1). ETA Considered Overarching Goals and Various Factors in Selecting Measures to Address Job Corps’ Financial Challenges

		ETA Used Funding Transfers and Spending Cuts to Address Job Corps’ Financial Challenges in Program Years 2011 and 2012

ETA addressed Job Corps’ financial challenges in program years 2011  and 2012 through a combination of funding transfers and spending cuts. Over both program years, ETA  used $38.4 million in funding transfers and implemented $75.3 million in  spending cuts (see table 2). Temporary cuts to training. Permanent cuts to student benefits and services. Job Corps Contractors and Some Members of Congress Said That Communications Were Sometimes Not Timely and Complete

Job Corps center contractors’ corporate and center staff, and outreach  and admissions contractors, told us that the timing of ETA’s internal  notices regarding spending cuts in program years 2011 and 2012 in some  cases created challenges for staff. For example, in two cases, ETA  issued a notice on a Friday that required all contractors to submit a  response by the following Monday or Tuesday. Staff at three of eight  centers we visited said they or corporate staff worked over the weekend  to prepare responses, such as revised spending plans. Our review of  ETA’s internal notices regarding spending cuts found that 11 of 19—8 of  which were issued in program year 2012—provided all contractors,  including center staff, with short notice of program changes or a short  time frame in which to respond, or both. In addition, Job Corps center contractors’ corporate and center staff, and  outreach and admissions contractors, told us that ETA’s internal notices  sometimes lacked information they needed to effectively implement  changes and communicate them to students and community partners. Given the challenges contractors identified, ETA’s  internal guidance may not ensure that contractors receive sufficiently  detailed information at the appropriate time to effectively communicate  and implement program changes. Similarly, while DOL met legal requirements for notifying the House and  Senate Committees on Appropriations of funding transfers within certain  time frames, some members of Congress expressed dissatisfaction with  the timing and completeness of DOL’s communications. The Workforce Innovation and Opportunity Act, which was enacted in  2014, requires DOL to provide more frequent and detailed reports to  several congressional committees and subcommittees on Job Corps’  financial position. ETA’s Spending Cuts Adversely Affected Applicants and Students, and Had Other Wide-Ranging Effects

		Enrollment Suspensions Reduced the Number of Applicants and New Enrollees, and Had Other Effects

The three enrollment suspensions ETA implemented in program years  2011 and 2012 restricted access to Job Corps for all but a few types of  applicants, which reduced the number of students who applied to and  entered the program (new enrollees) in those program years. The 2013 enrollment suspension also had subsequent effects on student  recruitment and enrollment. In response to the DOL inspector general’s  recommendations, ETA has implemented several initiatives to improve  the tracking and reporting of Job Corps’ financial information. Beyond these steps to address the DOL inspector general’s  recommendations, ETA has initiatives underway to better align Job  Corps’ costs with its appropriations. Furthermore, ETA officials told us that they are assessing the financial  implications associated with current and future program changes. While ETA is working to  close the inspector general’s recommendations, it is too early to  determine the extent to which the steps ETA has taken will help improve  its financial management of the program in the future. Recommendation for Executive Action

To enhance communication with contractors about Job Corps program  changes, we recommend that the Secretary of Labor direct the Assistant  Secretary for Employment and Training to review the sufficiency of ETA’s  guidance for internal notices—including Program Instruction Notices,  Policy and Requirements Handbook Change Notices, and Information  Notices—to ensure that contractors are provided with adequate  notification of program changes before they are expected to be  implemented, and an adequate level of information to assist them in  carrying out their responsibilities. DOL concurred with our  recommendation for ETA to review the sufficiency of its guidance for  internal notices provided to contractors. GAO staff who made key contributions to this report  are listed in appendix V.

Appendix I: Objectives, Scope, and Methodology

The objectives of this report were to examine (1) how ETA selected the  measures it implemented to address Job Corps’ financial challenges in  program years 2011 and 2012, (2) the timeliness and completeness of  ETA’s communications to contractors, including center staff, and  Congress, (3) the effects ETA’s spending cuts had on applicants and  students, and (4) the steps ETA has taken since to improve Job Corps’  financial management. We also assessed ETA’s internal communications guidance  using GAO’s standards for internal control in the federal government. We also interviewed DOL’s inspector general  to identify ETA’s progress in implementing its May 2013  recommendations.
Why GAO Did This Study

Job Corps—funded at about $1.6 billion in program year 2013—is the nation's largest residential, educational, and career training program for economically disadvantaged youth. In program years 2011 and 2012, ETA projected that Job Corps' costs would exceed its appropriations, and took action to resolve these gaps. In May 2013, DOL's inspector general reported internal control weaknesses and recommended improvements; however, questions remained about the funding transfers and spending cuts ETA implemented. GAO was asked to review these measures.
This report examines (1) how ETA selected the measures it implemented to address Job Corps' financial challenges, (2) the timeliness and completeness of ETA's communications to contractors, including center staff, and Congress, (3) how spending cuts affected applicants and students, and (4) steps ETA has taken since to improve Job Corps' financial management. GAO visited 8 of the 125 centers—selected based on their geographic diversity and other factors—and interviewed staff and students; reviewed ETA's internal notices to contractors and DOL's communications with Congress, and assessed ETA's guidance for internal notices using federal internal control standards; and analyzed ETA's enrollment data from program years 2010 through 2013.

What GAO Found

In selecting funding transfers and spending cuts to address Job Corps' projected funding gaps in program years 2011 and 2012, the Department of Labor's (DOL) Employment and Training Administration (ETA) considered various factors, including the potential effects on students and recommendations from stakeholders. After considering these factors, ETA used $38 million in funding transfers and implemented $75 million in spending cuts, which included several temporary suspensions of new enrollments, temporary cuts to training, and permanent cuts to student benefits and services, and administrative costs.
Job Corps' contractors, including center staff, said ETA's internal notices to implement spending cuts in program years 2011 and 2012 were sometimes not timely and complete. For example, in some cases, ETA issued a notice on a Friday that required a response by Monday or Tuesday. Staff at three of the eight centers GAO visited said they or other staff worked over the weekend to prepare responses, such as revised spending plans. GAO's review of ETA's internal notices found that 11 of 19 gave contractors 3 business days or fewer to implement a program change, respond, or both. Contractors also said ETA's notices sometimes lacked information they needed to effectively implement changes and communicate them to students and community partners, such as how long cuts would last. ETA officials said their communications were appropriate, given their oversight role and time constraints. Although ETA has guidance on the content of internal notices to contractors, it does not specify time frames for providing notice of program changes. Given challenges contractors identified, ETA's guidance may not ensure that, in accordance with federal internal control standards, contractors receive sufficiently detailed information at the appropriate time to effectively communicate and implement changes. With regard to Congress, while DOL met requirements for notification of funding transfers, some members sent letters to DOL expressing dissatisfaction with the timing and completeness of DOL's communications. The Workforce Innovation and Opportunity Act, subsequently enacted in 2014, requires DOL to provide more frequent and detailed reports to Congress on Job Corps' financial position.
ETA's spending cuts reduced the number of applicants and new enrollees, limited some training opportunities for students, and had other adverse effects. According to ETA data, Job Corps applicants decreased by about a third, from 79,567 in program year 2010 to 53,725 in program year 2012, and new student enrollments decreased by about a quarter, from 56,171 to 40,792 over the same time period. The final enrollment suspension, along with other factors, such as a reduction in outreach and admissions staff, also had subsequent effects on student recruitment. For example, after the enrollment suspension ended, it took Job Corps 8 months to reach over 90 percent of its planned enrollment goal.
In response to recommendations by DOL's inspector general for internal control improvements, ETA has implemented several initiatives to improve the tracking and reporting of Job Corps' financial information. ETA also has initiatives underway to help ensure that Job Corps' costs and appropriations are aligned and to assess the financial implications associated with program changes. While these are all important steps, it is too early to determine the extent to which they will help ETA improve its financial management of the program in the future.

What GAO Recommends

GAO recommends that ETA review the sufficiency of its guidance for internal notices about program changes. ETA concurred with this recommendation.