System Infrastructure and Service Strategies Have Evolved To Meet the Needs of Job Seekers and Employers

Seven years after the implementation of the workforce investment system  under WIA, the system’s infrastructure continues to evolve. Nationwide,  the number of comprehensive one-stop centers has decreased somewhat,  but not uniformly across states. States generally reported increased  availability of services for some of the mandatory programs at  comprehensive one-stop centers. But despite WIA’s requirement that all  mandatory partners provide services through the one-stop system, some  states have maintained a completely separate system for delivering  services for Wagner-Peyser-funded Employment Services (ES). Adults and  dislocated workers receive a wide range of services through the one-stop  system, but states and local areas have generally focused their youth  services on in-school youth, finding it difficult to recruit and retain out-of- school youth. Most medium and large employers are aware of and use the  system and are quite satisfied with its services, but they generally use one- stop centers to fill their needs for low-skilled workers. States continue to  have services for two key programs—WIA Adult and Dislocated  Workers—available on-site at the majority of the one-stop centers. Local boards used  about 40 percent of the approximately $2.4 billion in WIA funds they had  available in program year 2003 to provide training services to an estimated  416,000 WIA participants, primarily in occupational skills. Additional Action Could Help System Development

Despite the successes state and local officials have had since WIA’s  implementation, some aspects of the law and other factors have hampered  their efforts. For  example, the formulas in WIA that are used to allocate funds to states do  not reflect current program design and have caused wide fluctuations in  funding levels from year to year. In addition, Labor’s focus on  expenditures without including obligations overestimates the amount of  funds available to provide services at the local level. Labor has taken some steps to improve guidance  and communication, but does not involve key stakeholders in the  development of some major initiatives and provides too little time for  states and local areas to implement them. Funding Allocation and Spending Information Do Not Reflect Program Structure

As states and localities have implemented WIA, they have been hampered  by funding issues, including statutory funding formulas that are flawed. Little Is Known about What the System Is Achieving

We have little information at a national level about what the workforce  investment system under WIA achieves. Furthermore,  Labor has limited information about employer involvement in the one-stop  system. Both Labor’s OIG and our  early studies of WIA raised issues on the quality of the performance data,  and Labor has taken steps aimed at addressing these issues. In  2004, we recommended that Labor comply with the requirements of WIA  and conduct an impact evaluation of WIA services to better understand  what services are most effective for improving outcomes. In 2005, we  recommended that Labor consider alternative approaches that involve  ongoing consultation with key stakeholders as the agency seeks to  implement its new initiatives. Labor has not  taken steps to    more accurately estimate states’ available fund by considering  obligations as well as expenditures,    establish suitable performance levels for states to achieve by  developing and implementing a systematic approach for adjusting  expected performance to account for different populations and local  economic conditions,    maximize the likelihood that new initiatives will be adopted in an  achievable time frame by using a collaborative approach that engages  all key stakeholders, and  improve policymakers’ understanding of what employment and training  programs achieve by conducting important program evaluations,  including an impact study on WIA, and releasing those findings in a  timely way.
Why GAO Did This Study

Since the Workforce Investment Act's (WIA) enactment in 1998, GAO has issued numerous reports that included recommendations regarding many aspects of WIA, including performance measures and accountability, funding formulas and spending, one-stop centers, and training, as well as services provided to specific populations, such as dislocated workers, youth, and employers. Collectively, these studies employed an array of data collection techniques, including surveys to state and local workforce officials and private sector employers; site visits; interviews with local, state, and Labor officials; and analysis of Labor data and documents. This testimony draws upon the results of these reports, issued between 2000 and 2007, as well as GAO's ongoing work on one-stop infrastructure, and discusses issues raised and recommendations made. Specifically, the testimony addresses (1) progress made by federal, state, and local officials in implementing key provisions of WIA; and (2) challenges that remain in implementing an integrated employment and training system.

What GAO Found

Seven years after implementing the workforce investment system under WIA, the system's infrastructure continues to evolve. Nationwide, the number of comprehensive one-stop centers has decreased somewhat, but not uniformly across states. States generally reported increased availability of services for some of the mandatory programs at comprehensive one-stop centers. However, despite WIA's requirement that all mandatory partners provide services through the one-stop system, some states have maintained a completely separate system for delivering services for Wagner-Peyser-funded Employment Services. Adults and dislocated workers receive a wide range of services through the one-stop system. Local areas used about 40 percent of their WIA funds in 2003 to provide training services to an estimated 416,000 participants, but the vast majority of job seekers receive services other than training. States and local areas have generally focused their youth services on in-school youth and have found it difficult to recruit and retain out-of-school youth. Most medium and large employers are aware of and use the system and are quite satisfied with its services, but they generally use one-stop centers to fill their needs for low-skilled workers. Despite the successes state and local officials have had since WIA's implementation, some aspects of the law and other factors have hampered their efforts. Funding issues continue to hamper the system. WIA's formulas that are used to allocate funds to states do not reflect current program design and have caused wide fluctuations in funding levels from year to year that do not reflect actual layoff activity. In addition, Labor's focus on expenditures without including obligations overestimates the amount of funds available to provide services at the local level. Moreover, little is known about what the system is achieving because only a small minority of participants are captured in the performance measures, and Labor has not conducted an impact study to assess the effectiveness of the one-stop system, as required under WIA. Labor has taken some steps to improve guidance and communication, but does not involve key stakeholders in the development of some major initiatives and provides too little time for states and local areas to implement them. We are suggesting that Congress consider taking steps to improve the stability of the funding and enhance the data available on people who use the system. In addition, in our past work, we have recommended that Labor use obligations when estimating states' available funds, that it comply with the requirements of WIA and conduct an impact evaluation, and that it consider alternative approaches in implementing new initiatives that involve ongoing consultation with key stakeholders. Labor has taken little action on these recommendations.