The Employment and Training Administration (ETA) oversees the High  Growth, Community Based, and WIRED grant initiatives. 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. 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. From  2001 through 2007, Labor awarded 349 grants totaling almost $900 million  for these initiatives (see table 1). 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 money⎯are  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. 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. 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. 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. 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. 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. 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.
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.