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. From  2001 through 2007, Labor awarded 349 grants totaling almost $900 million  for these initiatives (see table 1). For a list of these grants, see appendix II. 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. 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. Congress  required that High Growth grants funded by H-1B fees be awarded  competitively for fiscal years 2007 and 2008. 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. In response to the inspector general’s report, Labor has taken steps to  strengthen the noncompetitive process. However, the newly developed  procedures do not explicitly identify the statutory program requirements  for which compliance should be documented. 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. Labor Uses a Risk- Based Monitoring Approach for High Growth and Community Based Grants but Not for 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, 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 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. Appendix I: Scope and Methodology

Our objectives were to examine (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. Veterans’ Employment and Training Service: Labor Could Improve  Information on Reemployment Services, Outcomes, and Program  Impact.
Why GAO Did This Study

Since 2001, Labor has spent nearly $900 million on three workforce employment and training grant initiatives: High Growth Job Training Initiative (High Growth), Community-Based Job Training Initiative (Community Based), and the Workforce Innovation in Regional Economic Development (WIRED). GAO was asked to examine (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. To answer these questions, GAO obtained from Labor a list of grants for fiscal years 2001 through 2007, and reviewed relevant laws and Labor's internal grant award procedures. GAO interviewed grantees, and state and local workforce officials in seven states where grantees were located, Labor officials, and subject matter experts.

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; therefore, 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 to those of other federally funded employment and training services. While grants under all three initiatives are now awarded competitively, the initial noncompetitive process for High Growth grants was not adequately documented and did not include key players. Community Based and WIRED grants have always been awarded competitively, but more than 80 percent of High Growth grants were awarded without competition. Labor began awarding some High Growth grants competitively in 2005 and Congress required Labor to award certain grants competitively in fiscal years 2007 and 2008. This requirement applies only to those years. Labor could not document criteria used to select the noncompetitive High Growth grants or whether these grants met internal or statutory requirements. Labor has taken steps to strengthen the noncompetitive process, but these procedures do not explicitly require documentation of compliance with statutory program requirements. Labor's process for identifying solutions for industry workforce challenges did not include the vast majority of local workforce investment boards, which oversee local employment and training services. 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, but not for WIRED. Labor has a process to address findings from single audit reports, but its inspector general found problems with Labor's follow up on the completion of these audits for its grantees in general and recommended that Labor put procedures in place to do so. Labor provides technical assistance for the three initiatives and spent $16 million on contracts to help offer this support.