overcame challenging problems. Our September 2002 report on the skill
grant program recommended that Labor establish mechanisms to share
successful strategies among grantees and encourage
networking.[Footnote 10] Labor agreed with this recommendation and
noted that it has provided grantees with two studies that include
information about grantees‘ best practices.
Improving Measurement of Program Performance:
Our work has also highlighted performance measurement problems for
Labor that affect its ability to determine the success of employment
and training programs under the one-stop system established by WIA.
These problems are relevant to one of the five areas for governmentwide
reforms identified in the President‘s 2002 Management Agenda:
integrating performance measures in the federal budget process so that
resource allocation is linked to specific outcomes. The problems we
identified affect programs overseen by Labor‘s Employment and Training
Administration (ETA) and Veterans‘ Employment and Training Service
(VETS). For example, we reported in February 2002 that ETA‘s
performance measurement system may not provide a true picture of WIA-
funded program performance because data are not comparable across
states, data are not timely, and there are no measures to gauge the
performance of the one-stop system as a whole.[Footnote 11] VETS also
faces performance measurement issues in managing its employment and
training programs for veterans. For example, we reported in September
2001 that VETS lacks sufficient performance data on these programs,
does not communicate a consistent message to states on expected
performance, and often does not monitor states‘ performance in a
consistent manner.[Footnote 12] Because of these problems, ETA and VETS
lack essential data for providing a true picture of how well employment
and training programs are performing.
Our February 2002 report also highlighted the problem of counter-
productive incentives created by WIA‘s performance measures and the
potential negative impact on job seekers. Because states see the
current WIA performance levels as too high for the current economy,
states and localities sometimes choose not to serve those job seekers
who may be helped by their services, but who may not help in achieving
their negotiated performance levels. For example, officials in each of
the five states we visited told us that local areas are not registering
many WIA participants largely because of concerns by local staff about
meeting performance levels. Unless the performance levels can be
adjusted to accurately reflect the differences in economic conditions
and the populations served, local areas will continue to be discouraged
from serving some job seekers that could be helped.
We have made recommendations to improve performance measurement by both
ETA and VETS. Our February 2002 report made several recommendations to
Labor, such as developing ways for states to share promising approaches
in addressing the difficulties of using Unemployment Insurance data in
measuring outcomes and developing optional performance measures for the
one-stop system. To eliminate possible disincentives to serve some job
seekers, we recommended that Labor expedite the release of guidance on
revising negotiated performance levels and allow states to immediately
begin the process of renegotiation. In September 2001 we recommended
that the Secretary of Labor direct VETS to specify performance goals
and expectations for serving veterans, implement a performance
measurement system that holds states accountable and meets other
objectives, and update oversight guidelines and improve staff training.
Labor generally agreed with our recommendations in these two reports
and has taken some actions in line with these recommendations. For
example, Labor is establishing a new unit within ETA--the Office of
Performance and Results--whose function will be to coordinate efforts
to identify and share promising approaches in such areas as the use of
supplemental data sources to close gaps in Unemployment Insurance data.
In addition, Labor implemented our recommendation to expedite the
release of guidance on revising negotiated performance levels. VETS has
developed performance measures to establish outcome goals for grant
programs offering services to veterans[Footnote 13] and expects to
implement these measures this fiscal year. In addition, VETS and ETA
have created a new joint reporting system that they are working to
implement.
Improving Information Security:
Labor also faces problems pertaining to information security, which is
an important aspect of effective performance management systems. In
2002, Labor operated 82 mission-critical applications and general
support systems that were used to perform functions such as monitoring
and analyzing the nation‘s labor market and economic activities,
managing workforce services, and protecting and compensating American
workers. In summarizing the results of its reviews of these information
systems, Labor‘s Office of the Inspector General has acknowledged
significant improvements in Labor‘s information security program. For
example, the Inspector General notes that Labor has established an
information security program that adopts recognized guidelines and
complies with federal requirements and direction from the Office of
Management and Budget, and if maintained, should lead to assurances
that Labor‘s computer systems are reliable and adequately safeguarded.
However, recent audits by the Inspector General have revealed some
specific vulnerabilities in computer security and the protection of
assets. For example, the Inspector General‘s assessment of Labor‘s core
financial system identified significant system security
vulnerabilities, including information that was inappropriately placed
on the public Internet and password policy and settings with inadequate
controls. Audits by the Inspector General have also identified repeated
system security vulnerabilities and other weaknesses in several areas,
such as entity-wide security program planning and management, access
controls, and system software. Despite these vulnerabilities, the
Inspector General has concluded that Labor is making progress toward
developing a fully integrated and comprehensive security
program.[Footnote 14]
Protect the Pensions and Benefits of Workers:
While Labor has key responsibilities for protecting workers‘ benefits
and wages, our work has highlighted weaknesses in strategically
targeting its compliance efforts, which limit Labor‘s ability to
maximize the impact of its limited resources. In addition, we found
that Labor agencies responsible for protecting pensions have not
adequately addressed their human capital issues, which could constrain
their efforts to protect pensions as these agencies face an expected
surge in retirements within their workforces. It is critical that these
weaknesses be addressed because of Labor‘s wide area of
responsibilities. Labor works to safeguard the economic interests of
more than 150 million people in an estimated 6 million employee benefit
plans--pension, health, and other plans with assets in excess of $5
trillion protected under the Employee Retirement Income Security Act of
1974 (ERISA)--and also enforces federal provisions pertaining to wage
protections, such as ensuring that eligible workers receive at least
the federal minimum hourly wage and overtime pay. The financial
collapse of Enron and other corporations suggests certain
vulnerabilities in private pension and savings plans that can affect
the nation‘s workers. Although such vulnerabilities may be cyclical in
nature, these events nonetheless underscore the importance of
maintaining a well-managed enforcement program.
Fostering Strategic Management to Better Target Compliance Efforts:
Labor has not strategically managed its efforts to protect employees‘
benefit plans and provide wage protections for certain vulnerable
populations, such as workers with disabilities and day laborers. For
example, we reported in March 2002 that Labor‘s Pension and Welfare
Benefits Administration (PWBA) has not systematically estimated the
nature and extent of employee benefit plans‘ noncompliance with ERISA
provisions.[Footnote 15] Therefore, PWBA cannot ensure that it is
accurately identifying the areas where it needs to focus to most
efficiently and effectively allocate its limited resources. Moreover,
although PWBA has taken steps to modernize its technology, most
investigative staff still do not have sufficient and timely access to
automated information for researching and selecting plans for
investigation. Finally, PWBA‘s performance measurement system provides
limited assurance of the overall effectiveness of its ERISA enforcement
program because the performance measures generally focuses on program
outputs, such as the number of specific investigations conducted,
rather than PWBA‘s impact on improving the plans‘ overall compliance
with ERISA. We made several recommendations to PWBA to improve its
management of the enforcement program, such as developing a cost-
effective strategy for assessing the level and type of ERISA
noncompliance among employee benefit plans and coordinating the sharing
of best practices among regions relating to the optimum and most
productive techniques for selecting and conducting investigations. In
response, PWBA acknowledged the need for more effective oversight and
quality controls, and the need to address the internal management
issues we raised. PWBA has identified planned actions to address
several of our recommendations. For example, PWBA plans to establish
parameters for identifying long-term projects to develop a cost-
effective strategy for assessing the level and type of ERISA
noncompliance among employee benefit plans.
Data gaps have affected Labor‘s ability to strategically manage wage
protections for disabled workers. Labor‘s Wage and Hour Division (WHD)
of the Employment Standards Administration carries out the oversight of
section 14(c) provisions of the Fair Labor Standards Act that allow
employers to pay individuals less than the minimum wage if they have a
physical or mental disability that impairs their earning or productive
capacity.[Footnote 16] However, we reported in September 2001 that
Labor had not effectively managed the special minimum wage program to
ensure that 14(c) workers receive the correct wages because Labor lacks
the data necessary to manage the program and determine what resources
are needed to ensure compliance by employers.[Footnote 17] We
recommended several actions that Labor should take to obtain the data
needed to properly manage the 14(c) program, such as improving the
accuracy of its data on the number of 14(c) employers and workers,
tracking the number of staff hours devoted to various program
activities, and using these data to manage the program. Labor generally
agreed with our recommendations to strengthen management of the 14(c)
program for disabled workers and has taken actions to address all but
one of the recommendations we made.
WHD also faces difficulties in targeting its efforts to protect
individuals working as ’day laborers,“[Footnote 18] who may be eligible
for wage protections provided under federal laws. Because WHD is unable
to obtain complete information about where day laborers work and what
violations they may face, it is hard to focus resources on them.
Moreover, day laborers are generally reluctant or unaware of their
right to complain to authorities about not being paid promised wages.
While current efforts to collect additional data on day laborers have
promise, such efforts can be expanded. To strengthen protections for
day laborers, our September 2002 report recommended that WHD obtain
better information concerning the presence of and potential for
violations involving day laborers, through such actions as expanding
contact with temporary staffing agencies or other agencies that work
with day laborers.[Footnote 19] WHD agreed with our recommendations
regarding its oversight of day laborers.
Ensuring Adequate Investment in Human Capital:
The Pension Benefit Guaranty Corporation (PBGC) and PWBA must address
human capital issues that could imperil their efforts to protect
workers‘ benefits. We identified human capital as a high-risk
governmentwide management challenge in January 2001 and the President‘s
2002 Management Agenda cited strategic management of human capital as
one of its five areas for governmentwide reforms. Labor has estimated
that over 27 percent of its entire workforce and 47 percent of its
supervisors will be eligible to retire in the next 5 years.
Faced with significant growth in the number of large pension plan
failures beginning in the mid-1980s, PBGC began to contract for
services rather than seek additional federal staff during a period of
government downsizing. Because PBGC‘s focus was on obtaining necessary
services quickly, it did not adequately link its contracting decisions
to long-term strategic planning considerations and their human capital
implications. As a result, PBGC could not be assured that it had a
cost-beneficial mix of contractor and federal employees, as federal
policy requires, and risked being unprepared for future workload
changes. In addition, we identified underlying management weaknesses in
PBGC‘s overall approach to selecting and managing contractors.
Inadequate oversight of these human capital resources could result in
contractor performance problems and deterioration of service to pension
plan participants. In our September 2000 report, we recommended that
PBGC‘s executive director conduct a comprehensive review of its future
human capital needs and strengthen its contract oversight role by
developing the capacity to centrally compile and monitor field office
performance data.[Footnote 20] PBGC agreed with our recommendations and
has taken actions to implement them. For example, PBGC engaged the
National Academy of Public Administration (NAPA) to examine human
capital issues and conduct a strategic workforce planning study. PBGC
has completed its review of NAPA‘s study and has begun to develop a
six-step workforce planning model as recommended by NAPA. In addition,
PGGC has begun to centrally compile field office performance data and
develop an approach to comparing the performance of field offices.
More recently, our work has highlighted human capital issues at
PWBA.[Footnote 21] PWBA has given limited attention to key human
capital issues, which could undermine the continuity and effectiveness
of its enforcement programs, because by fiscal year 2006, 21 percent of
its employees and 55 percent of its senior managers will be eligible to
retire. In addition, PWBA faces recruitment and retention issues. In
fiscal year 2001, PWBA‘s rate of attrition was 9.7 percent compared
with Labor‘s overall rate of 7.6 percent. In our March 2002 report, we
recommended that PWBA improve its human capital functions by conducting
a comprehensive review of its future human capital needs, including the
size and shape of the workforce; the knowledge, skills, and abilities
needed; succession planning challenges; and staff deployment issues. In
response to our recommendation, PWBA cited various current and planned
activities related to human capital management and succession planning.
However, the activities PWBA cited are primarily stand-alone efforts
and are not linked to an agencywide assessment of potential changes in
PWBA‘s future workload and workforce.
Foster Safe and Healthy Workplaces:
Labor continues to face major management challenges in fostering safe
and healthy workplaces. Labor‘s effectiveness in achieving this
objective is fundamentally dependent on the effectiveness of the
enforcement and compliance strategies that it employs. However, two of
Labor‘s primary enforcement agencies--the Occupational Safety and
Health Administration (OSHA) and WHD--lack performance measurement
systems that provide program managers with sufficient information to
gauge the impacts of their enforcement and compliance activities.
Furthermore, Labor has not always leveraged the impact of its limited
resources by coordinating effectively with other agencies that also
share responsibilities for protecting workers.
Improving Measurement of Program Performance:
OSHA and WHD lack management information on the impacts of their
various compliance activities that is essential for determining how to
best allocate their compliance resources. For example, OSHA has
substantially increased funding in recent years for its Consultation
Program, which is a free, confidential service that helps small
employers in hazardous industries identify and eliminate hazards to
employee safety. Yet OSHA made this commitment without establishing the
performance measurement system needed to determine how well the
Consultation Program promotes agency goals for workplace safety and
health. As a result, OSHA does not know to what degree it can rely on
consultation activities to achieve these goals or the extent to which
it should use consultations in combination with its enforcement
activities. To strengthen its ability to assess the Consultation
Program‘s progress toward key agency goals, our October 2001 report
recommended that OSHA take several actions, including requiring that
state consultation programs collect and forward to OSHA data on
injuries and illnesses from employers participating in the Consultation
Program, for use in analyzing the outcomes of the program.[Footnote 22]
OSHA generally agreed with our report recommendations and has taken
actions to strengthen its performance measurement systems. For example,
OSHA started collecting data on injuries and illnesses from sites that
received consultation visits and has contracted with the National
Council on Compensation Insurance, Incorporated, to analyze
compensation data from 40 states to assess the impact of the
consultation program on injury and illness rates.
WHD also faces performance measurement issues in its efforts to
adequately enforce child labor laws. According to a recent report by
Labor, over 200,000 children are injured on the job each year and about
70 die from their injuries. While WHD has taken some steps toward
developing a sound performance measurement system, it continues to lack
performance goals for industries in which children have high rates of
injuries and fatalities. Moreover, its performance measurement system
does not allow managers to fully assess the impact of its child labor
compliance efforts. As a result, WHD lacks a sound basis for
determining the extent to which it should devote resources to child
labor investigations versus its education and outreach and other
compliance assistance activities. Our September 2002 report recommended
a number of actions that Labor should take to strengthen its ability to
evaluate the effectiveness of its child labor compliance
efforts.[Footnote 23] These included establishing additional specific,
measurable goals for its child labor compliance efforts for the
industries in which most children work and in which they are most
likely to be injured or killed, and developing methods of measuring the
success of its child labor compliance efforts, including its education
and outreach activities. Labor disagreed with both of these specific
recommendations.
In some cases, OSHA‘s performance measurement system can be enhanced to
help the agency better respond to emerging issues in workplace safety.
For example, OSHA‘s efforts to provide health and safety protections
for day laborers have been hampered by a lack of information about
where day laborers work and what violations they may face.
Congressional representatives, researchers, and advocacy groups have
raised concerns that day laborers may be used for the most hazardous
work but not be provided safe working conditions. OSHA has sought to
obtain better information in this area. For example, OSHA implemented a
temporary pilot procedure in 2002 to collect additional national data
that would provide a better understanding of the extent to which day
laborers are involved in workplace fatalities. However, unless OSHA
refines and permanently implements its pilot data collection procedure
for fatality investigations, it may not get a complete picture of the
number or characteristics of day laborers killed on the job. Our
September 2002 report made several recommendations to OSHA to
strengthen protections for day laborers, including enhancing the
education and outreach procedures it uses to reach day laborers,
finalizing its current effort to collect data on fatalities and
catastrophes, and refining this data collection effort to explicitly
identify day laborers involved.[Footnote 24] OSHA agreed with our
recommendation to enhance the education and outreach procedures it uses
to reach day laborers, but did not express its views on the other
report recommendations.
Coordinating Enforcement Efforts with Other Agencies:
Labor also faces difficulties in effectively coordinating its
activities with other agencies involved in workplace safety. For
example, OSHA and three other federal agencies[Footnote 25] play
distinct roles in federal efforts to protect the health of workers at
hazardous materials work places and these agencies‘ functions overlap
in a number of areas. We found that, in many cases, agencies either did
not have or did not make use of existing mechanisms to properly
coordinate their activities--especially in the areas of incident
investigation, training, and emergency response procedures. Managers at
hazardous material facilities told us that this situation not only
leads to unnecessary burden and duplication for employers, but also
potentially weakens the protections afforded to workers. Our October
2000 report recommended various actions that Labor should take to
enhance worker protection and reduce the compliance burden associated
with the hazardous material statutes and associated regulations, such
as working with other relevant federal agencies to establish a general
protocol that sets forth the framework under which multiagency incident
investigations shall be conducted.[Footnote 26] Although Labor agreed
that it is important to coordinate with other agencies at such
investigations and have clear lines of jurisdiction, Labor has not
implemented this recommendation.
[End of section]
GAO Contacts:
[End of section]
Subject(s) covered in this report: Employment and training; Contact
person: Sigurd Nilsen, Director; Education, Workforce, and; Income
Security Issues; (202) 512-7215; nilsens@gao.gov.
Subject(s) covered in this report: Retirement; Contact person: Barbara
Bovbjerg, Director; Education, Workforce, and; Income Security Issues;
(202) 512-7215; bovbjergb@gao.gov.
Subject(s) covered in this report: Worker protection; Contact person:
Robert Robertson, Director; Education, Workforce, and; Income Security
Issues; (202) 512-7215; robertsonr@gao.gov.
[End of table]
[End of section]
Related GAO Products:
Performance and Accountability Series:
Major Management Challenges and Program Risks: A Governmentwide
Perspective. GAO-01-241. Washington, D.C.: January 2001.
Major Management Challenges and Program Risks: Department of Labor.
GAO-01-251. Washington, D.C.: January 2001.
High-Risk Series: An Update. GAO-01-263. Washington, D.C.: January
2001.
Manage Employment and Training Programs:
Workforce Investment Act: States‘ Spending Is on Track, but Better
Guidance Would Improve Financial Reporting. GAO-03-239. Washington,
D.C.: November 22, 2002.
High-Skill Training: Grants from H-1B Visa Fees Meet Specific Workforce
Needs, but at Varying Skill Levels. GAO-02-881. Washington, D.C.:
September 20, 2002.
Unemployment Insurance: Increased Focus on Program Integrity Could
Reduce Billions in Overpayments. GAO-02-697. Washington, D.C.:
July 12, 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: 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: 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.
Older Workers: Demographic Trends Pose Challenges for Employers and
Workers. GAO-02-85. Washington, D.C.: November 16, 2001.
Workforce Investment Act: Better Guidance Needed to Address Concerns
Over New Requirements. GAO-02-72. Washington, D.C.: October 4, 2001.
Veterans‘ Employment and Training Service: Flexibility and
Accountability Needed to Improve Service to Veterans. GAO-01-928.
Washington, D.C.: September 12, 2001.
Registered Apprenticeships: Labor Could Do More to Expand to Other
Occupations. GAO-01-940. Washington, D.C.: September 7, 2001.
Veterans‘ Employment and Training Service: Proposed Performance
Measurement System Improved, But Further Changes Needed.
GAO-01-580. Washington, D.C.: May 15, 2001.
Protect the Benefits of Workers:
Worker Protection: Labor‘s Efforts to Enforce Protections for Day
Laborers Could Benefit from Better Data and Guidance. GAO-02-925.
Washington, D.C.: September 26, 2002.
Private Pensions: Participants Need Information on the Risks of
Investing in Employer Securities and the Benefits of Diversification.
GAO-02-943. Washington, D.C.: September 6, 2002.
Pension and Welfare Benefits Administration: Opportunities Exist for
Improving Management of the Enforcement Program. GAO-02-232.
Washington, D.C.: March 15, 2002.
Private Pensions: Key Issues to Consider Following the Enron Collapse.
GAO-02-480T. Washington, D.C.: February 27, 2002.
Special Minimum Wage Program: Centers Offer Employment and Support
Services to Workers With Disabilities, But Labor Should Improve
Oversight. GAO-01-886. Washington, D.C.: September 4, 2001.
Pension Benefit Guaranty Corporation: Contracting Management Needs
Improvement. GAO/HEHS-00-130. Washington, D.C.: September 18, 2000.
Foster Safe and Healthy Workplaces:
Workplace Safety and Health: OSHA Can Strengthen Enforcement through
Improved Program Management. GAO-03-45. Washington, D.C. November 22,
2002.
Child Labor: Labor Can Strengthen Its Efforts to Protect Children Who
Work. GAO-02-880. Washington, D.C.: September 27, 2002.
Worker Protection: Labor‘s Efforts to Enforce Protections for Day
Laborers Could Benefit from Better Data and Guidance. GAO-02-925.
Washington, D.C.: September 26, 2002.
Workplace Safety and Health: OSHA Should Strengthen the Management of
Its Consultation Program. GAO-02-60. Washington, D.C.: October 12,
2001.
Worker Protection: Better Coordination Can Improve Safety at Hazardous
Material Facilities. GAO-01-62. Washington, D.C.:
October 26, 2000.
[End of section]
Performance and Accountability and High-Risk Series:
Major Management Challenges and Program Risks: A Governmentwide
Perspective. GAO-03-95.
Major Management Challenges and Program Risks: Department of
Agriculture. GAO-03-96.
Major Management Challenges and Program Risks: Department of Commerce.
GAO-03-97.
Major Management Challenges and Program Risks: Department of Defense.
GAO-03-98.
Major Management Challenges and Program Risks: Department of Education.
GAO-03-99.
Major Management Challenges and Program Risks: Department of Energy.
GAO-03-100.
Major Management Challenges and Program Risks: Department of Health and
Human Services. GAO-03-101.
Major Management Challenges and Program Risks: Department of Homeland
Security. GAO-03-102.
Major Management Challenges and Program Risks: Department of Housing
and Urban Development. GAO-03-103.
Major Management Challenges and Program Risks: Department of the
Interior. GAO-03-104.
Major Management Challenges and Program Risks: Department of Justice.
GAO-03-105.
Major Management Challenges and Program Risks: Department of Labor.
GAO-03-106.
Major Management Challenges and Program Risks: Department of State.
GAO-03-107.
Major Management Challenges and Program Risks: Department of
Transportation. GAO-03-108.
Major Management Challenges and Program Risks: Department of the
Treasury. GAO-03-109.
Major Management Challenges and Program Risks: Department of Veterans
Affairs. GAO-03-110.
Major Management Challenges and Program Risks: U.S. Agency for
International Development. GAO-03-111.
Major Management Challenges and Program Risks: Environmental Protection
Agency. GAO-03-112.
Major Management Challenges and Program Risks: Federal Emergency
Management Agency. GAO-03-113.
Major Management Challenges and Program Risks: National Aeronautics and
Space Administration. GAO-03-114.
Major Management Challenges and Program Risks: Office of Personnel
Management. GAO-03-115.
Major Management Challenges and Program Risks: Small Business
Administration. GAO-03-116.
Major Management Challenges and Program Risks: Social Security
Administration. GAO-03-117.
Major Management Challenges and Program Risks: U.S. Postal Service.
GAO-03-118.
High-Risk Series: An Update. GAO-03-119.
High-Risk Series: Strategic Human Capital Management. GAO-03-120.
High-Risk Series: Protecting Information Systems Supporting the Federal
Government and the Nation‘s Critical Infrastructures.
GAO-03-121.
High-Risk Series: Federal Real Property. GAO-03-122.
FOOTNOTES
[1] U.S. General Accounting Office, High-Skill Training: Grants from H-
1B Visa Fees Meet Specific Workforce Needs, but at Varying Skill
Levels, GAO-02-881 (Washington, D.C.:
Sept. 20, 2002).
[2] Apprenticeship combines supervised on-the-job training with formal
instruction and has been used for decades in construction trades and
some manufacturing occupations to ensure that workers have the skills
employers need.
[3] U.S. General Accounting Office, Registered Apprenticeships: Labor
Could Do More to Expand to Other Occupations, GAO-01-940 (Washington,
D.C.: Sept. 7, 2001).
[4] U.S. General Accounting Office, Older Workers: Demographic Trends
Pose Challenges for Employers and Workers, GAO-02-85 (Washington, D.C.:
Nov. 16, 2001).
[5] U.S. General Accounting Office, Workforce Investment Act: Better
Guidance Needed to Address Concerns Over New Requirements, GAO-02-72
(Washington, D.C.: Oct. 4, 2001).
[6] U.S. General Accounting Office, Workforce Investment Act: Better
Guidance and Revised Funding Formula Would Enhance Dislocated Worker
Program, GAO-02-274 (Washington, D.C.: Feb. 11, 2002).
[7] U.S. General Accounting Office, 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).
[8] To help U.S. employers in information technology and other
industries meet their needs for high-skilled workers, the H-1B visa
program allows employers to temporarily (for up to 6 years) fill needs
in specialty occupations with foreign workers.
[9] In 1998, the law set the fee at $500 (later raised to $1,000) for
each foreign worker for whom they applied.
[10] GAO-02-881.
[11] U.S. General Accounting Office, 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).
[12] U.S. General Accounting Office, Veterans‘ Employment and Training
Service: Flexibility and Accountability Needed to Improve Service to
Veterans, GAO-01-928 (Washington, D.C.: Sept. 12, 2001); and Veterans‘
Employment and Training Service: Proposed Performance Measurement
System Improved, But Further Changes Needed, GAO-01-580 (Washington,
D.C.: May 15, 2001).
[13] These are the Disabled Veterans‘ Outreach Program and the Local
Veterans‘ Employment Representative program.
[14] U.S. Department of Labor, Office of the Inspector General,
Semiannual Report to the Congress: April 1, 2002-September 30, 2002,
Volume 48 (Washington, D.C.: 2002).
[15] U.S. General Accounting Office, Pension and Welfare Benefits
Administration: Opportunities Exist for Improving Management of the
Enforcement Program, GAO-02-232 (Washington, D.C.: Mar. 15, 2002).
[16] In 2001, more than 5,600 employers paid special minimum wages to
about 424,000 workers.
[17] U.S. General Accounting Office, Special Minimum Wage Program:
Centers Offer Employment and Support Services to Workers With
Disabilities, But Labor Should Improve Oversight, GAO-01-886
(Washington, D.C.: Sept. 4, 2001).
[18] Day laborers is a term that generally refers to individuals who
work and get paid on a daily or short-term basis. Day laborers have an
informal relationship with the labor market, often working for
different employers each day, being paid in cash, and lacking key
benefits such as health or unemployment insurance.
[19] U.S. General Accounting Office, Workers Protection: Labor‘s
Efforts to Enforce Protections for Day Laborers Could Benefit from
Better Data and Guidance, GAO-02-925 (Washington, D.C.: Sept. 26,
2002).
[20] U.S. General Accounting Office, Pension Benefit Guaranty
Corporation: Contracting Management Needs Improvement, GAO/HEHS-00-130
(Washington, D.C.: Sept. 18, 2000).
[21] GAO-02-232.
[22] U.S. General Accounting Office, Workplace Safety and Health: OSHA
Should Strengthen the Management of Its Consultation Program, GAO-02-60
(Washington, D.C.: Oct. 12, 2001).
[23] U.S. General Accounting Office, Child Labor: Labor Can Strengthen
Its Efforts to Protect Children Who Work, GAO-02-880 (Washington, D.C.:
Sept. 27, 2002).
[24] GAO-02-925.
[25] These agencies are the Environmental Protection Agency; the
Department of the Treasury‘s Bureau of Alcohol, Tobacco and Firearms;
and the Chemical Safety and Hazard Investigation Board.
[26] U.S. General Accounting Office, Worker Protection: Better
Coordination Can Improve Safety at Hazardous Material Facilities, GAO-
01-62 (Washington, D.C.: Oct. 26, 2000).
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