Employment and Training Program Grants
Labor Has Outlined Steps for Additional Documentation and Monitoring but Assessing Impact Still Remains an Issue Gao ID: GAO-08-1140T September 23, 2008Since 2001, Labor has spent nearly $900 million on the High Growth Job Training Initiative (High Growth), Community-Based Job Training Initiative (Community Based), and the Workforce Innovation in Regional Economic Development (WIRED). This testimony addresses 1) the intent of the grant initiatives and the extent to which Labor will be able to assess their effects; (2) the extent to which the process used competition, was adequately documented, and included key players; and (3) what Labor is doing to monitor individual grantee compliance with grant requirements. This testimony is based on GAO's May 2008 report (GAO-08-486) and additional information provided by the agency in response to the report's recommendations. For that report, GAO reviewed Labor's strategic plan, documents related to evaluations of the initiatives, internal procedures for awarding grants, relevant laws, and monitoring procedures, and conducted interviews.
According to Labor officials, the grant initiatives were designed to shift the focus of the public workforce system toward the training and employment needs of high-growth, in-demand industries, but Labor will be challenged to assess their impact. Under the initiatives, Labor awarded 349 grants totaling almost $900 million to foster this change. However, the grant initiatives were not fully integrated into Labor's strategic plan or overall research agenda, so it is unclear what criteria Labor will use to evaluate their effectiveness. Labor lacks data that will allow it to compare outcomes for grant-funded services with those of other federally funded employment and training services. GAO recommended that Labor take steps to ensure that it could evaluate the initiatives' impact, but its response to our recommendation suggests that conditions remain much as they were when GAO did its audit work. While grants under all three initiatives are now awarded competitively, the initial noncompetitive process for High Growth grants was not adequately documented. Community Based and WIRED grants have always been awarded competitively, but more than 80 percent of High Growth grants were awarded without competition. Labor could not document criteria used to select the noncompetitive High Growth grants or whether these grants met internal or statutory requirements. In response to the report recommendation, Labor modified review forms used in its noncompetitive process to include documentation of statutory requirements; however, GAO has not evaluated the sufficiency of these changes. Another issue related to the process was that meetings Labor held to identify solutions for industry workforce challenges did not include the vast majority of local workforce investment boards. Labor provides some monitoring for grantees under all three initiatives and uses a risk-based monitoring approach for the High Growth and Community Based grants. However, when GAO conducted its audit work there was no risk-based monitoring approach for WIRED, and therefore recommended that Labor establish one. In response to the report recommendation, Labor documented steps it has taken to put a monitoring approach in place for WIRED grants. GAO has not reviewed the sufficiency of these steps.
GAO-08-1140T, Employment and Training Program Grants: Labor Has Outlined Steps for Additional Documentation and Monitoring but Assessing Impact Still Remains an Issue
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Testimony:
Before the Subcommittee on Employment and Workplace Safety, Committee
on Health, Education, Labor and Pensions, U.S. Senate:
United States Government Accountability Office:
GAO:
For Release on Delivery:
Expected at 9:30 a.m. EDT:
Tuesday, September 23, 2008:
Employment and Training Program Grants:
Labor Has Outlined Steps for Additional Documentation and Monitoring
but Assessing Impact Still Remains an Issue:
Statement of George A. Scott, Director:
Education, Workforce, and Income Security Issues:
GAO-08-1140T:
GAO Highlights:
Highlights of GAO-08-1140T, a testimony before the Subcommittee on
Employment and Workplace Safety, Committee on Health, Education, Labor,
and Pensions, U.S. Senate.
Why GAO Did This Study:
Since 2001, Labor has spent nearly $900 million on the High Growth Job
Training Initiative (High Growth), Community-Based Job Training
Initiative (Community Based), and the Workforce Innovation in Regional
Economic Development (WIRED). This testimony addresses 1) the intent of
the grant initiatives and the extent to which Labor will be able to
assess their effects; (2) the extent to which the process used
competition, was adequately documented, and included key players; and
(3) what Labor is doing to monitor individual grantee compliance with
grant requirements. This testimony is based on GAO‘s May 2008 report
(GAO-08-486) and additional information provided by the agency in
response to the report‘s recommendations. For that report, GAO reviewed
Labor‘s strategic plan, documents related to evaluations of the
initiatives, internal procedures for awarding grants, relevant laws,
and monitoring procedures, and conducted interviews.
What GAO Found:
According to Labor officials, the grant initiatives were designed to
shift the focus of the public workforce system toward the training and
employment needs of high-growth, in-demand industries, but Labor will
be challenged to assess their impact. Under the initiatives, Labor
awarded 349 grants totaling almost $900 million to foster this change.
However, the grant initiatives were not fully integrated into Labor‘s
strategic plan or overall research agenda, so it is unclear what
criteria Labor will use to evaluate their effectiveness. Labor lacks
data that will allow it to compare outcomes for grant-funded services
with those of other federally funded employment and training services.
GAO recommended that Labor take steps to ensure that it could evaluate
the initiatives‘ impact, but its response to our recommendation
suggests that conditions remain much as they were when GAO did its
audit work.
While grants under all three initiatives are now awarded competitively,
the initial noncompetitive process for High Growth grants was not
adequately documented. Community Based and WIRED grants have always
been awarded competitively, but more than 80 percent of High Growth
grants were awarded without competition. Labor could not document
criteria used to select the noncompetitive High Growth grants or
whether these grants met internal or statutory requirements. In
response to the report recommendation, Labor modified review forms used
in its noncompetitive process to include documentation of statutory
requirements; however, GAO has not evaluated the sufficiency of these
changes. Another issue related to the process was that meetings Labor
held to identify solutions for industry workforce challenges did not
include the vast majority of local workforce investment boards.
Labor provides some monitoring for grantees under all three initiatives
and uses a risk-based monitoring approach for the High Growth and
Community Based grants. However, when GAO conducted its audit work
there was no risk-based monitoring approach for WIRED, and therefore
recommended that Labor establish one. In response to the report
recommendation, Labor documented steps it has taken to put a monitoring
approach in place for WIRED grants. GAO has not reviewed the
sufficiency of these steps.
Table: Number of Grants and Funds Awarded Competitively and
Noncompetitively, Fiscal Years 2001-2007 (Dollars in millions):
Grant Initiative: High Growth: 166;
Competitively awarded amount: $31.8;
Noncompetitively awarded amount: $263.8;
Totals by grant initiative: $295.6.
Grant Initiative: Community Based: 142;
Competitively awarded amount: $250.0;
Noncompetitively awarded amount: 0;
Totals by grant initiative: $250.0.
Grant Initiative: WIRED: 41;
Competitively awarded amount: $324.0;
Noncompetitively awarded amount: 0;
Totals by grant initiative: $324.0.
Grant Initiative: Total: 349;
Competitively awarded amount: $605.8;
Noncompetitively awarded amount: $263.8;
Totals by grant initiative: $869.6.
Source: GAO analysis of U.S. Department of Labor grants data.
Note: Total dollar amount varies from Labor‘s reported figure due to
rounding.
[End of table]
What GAO Recommends:
In May 2008, GAO recommended that Labor take steps to ensure that it
can evaluate the initiatives‘ impact, document compliance with
statutory program requirements for noncompetitive grant awards, and
develop and implement a risk-based monitoring approach for WIRED
grants. Labor documented steps to implement the last two
recommendations. This statement contains no new recommendations.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-08-1140T]. For more
information, contact George Scott (202)512-7215, scottg@gao.gov.
[End of section]
Madam Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss the High Growth Job Training
(High Growth), the Community Based Job Training (Community Based), and
the Workforce Innovation in Regional Economic Development (WIRED)
initiatives. Since 2001, the Department of Labor (Labor) has spent
almost $900 million on these three employment and training grant
initiatives to address what it perceived as shortcomings in the one-
stop service delivery system.[Footnote 1] My testimony today focuses on
(1) the intent of the grant initiatives and the extent to which Labor
will be able to assess their effects; (2) the extent to which the
process used competition, was adequately documented, and included key
players; and (3) what Labor is doing to monitor individual grantee
compliance with grant requirements. My testimony today is based
primarily on findings from our May 2008 report,[Footnote 2] and
additional information provided by the agency in response to the
report's recommendations. Those findings were based on multiple
methodologies including a review of Labor's strategic plan, documents
related to evaluations of the initiatives and their purpose, internal
procedures for awarding grants, relevant laws, and monitoring
procedures. We also interviewed relevant Labor officials and persons
with recognized workforce and training expertise. We conducted that
performance audit from May 2007 to May 2008 in accordance with
generally accepted government auditing standards.
In summary, according to Labor officials, the grant initiatives were
designed to shift the focus of the public workforce system toward the
training and employment needs of high-growth, in-demand industries, but
Labor will be challenged to assess their impact. The grant initiatives
were not fully integrated into Labor's strategic plan or overall
research agenda, making it unclear what criteria Labor will use to
evaluate their effectiveness, and Labor lacks data that will allow it
to compare outcomes for grant-funded services to those of other
federally funded employment and training services. We recommended that
Labor take steps to ensure that it could evaluate the impact of the
initiatives. Labor's response to our recommendation suggests that
conditions remain much as they were when we did our audit work. While
grants under all three initiatives are now awarded competitively, more
than 80 percent of High Growth grants were awarded without competition.
Moreover, Labor could not document criteria used to select the
noncompetitive High Growth grants or whether these grants met internal
or statutory requirements. In response to a report from its Inspector
General, Labor took steps to strengthen the noncompetitive process, but
these procedures did not explicitly require documentation of compliance
with statutory program requirements. In response to our recommendation,
Labor modified its review forms used in its noncompetitive process to
include such documentation. We have not reviewed the sufficiency of
these changes. Another issue related to the process was that meetings
Labor held to identify solutions for industry workforce challenges did
not include the vast majority of local workforce investment boards,
even though WIA makes these boards central to the workforce system.
Finally, Labor provides some monitoring for grantees under all three
initiatives and uses a risk-based monitoring approach for the High
Growth and Community Based grants. When we conducted our audit work,
there was no risk-based monitoring approach for WIRED, and we
recommended Labor establish one. In response to our recommendation,
Labor documented steps it has taken to put a monitoring process for
WIRED in place. We have not reviewed the sufficiency of these steps.
Background:
When it was enacted in 1998, WIA created a new, comprehensive workforce
investment system designed to change the way employment and training
services are delivered. Under WIA, each state designates local
workforce investment areas across the state. Each local area is
governed by local workforce investment boards that make decisions about
the number and location of one-stop career centers, where partner
programs make their services and activities available. Local boards are
required to promote employers' participation in the workforce
investment system and assist them in meeting hiring needs. Training
services provided must be directly linked to occupations in demand in
the local area. WIA requires states and localities to track the
performance of WIA-funded activities and Labor to hold states
accountable for their performance in the areas of job placement,
employment retention, and earnings change.
The Employment and Training Administration (ETA) oversees the High
Growth, Community Based, and WIRED grant initiatives. The vast majority
of these grants are awarded under a provision of WIA,[Footnote 3] which
provides authority for demonstration, pilot, multiservice, research,
and multistate projects, and a provision of the American
Competitiveness and Workforce Improvement Act (ACWIA),[Footnote 4]
which provides authority for job training grants funded by the H-1B
visa program.[Footnote 5] [Footnote 6]
Labor is required to conduct impact evaluations of its programs and
activities carried out under WIA, including pilot and demonstration
projects.[Footnote 7] While impact evaluations make it possible to
isolate a program's effect on participants' outcomes, there are several
ways to conduct them, including experimental and quasi-experimental
methods.[Footnote 8] In 2004[Footnote 9] and 2007,[Footnote 10] GAO
recommended that Labor comply with WIA requirements to conduct an
impact evaluation of WIA services to determine what services are most
effective for improving employment-related outcomes. Labor agreed with
our recommendation. In December 2007, the agency announced it had begun
a quasi-experimental evaluationĉan impact evaluation that does not use
a control group--of the WIA Adult and Dislocated Worker programs, with
a final report expected in November 2008.
Federal law recommends, but does not require, that all grants be
awarded through competition. The Federal Grant and Cooperative
Agreement Act encourages competition in grant programs, where
appropriate, to ensure that the best possible projects are funded.
[Footnote 11] In addition, Labor's own guidance governing procurement
and grant operations--the Department of Labor Manual Series--states
that competition is recommended, unless one or more of eight exceptions
apply.[Footnote 12] Further, a guide on improving grant accountability
developed by the Domestic Working Group Grant Accountability Project
recommends grants be awarded competitively because competition
facilitates accountability, promotes fairness and openness, and
increases assurance that grantees have the systems in place to
efficiently and effectively use funds to meet grant goals.[Footnote 13]
Effective monitoring is also a critical component of grant management.
The Domestic Working Group's suggested grant practices state that
financial and performance monitoring is important to ensure
accountability and the attainment of performance goals. Labor monitors
most grants through a risk-based strategy based on its Core Monitoring
Guide. A key goal is to determine compliance with specific program
requirements. In addition, entities receiving Labor grants are subject
to the provisions of the Single Audit Act if certain conditions are
met.[Footnote 14] A single audit is an organization-wide audit that
covers, among other things, the recipient's internal controls and its
compliance with applicable provisions of laws, regulations, contracts,
and grants.
Grants Are Intended to Change the Workforce System, but Labor Will Be
Challenged to Evaluate Their Impact:
According to Labor officials, the grant initiatives are designed to
change the focus of the public workforce system to emphasize the
employment and training needs of high-growth, high-demand industries,
but Labor will be challenged in assessing their impact. For the three
grant initiatives, Labor awarded 349 grants totaling almost $900
million that were intended to bring about this change by identifying
the workforce and training needs of growing, high-demand industries;
engaging workforce, industry, and educational partners to develop
innovative solutions to workforce challenges, such as worker shortages;
leveraging a wide array of resources to fund the solutions; and
integrating workforce and economic development to transform regional
economies by creating good jobs. However, 7 years after awarding the
first grant, Labor will be challenged to evaluate the effect of the
grants. We recommended that Labor take steps to ensure that it could,
but its response to our recommendation suggests that conditions remain
much as they were when we did our audit work.
Labor Said the Grants Are Designed to Make the Workforce System More
Focused on High-Growth, High-Demand Industries:
According to Labor officials, the High Growth, Community Based, and
WIRED initiatives are designed to collectively change the focus of the
workforce investment system by giving greater emphasis to the
employment and training needs of high-growth, high-demand industries.
They characterized High Growth as a systematic change initiative
designed to make the system more demand-driven (i.e., focused on the
needs of growing and high-demand industries) and to make the system's
approach to workforce development more strategic by engaging business,
industry, and education partners to identify workforce challenges and
solutions. [Footnote 15] As a related effort, the Community Based
grants were designed to build the training capacity of community
colleges for high-growth, high-demand occupations. The goal of third
grant initiative, WIRED, was to "catalyze" the creation of high-skill
and high-wage opportunities for workers within the context of regional
economies, to test models for integrating workforce and economic
development, and to demonstrate that workforce development is a key
driver in transforming regional economies. From 2001 through 2007,
Labor awarded 349 grants totaling almost $900 million for these
initiatives (see table 1).
Table 1: Total Number and Amount of Grants Awarded by Labor, 2001-2007:
Grant initiative: High Growth;
Number of grants: 166;
Amount: $295,522,793.
Grant initiative: Community Based;
Number of grants: 142;
Amount: $250,000,000.
Grant initiative: WIRED;
Number of grants: 41;
Amount: $323,999,944.
Grant initiative: Total;
Number of grants: 349;
Amount: $869,522,737.
Source: GAO analysis of U.S. Department of Labor grants data.
[End of table]
Labor officials said a number of indicators show that the initiatives
are changing the system. According to Labor, they have seen a "system-
shift" in the approach to implementing workforce solutions through an
increase in demand-driven topics at conferences since the roll out of
the initiatives. Labor said this shift has been driven by partnerships
between the workforce investment system, business, industry, and
educators using the High Growth framework. Labor also said it is seeing
demand-driven strategies in state and local strategic plans and in
states using their own money to fund High Growth-like projects. Labor
pointed out that the system has evolved to the point where high
performing local workforce boards with demand-driven practices are
mentoring lesser performers. Lastly, Labor said the content on its Web
site, Workforce3 One, was also evidence of change. For example, Labor
held an interactive seminar broadcast on this site to train
participants to use an online tool to share curricula developed through
the initiatives.
However, experts identified a number of challenges states face in
pursuing demand-driven practices. These included insufficient funding,
limited flexibility in how funds can be used, statutory requirements to
target services to certain groups of workers, and the need to respond
to local economic conditions. Commenting on workforce boards' ability
to form strategic partnerships, one expert noted that there are no
funds to support such endeavors and no performance standards to measure
them. With regard to regional economic development, experts said boards
are structured around local areas, not regions, regional economies are
highly variable, regional governance structures can make achieving buy-
in difficult and that rural areas can be particularly challenged in
pursuing regional approaches.
Seven Years After Awarding the First Grant, Labor Will Be Challenged to
Evaluate Their Impact:
Despite the money invested and emphasis placed on these initiatives,
Labor did not fully integrate them into its strategic plan or ETA's
research plan from the start. The Government Performance and Results
Act states that strategic plans shall contain strategic goals and
objectives, including outcome-related, or performance goals, and
objectives for an agency's major functions and operations.[Footnote 16]
However, the strategic plan includes performance goals only for the
Community Based initiative. High Growth and WIRED--the two initiatives
where Labor spent the most moneyĉare mentioned in the strategic plan,
but not specifically linked to a performance goal; therefore, it is
unclear what criteria Labor will use to evaluate their effectiveness.
Moreover, the data needed to assess the performance of these
initiatives are not specified. Labor officials said the strategic plan
did not address the initiatives because it focuses on budget issues.
Just as the initiatives are not fully integrated into the strategic
plan, neither are they fully integrated into ETA's research plan, which
cites plans for future evaluations, but it does not specify an
assessment of their impact. In responding to recommendations made in
our May 2008 report, Labor said only that it would consider inclusion
of the initiatives in its next 5 year research agenda due for revision
in 2009.
Not fully incorporating the initiatives into its strategic or research
plans may have limited Labor's ability to collect consistent outcome
data. Labor said that, prior to 2005, it consistently collected data
from grantees on the number of participants enrolled in and completing
training funded under High Growth--the only one of the three grant
initiatives operating at that time. However, it did not collect
performance outcomes similar to those being collected for its other
training and employment services.[Footnote 17]
Labor will face challenges in obtaining the data necessary to make
meaningful comparisons. In 2005, Labor instituted what were called
common measures to assess the effectiveness of one-stop programs and
services. The common measures include participant employment outcomes,
earnings, and job retention after receiving services. At the time,
Labor could not require High Growth and Community Based grantees to
provide data on the common measures because it did not have Office of
Management and Budget (OMB) approval. In anticipation of OMB approval,
starting in 2006, Labor included information on the common measures in
all new solicitations for High Growth and Community Based grants,
notified grantees of its goal for standardizing performance reporting,
and provided technical assistance to help grantees prepare for it.
Labor also encouraged grantees to work with local workforce system
partners to leverage their experience in tracking and reporting
performance outcomes. According to Labor, it has an OMB approved
reporting format in place and expects data collection to begin in early
program year 2008. However, because some of the first grantees have
already completed their projects, obtaining information about workers
that have left the program may prove difficult and costly. According to
Labor, it can collect common measures for WIRED grantees, but it has
not yet done so.[Footnote 18]
As a result, Labor may not have consistent data for individuals
participating in the programs funded under the grant initiatives. In
addition, it may lack data that will allow it to compare outcomes for
individuals served by grant-funded programs with those served by
employment and training programs offered through the one-stop system.
Having comparable outcome data is important because the goal of an
impact evaluation is to determine if outcomes are attributable to a
program or can be explained by other factors.
Labor has some plans underway to evaluate the initiatives but may face
challenges drawing strong conclusions from them. Labor has conducted an
evaluation of the implementation and sustainability of 20 early High
Growth grantees. It is now evaluating the impact of the training
provided by High Growth grantees. Labor anticipated the final report in
December 2008, but now expects it in spring 2009. Labor experienced a
number of challenges in evaluating the initiatives. These include
having to limit its evaluation to only 6 grantees of 166, because only
6 had sufficient participants to ensure a statistically significant
evaluation. They also include problems gaining access to workers'
earnings data and inconsistent outcome data from grantees.
Labor officials said they plan to conduct a comprehensive evaluation of
the Community Based initiative. The first phase of the evaluation will
examine the extent to which the Community Based grants addressed the
stated workforce objectives and challenges funded projects were
intended to address, as well as document the role of business and the
workforce investment system in the overall success of the grants,
according to Labor. This phase will also include an examination of the
feasibility of performing an impact evaluation and will be completed in
late 2008. Depending on the results of this phase, Labor officials said
an impact evaluation will begin in 2009.
For its evaluation of the WIRED initiatives, Labor says it is examining
the implementation and cumulative effects of WIRED strategies,
including change in the number and size of companies in targeted high-
growth industries and whether new training led to job placement in the
targeted industries. It contracted with the Berkeley Policy Associates
to conduct the evaluation for the first 13 grantees, and a final report
is expected by June 2010. It also contracted with Public Policy
Associates to similarly evaluate the 28 remaining WIRED grantees.
Labor officials said these initiatives are not included in the agency's
broader WIA impact study. According to Labor, none of the three
initiatives is considered to be a research project or designed to
compare participant outcomes with the participant outcomes achieved
under WIA. Labor said it does not plan to include them in the
assessment of the impact of WIA services because the initiatives have
their own independent evaluations.
The Initial Noncompetitive Process Was Not Adequately Documented and
Did Not Include Key Players:
While Labor now awards grants under all three grant initiatives
competitively, initially almost all High Growth grants were awarded
without competition. Labor also did not document the criteria for
selecting noncompetitive High Growth grants or whether they met Labor's
internal requirements or the requirements of the laws under which the
grants are authorized. In response to recommendations we made in our
May 2008 report, Labor said it had modified its noncompetitive process
so it now includes documentation of statutory program requirements. We
have not evaluated the sufficiency of the modified forms for ensuring
statutory compliance. Another issue with the process was that meetings
Labor held to identify workforce solutions did not include most of the
state and local workforce investment boards.
All Three Types of Grants Are Now Awarded Competitively, but the Vast
Majority of High Growth Grants Were Awarded Without Competition:
The Community Based and the WIRED grants have always been awarded
through a competitive process but, until 2005, Labor did not award High
Growth grants competitively even though federal law and Labor's
internal procedures recommend competition. While Labor had discretion
in awarding High Growth grants without competition, the extent to which
it did so raises questions about how Labor used this method of awarding
grants. Competition facilitates accountability, promotes fairness and
openness, and increases assurance that grantees have systems in place
to meet grant goals. Yet Labor chose to award 83 percent of the High
Growth grants, which represented almost 90 percent of the funds,
without competition between fiscal years 2001 and 2007 (see table 2).
Congress required that High Growth grants funded by H-1B fees be
awarded competitively for fiscal years 2007 and 2008.[Footnote 19]
Prior to that time, there were no provisions requiring Labor to award
High Growth grants competitively.
Table 2: The Number of High Growth Grants and Funds Awarded
Competitively and Noncompetitively between Fiscal Years 2001 and 2007
(Dollars in millions):
Fiscal year: 2001;
Number of noncompetitive grants: 1;
Funds awarded noncompetitively: $2.8;
Number of competitive grants: 0;
Funds awarded competitively: 0;
Summary of grants and funds awarded noncompetitively: 100% of grants
and funds.
Fiscal year: 2002;
Number of noncompetitive grants: 7;
Funds awarded noncompetitively: $14.7;
Number of competitive grants: 0;
Funds awarded competitively: 0;
Summary of grants and funds awarded noncompetitively: 100% of grants
and funds.
Fiscal year: 2003;
Number of noncompetitive grants: 15;
Funds awarded noncompetitively: $30.3;
Number of competitive grants: 0;
Funds awarded competitively: 0;
Summary of grants and funds awarded noncompetitively: 100% of grants
and funds.
Fiscal year: 2004;
Number of noncompetitive grants: 37;
Funds awarded noncompetitively: $77.4;
Number of competitive grants: 0;
Funds awarded competitively: 0;
Summary of grants and funds awarded noncompetitively: 100% of grants
and funds.
Fiscal year: 2005;
Number of noncompetitive grants: 55;
Funds awarded noncompetitively: $86.7;
Number of competitive grants: 12;
Funds awarded competitively: $12;
Summary of grants and funds awarded noncompetitively: 82% of grants and
88% of funds.
Fiscal year: 2006;
Number of noncompetitive grants: 21;
Funds awarded noncompetitively: $50.5;
Number of competitive grants: 0;
Funds awarded competitively: 0;
Summary of grants and funds awarded noncompetitively: 100% of grants
and funds.
Fiscal year: 2007;
Number of noncompetitive grants: 1;
Funds awarded noncompetitively: $1.4;
Number of competitive grants: 17;
Funds awarded competitively: 1$9.8;
Summary of grants and funds awarded noncompetitively: 6% of grants and
7% of funds.
Fiscal year: Total;
Number of noncompetitive grants: 137;
Funds awarded noncompetitively: $263.8[A];
Number of competitive grants: 29;
Funds awarded competitively: $31.8[A];
Summary of grants and funds awarded noncompetitively: 83% of grants and
89% of funds.
Source: GAO analysis of U.S. Department of Labor grants data.
Notes: The fiscal year was calculated based on the start date of the
grant. Labor awards grants by program year rather than fiscal year,
which is from July 1 through June 30 of each year.
[A] Total dollar amount varies from Labor's reported figure due to
rounding.
[End of table]
Labor said that it used a noncompetitive process to promote innovation.
They also said that they awarded grants without competition to save the
time it would have taken to solicit grants through competition. In
hindsight, they said they could have offered the High Growth grants
competitively earlier because they recognized that the number of
noncompetitive awards created a perception that the process was unfair.
They said, however, that they always intended to award later grants
competitively.
In contrast to the High Growth grants, the Community Based and WIRED
initiatives have always been awarded through competition. These funding
opportunities were announced to potential applicants through a
solicitation for grant application that listed the information that an
application must include to compete for funding. These applications
were then reviewed and scored by a knowledgeable technical panel. These
solicitations were also reviewed by Labor attorneys for compliance with
procurement and statutory program requirements for awarding grants,
according to officials.
Labor Did Not Document the Criteria for Selecting Noncompetitive High
Growth Grants or Whether They Met Labor's Internal Requirements or
Requirements of the Law:
Because the initial High Growth process was noncompetitive, documenting
the decision steps was all the more important to ensure transparency.
However, Labor was unable to provide documentation of the initial
criteria for selecting grantees. As a result, it did not meet federal
internal control standards, which state that all transactions and other
significant events need to be clearly documented and that the
documentation should be readily available for examination.[Footnote 20]
In addition, it was unable to document that it met the statutory
requirements for the laws authorizing the grants. Finally, according to
Labor's Inspector General, it did not adequately document that it had
followed its own procedures for awarding grants without competition.
Labor did not document the criteria used to select the early
noncompetitive High Growth projects. Labor officials told us there were
no official published guidelines specific to High Growth grants, only
draft guidelines, which were no longer available. In addition, Labor
officials told us that generally they were looking for grantees that
pursued partnerships and leveraged resources, but that attributes they
sought changed over time. Labor published general requirements for
noncompetitive grants in 2005 and updated them in 2007. Officials said
these were not requirements, only guidelines for the kinds of
information Labor would find valuable in evaluating proposals.
In addition, while Labor said that it had discretion to award high
growth grants non-competitively under the WIA provision authorizing
demonstrations and pilot projects[Footnote 21] and under ACWIA before
2007, they could not document that the grants fully complied with the
requirements of these provisions. For example, WIA requirements include
providing direct services to individuals, including an evaluative
component, and being awarded to private entities with recognized
expertise, or to state and local entities with expertise in operating
or overseeing workforce investment programs.[Footnote 22] Officials
said that they were certain they had ensured that the projects met all
statutory requirements but acknowledged they did not document that the
requirements were met.
Labor's Inspector General found the agency did not always document that
it followed its own procedures or always obtained required review and
approval before awarding grants noncompetitively. Labor officials said
most of the noncompetitive grant proposals were presented to Labor's
Procurement Review Board[Footnote 23] for review and approval allowed
under exceptions for proposals that were unique or innovative, highly
cost-effective, or available from only one source.[Footnote 24]
However, in 2007, Labor's Inspector General reviewed a sample of the
noncompetitive High Growth grants awarded between July 2001 and March
2007 and found that 6 of the 26 grants, which should have undergone
review, were awarded without prior approval from the review board.
Furthermore, they found that Labor could not demonstrate that proper
procedures were followed in awarding the High Growth grants without
competition.[Footnote 25]
Although they were unable to provide documentation, Labor officials
said they used considerable rigor in selecting grant recipients under
the noncompetitive process. Similar to a competitive process, the
noncompetitive grant proposals were highly scrutinized and reviewed to
ensure they made best use of scarce resources. They said that, in most
cases, staff created abstracts to highlight strengths and weaknesses,
and multiple staff and managers participated in reviews and decision-
making. In addition, Labor officials strongly disagreed with the
majority of the Inspector General's findings. They said they followed
established procurement practices as required but agreed that
additional documentation would be valuable.
In response to the Inspector General's report, Labor took steps to
strengthen the noncompetitive process. These included developing
procedures to review noncompetitive grant proposals for criteria
including support of at least one of ETA's strategic goals and
investment priorities. The procedures also required ETA to document
that required procedures are followed and that required review and
approval is obtained before awarding grants noncompetitively. However,
the newly developed procedures did not explicitly identify the
statutory program requirements for which compliance should be
documented. In response to a recommendation in our May 2008 report,
Labor provided modified forms used in the noncompetitive process to
include statutory program requirements and said that grant officers and
program officials must confirm that the proposed grant is in compliance
with these requirements. We have not evaluated the sufficiency of the
modified forms for ensuring statutory compliance or reviewed how grant
and program officers confirm compliance using the forms.
Labor's Process for Identifying Industry Workforce Challenges Did Not
Include the Majority of Workforce Investment Boards:
The vast majority of workforce boards--which oversee the workforce
investment system--were not included in the meetings that served as
incubators for grant proposals. After identifying 13 high-growth/high-
demand sectors,[Footnote 26] Labor held a series of meetings between
2002 and 2005 with industry executives and other stakeholders to
identify workforce challenges and to develop solutions to
them.[Footnote 27] According to Labor, they first held meetings with
industry executives--executive forums--for 13 sectors to hear directly
from industry leaders about the growth potential for their industries
and to understand the workforce challenges they faced. Second, they
hosted a series of workforce solutions forums for 11 of the sectors,
which brought together industry executives (often those engaged in
human resources and training activities) with representatives from
education, state and local workforce boards, or other workforce-related
agencies.[Footnote 28] However, a review of Labor's rosters for the
solutions forums shows that while there were more than 800
participants, 26 of the almost 650 local workforce boards nationwide
were represented, and these came from 15 states. (See fig. 1.)
Figure 1: Number of Workforce Investment Boards and States with
Participants at Solutions Forums:
[See PDF for image]
This figure is a map of the United States with states shaded to
indicate their inclusion in the following categories:
Number of workforce investment board representatives: 0:
Alabama:
Alaska:
Arizona:
Arkansas:
Colorado:
District of Columbia:
Georgia:
Hawaii:
Indiana:
Iowa:
Kansas:
Louisiana:
Maryland:
Michigan:
Minnesota:
Mississippi:
Missouri:
Montana:
Nebraska:
Nevada:
New Hampshire:
New Jersey:
New Mexico:
North Carolina:
North Dakota:
Ohio:
Oklahoma:
Oregon:
Rhode Island:
South Carolina:
South Dakota:
Utah:
Vermont:
West Virginia:
Wisconsin:
Wyoming:
Number of workforce investment board representatives: 1:
Delaware:
Connecticut:
Idaho:
Maine:
Massachusetts:
New York:
Pennsylvania:
Tennessee:
Number of workforce investment board representatives: 2:
Illinois:
Virginia:
Washington:
Number of workforce investment board representatives: 3:
California:
Florida:
Kentucky:
Texas:
Source: GAO analysis of U.S. Department of Labor data on solutions
forums participants; map, Art Explosion.
[End of figure]
Further only 20 of the 50 states had their state workforce investment
board or other agency represented (see table 3).[Footnote 29]
Table 3: Industry Sector Solutions Forums and the Number of
Participants:
Industry sector solutions forum: Advanced manufacturing;
Total number of participants at each solutions forum: 61;
Local workforce investment board participation: 3;
State workforce investment board or other state agency participation:
0.
Industry sector solutions forum: Aerospace;
Total number of participants at each solutions forum: 40;
Local workforce investment board participation: 1;
State workforce investment board or other state agency participation:
0.
Industry sector solutions forum: Automotive;
Total number of participants at each solutions forum: 216;
Local workforce investment board participation: 6;
State workforce investment board or other state agency participation:
9.
Industry sector solutions forum: Biotechnology;
Total number of participants at each solutions forum: 29;
Local workforce investment board participation: 4;
State workforce investment board or other state agency participation:
6.
Industry sector solutions forum: Construction;
Total number of participants at each solutions forum: 86;
Local workforce investment board participation: 5;
State workforce investment board or other state agency participation:
2.
Industry sector solutions forum: Energy;
Total number of participants at each solutions forum: 26;
Local workforce investment board participation: 0;
State workforce investment board or other state agency participation:
1.
Industry sector solutions forum: Financial services;
Total number of participants at each solutions forum: 99;
Local workforce investment board participation: 3;
State workforce investment board or other state agency participation:
4.
Industry sector solutions forum: Geospatial technology;
Total number of participants at each solutions forum: 41;
Local workforce investment board participation: 1;
State workforce investment board or other state agency participation:
2.
Industry sector solutions forum: Health;
Total number of participants at each solutions forum: 155;
Local workforce investment board participation: 6;
State workforce investment board or other state agency participation:
10.
Industry sector solutions forum: Hospitality;
Total number of participants at each solutions forum: 57;
Local workforce investment board participation: 3;
State workforce investment board or other state agency participation:
3.
Industry sector solutions forum: Transportation;
Total number of participants at each solutions forum: 19;
Local workforce investment board participation: 2;
State workforce investment board or other state agency participation:
2.
Industry sector solutions forum: Total;
Total number of participants at each solutions forum: 829;
Local workforce investment board participation: 34[A];
State workforce investment board or other state agency participation:
39[B].
Source: GAO analysis of U.S. Department of Labor data on solutions
forums participants.
[A] The numbers for local workforce investment board participation do
not total 26 because 2 workforce investment boards participated in more
than one solutions forums; the remaining 24 participated in only one.
Also, some local workforce investment boards had more than one
representative.
[B] The numbers for state workforce investment board or other state
agency participation do not total 20 because several states attended
more than one forum and some states had more than one agency
represented.
[End of table]
Labor officials said they went to great lengths to include workforce
system participants in solutions forums. Officials said they asked
state workforce agencies to identify a state coordinator to interface
with Labor, work collaboratively with industry partners, and identify
potential attendees for executive and solutions forums. Further, the
state coordinators were to help Labor communicate with the workforce
system about High Growth activities and were kept updated through
routine conference calls and periodic in-person meetings, according to
Labor. Labor officials also said the Assistant Secretary and other
senior officials traveled frequently, speaking to workforce system
partners at conferences to gather information about innovative
practices. Labor officials said, even with these efforts, they found
only a few workforce boards operating unique or innovative demand-
driven programs.
However, most workforce board officials we spoke to in our site visits
reported becoming aware of the meetings and the grant opportunities
after the fact, even though they were pursuing the kinds of innovative
practices the meeting was supposed to promote. Some state board
officials said that they were often unaware that grants had been
awarded, and at least one local workforce board said it became aware of
a grant only when the community college grantee approached it for
assistance in getting enough students for their program. In addition,
officials in states we visited said they had been developing and using
the types of practices that Labor was seeking to promote at the
meetings.
Being present at the meetings could have been beneficial to workforce
boards. Labor officials acknowledged that when meeting participants
suggested a solution to an employment challenge that they deemed
innovative and had merit, they encouraged them to submit a proposal for
a grant to model the solution. In addition, officials said that, in
some cases, they provided applicants additional assistance to increase
the chances that the proposal would be funded.
Labor Uses a Risk-Based Monitoring Approach for High Growth and
Community Based Grants and Has Documented Steps for Monitoring WIRED
Grants:
For all three grant initiatives, Labor has a process to resolve
findings found in single audits, collects quarterly performance
information, and provides technical assistance as a part of monitoring.
In addition, it has a risk-based monitoring approach for High Growth
and Community Based grants.[Footnote 30] When we conducted our audit
work, there was no risk-based monitoring approach for WIRED. In
response to our recommendation, Labor has documented steps it has taken
to put a monitoring approach in place for WIRED grants.
Labor Has a Process to Ensure Grantees Resolve Findings in Single
Audits, Collects Quarterly Performance Information, and Provides
Technical Assistance:
Labor said it has a process to work with grantees, including High
Growth, Community Based, and WIRED to resolve findings in single
audits. However, Labor's Inspector General reported that Labor does not
have procedures in place for grant officers to follow up with grantees
with past due audit reports to ensure timely submission and thus proper
oversight and correction of audit findings. The Inspector General
recommended that Labor implement such procedures, and Labor has done
so, but the finding remains open because Labor's Inspector General has
not yet determined if the procedures adequately address the
recommendation.[Footnote 31]
As part of its monitoring, Labor requires High Growth, Community Based,
and WIRED grantees to submit quarterly financial and performance
reports. Financial reports contain information, such as total amount of
grant funds spent and amount of matching funds provided by the grantee.
Performance reports focus on activities leading to performance goals,
such as grantee accomplishments and challenges to meeting grant goals.
Labor officials said they review these reports and follow up with
grantees if there are questions. Labor officials acknowledge, however,
that they are still working to ensure the consistency of performance
reports provided by High Growth and Community Based grantees and are
working with OMB to establish consistent reporting requirements. In
addition, while the finding was not specific to these three grants,
Labor's Inspector General cited high error rates in grantee performance
data as a management challenge.[Footnote 32] Labor is taking steps to
improve grant accountability, such as providing grantee and grant
officer training.
All grantees receive technical assistance from Labor on how to comply
with laws and regulations, program guidance, and grant conditions. For
example, Labor issued guides for High Growth and Community Based
grantees that include information on allowable costs and reporting
requirements. In addition, Labor officials said they trained national
and regional office staff to address grantees' questions and help High
Growth and Community Based grantees obtain assistance from experts at
Labor and other grantees. Labor officials said they hold national and
regional High Growth and Community Based grantee orientation sessions
for new grantees, present technical assistance webinars and training
sessions focused on specific high-growth industries, assist grantees
with disseminating grant results and products, such as curricula, and
set up virtual networking groups of High Growth grantees to encourage
collaboration.
Labor officials told us they have teams who provide technical
assistance to each WIRED grantee including weekly contact. During these
sessions, Labor staff work with WIRED grantees on grant management
issues, such as costs that are allowed using grant funds. Labor staff
provide additional assistance through conference calls, site visits,
and documentation reviews. In addition, Labor officials said they have
held five webinars on allowable costs and provided grantees with a
paper on allowable costs in July 2006, which was updated in July 2007.
Finally, Labor officials explained that they made annual site visits
for the first 13 WIRED grantees in spring and summer of 2007 to discuss
implementation plans and progress toward plan goals. In addition, Labor
staff said they have reviewed the implementation of the remaining WIRED
grants to ensure that planned activities comply with requirements of
the law. However, none of these reviews resulted in written reports
with findings and corrective action plans.
Labor has spent $16 million on contracts to provide technical
assistance, improve grant management, administration, and monitoring,
and to assist Labor with tasks such as holding grantee training
conferences. The larger of these contracts focus on providing technical
assistance to WIRED grantees. For example, one contract valued at over
$2 million provides WIRED grantees assistance with assessing regional
strengths and weaknesses and developing regional economic strategies
and implementation plans. Another grant, valued at almost $4 million,
provides a database and geographic information system[Footnote 33] that
WIRED grantees can use to facilitate data analysis and reporting, among
other things.
While these monitoring and technical assistance efforts are useful to
help grantees manage their grants, they do not provide a risk-based
monitoring process to identify and resolve problems, such as compliance
issues, in a consistent and timely manner.
Labor Provides Risk-Based Monitoring for High Growth and Community
Based Grants and Has Documented Steps for Monitoring WIRED Grants:
Labor uses a risk-based strategy to monitor High Growth and Community
Based grant initiatives. For these initiatives, it selects grantees to
monitor based on indications of problems that may affect grant
performance. Labor's risk-based approach to monitoring most grants
reflects suggested grant practices. Suggested grant practices recognize
that it is important to identify, prioritize, and manage potential at-
risk grant recipients for monitoring given the large number of grants
awarded by federal agencies. Through this process, Labor staff
determine if grantee administration and program delivery systems
operate, the grantee is in compliance with program requirements, and
information reported is accurate.
Labor's risk-based monitoring strategy involves conducting site visits
based on grantees' assessed risk-levels and availability of resources,
among other things.[Footnote 34] These site visits include written
assessments of grantee's management and performance and compliance
findings and requirements for corrective action. For example, Labor's
site visit guide includes questions about financial and performance
data reporting systems, such as how well the grantee maintains files on
program participants.[Footnote 35]
Labor has monitored about half of the High Growth grants and over one-
quarter of the Community Based grants. Labor officials said these
monitoring efforts have resulted in a number of significant findings
which have generally been resolved in a timely manner. (See table 4.)
For example, during a November 2006 site visit of a Community Based
grantee, Labor identified three findings: incomplete participant files,
failure to follow internal procurement procedures, and missing grant
partnership agreements. Similarly, during a site visit in spring 2006
to a High Growth grantee, Labor found that the grantee did not
accurately track participant information and reported incorrect
information on expenditures, among other things. As of September 2007
Labor said these findings had been resolved (see table 4).
Table 4: Status of Risk-Based Monitored Grants as of September 30,
2007:
Status: Findings resolved;
High Growth: 38;
Community Based: 13.
Status: Findings not yet resolved;
High Growth: 10;
Community Based: 5.
Status: No findings;
High Growth: 31;
Community Based: 21.
Status: Total monitored;
High Growth: 79;
Community Based: 39.
Source: GAO analysis of U.S. Department of Labor grants monitoring
data.
[End of table]
As another part of Labor's risk-based monitoring strategy, Labor's
internal requirements specify that Labor staff are to make site visits
to all new grantees, including High Growth, Community Based, and WIRED,
within 12 months of beginning grant activity and to new grantees rated
as "at risk" within 3 months. Labor officials said they consider "new
grantee" site visits to be orientation visits and had not made visits
to most new grantees. They said they broadly interpret this requirement
to include a variety of methods of contact and generally use
teleconference and video conference training sessions rather than site
visits, based on the availability of resources. For example, Labor
calls each new Community Based grantee to schedule new grantee
training. Labor is taking steps to update its internal requirements to
better reflect the purpose of the new grantee monitoring.
According to Labor, in response to a recommendation we made in our May
2008 report, it has initiated the process for monitoring the financial
and administrative requirements of the WIRED grants. Labor says it
developed a WIRED Supplement to the Core Monitoring Guide which it is
using to conduct reviews of WIRED grants. Labor also stated that it is
developing a schedule of reviews that will provide for the monitoring
of all WIRED grants prior to September 30, 2008, to be followed by
reviews of remaining WIRED grants.
Labor said the monitoring reviews are being conducted by four teams of
ETA staff, consisting of experienced Regional Office financial staff,
National Office staff, and the Federal Project Officers assigned to the
grant. All of the teams have been provided training to maximize the
results of the initial review. ETA will utilize standard procedures for
issuance and resolution of any monitoring report issues.
While Labor has said it has taken steps to implement our recommendation
on documentation and monitoring, we have not assessed the sufficiency
of those efforts. Labor has said it is taking steps to ensure that it
can evaluate the impact of the initiatives, and this is an area that
warrants continued oversight.
Madam Chairman, this completes my prepared statement. I would be happy
to respond to any questions you or other Members of the Subcommittee
may have at this time.
GAO Contact and Staff Acknowledgments:
For further information regarding this testimony, please contact me at
(202) 512-7215. Individuals making key contributions to this testimony
include Patrick di Battista, Julianne Hartman Cutts, Karen A. Brown,
and Nancy Purvine, Senior Analysts, and Stephanie Toby, Analyst. Jean
McSween provided methodological assistance, and Jessica Botsford
provided legal assistance. The team also benefited from key technical
assistance from Susan Aschoff, Pat L. Bohan, Paul Caban, Jessica Orr,
Michael Springer, and Charles Willson.
[End of section]
Related GAO Products:
Workforce Investment Act: Additional Actions Would Improve the
Workforce System. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-
1061T]. Washington, D.C.: June 28, 2007.
Veterans' Employment and Training Service: Labor Could Improve
Information on Reemployment Services, Outcomes, and Program Impact.
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-594]. Washington,
D.C.: May 24, 2007.
Workforce Investment Act: Employers Found One-Stop Centers Useful in
Hiring Low-Skilled Workers; Performance Information Could Help Gauge
Employer Involvement. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-
07-167]. Washington, D.C.: December 22, 2006.
National Emergency Grants: Labor Has Improved Its Grant Award
Timeliness and Data Collection, but Further Steps Can Improve Process.
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-870]. Washington,
D.C.: September 5, 2006.
Discretionary Grants: Further Tightening of Education's Procedures for
Making Awards Could Improve Transparency and Accountability.
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-268]. Washington,
D.C.: February 21, 2006.
Workforce Investment Act: Labor and States Have Taken Actions to
Improve Data Quality, but Additional Steps Are Needed. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-06-82]. Washington, D.C.:
November 14, 2005:
Workforce Investment Act: Substantial Funds Are Used for Training, but
Little Is Known Nationally about Training Outcomes. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-05-650]. Washington, D.C.: June
29, 2005.
Workforce Investment Act: Labor Should Consider Alternative Approaches
to Implement New Performance and Reporting Requirements. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-05-539]. Washington, D.C.: May
27, 2005.
Workforce Investment Act: Employers Are Aware of, Using, and Satisfied
with One-Stop Services, but More Data Could Help Labor Better Address
Employers' Needs. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-
259]. Washington, D.C.: February 18, 2005.
Public Community Colleges and Technical Schools: Most Schools Use Both
Credit and Noncredit Programs for Workforce Development. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-05-4]. Washington, D.C.: October
18, 2004.
Workforce Investment Act: States and Local Areas Have Developed
Strategies to Assess Performance, but Labor Could Do More to Help.
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-657]. Washington,
D.C.: June 1, 2004.
National Emergency Grants: Labor Is Instituting Changes to Assess
Performance, but Labor Could Do More to Help. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-04-496]. Washington, D.C.: April
16, 2004.
Workforce Investment Act: Labor Actions Can Help States Improve Quality
of Performance Outcome Data and Delivery of Youth Services. [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-04-308]. Washington, D.C.:
February 23, 2004.
Workforce Investment Act: One-Stop Centers Implemented Strategies to
Strengthen Services and Partnerships, but More Research and Information
Sharing Is Needed. [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-
725]. Washington, D.C.: June 18, 2003.
Workforce Training: Employed Worker Programs Focus on Business Needs,
but Revised Performance Measures Could Improve Access for Some Workers.
[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-03-353]. Washington,
D.C.: February 14, 2003.
[End of section]
Footnotes:
[1] Federally funded training and employment services are delivered
through what is known as the one-stop system, which was developed under
the Workforce Investment Act (WIA) of 1998 and is governed by state and
local workforce investment boards. Sixteen categories of programs,
funded by four federal agencies, deliver their services through this
system. Under WIA, Labor has general responsibility and oversight of
the one-stop system.
[2] GAO, Employment and Training Program Grants: Evaluating Impact and
Enhancing Monitoring Would Improve Accountability, [hyperlink,
http://www.gao.gov/cgi-bin/getrpt?GAO-08-486]. (Washington, D.C.: May
7, 2008.)
[3] 29 U.S.C. § 2916.
[4] 29 U.S.C. § 2916a.
[5] This program imposes a fee on employers that hire foreign workers
to fill positions in specialized professions such as computer
technology.
[6] The High Growth Job Training Initiative was funded under both WIA
and ACWIA provisions; the Community Based Job Training Grants were
funded under the WIA provision, and WIRED grants were funded under
ACWIA. The High Growth grants were awarded under WIA as pilots and
demonstrations. The WIA provision requires that grants provide direct
services to individuals, include an evaluative component, and are made
to entities with recognized expertise. The ACWIA provision requires
Labor to identify industries and economic sectors projected to
experience significant growth. In addition, the ACWIA provision
requires Labor to use H-1B funds to award grants to entities to provide
job training and related activities, ensure that grants are equitably
distributed geographically, and ensure that training activities funded
by such grants are coordinated with the workforce investment system.
[7] This includes activities carried out under section 171.
[8] In evaluating the impact of programs, outcome data from the program
are compared with a baseline. Considered the most rigorous method for
conducting impact evaluations, the experimental method randomly assigns
participants to two groups--one that receives a program service (or
treatment) and one that does not (control group). The resulting outcome
data on both groups are compared, and the difference in outcomes
between the groups is taken to demonstrate the program's impact. In a
quasi-experimental approach, program participation is not randomly
assigned, but outcome data for individuals who participated in a
program are compared with others who did not.
[9] GAO, Workforce Investment Act: States and Local Areas Have
Developed Strategies to Assess Performance, but Labor Could Do More to
Help, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-04-657]
(Washington, D.C.: June 1, 2004).
[10] GAO, Veterans' Employment and Training Service: Labor Could
Improve Information on Reemployment Services, Outcomes, and Program
Impact, [hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-594]
(Washington, D.C.: May 24, 2007).
[11] 31 U.S.C. § 6301(3).
[12] Department of Labor Manual Series 2-836(G)-Exclusions and
Exceptions to Competitive Procedures for grants and cooperative
agreements.
[13] The Domestic Working Group Grant Accountability Project, Guide to
Opportunities for Improving Grant Accountability, October 2005. The
group was composed of representatives from federal, state, and local
audit organizations, including Labor's inspector general.
[14] OMB Circular A-133, which implements the Single Audit Act (31
U.S.C. §§7501-7507), requires nonfederal entities that expend $500,000
or more in federal funds to have a single or program-specific audit
conducted for that year.
[15] According to Labor, the High Growth initiative included several
key steps prior to awarding the grants and is ongoing through
dissemination of grant results. Key steps included: identification of
high-growth, high-demand industries; industry scans to understand the
size, trends, and scope of each industry; industry executive forums to
hear workforce challenges; workforce solutions forums to develop
solutions to address these challenges; investments in workforce
solutions (i.e., grants) for industry-identified challenges and follow-
on competitive opportunities; and dissemination strategies for High
Growth products.
[16] 5 U.S.C. § 306.
[17] While acknowledging that reporting practices for High Growth were
not established fully at the initiative's outset, officials said this
was because the nature of the initiative posed inherent challenges in
developing a common reporting and performance model: each grant was
different, with different training models for different populations;
some grants were for training, others were for capacity building. Labor
said that as it became clear that more rigorous procedures for
reporting were needed, it took the necessary steps to address the
problem.
[18] Labor developed a proposed approach to collect and report the
common measures for WIRED grants using the existing state WIA
performance system, but, as of November 2007, it had not yet collected
them.
[19] This requirement did not apply to grants awarded under the WIA
provision authorizing High Growth grants.
[20] GAO, Internal Control: Standards for Internal Control in the
Federal Government, [hyperlink, http://www.gao.gov/cgi-
bin/getrpt?GAO/AIMD-00-21.3.1] (Washington, D.C.: November 1999).
[21] 29 U.S.C § 2916.
[22] 29 U.S.C § 2916(b)(1) and 29 U.S.C § 2916(b)(2)(B).
[23] Labor's Procurement Review Board is responsible for reviewing
various acquisition activities, including most unsolicited grant
proposals, and recommending approval or disapproval to the department's
Chief Acquisitions Officer.
[24] Department of Labor Manual Series 2-836(G)-Exclusions and
Exceptions to Competitive Procedures for grants and cooperative
agreements. There are five additional exceptions listed for awarding
noncompetitive grants: (1) a noncompetitive award is authorized or
required by statute; (2) the activity is essential to the satisfactory
completion of an activity presently funded by DOL; (3) it is necessary
to fund a recipient with an established relationship with the agency
for a variety of reasons; (4) the application for the activity was
evaluated under the criteria of the competition for which the
application was submitted, was rated high enough to have been selected
under the competition, and was not selected because the application was
mishandled; and (5) the Secretary determined that a noncompetitive
award is in the public interest.
[25] U.S. Department of Labor Office of Inspector General--Office of
Audit, High Growth Job Training Initiative: Decisions for Non-
competitive Awards Not Adequately Justified, 02-08-201-03-390 (Nov. 2,
2007).
[26] Labor identified a 14th sector--Homeland Security--in 2005 and did
not hold an executive or solutions forum for this sector, according to
officials.
[27] Labor conducted industry scans of the size, trends, and scope of
certain industries to understand the industries and any known
challenges. In this process, they identified high-growth/high-demand
industries that have a high-demand for workers. Officials said that
they did not intend to identify all high-growth industry sectors in the
economy, but to provide a framework for the process to be used at the
state and local levels.
[28] Solutions forums were not held for the information technology and
retail sectors.
[29] Some states had representatives from the state workforce
investment board participating, and some states had a workforce-related
agency such as those involved in employment and/or economic
development.
[30] Labor's risk-based monitoring strategy differs from single audits.
Entities receiving Labor grants are subject to the provisions of the
Single Audit Act if certain conditions are met. The Single Audit Act
established the concept of the single audit to replace multiple grant
audits with one audit of a recipient as a whole. As such, a single
audit is an organization-wide audit that covers, among other things,
the recipient's internal controls and its compliance with applicable
provisions of laws, regulations, contracts, and grants. In contrast,
Labor's risk-based approach focuses on the readiness and capacity of
the grantee to operate the grant including compliance with laws,
regulations, and specific program requirements.
[31] U.S. Department of Labor--Office of Inspector General, report
prepared by KPMG LLP, Management Advisory Comments Identified in an
Audit of the Consolidated Financial Statements for the Year Ended
September 30, 2007, 22-08-006-13-001 (Washington, D.C.: Mar. 20, 2008).
[32] This observation was based on audits of three Labor grantees
during fiscal year 2007.
[33] A geographic information system is a computer application used to
store, view, and analyze geographical information, especially maps.
[34] Labor's grant monitoring plans are to reflect any program-specific
monitoring requirements as well as specific requirements for on-site
visits to grantees with new grants and those rated "at-risk" though the
risk assessment process.
[35] Employment and Training Administration, U.S. Department of Labor,
Core Monitoring Guide (Washington D.C.: April 2005).
[End of section]
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