[Senate Hearing 110-960]
[From the U.S. Government Publishing Office]
S. Hrg. 110-960
INVESTING IN A SKILLED WORKFORCE: MAKING THE BEST USE OF TAXPAYER
DOLLARS TO MAXIMIZE RESULTS
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HEARING
BEFORE THE
SUBCOMMITTEE ON EMPLOYMENT AND WORKPLACE SAFETY
OF THE
COMMITTEE ON HEALTH, EDUCATION,
LABOR, AND PENSIONS
UNITED STATES SENATE
ONE HUNDRED TENTH CONGRESS
SECOND SESSION
ON
EXAMINING A SKILLED WORKFORCE, FOCUSING ON MAKING THE BEST USE OF
TAXPAYER DOLLARS TO MAXIMIZE RESULTS
__________
SEPTEMBER 23, 2008
__________
Printed for the use of the Committee on Health, Education, Labor, and
Pensions
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COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS
EDWARD M. KENNEDY, Massachusetts, Chairman
CHRISTOPHER J. DODD, Connecticut MICHAEL B. ENZI, Wyoming
TOM HARKIN, Iowa JUDD GREGG, New Hampshire
BARBARA A. MIKULSKI, Maryland LAMAR ALEXANDER, Tennessee
JEFF BINGAMAN, New Mexico RICHARD BURR, North Carolina
PATTY MURRAY, Washington JOHNNY ISAKSON, Georgia
JACK REED, Rhode Island LISA MURKOWSKI, Alaska
HILLARY RODHAM CLINTON, New York ORRIN G. HATCH, Utah
BARACK OBAMA, Illinois PAT ROBERTS, Kansas
BERNARD SANDERS (I), Vermont WAYNE ALLARD, Colorado
SHERROD BROWN, Ohio TOM COBURN, M.D., Oklahoma
J. Michael Myers, Staff Director and Chief Counsel
Ilyse Schuman, Minority Staff Director and Chief Counsel
______
Subcommittee on Employment and Workplace Safety
PATTY MURRAY, Washington, Chairman
CHRISTOPHER J. DODD, Connecticut JOHNNY ISAKSON, Georgia
TOM HARKIN, Iowa RICHARD BURR, North Carolina
BARBARA A. MIKULSKI, Maryland LISA MURKOWSKI, Alaska
HILLARY RODHAM CLINTON, New York PAT ROBERTS, Kansas
BARACK OBAMA, Illinois WAYNE ALLARD, Colorado
SHERROD BROWN, Ohio TOM COBURN, M.D., Oklahoma
EDWARD M. KENNEDY, Massachusetts MICHAEL B. ENZI, Wyoming (ex
(ex officio) officio)
William C. Kamela, Staff Director
Glee Smith, Minority Staff Director
(ii)
C O N T E N T S
__________
STATEMENTS
TUESDAY, SEPTEMBER 23, 2008
Page
Murray, Hon. Patty, Chairman, Subcommittee on Employment and
Workplace Safety, opening statement............................ 1
Isakson, Johnny, a U.S. Senator from the State of Georgia,
opening statement.............................................. 3
Scott, George A., Director, Education, Workforce, and Income
Security Issues, U.S. Government Accountability Office,
Washington, DC................................................. 3
Prepared statement........................................... 5
Lewis, Elliot P., Assistant Inspector General, Office of Audit,
U.S. Department of Labor, Washington, DC....................... 18
Prepared statement........................................... 20
Orrell, Brent R., Deputy Assistant Secretary, Workforce
Investment System, Employment And Training Administration
(EYA), U.S. Department of Labor, Washington, DC................ 24
Prepared statement........................................... 25
ADDITIONAL MATERIAL
Statements, articles, publications, letters, etc.:
Brown, Hon. Sherrod, a U.S. Senator from the State of Ohio,
prepared statement......................................... 43
Response by Brent R. Orrell to questions of:
Senator Murray........................................... 44
Senator Brown............................................ 60
(iii)
INVESTING IN A SKILLED WORKFORCE: MAKING THE BEST USE OF TAXPAYER
DOLLARS TO MAXIMIZE RESULTS
----------
TUESDAY, SEPTEMBER 23, 2008
U.S. Senate,
Subcommittee on Employment and Workplace Safety, Committee
on Health, Education, Labor, and Pensions,
Washington, DC.
The subcommittee met, pursuant to notice, at 10:00 a.m. in
room SD-430, Dirksen Senate Office Building, Hon. Patty Murray,
chairman of the subcommittee, presiding.
Present: Senators Murray and Isakson.
Opening Statement of Senator Murray
Senator Murray. Good morning. This hearing of this
subcommittee will come to order.
Today's hearing examines just how well the Department of
Labor is managing public dollars intended to pay for workforce
development. I want to thank all of our witnesses for being
here today, and I would also like to thank Senator Isakson for
working with me on a bipartisan basis to hold this hearing. As
always, I really appreciate your work on this subcommittee.
A few years ago, a Congressional Research Service report
sparked several investigations into Labor's management
practices with regards to grants under the President's new
demand-driven initiatives. A series of audits by the Labor
Department's inspector general, as well as the report from the
Government Accountability Office, confirmed what CRS found.
Labor's management of public workforce dollars was questionable
at best.
Beginning in 2001, the Employment and Training
Administration at DOL began issuing grants under the umbrella
of this new initiative. The process was meant to reshape the
public workforce system created largely by the Workforce
Investment Act of 1998.
By 2007, ETA had issued nearly $900 million in grants under
these initiatives, but the investigators found it did so with
unclear connections to legislative authority and requirements
for the use of these funds, unclear explanations for awarding a
significant amount of funds noncompetitively, unclear
description of the purposes of these grants were meant to
serve, and an unclear process for accountability, both for the
grant recipients and for the Department of Labor.
The workforce development community, Congress, and the
American taxpayer deserve better from our Government agencies,
and that is why we are having this hearing here today. We want
to understand why the Department failed to make clear
connections between the more than $900 million they invested in
these projects and their value for workers and taxpayers. We
want to know what actions the Department has taken to correct
these problems, what remains to be done, and how the next
administration can be a better steward of taxpayer dollars and
Congress's trust.
There are some who are more than willing to overlook the
agency's actions. After all, these are only experimental grant
projects, and the intent behind the initiative sounds laudable.
The initiatives--specifically, the High-Growth Job Training
Initiative, Community-Based Job Training grants, and the
Workforce Innovation and Regional Economic Development
Initiative--seem to share a common approach, partnering the
existing publicly funded workforce system with key members of
the business, education, and economic development communities.
But when we compare that to the almost $1.7 billion that
has been slowly drained from the public workforce system at the
recommendation of this Administration, Congress must ask the
Department what kind of return on investment the American
taxpayer and worker get for their $900 million in grants under
the agent's marquee workforce programs? Will it ever be able to
prove their value, as compared to existing employment and
training programs? And why did the Department think so little
of its signature programs that it failed to strategically plan
for or adequately evaluate their effectiveness?
With scarce public funds available, leveraging resources
from other groups interested in job training is an idea that I
think we can all agree is promising. Unfortunately, the
Department likely will never be able to fully prove the
effectiveness of these programs to policymakers or to
taxpayers. In the end, the Department's lack of transparency
adds up to what some would say is nothing more than a slush
fund for the agency.
It leaves a cloud over the public's ability to clearly
understand the intent behind these grants and their value to
taxpayers, workers, and industry. And it does little to develop
new knowledge about how we can improve the current workforce
system so that it better connects to regions where many
industries, investors, workers, schools, R&D entities, and
others join forces to create competitive advantages and more
jobs.
As we look forward to a new administration, it is our goal
to understand what can be done better. After all, this is money
that is supposed to be used on policies and practices that help
our economy. And taxpayers should expect that the Government
will make smart investments with their money and that it will
be held accountable for how it uses those dollars.
Today, I am looking forward to hearing from our witnesses
about this important issue. We are joined by George Scott. He
is the director of education, workforce, and income security
issues at the Government Accountability Office. Elliot Lewis is
the assistant inspector general at the Labor Department. And
Brent Orrell, who is deputy assistant secretary in the
Employment and Training Administration at Labor.
Again, I would like to thank all of you for being here
today.
And with that, before we hear from our first witness, I
will turn it over to recognize Senator Isakson for his opening
statement.
Opening Statement of Senator Isakson
Senator Isakson. Well, thank you very much, Chairman
Murray.
And welcome to all of our guests who are here to testify
today.
When Congress passed the Workforce Investment Act in 1998,
it created a new comprehensive workforce investment system.
Part of WIA, as it is called, provided authority for the
Employment and Training Administration to design demonstration
and pilot projects.
The Bush administration has developed and implemented three
demand-driven initiatives designed to address the 21st century
workforce--high growth, community based, and WIRED. All seek to
partner the Government workforce system with business
executives, education and training providers, and State
economic development agencies.
Since 2001, the Department of Labor has awarded
approximately 430 grants, totaling almost $1 billion in these
three initiatives. Certainly, we all share the goal of the
programs to prepare workers with the skills they need to
succeed in an ever more globalized labor market. Business
leaders in Georgia and across the Nation often tell me of the
need for workers with 21st century skills.
Just as Congress asked future administrations to create new
and innovative workforce training programs, we also urged them
to continually evaluate the impact of these programs. The GAO
and OIG reports allow us to revisit the effectiveness of
employment and training grants. Federal dollars are scarce.
Monitoring and oversight of DOL grantees is necessary to ensure
the efficient use of the taxpayers' money.
Moreover, if taxpayers are going to invest their money in
these programs, they deserve to have a way to measure the
results. Requiring outcome data statistics measuring the
effectiveness of how employment and training grant money is
utilized provides measurable results and is simply the right
thing to do.
I remain a huge proponent of transparency in government.
Transparency as to program funding is essential to ensure
public confidence in the agency and in the Government and the
programs it recommends. With regard to noncompetitive grants,
the decision-making process used to determine who receives
awards should be well documented. Transparency, sunshine, and
disclosure ought to be a cornerstone of each agency's standard
operating procedure.
I thank you, Chairman Murray, for calling the hearing, and
I look forward to hearing the testimony of our witnesses.
Senator Murray. Thank you very much, Senator Isakson.
We will begin with Mr. Scott and your testimony.
STATEMENT OF GEORGE A. SCOTT, DIRECTOR, EDUCATION, WORKFORCE,
AND INCOME SECURITY ISSUES, U.S. GOVERNMENT ACCOUNTABILITY
OFFICE, WASHINGTON, DC
Mr. Scott. Madam Chair and Ranking Member Isakson, I am
pleased to be here today to discuss the Department of Labor's
high-growth, community-based, and WIRED grant initiatives.
As you know, federally funded training and employment
services under the Workforce Investment Act are delivered
through the One-Stop system. Since 2001, Labor has spent almost
$900 million on these grant initiatives to address what it
perceived as shortcomings in the One-Stop system.
My testimony summarizes the key findings from our May 2008
report, which discusses the purpose of the grant initiatives
and whether Labor will be able to determine their impact, the
extent to which the grant award process was adequately
documented, and steps Labor is taking to monitor grantee
compliance.
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. Labor, however, will be challenged to assess
the impact of these efforts.
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. Furthermore, the Department 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. However, Labor
indicates that the initiatives have their own evaluations and
does not plan to include them in its broader assessment of the
impact of employment and training services.
While grants under all three initiatives are now awarded
competitively, more than 80 percent of high-growth grants,
totaling over $263 million, were awarded without competition.
Labor cannot document the criteria it used to select the
noncompetitive grants or whether these grants met statutory
requirements. The noncompetitive award process and the lack of
documentation of key decisions raises questions about whether
the grants selected were the best possible projects.
In response to a report from its inspector general, Labor
took steps to strengthen the noncompetitive process. Based on
our review, we recommended that Labor identify and document
compliance with statutory requirements for noncompetitive
grants. In response to our recommendation, Labor has now
modified its review forms used in its noncompetitive process to
include such documentation.
Another issue related to the grant awards process was that
meetings Labor held to identify solutions for high-growth
industry workforce challenges did not include the vast majority
of local workforce investment boards. We found that only 26 of
the roughly 650 local workforce boards were included in these
key meetings with Labor. Ultimately, these meetings also served
as incubators for grant proposals.
Labor officials said that they went to great lengths to
include workforce system participants, but found only a few
boards operating innovative, demand-driven programs. Despite
this concern, being present at the meetings could have been
beneficial to workforce boards. Broader participation of such
key stakeholders is important, given that these boards are
central to the workforce system.
Finally, we found that Labor provided some monitoring for
grantees under all three initiatives and uses a risk-based
monitoring approach for the high-growth and community-based
grants. This monitoring strategy involves conducting site
visits based on a number of factors, including the grantee's
risk level and availability of resources.
At the time of our work, Labor had monitored about half of
the high-growth grants and over one quarter of the community-
based grants. However, there was no risk-based monitoring
approach for WIRED, and we recommended that Labor establish
such monitoring. Labor has now documented steps it has taken to
implement a risk-based monitoring process for WIRED and plans
to develop a schedule to review the grants.
In conclusion, Labor has taken steps to address two of the
three recommendations in our recent report. It has outlined
steps to better document compliance with requirements for
noncompetitive grants and initiated the process for risk-based
monitoring of WIRED grants. However, we have not yet assessed
the sufficiency of these efforts.
While Labor has plans underway to evaluate the grant
initiatives, it is important that Labor take steps to determine
to what extent, if at all, these initiatives improve employment
outcomes. In light of the challenges Labor will face in
assessing the impact of these efforts, continued oversight is
warranted.
This concludes my statement, and I would be happy to
respond to any questions you or other members of the
subcommittee may have at this time.
Thank you.
[The prepared statement of Mr. Scott follows:]
Prepared Statement of George A. Scott
Highlights of GAO-08-1140T
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 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.
______
Employment and Training Program Grants (Labor Has Outlined Steps for
Additional Documentation and Monitoring but Assessing Impact Still
Remains an Issue)
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.
No. of Grants and Funds Awarded Competitively and Noncompetitively, Fiscal Years 2001-2007
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
Competitively Totals by
Grant initiative awarded Noncompetitively grant
amount awarded amount initiative
----------------------------------------------------------------------------------------------------------------
High Growth.......................................... 166 $31.8 $263.8 $295.6
Community Based...................................... 142 250.0 0 250.0
WIRED................................................ 41 324.0 0 324.0
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Total.............................................. 349 $605.8 $263.8 $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.
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.\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,\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.
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\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, GAO-08-486.
(Washington, DC: May 7, 2008.)
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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,\3\ which provides
authority for demonstration, pilot, multiservice, research, and
multistate projects, and a provision of the American Competitiveness
and Workforce Improvement Act (ACWIA),\4\ which provides authority for
job training grants funded by the H-1B visa program.\5\ \6\
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\3\ 29 U.S.C. Sec. 2916.
\4\ 29 U.S.C. Sec. 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.
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Labor is required to conduct impact evaluations of its programs and
activities carried out under WIA, including pilot and demonstration
projects.\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.\8\
In 2004 \9\ and 2007,\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
evaluation--an 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.
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\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, GAO-04-657 (Washington, DC: June 1, 2004).
\10\ GAO, Veterans' Employment and Training Service: Labor Could
Improve Information on Reemployment Services, Outcomes, and Program
Impact, GAO-07-594 (Washington, DC: May 24, 2007).
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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.\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.\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.\13\
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\11\ 31 U.S.C. Sec. 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.
---------------------------------------------------------------------------
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.\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.
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\14\ OMB Circular A-133, which implements the Single Audit Act (31
U.S.C. Sec. Sec. 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.
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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.\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).
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\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.
Table 1.--Total Number and Amount of Grants Awarded by Labor, 2001-2007
------------------------------------------------------------------------
No. of
Grant initiative grants Amount
------------------------------------------------------------------------
High Growth.................................... 166 $295,522,793
Community Based................................ 142 250,000,000
WIRED.......................................... 41 323,999,944
------------------------
Total........................................ 349 $869,522,737
------------------------------------------------------------------------
Source: GAO analysis of U.S. Department of Labor grants data.
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.\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 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. 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.
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\16\ 5 U.S.C. Sec. 306.
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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.\17\
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\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.
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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.\18\
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\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.
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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.\19\ Prior to that
time, there were no provisions requiring Labor to award High Growth
grants competitively.
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\19\ This requirement did not apply to grants awarded under the WIA
provision authorizing High Growth grants.
Table 2.--No. of High Growth Grants and Funds Awarded Competitively and Noncompetitively between Fiscal Years
2001 and 2007
[Dollars in millions]
----------------------------------------------------------------------------------------------------------------
No. of No. of Summary of grants
Fiscal year noncompetitive Funds awarded competitive Funds awarded and funds awarded
grants noncompetitively grants competitively noncompetitively
----------------------------------------------------------------------------------------------------------------
2001.......................... 1 $2.8 0 0 100 percent of
grants and funds
2002.......................... 7 14.7 0 0 100 percent of
grants and funds
2003.......................... 15 30.3 0 0 100 percent of
grants and funds
2004.......................... 37 77.4 0 0 100 percent of
grants and funds
2005.......................... 55 86.7 12 $12 82 percent of
grants and 88
percent of funds
2006.......................... 21 50.5 0 0 100 percent of
grants and funds
2007.......................... 1 1.4 17 19.8 6 percent of
grants and 7
percent of funds
---------------------------------------------------------------------------------
Total....................... 137 $263.8 \1\ 29 $31.8 \1\ 83 percent of
grants and 89
percent 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.
\1\ Total dollar amount varies from Labor's reported figure due to rounding.
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.\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.
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\20\ GAO, Internal Control: Standards for Internal Control in the
Federal Government, GAO/AIMD-00-21.3.1 (Washington, DC: November 1999).
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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 \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.\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.
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\21\ 29 U.S.C Sec. 2916.
\22\ 29 U.S.C Sec. 2916(b)(1) and 29 U.S.C Sec. 2916(b)(2)(B).
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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 \23\ for review and approval allowed
under exceptions for proposals that were unique or innovative, highly
cost-effective, or available from only one source.\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.\25\
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\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).
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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,\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.\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.\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.)
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\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.
Further only 20 of the 50 States had their State workforce
investment board or other agency represented (see Table 3).\29\
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\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.
Table 3.--Industry Sector Solutions Forums and the No. of Participants
----------------------------------------------------------------------------------------------------------------
State workforce
Total no. of Local workforce investment board
Industry sector solutions forum participants at investment board or other State
each solutions participation agency
forum participation
----------------------------------------------------------------------------------------------------------------
Advanced manufacturing................................. 61 3 0
Aerospace.............................................. 40 1 0
Automotive............................................. 216 6 9
Biotechnology.......................................... 29 4 6
Construction........................................... 86 5 2
Energy................................................. 26 0 1
Financial services..................................... 99 3 4
Geospatial technology.................................. 41 1 2
Health................................................. 155 6 10
Hospitality............................................ 57 3 3
Transportation......................................... 19 2 2
--------------------------------------------------------
Total................................................ 829 34 \1\ 39 \2\
----------------------------------------------------------------------------------------------------------------
Source: GAO analysis of U.S. Department of Labor data on solutions forums participants.
\1\ 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.
\2\ 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.
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.\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.
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\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.
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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.\31\
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\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, DC: Mar. 20, 2008).
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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.\32\ Labor is taking steps to improve
grant accountability, such as providing grantee and grant officer
training.
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\32\ This observation was based on audits of three Labor grantees
during fiscal year 2007.
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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 \33\ that WIRED
grantees can use to facilitate data analysis and reporting, among other
things.
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\33\ A geographic information system is a computer application used
to store, view, and analyze geographical information, especially maps.
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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.\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.\35\
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\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''
through the risk assessment process.
\35\ Employment and Training Administration, U.S. Department of
Labor, Core Monitoring Guide (Washington, DC: April 2005).
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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
------------------------------------------------------------------------
High Community
Status Growth Based
------------------------------------------------------------------------
Findings resolved.................................... 38 13
Findings not yet resolved............................ 10 5
No findings.......................................... 31 21
------------------
Total monitored.................................... 79 39
------------------------------------------------------------------------
Source: GAO analysis of U.S. Department of Labor grants monitoring data.
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.
Senator Murray. Thank you very much, Mr. Scott.
Mr. Lewis.
STATEMENT OF ELLIOT P. LEWIS, ASSISTANT INSPECTOR GENERAL,
OFFICE OF AUDIT, U.S. DEPARTMENT OF LABOR, WASHINGTON, DC
Mr. Lewis. Madam Chair and members of the subcommittee, I
appreciate the opportunity to discuss the OIG's audits of the
Employment and Training Administration's High-Growth Job
Training Initiative.
I will summarize my full statement and ask that it be
entered into the record in its entirety.
Successfully meeting the employment and training needs of
citizens with programs funded by Federal grants requires
picking the best service providers, making expectations clear
to grantees, ensuring that success can be measured, providing
active oversight, evaluating outcomes, and disseminating and
replicating proven strategies and programs. Our audits have
found that ETA has weaknesses managing its grants to this end.
I will focus my testimony on our two most recent audits
that assess the ETA's grant-making procedures and performance
of high-growth grants of presidential initiative. Our first
audit reviewed the grant-making process for a sample of 39
grants totaling $70 million, which were awarded
noncompetitively between fiscal years 2003 and 2007.
We found that ETA could not demonstrate that it followed
proper grant-making procedures for 90 percent of the grants in
our sample. We found that ETA did not adequately justify its
decisions to award noncompetitively 10 grants. Conflict of
interest certifications were not documented for 19 of 39
grants, and matching requirements of $34 million were not
carried forward in grant modifications.
ETA could not show that it met Department of Labor policy
governing noncompetitive awards. ETA indicated that it
developed its own procedures to review the grants awarded
noncompetitively, however could not provide documentation to
justify why certain proposals were funded while others were
not. Thus, ETA could not demonstrate it made the best decisions
in awarding grants to achieve the goals of the high-growth
initiative.
Further, although ETA asserted that grantees' commitments
to provide matching funds were part of the justification for
the noncompetitive award in the first place, ETA did not ensure
the $34 million in required matching funds were carried forward
when 9 grants were modified. As a result, the programs and
levels of service provided may have been significantly reduced
from what was intended in the original grant.
We made eight recommendations to ETA to improve its process
for awarding grants noncompetitively. Chief among these
recommendations was that ETA take steps to ensure that
competition is encouraged for discretionary grant awards, award
decisions are adequately documented, and matching requirements
are carried forward in grant modifications.
ETA generally agreed with our recommendations. However, ETA
asserted that it would limit its verification of matching
requirements to only active grants. The OIG strongly believes
that ETA should verify matching requirements for all grants
because a closeout of an award does not end ETA's right to
later recover funds.
Our second audit reviewed 10 grants to determine whether
the grantees accomplished the goals of the grants, whether the
required matching funds were provided, and whether the grants
resulted in expanded system capacity for employment and
training.
We found that grantees failed to achieve major performance
goals or that it was impossible to determine success because
goals were not clear. For example, one grantee placed only 58
percent of its participants in jobs. Two did not complete
required products, and one grantee never provided its finished
product to ETA.
We found that grantees did not provide $20.5 million in
required matching funds partly because they couldn't provide
documentation they had done so. We also found that ETA
disseminated unproven training and employment strategies and
products.
ETA took exception with our position that it was
inappropriate to disseminate products without a formal
evaluation of their quality, stating that it was not necessary
or valuable to evaluate every high-growth deliverable, and it
does not have the expertise or resources to evaluate every
product. Rather, ETA stated that its approach was to let
business and industry determine the value of the products
disseminated.
The lack of clarity and, in certain cases, the failure by
grantees to accomplish their goals calls into question the
rigor of ETA's reviews, its assessment of the proposals, and
the merit of ETA's decision to award the grants. This is of
particular concern since the ETA awarded the grants
noncompetitively.
We recommended that ETA improve its grant writing,
solicitation, and award process by developing a process that
ensures that grant agreements delineate clear, concise, and
measurable objectives, improve grant monitoring and closeout by
adhering to its policy that each grant be monitored on an
ongoing basis to identify and correct problems, and enhance the
effectiveness of high-growth grant program by evaluating grant
results prior to dissemination to the workforce investment
system and using the results of the evaluation to ensure that
the most successful strategies are replicated.
ETA generally disagreed with our findings and
recommendations. However, on September 12, the ETA provided a
comprehensive action plan in response to our report. We are
analyzing this plan to determine which recommendations are
addressed by the plan.
Madam Chair, in closing, much can be learned from ETA's
shortcomings in administering the high-growth initiative. To
meet the needs of the 21st century workforce, it is essential
that ETA strengthen its grant-making procedures and its
monitoring of grantees receiving Federal funds to provide
critical employment and training services.
I would be pleased to answer any questions you or the
subcommittee members may have.
[The prepared statement of Mr. Lewis follows:]
Prepared Statement of Elliot P. Lewis
Madam Chair, and members of the subcommittee, I appreciate the
opportunity to discuss the Office of Inspector General's (OIG) audits
of the High Growth Job Training Initiative (HGJTI ). As you know, the
OIG is an independent entity within the Department of Labor (DOL);
therefore, the views expressed in my testimony are based on the
findings and recommendations of my office's work and are not intended
to reflect the Department's position.
background
Since its inception in 1913, the core mission of the Department of
Labor has been ``to foster, promote and develop the welfare of working
people, to improve their working conditions, and to advance their
opportunities for profitable employment.'' The Department's Employment
and Training Administration (ETA) is charged with the latter. As you
know Madam Chair, ETA utilizes grants to States, local governments and
nonprofit organizations as its primary means to provide the services to
accomplish this mission.
Successfully meeting the employment and training needs of citizens
in programs funded by Federal grants requires picking the best service
providers, making expectations clear to grantees, ensuring that success
can be measured, providing active oversight, evaluating outcomes, and
disseminating and replicating those strategies and programs that have
been proven to be successful. OIG audits have found that ETA has
weaknesses in managing its grants to this end.
high growth job training initiative
Madam Chair, as requested by the subcommittee, I will focus my
testimony on our two most recent reports that assessed ETA's grant-
making procedures and the performance of grants awarded under the High
Growth Job Training Initiative. As you know, we conducted these audits
at the request of Senator Tom Harkin, Chairman of the Subcommittee on
Labor, Health and Human Services, and Education and Related Agencies.
This Presidential initiative was created to prepare workers for
employment in high-growth areas such as health care, financial
services, and biotechnology. ETA stated that one of the objectives of
this initiative was to reach beyond those organizations that typically
receive Federal grants in order to ``bring new ideas to the table'' and
to obtain innovative approaches and strategies.
Between July 1, 2001, and March 31, 2007, ETA awarded non-
competitively 133 (87 percent) high growth grants totaling $235
million. We conducted two audits of the HGJTI grants. The objective of
the first audit was to determine whether ETA followed proper procedures
in awarding these grants without competition. The objective of the
second audit was to determine whether grantees accomplished the goals
of the grants and whether the grants resulted in expanded system
capacity for employment and training.
non-competitive grant awards not adequately justified
Our first audit reviewed the grant-making process for a statistical
sample of 39 grants, totaling $70 million, which were awarded from
fiscal year 2003 through fiscal year 2007. We concluded that ETA could
not demonstrate that it followed proper grant-making procedures for 90
percent of its grants in our sample which ETA awarded non-
competitively. These grants totaled $57 million. Specifically, we found
that decisions to award 10 non-competitive grants in our sample were
not adequately justified; reviews of grant proposals were not
consistently documented; required conflict of interest certifications
were not documented; and matching requirements of $34 million were not
carried forward in grant modifications.
Our specific findings follow.
findings
Decisions to Award 10 of the 39 Grants Non-Competitively Were Not
Adequately Justified
We found that ETA could not demonstrate that its decisions to award
10 grants non-competitively were adequately justified. Moreover, they
could not demonstrate that they met the Department's own policy
governing sole source awards. This policy states that, with limited
exceptions, competition is the appropriate method for awarding
discretionary grants. We also found that ETA awarded 6 grants without
obtaining the required prior approval from the Procurement Review
Board, an independent board within the Department whose primary
function is to review non-competitive acquisitions.
ETA developed their own procedures to review grants awarded non-
competitively. ETA indicated that they did not compare proposals, but
instead evaluated each proposal on its own merits. However, ETA could
not provide documentation to justify why proposals that were funded
were selected to receive awards.
Required Conflict of Interest Certifications Were Not Documented
We found that ETA did not maintain required conflict of interest
certifications. DOL policy requires that ETA maintain conflict of
interest certifications for all non-competitive awards to reduce the
bias, or appearance of bias, in selecting applicants for awards. The
certification indicates independence from personal, external, or
organization impairments to independence. Program officials responsible
for requesting that a grant be awarded under ``other than full and open
competition'' are required to sign the conflict of interest
certification. ETA did not have this documentation for 19 of the 39
grants in our sample.
Matching Requirements of $34 Million Were Not Carried Forward in Grant
Modifications
We found that $34 million in required matching funds were not
carried forward when ETA did grant modifications. Commitments by
grantees to provide matching funds were part of the justification for
the sole source procurement in the first place. Therefore, it was
critical for ETA to carry forward these requirements. As a result, the
programs and levels of services actually provided under the grant may
have been significantly reduced from those intended in the original
grant agreements.
recommendations
In this audit, we made eight recommendations to ETA to improve
management controls over its process for awarding grants.
We recommended that ETA review all high growth initiative grants
with matching requirements to ensure that these requirements are
maintained. ETA's response stated that it would limit its review to
active grants and grants in the close-out phase. We disagreed with
ETA's response to this recommendation. The OIG believes that ETA should
review all high growth initiative grants, including grants that have
already been closed out to ensure that grantees provided all required
matching funds as promised and as required as conditions for being
awarded the grant. The close-out of an award does not end the
Department's right to disallow costs and to recover funds if it later
determines that grantees did not meet their grant requirements.
Therefore, it is important for ETA to review grants that have already
been closed out.
We also recommended that ETA ensure that:
Policy is established for documenting all decision and
discussions that lead to actions by DOL officials that affect how and
to whom grant funds are distributed.
Any future grants awarded non-competitively be properly
justified and based on appropriate Department of Labor Manual Series
(DLMS) exceptions.
Decisions to exempt proposals from Procurement Review
Board review are properly researched, valid, and documented.
Agency officials are fully trained and aware of the
procurement procedures for non-competitive awards, including
documenting the decisionmaking process.
In its response, ETA stated that it has implemented new processes
for documenting decisions related to grant making and for documenting
the basis for a grant meeting a DLMS exception for a non-competitive
award. In addition, ETA reported that it has developed a process for
documenting its recommendation to exempt proposals from a review by the
Procurement Review Board.
We are currently awaiting supporting documentation from ETA
regarding these actions. Once the OIG receives this documentation, we
will determine whether ETA has sufficiently addressed our
recommendations.
Finally, we recommended that ETA ensure that:
Competition is encouraged when awarding discretionary
grants.
A separate document for conflict of interest
certifications is completed and maintained.
Matching requirements of $34 million are carried forward
in future grant modifications for those grants in our audit sample.
In its response to our audit report, ETA has implemented new
policies to address these three recommendations, and we consider these
three recommendations closed.
value of high growth job training initiative grants not demonstrated
Madam Chair, phase two of our audit effort regarding this
initiative was a performance audit of 10 grants from our original 39
grant audit sample. Specifically, we designed our audit to answer three
questions:
1. Did grantees accomplish their grant objectives?
2. Were additional matching funds or leveraged resources provided
by grantees as required?
3. Did HGJTI grants result in expanded system capacity for skills
training and competency development?
We concluded that grantees failed to achieve major performance
goals or that it was impossible to determine success because the goals
were not clear. We also concluded that matching funds were not always
provided by grantees as required and that ETA disseminated unproven
training and employment strategies and products.
A discussion of our specific findings follows.
findings
Grant Objectives Were Often not Clear
We found that 7 grantees either did not meet all of their
objectives or we could not determine whether their objectives were met.
Specifically, we found that objectives in 6 of the 10 grants in our
sample were so unclear that we could not determine whether the grantee
delivered the performance they were funded to produce.
The grantees' failure to accomplish their grant objectives, and the
lack of clarity of the grant objectives in some cases, calls into
question the rigor of ETA's review and assessment of the proposals, and
the merit of ETA's decision to award the grants. This is of particular
concern because ETA decided to award these grants non-competitively.
We determined that grantees did not meet objectives with respect
to: training and placement goals; product completion; product delivery
and required tracking of outcomes. Examples of these shortcomings
follow:
Three grantees did not meet their training and placement
goals. For example, one grantee was required to place at least 2,500
job seekers, but could only demonstrate that it placed 1,443 or 58
percent of the required number.
Two grantees did not complete products required by their
grant agreements. In one instance, the grantee did not provide a
bilingual web portal that was to assist Hispanic job seekers to train
for employment as skilled automotive technicians.
One grantee never provided ETA its finished product, a
training process to upgrade worker skills for advanced manufacturing
jobs. This occurred despite the fact that ETA conducted on-site
monitoring of the grantee and had completed the close-out process.
Two grantees did not track the outcomes of the
participants as required by the grants. For example, one of these
grantees was required to track student completion rates in pre-LPN
classes designed to better participants' chances of success in the LPN
program. However, since the grantee did not track outcomes, ETA did not
obtain potentially useful information about how to improve student
outcomes for the LPN program.
In addition, ETA did not adequately monitor 6 of the 10 grants we
reviewed, and 3 of the grants did not perform well. It is important to
note the four grants that did receive oversight by ETA also had
performance issues. In addition, of the eight grants that completed
ETA's close-out process, five had performance issues.
Grantees did not Provide $20.5 Million in Required Matching Funds and
Leveraged Resources
We also found problems with grantees not fulfilling requirements to
provide additional matching or leveraged resources. Specifically, the
justification for non-competitively awarding 9 of the 10 grants that
had matching or leveraged requirements was based, in part, on the
grantees' commitment to provide additional resources of $42.1 million.
However, we found that grantees did not provide $20.5 million of those
funds; therefore, the level of services provided by the grantees was
significantly reduced from the levels indicated in the original grants.
ETA did not Evaluate the Usefulness of Grant Products Before
Disseminating Them
We found that ETA did not evaluate high growth initiative grants to
determine the usefulness of the grants' products and activities before
it decided to continue or disseminate them. With one exception this
occurred because the grant agreements did not require an evaluation to
determine the success of grant strategies and because ETA's policy was
to disseminate grant results without first assessing their
effectiveness. As a result, ETA disseminated unproven strategies for
expanding system capacity for skills training and competency
development.
recommendations
We recommended that ETA:
Improve the grant writing, solicitation and award process
by developing a process that ensures that grant agreements delineate
clear, concise, and measureable objectives that can be used to measure
the success of grant performance.
Improve grant monitoring and close out by adhering to its
policy that each grant be monitored on an ongoing basis so that
problems are identified and corrective action implemented, and
providing ETA grant monitors with the training and tools, such as
access to the Grant e-management system, that will assist them in
fulfilling their responsibilities.
Enhance the effectiveness of HGJTI by evaluating grant
results prior to dissemination to the workforce investment system, and
using the results of those evaluations to ensure that the most
successful strategies are replicated.
In its response to our report, ETA generally disagreed with how we
evaluated grant performance. ETA strongly disagreed with our finding
that they did not provide sufficient oversight. They took exception
with our position that it was inappropriate to share knowledge gained
and products developed without a formal evaluation of the quality of
the products. Moreover, ETA stated that it does not have the expertise
or resources to evaluate every product. ETA further stated that it was
not ``necessary or valuable to evaluate every High Growth deliverable''
before sharing it with the workforce system. ETA cited that its
approach was to let key constituents such as ``business and industry,''
determine the value of the products it disseminated.
In its response, ETA pointed out that the OIG examined only 10
grantees in its audit as part of their disagreement with our overall
findings. However, it is important to note that ETA has contracted for
a study to evaluate the effectiveness of this initiative that would be
limited to reviewing only 6 grantees.
On September 14, ETA provided a comprehensive action plan in
response to our final report. From our cursory review of this response,
it appears that ETA intends to implement a number of our
recommendations. We are reviewing and analyzing ETA's plan to determine
which recommendations can be considered resolved and which will remain
open. From our initial reading of this plan, it appears that ETA
continues to maintain that strategies and products developed under
these grants should be disseminated without first assessing their
effectiveness. We believe this undermines the objectives of this
initiative and is in conflict with the President's Management Agenda
mandate that agencies be ``citizen-centered'' and ``result-
oriented.''
conclusion
Much can be learned from this initiative that can be carried
forward to improve ETA's discretionary grant program. In order to meet
the employment and training needs of workers in the 21st century, it is
critical that ETA ensure that it selects the best service providers,
makes goals and expectations clear to grantees, ensures that success
can be measured, provides active oversight of its grantees, evaluates
outcomes, and disseminates and replicates only those strategies and
programs that have been proven to be successful.
This concludes my statement. I would be pleased to answer any
questions you or the other subcommittee members may have.
Senator Murray. Thank you very much.
Mr. Orrell.
STATEMENT OF BRENT R. ORRELL, DEPUTY ASSISTANT SECRETARY,
WORKFORCE INVESTMENT SYSTEM, EMPLOYMENT AND TRAINING
ADMINISTRATION (ETA), U.S. DEPARTMENT OF LABOR, WASHINGTON, DC
Mr. Orrell. Madam Chairwoman, Senator Isakson, good to be
with you this morning.
I am pleased to have the opportunity to testify today on
the Employment and Training Administration's management of
grants under the President's demand-driven workforce
development initiatives--the High-Growth Job Training
Initiative, Community-Based Job Training Grants, and the
Workforce Innovation and Regional Economic Development, or
WIRED, Initiative.
The high-growth initiative began as a strategy to transform
the public workforce system into a demand-driven system that
framed its workforce strategies and service delivery models on
a firm understanding of the jobs of the 21st century and the
skills workers need to get good jobs with career pathways.
This approach required new types of partnerships with
businesses and industry and education, as well as new ways of
doing business. We consulted with business and industry in 14
sectors to understand their workforce challenges, formed a wide
array of strategic partners to think creatively about solutions
to those challenges, and invested in innovative solutions.
ETA chose to award the first round of high-growth
investments noncompetitively because it allowed us to identify
the most innovative solutions that were directly tied to the
specific workforce challenges that each industry identified. In
making these selections, ETA used a comprehensive review
process to evaluate the unsolicited proposals that emerged from
the overall consultation process and made sole-source awards
consistent with the Department of Labor policies and procedures
governing noncompetitive awards and Federal procurement rules.
It has been ETA's intent to move to a fully competitive
investment model from the beginning, and currently, all High-
Growth Job Training Initiative grants are awarded
competitively. Our work with the high-growth grantees
highlighted the need to build educational capacity to train
workers and the important role that community colleges play in
workforce development.
The primary purpose of the community-based job training
grants is to build the capacity of community colleges to train
workers in the skills required to succeed in high-growth, high-
demand industries. The grants were also designed to help
strengthen the partnership between the public workforce
investment system and community colleges.
ETA's WIRED initiative is based on the principle that
talent development and having skilled workers drives economic
growth and competitiveness. The goal for WIRED is to help
regions transform and integrate their workforce investment,
economic development, and education systems to support overall
economic growth through sustained collaborative partnerships
among a wide array of partners with a shared regional vision
and plan for economic growth and talent development strategy to
drive it.
The subcommittee asked that I testify concerning the
reports issued by the Government Accountability Office and the
Office of the Inspector General on ETA's grant management
activities under these initiatives. The first of the OIG
reports concern the justification for noncompetitive award
grants under the high-growth initiative. The second related to
the value of selected high-growth grants.
ETA has provided detailed responses to the findings in both
reports. In June 2008, ETA submitted a comprehensive package
documenting the corrective actions ETA has completed or planned
concerning the first audit. On September 11, 2008, the OIG
responded that it considers three of the recommendations
closed, three others resolved but not closed, and one
recommendation unresolved. ETA is compiling additional
information for the OIG so that all recommendations can be
resolved and closed.
A similar corrective action plan in response to
recommendations in the second OIG report was submitted to the
OIG on September 12. While ETA did not agree with all the
findings in the OIG reports, we do believe the audits were
helpful in pointing out areas where the processes for
documenting sole-source grants, making decisions could be
strengthened.
To help promote a clearer understanding of ETA's commitment
to fostering innovation in the public workforce system, we have
also met with the OIG to discuss the strategic nature of this
approach. These discussions have helped the agency in
responding to concerns raised by the OIG and their audits of
the high-growth initiative.
Additionally, we recently shared a draft competitive grant
solicitation with the OIG, and they provided us with useful
comments on ways to clarify those areas that focus on
innovative activities, as well as specific grant requirements
such as grant matches.
In 2008, the GAO released its report on employment and
training grants under these initiatives. The issues identified
and recommendations made by the GAO were similar to those made
by the OIG. ETA submitted its detailed views on the findings
and recommendations in the report, which were printed as an
appendix in the report. We have also submitted our statement of
executive action in response to the recommendations in the
report.
As indicated in our letters to the GAO, we did not agree
with every conclusion in the report, but we believe the actions
we are taking will help us determine the impact of the three
initiatives, ensure the best possible projects are selected in
the future, and improve accountability.
Madam Chairwoman and Senator Isakson, I hope that the
information I provided in my written testimony on specific
steps that ETA is taking in regard to both the OIG and GAO
recommendations is helpful in response to your interest, and I
would be happy to take questions.
Thanks.
[The prepared statement of Mr. Orrell follows:]
Prepared Statement of Brent R. Orrell
Madam Chairwoman, Ranking Member Isakson, and members of the
subcommittee, I am pleased to have the opportunity to testify today on
the Employment and Training Administration's (ETA) management of grants
under the President's demand-driven workforce development initiatives.
I wish to begin by providing you with some background on our
initiatives. ETA has strived to transform the public workforce
investment system into a demand-driven system that aligns with the new
economic realities of the 21st century. Such a system would catalyze
and leverage all available resources to prepare workers with the skills
they need to succeed in a global labor market. It would also respond to
businesses' need for skilled workers and the talent demands of regional
and State economies in order to strengthen our national economy. ETA
has undertaken three key initiatives to foster demand-driven approaches
across the workforce investment system and increase opportunities for
education and skills training. These are the High Growth Job Training
Initiative (HGJTI), Community-Based Job Training Grants (CBJTG), and
the Workforce Innovation in Regional Economic Development (WIRED)
Initiative.
Through the HGJTI, ETA has awarded over $298 million to 167
partnerships among employers, education programs, and the workforce
investment system. These innovative projects train workers in the skill
and talent needs of high-growth, high-demand industries in our Nation's
economy. Since 2002, over 105,000 individuals have completed training
through these grants, and there are currently more than 65,000 enrolled
in training. ETA is excited that this year we have established the
capacity to utilize wage record data to measure aggregate employment
and retention performance outcomes on behalf of High Growth and
Community-Based grantees. The absence of this capacity had made it
extremely difficult to track outcomes for these grants.
Our work with the HGJTI grantees highlighted the need to build
educational capacity to train workers in high-growth industries and the
important role that community colleges play in workforce development.
Community colleges are well positioned to prepare workers for high-
demand occupations. Not only are community colleges an accessible and
affordable choice for many Americans, but they also work directly with
employers to provide training for incumbent workers, and are flexible
and adaptable to the needs of their local and regional labor markets.
The primary purpose of the CBJTG is to build the capacity of community
colleges to train workers in the skills required to succeed in high-
growth, high-demand industries. The grants are also designed to help
strengthen the partnerships between the public workforce investment
system and community colleges. To date, ETA has competitively awarded
211 CBJT grants totaling $375 million. Through these grants, nearly
25,000 individuals have completed training, and over 80,000 are
currently receiving training.
The Department launched the WIRED Initiative in February 2006 to
emphasize the critical linkages between workforce and economic
development in regional economies. The WIRED Initiative seeks to help
regions transform their workforce investment, economic development, and
education systems to support overall regional economic growth by
fostering collaborative partnerships among universities, businesses,
government, workforce and economic development organizations, and other
key regional partners. Under the WIRED Initiative, the Department has
competitively awarded $325 million of H-1B fee revenues and is
providing expert assistance to 39 regions across the Nation to
implement strategies that will create high-skill and high-wage
opportunities for American workers. Training and employment services
are focused on high-growth industries within each region.
Not only are these three initiatives training individual workers,
but they are also supporting key foundational elements of the Workforce
Investment Act; for example, promoting strong collaboration between the
public workforce investment system and other strategic partners;
creating a strong role for business; and encouraging customer choice
and accessibility of training opportunities. This is reinforced by ETA
policy guidance and technical assistance to the public workforce
investment system. We have learned that broad partnerships result in
innovative workforce solutions and the ability to leverage many more
resources to address workforce challenges. The initiatives also
recognize the fundamental importance of engaging employers as strategic
partners to define skill needs, develop curriculum, engage in the
education and training process, and leverage the significant resources
employers invest routinely in workforce development.
Each of these initiatives is designed to enhance, challenge, and
highlight the role of the workforce system in supporting the delivery
of quality education and relevant workplace training. All three
initiatives emphasize the workforce system's integral partnership with
education, economic development, and industry.
There are a number of activities that ETA is carrying out in order
to disseminate the learning, promising practices, results, and
deliverables from these initiatives more broadly to the public
workforce investment system and other stakeholders. Specifically, ETA
has designed technical assistance strategies to support the preparation
and packaging of results, products, and promising practices--what we
refer to as ``workforce solutions''--that result from these grants.
Deliverables from each grant vary and include: competency models,
career ladders or lattices; curriculum; outreach materials; and program
management and implementation tools. At this time, ETA is tracking
1,300 workforce solutions across our HGJTI and CBJTG grants, with plans
to add solutions developed through WIRED grants. We anticipate over 350
new solutions will be ready for dissemination later this year. There
are a number of ways that ETA distributes the solutions and lessons
learned that resulted from the grants and encourages learning among
grantees, industries, communities of practice, peer networks, and the
public workforce investment system more broadly:
First, we distribute information and promising practices
through Workforce \3\One (www.workforce3one.org), a Web-based technical
assistance portal, and our doleta.gov site. These sites offer the
public workforce investment system and its strategic partners access to
a wide array of learning opportunities, including webinars, podcasts,
and newsletters, as well as serve as the central repository for HGJTI
and CBJTG workforce solutions.
We also inform grantees about approaches that other
grantees have implemented through the administration and management of
grants provided by our Federal Project Officers. Federal Project
Officers are responsible for helping to ensure appropriate expenditure
of funds and monitoring the progress of HGJTI, CBJTG and WIRED grants.
ETA participates in national conferences where we
highlight workforce solutions from HGJTI, CBJTG, and WIRED grantees. At
these conferences, local, State, and national workforce leaders have
the opportunity to dialogue directly with grantees to learn how to
replicate demand-driven strategies. This last July, at our agency's
annual conference, Workforce Innovations, over 3,000 conference
attendees received a catalogue of over 300 workforce solutions.
ETA supports regular grantee meetings and conference calls
across HGJTI and CBJTG grantees according to their industry focus.
Through these conference calls and meetings, grantees are able to share
strategies, promising approaches, and solutions with one another
according to their particular industry workforce needs and challenges.
We have issued a Training and Employment Notice (TEN) in
July 2008 that announced the availability of new HGJTI and CBJTG
workforce solutions to the public workforce investment system, and
discussed the types of solutions developed; how they add value to One-
Stop Career Centers, community colleges, and other organizations; and
how the solutions can be accessed, applied, and shared across the
public workforce system community.
I'd like to give you several examples of results of these grants.
Calhoun Community College, a CBJTG grantee in Alabama, is using its
Alternate Health Education Asynchronous Delivery (AHEAD) program to
offer students training for new career opportunities in nursing,
surgical technology, radiography, and clinical laboratory technology.
The program is designed to increase the community college partners'
capacity by offering an extended consortium of healthcare programs
through shared resources and Web-based instruction. Through this grant,
Calhoun Community College developed the Delayed Progression Nursing
Program. This redesigned nursing program provides an alternative
learning format using video streaming technology that allows students
to view lecture content on the Internet or by podcast. Several regions
across the country have adapted workforce solutions developed by
Calhoun Community College. For example, Central Alabama and Southern
Union Community Colleges adopted Calhoun's Delayed Progression Nursing
Program in its entirety, modifying the education schedule to meet the
needs of working adults. In addition, the expanded enrollment at
Calhoun Community College has led to an increased number of healthcare
professionals ready to respond to industry workforce needs.
In California, the San Diego Workforce Partnership and its partner,
BIOCOM, have worked to define avenues for young people to explore
whether biotechnology is the right career path for them. Through a
HGJTI grant, they established a clearinghouse on the biotechnology
industry, coordinated student internships, and developed teacher
externships for San Diego region's biotechnology community. As a
result, 57 students completed hands-on internships; 30 high school
science teachers have had externships at area biotechnology employers;
and 139 career counselors in area high schools, community colleges, 4-
year universities, and One-Stop Career Centers have experienced
training sessions in biotechnology. Additionally, the project has had
even greater scope: 5,670 high school students have been exposed to new
biotechnology curriculum, and 45,175 high school and college students
have interacted with career and guidance counselors who have
participated in biotechnology training.
eta's management of grants under the demand-driven workforce
initiatives
The subcommittee asked that I testify concerning the reports issued
by the Government Accountability Office (GAO) and the Office of the
Inspector General at the Department of Labor (OIG) on ETA's management
of grants issued under the President's demand-driven workforce
development initiatives. I will address each of these reports in turn,
beginning with the OIG reports.
office of the inspector general audit reports
The first of the OIG reports was issued in November 2007,
concerning the justification for non-competitive award of grants under
the HGJTI. The second report was issued in April 2008, concerning the
value of selected HGJTI grants. ETA has provided detailed responses to
the findings in both reports. In addition, in January 2008, ETA
submitted to the OIG a Corrective Action Plan outlining the steps ETA
is taking to address each of the recommendations in the November 2007
audit report. In June 2008, ETA submitted a comprehensive package
documenting the corrective actions ETA has completed or planned
concerning this audit. On September 11, 2008, the OIG responded that it
considers all but one of the recommendations resolved. ETA is compiling
additional information for the OIG so that the remaining recommendation
can be resolved. I would be pleased to provide the Corrective Action
Plan to the subcommittee. A similar Corrective Action Plan in response
to recommendations in the April 2008 OIG audit report was submitted to
the OIG on September 12, 2008. I will be pleased to provide this plan
to the subcommittee.
ETA is extremely proud of the HGJTI. This initiative began as a
strategy to transform the public workforce investment system into a
demand-driven system--one that framed its workforce strategies and
service delivery models based on a firm understanding of the jobs of
the 21st century and the skills workers need to get good jobs with
career pathways. This approach required new types of partnerships with
business and industry and education as well as new ways of doing
business. The High Growth initiative involved: extensive consultation
with business and industry in 14 industry sectors to understand
workforce challenges and skill needs; solutions forums with a wide
array of strategic partners including the workforce system, business
and industry, educators and others to think creatively about innovative
solutions to those challenges; and, finally, investments in those
innovative solutions.
ETA chose to award the first round of High Growth investments non-
competitively for one very important reason. It allowed us to identify
the most innovative solutions that were directly tied to the specific
workforce challenges that industry identified--issues such as the need
for competency models and career ladder strategies, the need to engage
untapped labor pools, the need for qualified instructors, and so on. In
making these selections, however, there was a comprehensive review
process internal to ETA to evaluate the unsolicited proposals that
emerged from the overall consultation process. ETA made sole-source
awards consistent with the statutory authority under the Workforce
Investment Act, Department of Labor policies and procedures governing
non-competitive awards and Federal procurement rules. It was ETA's
intent from the early phases of the HGJTI to move to a fully
competitive investment model, and ETA began that process in Program
Year 2004. Currently, all HGJTI grants are awarded through a
competitive process.
While ETA did not agree with all of the findings in the two OIG
reports, we do believe the audits were helpful in pointing out areas
where our grant-making processes could be strengthened. In particular,
we believe the steps taken by ETA in response to the OIG report
recommendations will enhance our grant solicitation and grant award
management practices. I will briefly summarize some of the specific
steps ETA is taking to respond to the OIG recommendations.
ETA has completed most of the actions associated with the
recommendations in the November 2007 OIG report and we are working to
implement the outstanding actions over the course of the coming year.
We continue to award the vast majority of grants through the
competitive award process (including all grants under the HGJTI), and
use the non-competitive process on an extremely limited basis,
following the appropriate Federal and Departmental guidelines and the
provisions in the Department's annual appropriations act and in the
Workforce Investment Act. We have also instituted additional operating
procedures to ensure rigorous documentation of the award decisionmaking
process. This process further underscores our commitment to ensure that
there are no conflicts of interest involving decisionmakers and grant
awardees. When grant awards are made non-competitively based on the
Federal standards for sole-source awards, we are using a standardized
process to document the justification of such requests made by ETA to
the Department's Procurement Review Board. Similarly, we have
implemented a process to ensure that requests to exempt proposals from
the Department's Procurement Review Board review are properly
researched, validated, and documented, as recommended by the OIG. All
of ETA's executives have received training on these revised operating
procedures regarding non-competitive awards. When grant agreements
include a match requirement, we have taken appropriate action to ensure
that all match requirements are monitored to make sure this commitment
is fulfilled, regardless of grant modifications or extensions of
performance periods.
The OIG's second report was issued in April 2008 and included
several recommendations on ways to improve the grant solicitation and
award process and the grant monitoring and closeout procedures, and to
enhance the effectiveness of the HGJTI. ETA has taken a number of steps
that should help address OIG's concerns. For example, ETA has improved
the guidance provided in grant solicitations to prospective grant
applicants on the need to articulate clearly projected outcomes and
deliverables in their applications. ETA has also provided training to
all grant officers to ensure that all deliverable products will be
provided to ETA. As in the first OIG report, ETA continues to ensure
that all matching and leveraged fund requirements are incorporated into
grant agreements. We have also improved processes to require that
grants acknowledge the source of the grant funds and the corresponding
requirements associated with them, e.g., H-1B visa fees.
With respect to OIG's recommendations to improve grant monitoring
and closeout, ETA is continuously training grant staff and revising
grants management guidance materials to ensure each grant is monitored
periodically in order to identify potential problems and to provide
corrective action as necessary. This training and guidance ensures that
ETA staff are aware of matching and leveraged fund requirements from
other Federal sources, and that grantees meet established grant
requirements prior to grant closeout. We are also expanding the use of
ETA's electronic grant management system--a monitoring tool that has
been enhanced to include risk-based management, quarterly desk reviews,
and other management tools--to all grant management staff. This
expansion is expected to be complete in December 2008.
The OIG made recommendations regarding questioned costs in three
HGJTI grants. ETA is following its normal audit resolution procedures
concerning these questioned costs, and is working to reconcile these
issues and close out the grants.
The OIG expressed concerns with our ability to evaluate the
effectiveness of the HGJTI, with specific emphasis on products and
results. As I described earlier today and in our written response to
the OIG, ETA's approach has been to work closely with grantees to
package their results for broad dissemination and to share all of the
products that have been developed with grantees and the workforce
system. We consider the HGJTI grants to be a wealth of learning that
produced specific products and approaches for potential replication,
and believe there is value in each grant's results. So, unless the
products are clearly deficient or contain inappropriate material, such
as a political endorsement, all products are posted online, and
stakeholders are able to determine their value and use in the
marketplace. However, responding to OIG's recommendation, future
solicitations will require that grantees secure reviews of products
developed through their grants and submit the results of this review to
ETA to consider when sharing the product. While the OIG recommended
that ETA evaluate all products that had been posted online to date, ETA
does not plan to retroactively evaluate each product due to capacity
and resource constraints. Instead, we will address this recommendation
by posting revised and more specific disclaimer language to our
Internet Web sites where we make these products available. Finally,
responding to the OIG's recommendation to implement a process of
continuous evaluation of the effectiveness of the HGJTI, ETA is
conducting an independent evaluation of this initiative.
The HGJTI evaluation began in July 2006. Through the evaluation,
the Department seeks to learn more about how the projects grantees
developed and how those projects were implemented. The evaluation will
include a rigorous net-impact analysis of outcomes and impacts of
training provided by specific HGJTI grantees. This evaluation is a
three-step process. The first report, published in July 2007,
summarized the major implementation lessons that emerged from the early
grantees and documented the extent to which projects continued after
the grant period ended. The second report is scheduled to be released
in the fall of 2008 and will document the initiative and describe the
structure and implementation of selected grantee projects. The final
report is scheduled to be released next spring and will analyze the
early impacts of training on participants' employment and earnings
outcomes.
gao report on employment and training program grants
In May 2008, GAO released its report on employment and training
grants under the HGJTI, CBJTG, and WIRED Initiative. The issues
identified and recommendations made by the GAO were similar to those
made by the OIG in their November 2007 and April 2008 reports. ETA
submitted its detailed views on the findings and recommendations in the
report, which are printed as an Appendix in the report. We have also
submitted our ``Statement of Executive Action'' in response to the
recommendations in the report, which I will be pleased to provide to
the subcommittee. As indicated in our letters to the GAO, we did not
agree with every conclusion in the report, but we believe the actions
we are taking to address GAO's recommendations will help us to
determine the impact of the three initiatives, ensure that the best
possible projects are selected in the future, and improve
accountability.
The GAO recommended that the Department take steps to ensure that
the initiatives are evaluated so that strong conclusions about their
impact can be drawn. We agree, and intend to evaluate these programs.
There are ongoing independent evaluations of all three efforts.
I have already discussed the HGJTI evaluation. The CBJTG evaluation
began this summer. The purpose of this evaluation is to develop an in-
depth understanding of key differences and similarities across CBJTG
grantees. DOL expects an interim report in the spring of 2009 and a
final report in the winter of 2010. We anticipate that the evaluation
will include a survey of all grantees, and expect it to be rich with
valuable information. ETA will be pleased to share the results of the
CBJTG evaluations with you as they become available, and like all of
our evaluation reports, they will be available online at
www.doleta.gov.
ETA currently has two evaluations of the WIRED Initiative underway.
The first evaluation began in November 2006 and focuses on the first
set of 13 WIRED grantees or Generation I. The second evaluation began
in November 2007 and focuses on the 26 grantees that were awarded
during the second and third rounds, or the Generation II and III
regions. Both evaluations will provide a comprehensive understanding of
the implementation and cumulative effects of WIRED strategies,
including transformations of the regional economies and the region's
public workforce investment systems. The Department released the first
interim report of the WIRED Generation I evaluation in June 2008. We
anticipate release of final reports for both of these evaluations to
occur in 2010.
To further support the evaluations of all three initiatives, the
Department has also taken action to ensure the collection of consistent
performance outcome data by requesting that all HGJTI, CBJTG, and WIRED
grantees provide data that reflects how the programs have assisted job
seekers in getting jobs, retaining jobs and improving earnings. These
measures are the ``Common Measures'' utilized by ETA's employment and
training programs. As of this summer, all HGJTI and CBJTG grantees are
collecting and reporting outcomes against the Common Measures and all
WIRED grantees will begin to do so.
Like the OIG recommendation, the GAO recommended that ETA better
document the statutory program requirements when awarding
noncompetitive grants. ETA has modified two required forms that are
used during the process of awarding a noncompetitive grant. These
modifications ensure that the assigned Grant Officer and Program
Official confirm that the proposed sole source grant is in compliance
with relevant statutory requirements, including the requirements of the
authorizing act that permits grant awards and the appropriations act
from where the funds will come, and any congressional report language
that provides further guidance or clarification of congressional
intent.
GAO recommended that the Department develop and implement a risk-
based monitoring approach for the WIRED Initiative and a schedule for
its use. In response, the Department initiated monitoring reviews of
WIRED grantees to ensure that they are complying with financial and
administrative requirements. The reviews of WIRED Generation I grants
will be completed by September 30, 2008, and will be followed by
reviews of the WIRED Generation II and III grants. The monitoring
reviews are conducted by teams of ETA staff comprised of experienced
Regional Office and National Office staff, and the regional Federal
Project Officers assigned to each grant. In their reviews, the teams
are using a supplement to ETA's Core Monitoring Guide, issued on June
2, 2008, that meets the specific needs and requirements of WIRED grants
and includes review strategies for both the State Grantee and Regional
Lead organizations. The Department will utilize standard procedures for
issuance and resolution of any monitoring report issues.
Madam Chairwoman and members of the subcommittee, I hope that the
information I have provided is helpful and responds to your interests.
As I have indicated, more detailed information may be found in the
materials we have submitted. We appreciate the subcommittee's efforts,
and those of the GAO and OIG, to ensure that the investments of the
demand-driven workforce development initiatives are well managed, meet
their objectives, and are cost-effective. This concludes my prepared
testimony and at this time I would be pleased to answer any questions
that you may have.
Senator Murray. Thank you very much to all three of you for
your testimony.
During this year's Labor/HHS appropriations subcommittee, I
asked Secretary Chao about one of the Department's five
critical priorities in budget and policy planning, and I quote:
``increasing the competitiveness of America's workforce.'' We
also heard the secretary and many other administration
officials talk about the Department's efforts to support the
President's ``results-driven agenda.''
Now, to me, ``results'' really implies that you are able to
measure the impact and effectiveness of programs that are
supported by the Department. And yet when the GAO released a
report which finds that for almost $900 million spent under the
President's demand-driven workforce agenda, the employment and
training agency failed to establish any kind of benchmark that
would allow you to adequately monitor whether all of these
grants met the statutory requirements they were awarded under
or, in fact, allow you to measure the performance of the
programs that receive the funding.
Now, I initiated this report, along with Senator Kennedy
and Senator Enzi, after we learned that the Employment and
Training Administration awarded 87 percent of its High-Growth
Job Training Initiative grants noncompetitively over the last 6
years. And I find the GAO's report's findings particularly
troubling, given that the agency intended to use these grants
to shift the focus of the Nation's workforce development
system.
Because there was very little planning by the agency on the
front end, it is nearly impossible now to compare these
initiatives to the other programs under Workforce Investment
Act. And it means that proving that your initiatives are more
successful in ``increasing the competitiveness of America's
workforce'' is really out of the question.
In fact, GAO found that the Department failed to even
integrate these initiatives fully into its strategic plan. And
in my opinion, that really fails to live up to that results-
driven agenda that we kept hearing about.
So, I would like you--Mr. Orrell, if you could talk to us
about how you planned to demonstrate the effectiveness of the
President's demand-driven job agenda training for each of those
three initiatives?
Mr. Orrell. Thank you very much for the question.
I would like to just start out by saying that all three of
the initiatives are being subjected to broad and long-range
evaluations to look at their effectiveness.
The High-Growth Job Training Initiative is currently being
evaluated by the Urban Institute with its partners, Johns
Hopkins University and Capital Research Corporation. They are
conducting a national evaluation of the high-growth initiative,
which has two major components--an implementation analysis and
an analysis of early incomes and impacts of training in six of
the grant programs.
The first report on the implementation and sustainability
of 20 early High-Growth Job Training Initiative grants was
released in June 2007. The second, more in-depth,
implementation analysis was released in mid-June. And a final
report is expected in late 2008 and will present analysis of
the early outcomes and impacts of job training in six of the
grant programs.
On the Community-Based Job Training Initiative, ETA began a
comprehensive evaluation of the community-based initiative
beginning in July of this year.
Senator Murray. Mr. Orrell.
Mr. Orrell. Yes.
Senator Murray. In six of the--you said in six of the
programs----
Mr. Orrell. Right.
Senator Murray. There were----
Mr. Orrell. It is a sample of six of the grants that were
funded through the high growth.
Senator Murray [continuing]. And there were over 100? There
were over 100. So what were you going to do with the other 95-
plus?
Mr. Orrell. We are evaluating in-depth six of the grantees,
which is very similar, actually, to the sample that the OIG
looked at in terms of its in-depth analysis of the high-growth
grantees, trying to really dig deeply into those grants, figure
out which strategies were effective in helping the American
workers link to high-growth, high-wage industries.
Senator Murray. Was that planned initially that you were
only going to do six of the many, or this is an outgrowth of
the questions the committee has been asking?
Mr. Orrell. Let us see, this has been underway for several
years prior to the--I believe, prior to the GAO and OIG
investigations. It had always been planned to be evaluated.
Senator Murray. Mr. Scott, would you like to comment on
that at all, what you just heard?
Mr. Scott. Madam Chair, our understanding is that the
Department has had some trouble in terms of looking at--being
able to only look at 6 of the 100--approximately 166 grantees
because only the 6 grantees had sufficient participants to
ensure statistically significant evaluation. That was based on
the information we have received.
Senator Murray. So, Mr. Orrell, the six that you chose,
were those because they were the only ones that you could find
any outcomes on?
Mr. Orrell. That isn't my understanding of why those six
were chosen. I think they were chosen because they would give
us an interesting cross-section of the types of grants that
were funded by the Department.
With regard to the number of participants that have taken
part in the high-growth initiative, so far, over 250,000
American workers have either received training, completed
training, or are in the process of being trained through our
grantees--
Senator Murray. How were those six picked? That is----
Mr. Orrell. The six, I believe, were picked by the Urban
Institute and Johns Hopkins University, who we have contracted
to do the evaluation.
Senator Murray. Senator Isakson.
Senator Isakson. Thank you, Madam Chairman.
Mr. Scott, you said 80 percent of the high-growth grants
were noncompetitive. Is that right?
Mr. Scott. Yes.
Senator Isakson. Was that totally at the discretion of the
Department to make them noncompetitive? Was there no direction
in the legislation as to whether or not there was any
competition?
Mr. Scott. My understanding is the Department had the
discretion in terms of awarding the grants noncompetitively.
Senator Isakson. Do you know of any statutory requirement
in general, in terms of noncompetitive grants, that exist
today? In the existing statutory authority, granting or
limiting noncompetitive grants by any Department. Do you know
of any?
Mr. Scott. I am not qualified to answer that question, sir.
Senator Isakson. Well, neither am I, but I am going to try
and find out the answer because that would be an interesting
one to find the answer to.
Mr. Lewis, at the bottom of page 6 in your printed
testimony, after your three recommendations, there is a
paragraph I am going to ask Mr. Orrell some questions about.
But I wanted to know if these were your words or these were
written by somebody else in terms of the opening statement?
Page 6 at the last paragraph?
While you are looking, Mr. Orrell, let me ask, these are
the words in his report. It says, ``ETA strongly disagreed with
our findings that they did not provide sufficient oversight.''
Then it goes on to say, ``Moreover, ETA stated that it does not
have the expertise or the resources to evaluate every
product.''
And then it says, ``ETA further stated that ``it is not''--
and I quote--``necessary or valuable to evaluate every high-
growth deliverable before sharing it with the workforce
system.'' And then it says, ``ETA cited that its approach was
to let key constituents such as business and industry determine
the value of the products it disseminated.''
That response says that the Department doesn't think it has
the ability or the personnel, I guess, to evaluate the
programs. And so, it is going to determine evaluations based on
what business and industry tell it. Am I hearing that correct?
Mr. Orrell. Two things with regard to that. The decision--
we have all these grants out there that are producing a number
of products, over 1,300 products so far. And they range from
curriculums to strategies for linking workers to high-growth,
high-wage industries. A wide variety of products are intended
to help re-direct the broader workforce system toward the
demands of high-growth, high-wage industries.
Evaluation is such--if you are talking about rigorous
evaluation, it would not be possible to put every single one of
those products through a rigorous, scientific evaluation to
determine its effectiveness. That doesn't mean that the
products haven't been screened.
What we typically look for are things that hold promise in
terms of strategies that we think when the products come in, we
look at the products, does it seem to hold promise for helping
the workforce system or industry or education or the economic
development authorities to link workers to high-wage, high-
growth jobs?
And when we determine through that screen that they are--or
that they do hold promise, then they are posted for the public
to review and to make decisions about whether to use those
products or not. I would think from a public policy, public
trust standpoint, when we have invested this much money, it
probably wouldn't make sense to not publish these things, but
to put them out so that people can look at them and see what
the public dollars are purchasing.
Senator Isakson. OK. I understand you referenced curriculum
as some of the grants, and I understand that an evaluation of a
grant for curriculum would be a subjective evaluation probably
at best. But a lot of these grants are, in fact, directly for
training to subsequently employ people. Is that not correct?
Mr. Orrell. They are both. The purpose of the grants----
Senator Isakson. Some of them are specifically for that
purpose.
Mr. Orrell. Right. Right.
Senator Isakson. Do you have a system in the Department now
that you--since this doesn't have the time to make the
evaluation, do you seek from the businesses or industries for
whom these people are supposed to work whether or not they
think the program has been valuable in getting them a better-
trained, qualified employee?
Mr. Orrell. It is an interesting question. I don't know the
answer to whether we are actually talking to the industry
groups about the effectiveness. What we are doing is collecting
data on entered employment, wages, and retention, which are the
common measures, that will permit us to see how people are
faring who have gone through these programs.
Senator Isakson. Well, my only reason of raising the point
is that it would seem if--were those your words, Mr. Lewis?
Mr. Lewis. Yes. They were my words, and except where
quoted, they had come directly from ETA's response to the draft
report.
Senator Isakson. My response to that is, it would seem that
if the Department takes the position that it doesn't have the
ability to measure the results and it seeks to get it from the
business and industry, that it would have a system for business
and industry to respond, to tell it whether or not it is
getting results.
Mr. Orrell. The head of our Office of Workforce Investment
informs me that, yes, we talk to industry every day about
whether they are getting the kind of employees that they need
from these grants.
Senator Isakson. Thank you.
Mr. Orrell. Yes.
Senator Murray. So you talk to them every day. Is there any
kind of written form or evaluation or anything that comes back?
Mr. Orrell. I don't believe there is a formal evaluation of
that, no.
Senator Murray. So we simply have a series of conversations
that we are supposed to rely on?
Mr. Orrell. We remain engaged with employers, the high-
growth, high-wage employment community to determine whether
they are seeing the results that they would like to see in
terms of the training provided to American workers.
Senator Murray. Well, it is frustrating because these are
the signature initiatives of this administration, which were
designed to show us that there is a better way to do job
training. And if we don't have concrete ways of showing
taxpayers, the public and the people we represent that those
dollars are actually making a difference, other than a series
of conversations, we can't come back and ask for more money for
those programs.
Mr. Orrell. Well, as I indicated earlier, all three of the
initiatives are subject to rigorous long-term evaluations to
determine whether and how effective they are.
Senator Murray. OK. Well, let me change course a little
bit. As far as we know, the funding sources and, by
consequence, the statutory authority for grants under these
three initiatives haven't been made public. We have, however,
received a helpful Excel chart of the sources provided by ETA
to CRS during some of their investigatory work.
So, in the interest of transparency, will you commit to
making those funding sources public, so that we and the public
can gain a clear understanding of the statutory requirements
attached to the funds that you do award?
Mr. Orrell. As far as I know, those--all of our financial
transactions within the agency are already public. But if there
is additional data the committee would like or CRS or any
other--IG or GAO, we would be happy to provide it.
Senator Murray. So you will provide us with a copy of that?
Mr. Orrell. Yes.
Senator Murray. You mentioned the Calhoun Community College
CBJTG program on page 6 of your written testimony. ETA's
October 19, 2005, press announcement for the grant states the
grant award was for $2.5 million, with an additional $4.6
million of leveraged resources brought to the project by eight
employer partners, three education partners, and one workforce
partner, for a total project of over $7 million.
How many years of performance will the $2.5 million Federal
investment support?
Mr. Orrell. Two to three years typically on these grants.
Senator Murray. Two to three years. Could you describe the
nature of the $4.6 million in leveraged resources that is
referenced?
Mr. Orrell. I don't have the details in front of me, but I
would be happy to find that and provide them to you.
[The information requested can be found in Additional
Material under Senator Murray's question 4b.]
Senator Murray. If you could provide them to the committee?
Can you tell us what was the role of the Federal
contribution to the project? What did Federal money provide
that private money couldn't provide?
Mr. Orrell. Typically in these grants, and with most
grants, the applicants lay out a strategy and a program for
training workers. They bring their partnerships to the table to
enable the training of workers for demand-driven occupations or
high-growth occupations.
The resources that the grantee brings come in both cash and
in-kind resources. They frequently put up--in many of these
grants, they put up their own dollars as well as bring to the
table other resources, partnerships, and their previous
investment in the training that they've made as a form of
matching resources.
Senator Murray. On this project in particular?
Mr. Orrell. Again, I will have to get the details for you.
Senator Murray. Can you share with the committee which
partners actually received the Federal money, and when the
grant is over, are they going to be able to sustain the
project?
Mr. Orrell. With all of the grants, across all three
initiatives, very heavy emphasis is placed on sustainability,
working with the grantees to make sure that when the Federal
dollars are done, the project can continue without Federal
support.
Senator Murray. Can you share with the committee which of
these partners actually received the Federal dollars?
Mr. Orrell. Yes.
Senator Murray. And you can get that to our committee?
Mr. Orrell. Yes.
Senator Murray. OK. And can you tell us how many healthcare
workers will be in the Alabama workforce as the result of a
$2.5 million Federal investment?
Mr. Orrell. Don't have it here. I am sorry.
[The information requested can be found in Additional
Material under Senator Murray's question 4e.]
Senator Murray. OK, and I understand that. But I would
appreciate a written response for the record.
Let me go back, Mr. Orrell, you said that the projects and
products from high-growth grants went through what you call the
screening process even though they were not evaluated. Can you
describe for us what that screening process is?
Mr. Orrell. As these deliverables are provided to the
Department, our Office of Workforce Investment, which oversees
all activities related to the High-Growth and Community-Based
Job Training Initiatives, will look at those products, the
curriculums, the strategies, the efforts to link workers to
high-growth, high-wage industries. So that it comes in a
variety of different forms.
Different deliverables will be evaluated by content
knowledge experts within the Department, and a decision will be
made in looking--reading through those whether or not the
practices that are outlined in them show promise.
Senator Murray. Is this a written screening process? Does
anybody supplying know what they are going to be screened on
once they apply for Federal dollars?
Mr. Orrell. Again, the threshold here isn't a sort of
formal ``can you demonstrate in hard numbers whether this
strategy provided absolute assurances of success? '' It is more
of looking at it, seeing whether it looks promising. If it does
look promising, then it is made available to the public.
Senator Murray. And if there is no evaluation at the end,
how do we know?
Mr. Orrell. For the high-growth initiative, well, I think
there are two ways of knowing. For instance, in the instance of
the SEIU grant that we made for the training of LPNs, the SEIU
has decided, based on what it regarded as the success of its
grant, to go ahead and replicate those activities with its own
funding.
In my view, that is probably the highest endorsement of
success that there is, when people are willing to take the
products that come off of these grants and then go out and use
them with their own funds without any Federal support. So that
is one way of measuring whether something is successful or not.
In broader terms, the products that are being put out there
off of the high-growth initiative and the community-based
initiative, I think that it is really a question of whether
those products are seen as having sufficient value by the
Workforce Investment Act system, other training entities, and
educational entities. Whether those products get picked up and
used, that is going to be one of our key indicators as to
whether it is valuable to the people who have to, on a daily
basis, engage American workers in preparing them for future
employment.
Senator Murray. Mr. Lewis or Mr. Scott, could you comment
on that kind of evaluation and how reliable it is?
Mr. Lewis. Sure, certainly. Going back to the example that
was raised with the SEIU grant, we really--with something like
that, we couldn't evaluate how good that success was. Yes,
there was some performance under the grant. Our concern was
that, relatively, we didn't know how good that was compared to
other potential grants.
Knowing that there were other proposals that weren't
funded, I would say regardless of what was achieved under that
grant or any of the others, we don't know if we left even
better potential on the table because we picked that grant over
another.
Senator Murray. Mr. Scott.
Mr. Scott. One of the issues, one of the concerns we
continue to have with the Department of Labor's efforts here is
that while clearly they are taking steps to evaluate some of
the initiatives, at the end of the day, it is important that
these evaluations include an assessment of impact. At the end
of the day, we need to be assured that the investment of funds
is actually resulting in the outcomes and providing us the
information we need to assess to what extent, if at all, we
should continue to fund some of these initiatives.
So while we certainly acknowledge the Department of Labor
is taking steps to assess the initiatives, we also believe that
it is important to include those impact evaluations so that, at
the end of the day, policymakers have the information they need
to determine how best to proceed in changing the workforce
system.
Senator Murray. Senator Isakson.
Senator Isakson. Madam Chairman, unfortunately, I have to
go to another committee. So I am not going to ask any further
questions.
But I want to thank our witnesses for being here today and
thank you for calling the meeting.
Senator Murray. Absolutely. Thank you very much, Senator
Isakson. I appreciate it.
And I will have questions that I will submit for the record
as well this morning. But, Mr. Orrell, let me go back to you
again. You just heard that it is important to have impact
evaluations. Can you comment on that?
Mr. Orrell. We do have a net impact evaluation going on in
the High-Growth Job Training Initiative. That report will be
available some time between now and the end of the year. It
is----
Senator Murray. Due on the end of this year, are we talking
about?
Mr. Orrell. End of 2008, yes.
The other thing, the other point I neglected to mention was
that for future high-growth initiatives, in order to respond as
fully possible as we could to the OIG and the GAO around these
issues, we have included in the requirement for grantees that
they have to have a contract with an outside content subject
matter expert to evaluate the products that they are producing
so that we do have at least a glimpse, a picture from an
outside evaluator on each of the products that our high-growth
initiatives are producing.
Senator Murray. OK. I am trying to understand how this
happened. We have a responsibility to make sure there is an
evaluation so that we can make sure taxpayer dollars are used
wisely. And data provided by ETA to CRS show that at least 19
of the high-growth noncompetitive grants were fully or
partially funded from Wagner-Peyser Act funds at a sum of about
$17 million.
Now this was also noted by the inspector general that these
funds seemed to have been awarded from an authority relating to
labor market information. Now, unfortunately, none of the ETA's
documentation on the program--press releases, budget
justifications--include any reference to the source of those
funds. So could you describe for the committee the
justification for the use of those funds for the high-growth
grants?
Mr. Orrell. I think I would be venturing into an area that
I couldn't speak authoritatively about just because I wasn't
here in this position when those decisions were made back in
early 2000s. But I would be happy to research it and get it
back to you.
Senator Murray. If you could please do that and get it back
in written comment to the committee?
Mr. Orrell. Yes.
[The information requested can be found in Additional
Material under Senator Murray's question 15.]
Senator Murray. In your written testimony on page 8, it
states that:
``ETA chose to award the first round of high-growth
investments noncompetitively for one very important
reason. It allowed us to identify the most innovative
solutions that were directly tied to the specific
workforce challenges that industry identify.''
You further state that there was a ``comprehensive review
process internal to ETA to evaluate unsolicited proposals that
emerged from the overall consultation process.''
I have a couple questions about that. Do you consider 133
noncompetitive grants totaling $235 million and spanning 6
years to be a first round?
Mr. Orrell. I am sorry. Say that----
Senator Murray. To be first round?
Mr. Orrell. I believe that is--that is the first round in
each industry sector.
Senator Murray. I am sorry. I don't understand what you
mean.
Mr. Orrell. That was the first----
Senator Murray. There are 133 grants. It's $235 million,
spans 6 years. Is that the first round? I am confused by what
you are saying that this is how you are looking at the first
round. What is the second round, if that is the first round?
Mr. Orrell. I am not quite clear either, Madam Chairman.
ETA funded these grants, 133----
Senator Murray. Noncompetitive.
Mr. Orrell. Noncompetitive grants in the first round. The
purpose of doing that was that it was clear--I think--my
understanding is when the administration came in, it was really
looking at the skills gap between where American workers were
and their skill levels and the needs of industry, there was a
big skills gap there. And there was an effort to jump start
this process of reorienting our Workforce Investment Act
system.
When I look at these grants, I look at them as kind of
steering grants, trying to steer the system in closer alignment
with the demand in high-wage, high-growth, industries that we
have in this country.
I can tell you that from my experience in the last 6 months
of being in this job, even in the current economic times, we
are dealing with employers across all of these high-demand,
high-growth industries that need people now. And these grants
were an effort to begin to equip workers now for jobs that
currently exist and will exist in the future.
Senator Murray. Well, I think the more specific question
that would help us understand what you have done here is if you
can explain to us why a noncompetitive process would identify
more innovative projects than a competitive process?
Mr. Orrell. Again, my understanding of how this process
rolled out was, first, there were a series of forums with
industry executives to try to get a handle on where the needs
were in terms of openings in those high-growth industries,
across 14 different sectors of high-growth industries.
Senator Murray. And you don't think a competitive process
would have gotten you----
Mr. Orrell. I think, as I said, the effort was really
focused on getting as quick a start as we could on the problem
because we knew, based on what we were hearing from industry,
that the demands were present in 2001, 2002, just as they are
currently. These industries are still in need of people with
the right skills in order to get those jobs.
Senator Murray. Well, both the inspector general and the
GAO found no documentation that you evaluated the proposals and
stated that ``the ETA could not identify any ways in which the
grants had the most innovative solutions or that they were
measured against any industry-identified criteria.''
So could you explain how your comprehensive review process
that is apparently internal to ETA----
Mr. Orrell. Right.
Senator Murray [continuing] Was able to accomplish such an
evaluation without leaving any documentation?
Mr. Orrell. The review process had three different levels.
First was a technical review, which is looking at, ``do we
think the grant can actually achieve what it says it wants to
achieve?'' The second was a peer review. Does this make sense?
Does it fit within the goals that we had to equip workers for
jobs that were currently available? And then finally was the
review process through the Procurement Review Board that
examines noncompetitive awards.
So each one of these grants passed through all three of
those gates before it was awarded. And my understanding of what
I have read and understand from the GAO and OIG, there has
never been a question about whether we have the authority to
make these on a noncompetitive basis or whether we violated any
authority in that regard. The question has been did we
adequately document the process that we used?
That is what we have been working to correct with the GAO
and the OIG is making sure that we have the documentation in
place to show that all of the steps were appropriately
followed.
Senator Murray. OK. Well, you stated that your goal is to
close the skill gaps.
Mr. Orrell. That is correct.
Senator Murray. Which we all believe. But how do you show
that if these noncompetitive grants were never evaluated?
Particularly when you use pilot demonstration funds, it seems
important that you show the purpose was actually accomplished?
Mr. Orrell. As I said earlier in our conversation, the
high-growth initiative, the community-based initiative, and the
WIRED initiative are all subject to evaluation to tell us what
degree they were successful.
Senator Murray. Mr. Lewis or Mr. Scott, would you care to
make any comments at this point?
Mr. Lewis. Well, in terms of the IG's report, we did note
that there is not an absolute requirement that every grant
award be done competitively. We did acknowledge that it is
permissible in circumstances to have noncompetitive awards.
However, we do note that the preference is to do them
competitively.
So we are concerned that with demonstration grants in
particular that we have done the best to look for the best
awards to make and that that can be best done by comparing one
award to another. And where we did have documentation of ETA's
process, the comparison was of the award to itself, not to
other awards or other proposals.
Senator Murray. OK. Mr. Scott.
Mr. Scott. Madam Chair, just a couple of comments.
First, as we state in our written testimony, it is our view
that while clearly the Department had the discretion to award
these grants noncompetitively under those circumstances,
ultimately, we believe that competition actually facilitates
accountability, promotes fairness and openness, and increases
the assurances that grantees have the system in place to meet
grants. So that is sort of a bottom line sort of baseline for
which I think the Department needs to consider--should consider
as it goes forward.
Second, some of the concerns we had was that given that
these high-growth grants were initially awarded
noncompetitively, that made it even more important that the
Department adequately document the decision steps along the way
so that it could provide transparency to the process. And given
the fact that there were circumstances where they could not
provide us the documents that we needed to assess that, I think
that raises questions.
And finally, on this point of evaluation, while clearly the
Department is taking steps to evaluate some of these grantees,
we continue to believe that evaluating is one step, but
actually being able to assess the impact--at the end of the
day, what are these dollars buying us--is another step that at
this point it doesn't appear that the Department, other than on
a limited basis on some of the high-growth grants, will be able
to achieve. And so, that continues to be a concern for us.
Senator Murray. OK. I think I heard Mr. Orrell say just a
minute ago that all of the noncompetitive grants were reviewed
by the Procurement Review Board internal to Labor.
Mr. Scott or Mr. Lewis, is that consistent with your
findings?
Mr. Lewis. In our report, we noted a number that should
have gone to the Procurement Review Board but did not go.
Senator Murray. So----
Mr. Orrell. It is a matter of ongoing disagreement--
actually not between ETA and the OIG, but really between the
OIG and the Office of the Solicitor at the U.S. Department of
Labor--as to whether a small number of these grants, fewer than
10, should have gone to the PRB or not. Three of them were
under the procurement threshold of $100,000. Sole-source grants
of less than $100,000 do not have to go through the PRB.
The second area is really the technical one, where we have
got disagreement between the OIG and our solicitor's office as
to whether grants made to local Workforce Investment Act system
entities--workforce boards, State workforce agencies--qualify
as Government entities. Under the Department's rules, grants
going to Government entities can go on a sole-source basis
without going through the PRB.
Senator Murray. Is that correct, Mr. Lewis?
Mr. Lewis. That is correct.
Senator Murray. OK. Mr. Orrell, I want to go back to what I
was just talking to you about earlier, because I am still
puzzled by your statement that all of these grants were part of
a first round of funding that span 6 or more years, and
millions of dollars. Was there never an opportunity earlier for
the Department to go to a competitive process?
Mr. Orrell. The competitive processes for the high-growth
initiative started in 2004. The first grants under--the
noncompetitive grants were awarded in 2003. So we moved rather
quickly--is that right? A little bit earlier than 2003?
Oh, OK. So the 2002, 2003 grants were noncompetitive. We
moved into a competitive format for the high-growth initiative
in 2004.
Senator Murray. How many were awarded then?
Mr. Orrell. Oh, let us see. No, but how many? Yes, we will
have to look it up.
Senator Murray. You will have to get back to us, OK.
Well, I have a number of other questions as well. And
clearly, this is a busy time on Capitol Hill with a lot going
on, and my Ranking Member already had to leave.
I am going to submit these questions to the record, and I
would like all of your responses back as quickly as possible. I
particularly appreciate all of you taking time out of your
schedules today.
I do think that the overall intent of Congress and
certainly of the reports that we have gotten is that we have to
be held accountable for taxpayer dollars. We need to know where
our dollars actually go to work. That is why Congress has been
interested in this issue and previously issued directives
without that, we can't go back and ask, in very tight budget
times, for additional funds.
Workforce training is extremely important. Closing the
skills gap is important. We agree with the DOL on that. But if
we can't show that the money is working, we are not going to
get additional money, and we can't prove to the taxpayers that
we are doing the right thing. That is why this committee is
interested in this issue.
Thank you very much to all of you for your testimony, and
with that, we will adjourn for the day.
Thank you.
[Additional material follows.]
ADDITIONAL MATERIAL
Prepared Statement of Senator Brown
Thank you, Madam Chair.
I appreciate your solid leadership on workforce issues and
your decision to conduct this oversight hearing.
And I'd like to thank our witnesses for sharing their
insights with us this morning.
Our Nation's economic prospects hinge on the capabilities
of our workforce. That's the bottom line. If we are not
investing as we should in workforce development, we are
constructing a poor foundation for our Nation's future. That's
a fact.
And that's why this hearing is so important. That's why the
Department of Labor's demand-driven workforce initiatives
deserve the attention of this committee.
Since early 2007, I have held more than 100 roundtables
around Ohio. One recurring theme--from workers and employers,
business and labor, teachers and school administrators--is that
we need to do a better job connecting workers to work.
That not only means creating linkages between employers and
potential employees, it means helping to equip workers with the
skills necessary to take on new jobs in emerging industries.
I think everyone here today understands the importance of
good workforce training programs. We understand the role good
workforce policy can play in developing the skilled workers
needed, especially for in-demand industries. We also know that
good workforce policy is a tool for regional economic
development.
As we consider where we are today and where we should be
going forward when it comes to workforce policy, some
fundamental questions come to mind:
How do we ensure taxpayer dollars are used effectively and
efficiently? How do we ensure accountability? How do we see
that grants are awarded competitively? What are the defined
goals and benchmarks policymakers and lawmakers should strive
for? What data will help us compare outcomes for grant-funded
training programs against other federally funded workforce
training initiatives around the country?
There have been problems with the Labor Department's
execution of training grants programs. These are well
documented by the Government Accountability Office (GAO), the
Office of Inspector General (OIG) and Congressional Research
Service (CRS).
We know that High Growth Job Training Initiative (HGJTI)
grants were awarded through a noncompetitive process. Between
May 2002 and December 2006, nearly $287 million was awarded for
the HGJTI grants, 90 percent of which was awarded non-
competitively.
These are now awarded competitively.
We know that there has been little monitoring of the WIRED
programs, and I hope to hear today how the Department has
corrected that process.
I believe we need to learn from mistakes and mismanagement,
and make sure federally funded training programs work as they
should. I believe Congress has a responsibility to authorize
these programs to ensure taxpayer dollars are being invested in
them wisely, to the benefit of workers, employers, and the U.S.
economy.
In July, I introduced with Senator Olympia Snowe the
Strengthening Employment Clusters to Organize Regional Success,
or SECTORS Act.
The bill focuses on targeted training, with multiple
stakeholders in the same industry.
The legislation focuses on effective skills training, but
also emphasizes program integrity. It includes provisions to
ensure training programs can be sustained beyond the Federal
investment and builds in rigorous evaluation so lawmakers and
policymakers know how tax dollars are being spent.
I hope that the lessons learned at the Labor Department
will help Congress to promote best practices and bypass
pitfalls as we explore innovative skills training programs for
the 21st century economy.
Thank you, Madam Chair.
Responses to Questions of Senators Murray and Brown by Brent R. Orrell
senator murray
Question 1. It seems that any pilot/demo would require extra care
in describing measurable objectives (what are you piloting?; what will
you demonstrate?). It also seems that any noncompetitive grant would
require extra care to show that the money was awarded appropriately
(are there conflicts of interest?; are these the best providers?). This
program started as both a pilot and a noncompetitive program, but it
seems less care was taken than would be warranted even for a regular,
competitive grant program. Since these grants are BOTH pilots/demos AND
noncompetitive, wouldn't they necessarily warrant extra scrutiny and
clear documentation?
Answer 1. ETA adhered to generally applicable Federal requirements
and met the Department of Labor's policies and procedures governing
non-competitive awards when making grants under the High Growth Job
Training Initiative (HGJTI). As part of those processes, ETA has a
significant amount of documentation of the grant making process for the
HGJTI grants that actually exceeded prior practices in ETA related to
decisions to award non-competitive grants. ETA has now enhanced our
documentation in response to the Inspector General's report (Report
#02-08-201-03-390). Specifically, ETA has new processes in place for
every phase of the review of unsolicited proposals and for making non-
competitive grants. The processes have been issued in an ETA policy
directive and include, but are not limited to, justification for non-
competitive award, documentation of statutory authority, and rationale
for the decision to fund. In addition, ETA has provided training on
these enhanced procedures to relevant ETA staff.
Question 2. Your testimony states (p. 2) there are 105,000
completers and 65,000 current participants in HGJTI, costing nearly
$300 million, which is a Federal cost per participant of nearly $1,800.
This amount is remarkably lower than the cost per participant rates for
WIA programs that are listed on page TES-31 of the fiscal year 2009
budget justifications. Are HG students receiving training at the same
intensity and duration as WIA programs? If so, what has been
demonstrated in the 7 years of the programs as to how the initiative
was able to achieve this level of efficiency?
Answer 2. ETA has not conducted studies to compare the intensity
and duration of training provided under the HGJTI and the Workforce
Investment Act (WIA), or to compare the cost per participant in HGJTI
grants and WIA. HGJTI grants are a set of demonstrations and do not
necessarily have the characteristics of a formula-funded program. The
training solutions demonstrated in these grants vary widely ranging
from fast-track construction training that was utilized in response to
Hurricane Katrina, to on-site training for incumbent workers to upgrade
skills, to more intensive, longer term training.
Question 3a. Similarly, on page 2, the testimony states that CBJTG
has 25,000 completers, 80,000 participants, and costs of $375 million--
or Federal cost per participant of nearly $3,600. However, page TES-31
of the fiscal year 2009 budget justifications state that the target
cost per participant for CBJTG is $2,500. Why the difference?
Answer 3a. The projected cost of $2,500 is a projection based on
the calculation of funding divided by the projected number of
individuals to be trained over the life of the grant.
The calculation of $3,600 as the cost per participant as framed in
the question is misleading in the context of the Community Based Job
Training Grants (CBJTG) program which has two purposes: the first is to
build the capacity of the community college to do training in high
growth industry sectors, which ultimately enables the college to train
many more students than those funded by the grant; and second, to
actually do training. The portion of the grant used to build capacity
will benefit future students in addition to those who have already
participated or are currently participating in the program. Therefore,
the ``cost per participant'' based upon the number to date appears
higher than it would be if future students were considered in the
calculation.
Question 3b. If other measurable outcomes in addition to students
trained is desired (e.g., curricular products, infrastructure
capacity), then how is this comparable to other Federal programs?
Answer 3b. The CBJTG was not intended to be comparable to other
Federal programs. The goals were to build the capacity of community
colleges to train individuals for careers in high-growth, high-demand
industries in the local and/or regional economies and to actually train
more workers in those industries to meet the demand.
CBJTG grantees report both qualitative and quantitative outcomes.
CBJTG grantees have provided narrative reports on a quarterly basis to
ETA from their inception. These reports include updates on capacity
building activities as well as progress made regarding the common
performance measures. ETA has been issued a control number by the
Office of Management and Budget (OMB) for the use of a standardized
data collection form, and CBJTG and HGJTI grantees have been required
to use that form as of July 2008. Through this system, ETA will now be
able to calculate outcomes regarding the common measures on behalf of
grantees through the Wage Record Interchange System.
Question 4a. Your testimony cites (p. 6) the Calhoun Community
College CBJTG program. ETA's October 19, 2005 press announcement for
this grant states the grant award was for $2.5 million with an
additional $4.6 million of leveraged resources brought to the project
by 8 employer-partners, 3-education partners, and 1 workforce partner--
for a total project of over $7 million. How many years of performance
will the $2.5 million Federal investment support?
Answer 4a. This grant had an original period of performance from
November 1, 2005-July 31, 2008. This grantee requested and was approved
a 1 year extension until July 31, 2009.
Question 4b. Could you describe the nature of the $4.6 million in
leveraged resources?
Answer 4b. Sources of leveraged funding for Project AHEAD include
WIA Individual Training Account Vouchers, Tuition Assistance from
regional employers and in-kind salaries and facilities from partnering
community colleges. To date, $3,698,964 has been documented in
leveraged funding and the grantee expects to meet the planned leverage
of $4.6 million during the last 8 months of the project. The breakdown
of leveraged resources is outlined in the table below.
------------------------------------------------------------------------
Leveraged
Source Description amount to
date
------------------------------------------------------------------------
Calhoun Community College.......... Nursing, Surg-Tech, $1,966,628
CLT Program salaries,
benefits, and
facility usage.
Central Alabama Community College.. Nursing faculty and $747,280
supporting salaries/
benefits and facility
usage.
Southern Union Community College... Radiography and $389,319
Nursing faculty and
supporting salaries/
benefits and facility
usage.
Wallace State Community College.... Radiography and $189,030
Nursing faculty and
supporting salaries/
benefits and facility
usage.
NW Shoals Community College........ Surg-Tech facility $2,080
salaries/benefits and
facility usage.
Decatur General Hospital........... Health Career Camp $254,422
Huntsville Hospital................ Sponsorships.
Coffee Health Group................ Personnel Costs for
Crestwood Hospital................. Clinical Phlebotomy.
Athens-Limestone Hospital.......... Supervisors...........
East Alabama Medical Center........ Personnel Costs for
Nursing Preceptors.
Personnel Costs for
CLT Preceptors.
....................
WIA (U.S. Department of Labor)..... Individual Training $54,437
Accounts for student
participants in
Project AHEAD.
Decatur General Hospital........... Employer Tuition/ $29,077
Huntsville Hospital................ Scholarships for
Coffee Health Group................ Project AHEAD
Crestwood Hospital................. participants.
Athens-Limestone Hospital..........
East Alabama Medical Center........
U.S. Department of Education....... Pell Grants........... $66,691
------------------------------------
Total............................ .................... $3,698,964
------------------------------------------------------------------------
Question 4c. What was the role of the Federal contribution to the
project--what did Federal money provide that private sources could not?
Answer 4c. Community colleges are frequently challenged with
finding funding to quickly and effectively align programs with evolving
demands of the job market. While some community colleges have been
entrepreneurial and partnered with the private sector to support new
programming, these contributions may not be sufficient to fund
expensive training equipment required in technology-driven industries
like healthcare.
In this specific grant, the budget is allocated as follows.
------------------------------------------------------------------------
Approved
budget
Category [In
percent]
------------------------------------------------------------------------
Personnel..................................................... 32%
Fringe........................................................ 6
Travel........................................................ 1
Equipment..................................................... 36
Supplies...................................................... 7
Contractual................................................... 4
Other......................................................... 9
Indirect...................................................... 5
---------
Total....................................................... 100%
------------------------------------------------------------------------
Question 4d. Which partners actually received the Federal money?
When the grant is over, will they be able to sustain the project?
Answer 4d. Community college partners that received the grant
funds:
Calhoun Community College;
Southern Union State Community College;
Central Alabama Community College; and
Wallace State Community College.
According to the grantee, since this project builds on existing
programs and shared resources through distance learning formats, these
programs will continue after grant funding expires. The grantee
attributes the fact that all partnering colleges have been able to
increase their enrollments in nursing, radiography, and other allied
health professions to Departmental funding. As the demand for
healthcare workers continues to increase, the colleges will be able to
rely on enrollment in the program(s) to maintain the equipment and
personnel beyond the grant cycle.
ETA has promoted the importance of both partnerships and leveraged
resources through its solicitations and through technical assistance
provided to these grantees. The public workforce system, employer,
education, and community-based partners represent expertise and
resources that are essential to the successful implementation of the
grant and its longer-term sustainability. ETA has helped grantees learn
and exchange with one another ideas for building and maintaining these
partnerships in order to sustain grant activities beyond the grant.
Question 4e. How many more healthcare workers will be in the
Alabama workforce as a result of this $2.5 million Federal investment?
Answer 4e. This grant will have a substantial impact on the
healthcare workforce in Alabama both during the grant, and after the
grant ends. There are currently 443 students enrolled in Project AHEAD
Programs. To date, 150 students have successfully completed their
training activities and are eligible for certification or degree. Based
on current enrollment, the grantee estimates that 75 percent of these
students will complete their program of study, so it's projected that
332 healthcare workers will be employed in the Alabama workforce as a
result of this grant.
Further, some of the grant activities help to increase the capacity
of the community colleges and will also impact the future healthcare
workforce in Alabama. For example, by the end of the grant period (July
31, 2009), it is expected that the activities will have affected:
4,931 secondary students through career awareness
programs;
180 students/year in early career awareness/job shadowing
activities at camps;
27 hospitals and long-term care facilities in clinical
site experiences;
222 secondary teachers, counselors and administrators
through training sessions;
412 instructors in the Alabama community college system
through training sessions; and
201 existing healthcare professionals through continuing
education courses each year.
Finally, though grant funding for Project AHEAD will conclude on
July 31, 2009, the broader impacts of the grant will continue for many
years. For example, many of the over 5,000 high school students who
have been reached through career awareness programs funded by Project
AHEAD will pursue education and training in health careers. Due to the
tremendous response from high school students to the summer Health
Career Camps, Calhoun Community College will continue to offer these
camps with the help of community partners. The Delayed Progression
Nursing Program curriculum is available to all 26 community colleges
comprising the Alabama Community College System. Enrollment in the
Delayed Progression Nursing Program continues to grow because it allows
students to ``keep their day jobs'' and achieve their dream of becoming
a nurse. Through distance education equipment purchased by grant funds,
students in rural areas now have access to healthcare programs and can
meet workforce needs in their regions. This also reduced high start-up
costs for community colleges by sharing resources. Through Project
AHEAD, the College has expanded the network of clinical sites in the
region. Calhoun will continue to work with these partners to develop
healthcare programs in emerging technologies based on local employer
demands. Continuing Education/Professional Development for healthcare
workers in traditional and alternative formats was very successful. The
College will continue to work through local employers to increase these
offerings. Due to the success of and student demand for a flexible
access to online education, LPNs will have the opportunity to pursue RN
training through an online Bridge Program developed through grant
funds. The College has approval from the Alabama Board of Nursing to
pilot this program.
Question 5. Your testimony states (p. 3) that WIRED ``emphasize[s]
the critical linkages between workforce and economic development'' and
promotes ``strong collaboration between the public workforce investment
system and other strategic partners.'' If these linkages are both
``critical'' and ``strong''--then why were local workforce boards not
partners in these grants until the third round solicitation?
Answer 5. The Workforce Innovation in Regional Economic Development
(WIRED) initiative is another important step in the evolution of the
demand-driven approach to reshape the public workforce system to be
relevant in the 21st century economy. At each phase of this evolution--
HGJTI, CBJTG, and WIRED--the Department consistently conveyed the
message that the public workforce system, particularly the employer-
driven workforce investment boards (WIBs), were essential members of
strategic partnerships and should serve as a catalyst within their
communities to bring other partners to the table.
The WIRED initiative was intended to promote the development of
regional economies that do not typically correspond to political
jurisdictions such as State, county, and local workforce areas. The
Department did not mandate WIBs as partners in the first WIRED
Solicitation for Grant Applications (SGA) in order to find and attract
partnerships that were already working toward a regional approach,
which may not have included WIBs. However, the Department always
expected that WIBs would be an essential component of the WIRED
initiative, and that the membership on WIBs should represent the key
leadership necessary to implement regionally driven activities. It
should also be noted that the required applicants were the Governors of
the States involved, who are the heads of the State workforce
development system. Each WIRED region has ETA leads assigned to work in
partnership with the region to achieve their goals. The ETA Leads for
Generations I and II regions have worked to ensure that the workforce
system is a strong partner at the table, and these partnerships have
strengthened over time. The second SGA, which awarded the third round
of grants, mandated the workforce system's role and clarified the
importance of WIBs' involvement within the WIRED framework.
Question 6a. On Page 4, the testimony states that ``ETA is tracking
1,300 workforce solutions'' and states on page 5 that ETA distributed a
catalogue of over 300 workforce solutions to over 3,000 conference
guests. Despite this large dissemination, in ETA's response to the OIG
audit, the Department stated that regular scrutiny of all HGJTI
products would not be ``necessary or valuable.'' ETA also stated in
response to the OIG that the agency lacked expertise to assess what
grantees were developing; then, page 11 of your testimony describes a
process of requiring grantees to secure reviews of products and share
results with ETA. Does ETA now consider reviewing products to be
``necessary and valuable'' and will it now only disseminate products
that have been reviewed?
Answer 6a. ETA continues to believe that the intended audience for
these products has the expertise and is able to identify their value
and use them appropriately. However, ETA has always considered
screening of products to be important and has developed a comprehensive
set of standard operating procedures and trained staff in verifying,
cataloging, reviewing, and disseminating products to ensure that
products disseminated are not clearly deficient and do not contain
inappropriate material. These procedures enable ETA to manage the large
volume of products created by the grantees. Products are not released
until they have been reviewed in accordance with these procedures. ETA
has explained to the IG that a complete evaluation of every product is
not feasible due to resource constraints, and that the approach taken
allows the key constituents to access the products and decide their
value.
Question 6b. Will there be any independent assessment of the
grantee-secured reviews of their own products?
Answer 6b. In future SGAs, ETA will require grantees to provide
evidence of an independent review by subject matter experts of the
deliverables produced through the grant activity using grant funds. The
applicant must provide ETA with the results of the review and the
qualifications of the reviewer(s) at the time the deliverable is
provided to ETA. This process will provide additional and valuable
information to ETA as part of its standard operating procedure for
product collection, screening, and cataloging. ETA does not plan any
independent assessment of the grantee-secured reviews.
Question 7a. On page 10, the testimony states that a new process
will ensure all grantee deliverables are actually provided to ETA. In
response to the OIG, however, ETA asserted the inappropriateness of
receiving some grantee products, arguing that these products are
proprietary.
Answer 7a. ETA does not fund the development of proprietary
products. ETA does maintain the right of distribution of all products
developed with grant funds in accordance with the Uniform
Administrative Requirements (Specifically, 29 CFR Part 97 for State/
Local Governments and Indian; or, 29 CFR Part 95 for Institutions of
Higher Education, Hospitals and other Non-Profit Organizations and
Commercial Organizations, as appropriate). All grantees are made aware
of this requirement through training and the requirement is further
specifically addressed in the Special Clauses and Conditions to the
Grant Agreement, signed by each grantee as a condition of receiving
Federal funds.
Question 7b. Has ETA changed its policy to now require it receive
all products or could you describe the circumstances under which
products would not be provided to ETA?
Answer 7b. ETA has not changed its intellectual property policy.
With respect to ownership and rights in such property, ETA is governed
by the intellectual property provisions contained in the Uniform
Administrative Requirements (29 CFR, Part 97) and in 29 CFR Part 95.
Such provisions generally provide that ETA reserves a royalty-free,
nonexclusive, and irrevocable license to reproduce, publish or
otherwise use and authorize others to use for Federal purposes, the
copyright in any materials developed under a grant. In accordance with
these regulations, ETA requires that grantees using ETA grant funds for
the development of copyrighted materials allow ETA to distribute such
materials.
Question 7c. When does ETA believe it is appropriate for the
Federal Government to fund proprietary products, even from pilot and
demonstration funds, that cannot be distributed?
Answer 7c. ETA does not believe it is appropriate to fund the
development of products that become the exclusive property of the
grantee without a reservation of rights for the awarding agency. As
stated above, ETA reserves the license rights specified in its
regulations and assures compliance by grantees through specific clauses
in the grant agreement and our policy on collection and distribution of
such property. These requirements apply to all intellectual property
developed with grant funds.
Question 8a. On page 13, the testimony describes ETA's efforts to
evaluate the demand-driven grants. It appears that much of the
evaluations will be focused evaluating specific grantee strategies.
But, since the HGJTI and CBJTG programs were funded from pilot/
demonstration authority, how will any evaluation measure the success of
these pilots as a whole?
Answer 8a. The success of these pilots is being evaluated through a
thorough review of grant documents, grant deliverables and training
outcomes in selected sites. ETA is examining the extent to which the
grantees fulfilled their grant requirements and the extent to which the
approaches developed under these grants were feasible, sustainable, and
replicable.
In addition, ETA, through the collection of both impact and
performance data, has significant information on the outcomes of the
HGJTI and CBJTG. This information indicates that both initiatives are
meeting their intended goals of addressing workforce challenges in
high-growth, high-demand industries. These goals include increasing the
capacity of community colleges to train more individuals for
occupations in high-growth, high-demand industries and creating a
stronger pipeline of workers for high-growth industries by training
more workers.
Also, there are many indicators that the workforce investment
system has embedded the demand-driven tenets of the HGJTI into how it
does business. Examples are the content of WIA State and local plans;
implementation of State-driven investments that mirror the HGJTI; and
the content posted and featured on Workforce3 One--ETA's online
knowledge network for employers, academic institutions, and economic
and workforce development professionals. While the HGJTI may not be the
only influencer of this transformation, ETA believes that it had a
major impact and accelerated the adoption of these practices.
Question 8b. What will ETA be looking for to determine whether
these pilot programs were successful enough to continue?
Answer 8b. The success of these pilot programs is being assessed
through a thorough review of grant documents, grant deliverables and
training outcomes in selected sites. ETA is examining the extent to
which the grantees fulfilled their grant requirements and the extent to
which the approaches developed under these grants were feasible,
sustainable, and replicable. High Growth grants were generally designed
to respond to an industry defined workforce challenge by bringing
together strategic partners, leveraging resources, and finding an
innovative solution that works. In addition, they were intended to
incent long-term partnerships among the workforce system, business and
industry, and educators in order to continuously be at the table
addressing workforce issues. ETA has no current plans to ``continue''
any individual pilots with Federal funding. However, we have worked
with grantees to ensure sustainability of the solution being modeled or
piloted. In addition, we are sharing the innovative approaches and
``solutions'' broadly to encourage replication where appropriate.
Question 9. On page 19, the testimony states that ETA will be
pleased to post its evaluations online. In the past, this committee has
been frustrated by DOL sometimes taking literally years to release
evaluations that were completed under contract. What will ETA do to
ensure the HGJTI, CBJTG, and WIRED evaluations are released in a timely
way?
Answer 9. ETA has been working to improve its release of research
and evaluation reports. Under ETA's recent Pilot, Demonstration,
Research, and Evaluation Process Improvement Plan, reports approved for
publication are disseminated via ETA's research Web site
(www.doleta.gov) within 2 months. As a safeguard, ETA has added new
language to all contracts indicating that all final reports submitted
after September 2008 must be published within 6 months of the receipt
of the final document. In addition, if ETA chooses not to publish the
final document, the contractor may publish the document themselves
after 9 months.
The report for Phase I of the HGJTI evaluation and the interim
report for the WIRED Initiative are available on ETA's Web site at
http://wdr.doleta.gov/
research/keyword.cfm.
Question 10a. On page 14, the testimony states that the WIRED
evaluations will measure the cumulative effects of WIRED strategies,
``including transformation of the regional economies.'' How do you
intend to measure this transformation?
Answer 10a. The evaluations focus on three critical aspects of
regional economic transformation: (1) regional alliance-building across
geographic and professional boundaries, and identity development; (2)
specific organizational and programmatic strategies, in terms of
partners, governance, co-investment, and specific business and
workforce development initiatives; and (3) measurable progress toward
sustainable economic transformation, as indicated by outcome metrics
related to regional economic well-being and workforce preparedness. In
doing so, the evaluations will document how regional organizations that
are concerned with economic growth and building human capital come
together in new relationships through which shared goals, co-
investment, and a renewed sense of regional purpose can develop.
Question 10b. What measurable impact on economic development do you
anticipate being a result of WIRED?
Answer 10b. The WIRED evaluations are intended to provide a
comprehensive understanding of the implementation and cumulative
affects of WIRED strategies on the 39 participating regions. Using
statistical methods, the study will attempt to identify the short-term
impact of WIRED on several regional economic indicators. The
evaluations will document early indicators of economic growth and
development across a number of dimensions, including:
Number and types of new companies or partnerships formed;
Job retention and/or creation via growth in existing
industries, new enterprises, or business relocating from outside the
region;
Increase in average wages, overall or in targeted
industries;
The extent of growth in the business services sector and
within professional occupations such as intellectual property law and
accounting; and
Success of workforce development and training programs in
training workers and assisting them to obtain well-paying jobs (e.g.,
workforce investment system common measures).
Question 11a. On page 6, the testimony cites the San Diego
Workforce Partnership HGJTI program. The project's goal is to ``define
avenues for young people to explore . . . [a] biotechnology . . .
career path,'' and the testimony describes any career path information
clearinghouse, high school student internships, and training services
for high school teachers and counselors. ETA's June 7, 2004 press
announcement for this grant states the grant award was for $2.5
million. This was a noncompetitive award. Although not reported
publicly, data provided to CRS by ETA show that this $2.5 million
Federal investment stemmed from Dislocated Worker Demonstration funds,
authorized under WIA Section 171(d). Both OIG and GAO noted that ETA
did not document how HGJTI noncompetitive grants met statutory
criteria. ETA asserted that, despite the lack of documentation, it did
ensure all statutory criteria were met. In relation to this grant, how
were the following 3 statutory criteria met?
(i) The statute requires this funding stream is to be used for
``the employment and training needs of dislocated workers.'' How does
career path information for youth relate to the employment and training
needs of dislocated workers?
Answer 11a. The Department's appropriations acts have contained a
proviso that funds appropriated to carry out the dislocated workers
pilots and demonstration under section 171(d) of WIA ``may be used for
demonstration projects that provide assistance to new entrants in the
workforce and incumbent workers.'' We believe the development of career
pathways in an industry sector provides significant assistance to new
entrants in the workforce, as well as to dislocated and incumbent
workers, in a manner that is consistent with the authority provided
under section 171(d) as modified by the proviso identified above.
The activities of this specific grant are outlined as follows:
San Diego Workforce Partnership developed a multi-purpose
biotechnology training and resource center which serves as a national
clearinghouse/central training resources for local businesses and
academic institutions, focusing on the training needs of the industry's
existing and future employers.
A key function of this center is to coordinate student
internships (high-school to post-doc) and teacher externships for the
local biotechnology community. Industry and education partners have an
increasing need to help students (at all education levels) and entry
level workers in getting the hands-on experience they need to enhance
their academic study. This central ``clearinghouse'' helps students
looking for internships, educators seeking internships for their
students, and dislocated or displaced workers in the broader San Diego
biotechnology community find the hands-on experiences they need to
change careers and break into this high growth industry.
These internships provide hands-on, industry-standard
learning opportunities for students ranging from the secondary to post-
doctoral level, and also provide a pathway for dislocated workers to
transition to high-growth biotechnology careers. The externship program
also helps provide area biotechnology employers with a needed pipeline
of biotechnology workers.
This multi-use biotechnology training center introduces
new biotechnology education and training opportunities for San Diego's
students and workers and expanded education and training opportunities
that reach a broader base of San Diego's students and workers.
Question 11b. (ii). The statute requires grants from this funding
stream that are larger than $500,000 to be subject to a peer review
process. Was this grant subject to such a process?
Answer 11b. The process generally involved several stages of
review, including peer review conducted by ETA staff and management.
The peer review process included development of an ``abstract'' to
highlight the basics of the proposal(s) and initial observations
regarding strengths and weaknesses, and continued with review and
discussion among management and other ETA leadership on the merits of
the proposals. When a proposal was identified as desirable to fund, the
next step was to gain approval from the Department of Labor's
Procurement Review Board (PRB), which rigorously screens proposals in
accordance with Federal procurement laws and policies (including the
Federal Acquisition Regulations and Department of Labor Manual Series
(DLMS) 2-836).
The San Diego Workforce Partnership proposal went through this peer
review process as well as with the PRB.
The OIG and GAO were provided with extensive information and
considerable documentation on the processes used to select grants for
funding.
Question 11c. (iii). The statute requires grants from this funding
stream to be administered by the dislocated worker office. Was this
grant administered by the dislocated worker office?
Answer 11c. These grant funds are administered by the Office of
National Response, the office within ETA responsible for administering
dislocated worker funds. Like other funds provided under section 171(d)
of WIA to carry out projects for dislocated workers, these funds are at
times co-managed with the assistance of other offices within ETA such
as the Office of Workforce Investment, the Office of Financial and
Administrative Management, and the Office of Policy Development and
Research in order to ensure proper program integration, administration
and the use of funds for allowable purposes.
Question 12. On pages 10 and 14, the testimony states that in the
future grant officers and program officials will confirm that
noncompetitive grants are in compliance with statutory requirements.
How will the public and Congress be informed of these decisions in a
transparent way?
Answer 12. The Federal Funding and Transparency Act of 2006 (FFATA)
requires all Federal agencies to make publicly available information
about entities that are awarded Federal grants, loans, and contracts.
ETA is in compliance with the FFATA and will continue to publish all
awards to USAspending.gov.
Question 13. On page 3, the testimony states that WIRED grants are
focused on high-growth industries within the region. Given the recently
imposed limitation that H-1B visa fee training funds be limited to
sectors in which H-1B visas are sought, what is ETA's plan for
connecting a grant program focused on regional economies with a funding
stream focused on nonimmigrant professional specialty workers?
Answer 13. The recently imposed limitation cited does not apply to
multi-year grants awarded prior to June 30, 2007. However, ETA has
compared the industries on which WIRED regions are focusing with the
industries and occupations for which H-1B visas are issued and found
that there is a very high correlation.
ETA does not currently have any plans to use any additional H-1B
funds for grants focused on regional economies as the primary purpose.
ETA does include language in SGAs for the HGJTI that requires the
workforce solution being developed to be done so in alignment with and
connected to a broader regional economic and talent development
strategy. Any competitive grant awards using H-1B funds now contain
language that ensure that funding is used to train workers in those
industries or occupations for which H-1B visas are utilized.
Question 14. On page 9, you state that ``ETA made sole-source
awards consistent with the statutory authority under the Workforce
Investment Act.'' ETA documentation provided to CRS, GAO, and OIG has
shown that ``sole-source'' (or noncompetitive) awards were also made
from funds authorized under the Wagner-Peyser Act and the American
Competitiveness and Workforce Improvement Act. Please describe how the
HGJTI grants were awarded consistent with these laws.
Answer 14. The American Competitiveness and Workforce Improvement
Act allows DOL to issue grants for job training and related activities
in high growth industry sectors utilizing H-1B fee revenues. The
authority provided is broad and HGJTI grants using H-1B fee money have
been consistent with the statutory language.
HGJTI grants that utilized funds authorized under the Wagner-Peyser
Act used those funds for activities involving the development and
dissemination of tools and products related to labor market information
and/or career guidance information--activities that are allowable under
the Wagner-Peyser Act. ETA used the One-Stop/ALMIS funds appropriated
under Wagner-Peyser Act authority for these grants.
In addition to providing for activities authorized under those
statutes, the awards were made in a manner consistent with the
requirements of the DLMS, including requirements relating to sole-
source awards. Please see the response to Question 19 for additional
information on the DLMS requirements.
Question 15. Data provided by ETA to CRS show that at least 19
HGJTI noncompetitive grants were fully or partially funded from Wagner-
Peyser Act funds, at a sum of over $17 million. This was also noted by
the OIG. These funds seem to have been awarded from an authority
relating to labor market information. Unfortunately, none of ETA's
documentation on the program--press releases, budget justifications,
etc.--includes any reference to this source of funds. Could you please
describe the justification for the use of these funds for the HGJTI?
How is this use consistent with the statutory authority as described
under Wagner-Peyser? Why has ETA not been transparent about this?
Answer 15. As indicated in the response to Question 14, there are
national activities relating to labor market and career guidance
information funded under the authority of the Wagner-Peyser Act and the
Wagner-Peyser funds used to support the HGJTI were used to carry out
those activities. The Wagner-Peyser funded activities carried out as
part of HGJTI were consistent with the Wagner-Peyser activities
described in the budget justifications regarding the use of Wagner-
Peyser funds. ETA was not attempting to avoid transparency on the use
of funds; rather, the agency exercised discretion in the use of funds
consistent with their purposes.
Question 16. On page 14, the testimony states that the WIRED
grantees will soon report outcomes against the Common Measures.
However, WIRED was funded from H-1B visa fee funds, and section
414(c)(7) of the authorizing statute requires that such measures be
collected. Why did ETA not choose to enforce this provision until now?
Answer 16. ETA leadership communicated the need to collect data for
the common measures at the onset of the initiative, both in town hall
meetings and again in each region's grant kick-off meeting. On April
27, 2007, a performance memo went out to WIRED regional leadership from
the Assistant Secretary reiterating the WIRED Accountability Framework.
Further, ETA worked with grantees to ensure that both common
performance measures and measures appropriate to each grantee's plans
and outcomes were implemented as part of their plans.
It is important to note that the WIRED grants focused on many
outcomes in addition to the outcomes directly related to the provision
of training services and each grantee has identified the additional
specific outcomes related to their regional vision for economic and
talent development.
Question 17a. On page 8, the testimony states that:
``ETA chose to award the first round of High Growth
investments noncompetitively for one very important reason. It
allowed us to identify the most innovative solutions that were
directly tied to the specific workforce challenges that
industry identify . . . '' You further state that there was a
``comprehensive review process internal to ETA to evaluate
unsolicited proposals that emerged from the overall
consultation process.''
Several questions emerge from this testimony. Does DOL consider 133
noncompetitive grants, totaling $235 million and spanning 6 years, to
be a ``first round? ''&
Answer 17a. The HGJTI was rolled out in a phased approach, industry
by industry, over several years time. Prior to awarding grants in each
industry, ETA conducted a scan of the industry and hosted forums in
order to better understand the workforce challenges of the industry and
possible solutions to those challenges. It was always ETA's intent over
time to move to competitive opportunities after funding initial awards
in each industry. This process began in 2004 with a solicitation
targeting the health care and biotechnology industry sectors. Because
of the phased approach to working across these different industries,
ETA continued to award non-competitive grants in the first round of
grants in successive industry sectors as we moved to competitive
opportunities in the second round for those industries we completed
earlier.
Question 17b. How does a noncompetitive process identify more
innovative projects than a competitive process? Would not a national
open call for innovative ideas have yielded possibly more ideas than a
process that took place behind closed doors?
Answer 17b. HGJTI included a broad consultative process involving a
wide array of stakeholders and discussions in public forums. These
forums helped ETA to understand the workforce challenges and potential
solutions to these challenges. DOL conducted 37 ``Executive Forums''
with industry leaders across each of the industry sectors, reaching 815
industry partners through the process. DOL conducted 15 ``Workforce
Solutions Forums,'' reaching 627 strategic partners. While it may be
true that a competitive process may have yielded more proposals, ETA
believes its process yielded very high quality and innovative
submissions.
Question 17c. OIG and GAO found no documentation that you
``evaluated'' the proposals and stated that ETA could not identify any
ways in which the grants had the ``most innovative solutions'' or that
they were measured against any ``industry identified'' criteria. Could
you explain how your ``comprehensive review process internal to ETA''
was able to accomplish such an evaluation of proposals without leaving
any documentation? Who conducted the ``comprehensive review process? ''
Answer 17c. The OIG and GAO were provided with extensive
information and documentation on the processes used to select grants
for funding. The process generally involved several stages of review
and input by multiple staff members and ETA leadership. The first step
was for one or more staff members to read the proposal and develop an
``abstract'' that included the basics of the proposal and initial
observations regarding strengths and weaknesses. In some circumstances
this process was applied to multiple proposals submitted from a
specific industry sector. Meetings would then be convened that included
managers and other ETA leadership to discuss the merits of proposals
and to identify those we considered to be the most innovative and that
met the industry identified workforce challenges. When a proposal was
identified as desirable to fund, the next step was to gain approval
from the Department's PRB, which rigorously screens proposals in
accordance with Federal procurement policies (DLMS 2-836).
Proposals were presented for review under the required criteria of
[DLMS 2-836 (G)(3)] where services are available from only one
responsible source and no substitute will suffice; or the recipient has
unique qualifications to perform the type of activity to be funded;
[DLMS 2-836 (G)(4)] unique or innovative and has outstanding merit; or
[DLMS 2-836 (G)(5)] the activity will be conducted by an organization
using its own resources or those donated or provided by third parties,
and DOL support of the activity would be highly cost effective. Once
approval was obtained by the PRB, the proposal was forwarded to the ETA
grant office for funding. Standard assurances and control processes are
applied to proposals prior to grant award.
Although no documentation requirements existed at the time the
grants were reviewed, the OIG and GAO suggested that ETA should have
been more rigorous in documenting the specifics of why ETA made the
choice to fund particular grants. ETA agreed that additional
documentation would be valuable going forward, and, as stated above,
ETA has taken steps to enhance its documentation processes.
Question 18. On page 8, the testimony refers to these as
``unsolicited proposals,'' as do ETA responses to OIG and GAO. Were
these 133 grants really ``unsolicited? '' That is, are you stating that
no officials from ETA were involved in soliciting grantees
participation? How is it that 133 grantees over 6 years came to ETA
with proposals in a high-growth framework without any invitation to do
so? Or, alternatively, did ETA actually invite certain grantees to
participate in the first 6 years of HGJTI? If so, how were these grant
providers chosen over other possibilities?
Answer 18. The HGJTI process included extensive consultations with
industry, education, and the workforce system. The primary goal of the
executive forums and workforce solutions forums was to develop
potential solutions that addressed industry-identified workforce
challenges. During the course of this process, ETA made it known
broadly that ETA anticipated funding innovative workforce solutions and
that ETA routinely receives and considers unsolicited proposals. As a
result, ETA received many unsolicited proposals and concept papers in
the course of the consultations. ETA did, on occasion, encourage
entities to expand their concept papers into proposals if the concepts
seemed promising. This encouragement did not guarantee a proposal would
ultimately be funded.
Question 19. On page 9, the testimony states that the
noncompetitive grant process will be used on ``an extremely limited
basis.'' Please describe under what extremely limited circumstances
would a noncompetitive grant be justifiable?
Answer 19. The Federal Grant and Cooperative Agreement Act of 1977
encourages competition, where deemed appropriate, in the awarding of
grants and cooperative agreements. According to the DLMS, competition
is deemed appropriate in awarding discretionary grants and cooperative
agreements unless one or more of the following exceptions apply:
A non-competitive award is authorized or required by the
statute funding the program.
The activity to be funded is essential to the satisfactory
completion of an activity presently funded by DOL, wherein competition
would result in significant or real:
i. harm (further harm) to the public good; or
ii. expenses in excess of any potential savings to the
Government; or
iii. disruption to program services; or
iv. duplication of work at additional cost to the Government,
or
v. delay in the time of program completion.
Services are available from only one responsible source
and no substitute will suffice; or the recipient has unique
qualifications to perform the type of activity to be funded.
The recipient has submitted an unsolicited proposal that
is unique or innovative and has outstanding merit.
The activity will be conducted by an organization using
its own resources or those donated or provided by third parties, and
DOL support of the activity would be highly cost effective.
It is necessary to fund a recipient that has an
established relationship with the agency in order to:
i. Maintain an existing facility or capability to furnish
services or benefits of particular significance to the agency
on a long-term basis; or
ii. Maintain a capability for investigative, scientific,
technical, economic, or sociological research.
The application for the activity was:
i. evaluated under the criteria of the competition for which
the application was submitted;
ii. rated high enough to have deserved selection under that
competition; and
iii. not selected for funding because the Department mishandled
the application.
The Secretary has determined that a noncompetitive award
is in the public interest. This authority may not be delegated.
The testimony is simply expressing ETA's intent moving forward to
primarily award HGJTI grants on a competitive basis. Currently, H-1B
funds may be utilized only for competitive awards. The Department of
Labor cannot predict the exact circumstances under which this authority
to award noncompetitive grants would be used, but has the procedures in
place to properly document and justify award decisions made
noncompetitively.
Question 20. On page 10, the testimony states that ETA is providing
improved guidance in grant solicitations regarding clearly articulated
outcomes and deliverables. How is ETA ensuring that, likewise, there
will be clearly articulated outcomes and deliverables when there is no
such solicitation (that is, for noncompetitive grants)?
Answer 20. ETA includes standard clauses in grant agreements that
are similar to those requirements described in a solicitation. These
clauses preserve the government's rights regarding intellectual
property and require grantees to collect and report information on
grant progress and accomplishments. Further, OMB approved and ETA is
utilizing, a standard reporting format for all HGJTI grantees. In
addition, during the grant award process, ETA endeavors to ensure
clearly articulated outcomes and deliverables prior to grant award.
Question 21. On pages 9 and 10, the testimony stated that you have
changed your noncompetitive grant processes in response to the OIG and
GAO reports and describes a new, standardized process to document the
justification of such grants. Using a recent, actual example of a
noncompetitive award that ETA granted, could you describe how the new
process was used for that award?
Answer 21. As part of the ETA corrective action plan for sole
source selections, ETA has implemented procedures for non-competitive
grant awards requiring inclusion of a form that documents which DLMS
exception applies and the justification for why the subject project
meets the exception cited. This form is completed by ETA's Office of
Grants and Contracts Management (OGCM) for all proposals that require
submission to the PRB and those that are exempt from PRB review. ETA
also has developed a process requiring the completion of a
comprehensive checklist and review form by the Program Office when
recommending a PRB exempt proposal and one for OGCM to complete and
sign when approving a PRB exempt proposal. Finally, ETA has developed
and is using a conflict of interest certification form to be completed
as part of the review and approval process for all unsolicited
proposals. This form requires signatures from the reviewer of the
unsolicited proposal, the manager and the Senior Executive of the
appropriate Program Office.
As an example, ETA received an unsolicited proposal from the
Consortium for Entrepreneurship Education for $99,880 in Pilots,
Demonstrations and Research funds to conduct an assessment of
entrepreneurship resources and programs in the workforce investment
system. After initial receipt, the proposal was routed to the Office of
Policy Development and Research (OPDR) and a new Program Office
checklist form was initiated for the proposal. The proposal was
initially reviewed using the new review form by staff in the OPDR and
was determined to have merit and to be appropriate to be considered for
funding. The proposal was then sent to Office of Workforce Investment
(OWI) for review. OWI concurred with OPDR's assessment that the
proposal had merit and should be funded. Given the concurring funding
recommendations by OPDR and OWI, represented by the signatures of the
Administrators from these respective offices on the review form, the
proposal was packaged for funding approval and routed to the Office of
the Assistant Secretary for Employment and Training. Upon funding
approval by ETA Executive Leadership, the unsolicited proposal
checklist was closed out and the grant was awarded to the offeror.
Question 22. It would seem to me that if the Department's intent in
awarding grants under these initiatives was to influence the overall
direction of the workforce investment system, it would invest time and
forethought into comparing their success to other programs funded under
that system. The Department chose not to do that in this case. In fact,
you've indicated that such a comparison was never the agency's intent.
How do you plan to show that the projects funded by these grants should
have any impact whatsoever on our workforce investment system when they
were not properly evaluated?
Answer 22. First, it is important to note that both High Growth and
WIRED are intended to influence the strategic use of existing program
funds and new, collaborative approaches to workforce development that
leverage other investments in workforce strategies. They are not to
demonstrate a new program per se that would lend itself to a program-
to-program comparison.
With regard to the HGJTI, the success of the grants is being
evaluated through a thorough review of grant documents, grant
deliverables and training outcomes in selected sites. ETA is examining
the extent to which the grantees fulfilled their grant requirements and
the extent to which the approaches developed under these grants were
feasible, sustainable, and replicable.
While ETA has not structured its evaluation to assess broad impact
on the workforce investment system, there are many indicators that the
workforce investment system has embedded the demand-driven tenets of
the HGJTI into how it does business. Examples are the content of WIA
State and local plans that identify priority industries and demand-
driven approaches to addressing industry-defined workforce challenges;
implementation of State-driven investments that mirror HGJTI; the many
anecdotal comments from workforce system partners at the State and
local level that indicate the seed money provided through the High
Growth grants was the catalyst for changing the way they work; the
promising practices featured at workforce conferences nationally that
demonstrate that demand-driven, solutions-based approaches to workforce
development, including ETA's Workforce Innovations, and the content
posted and featured on Workforce3One. Based on this evidence, ETA
considers the HGJTI to have been the catalyst for this transformation.
The CBJTG program contains many of the same features as High Growth
grants and has reinforced demand-driven principles and strategic
partnerships which has improved partnerships among community colleges
and the workforce investment system.
The results of ETA's WIRED investment are not fully available yet,
although, similar to High Growth, there is already evidence that
suggest the workforce investment system is beginning to adopt the
concepts that underpin WIRED, i.e. regional approaches to economic and
talent development. Several States have made grants similar to WIRED
using WIA State set-aside funds. A number of regional efforts that
mirror WIRED principles have been mounted in response to significant
economic shocks due to plant closures, natural disasters, and the Base
Realignment and Closure process.
Question 23a. Why did the Department choose not to adequately
include these three programs in its strategic plans? Were the grants
under all 3 initiatives directly connected to a performance measure for
the Department?
Answer 23a. While the Strategic Plan for fiscal years 2006-2011
included measures for CBJTGs, reporting systems, the process and
methodology for collection, including a new process to enable matching
with wage data, was only finalized in the last few months. As the
reporting systems were developed, we included performance measures for
both the CBJTG and HGJTI in the fiscal year 2009 Congressional Budget
Justification.
Performance measures for the CBJTG's include the
numbers of participants: enrolled and completing training,
receiving certifications, entering employment, retaining
employment, in addition to average earnings.
Performance measures for the HGJTI include the totals
enrolled and completing training, participants entering and
retaining employment, in addition to average earnings.
Guidance issued in April 27, 2007 to the WIRED grantees stipulates
the use of the Common Measures and set expectations on leveraging the
existing workforce investment reporting system to capture the necessary
data.
Performance measures for the WIRED grantees include
participants entering and retaining employment, in addition to
average earnings.
Question 23b. Why did ETA choose not to adequately include the
initiatives in its research plans, particularly when they seem to be
signature programs for the agency?
Answer 23b. These initiatives are included in the U.S. Department
of Labor's Strategic Plan for fiscal 2006-2011. Please see http://
www.dol.gov/_sec/stratplan for further details. In addition, each
initiative is addressed in the U.S. Department of Labor, Employment and
Training Administration's 5-year pilot, demonstration and evaluation
strategic plan for 2007-2012. For further details, please see: http://
wdr.doleta.gov/research/FullText_Documents/
ETA%20Five%2DYear%20Research%
20Plan%2Epdf.
Question 24. As far as we know, the funding sources, and by
consequence the statutory authority, for grants under these 3
initiatives has not been made public. We have, however, reviewed a
helpful Excel chart of these sources provided by ETA to CRS during some
of their investigatory work. In the interest of transparency, you
committed during the hearing to make these funding sources public so
that we and the public gain a clear understanding of the statutory
requirements attached to the grant funds you award? Please describe
exactly when that information will be available to the public and where
it will be located.
Answer 24. Information relating to grant funding sources is always
a matter of public record. Given the committee's interest and our
promise to provide additional information, we have attached a
spreadsheet of High Growth grantees by fund source. With respect to
making grant award information available to the public, the Department
is in compliance with the FFATA, will continue to publish all awards to
USAspending.gov, and will make all records available as required by the
Freedom of Information Act.
Question 25a. As we discussed during the hearing, numerous grants
were awarded non-competitively for unclear reasons. The new majority in
Congress wasn't satisfied with that justification and required funds be
awarded competitively in fiscal year 2007. In addition, it required
that funds from H-1B employer fees be spent on training U.S. workers to
meet the skills needed by employers in high growth areas who seek
skilled temporary foreign workers. The Department has consistently
stated that it was always its intention to move toward a fully
competitive process. If that was always the Department's intention, why
did it take a congressional directive to award funds competitively?
Answer 25a. ETA did not require a congressional mandate to begin
awarding High Growth grants competitively. The first competitive High
Growth solicitation focusing on the health care and biotechnology
industry sectors was published in September 2004, and grants were
awarded in June 2005. A second set of competitive awards focusing on
the Advanced Manufacturing industry was published in May 2006, and
grants were awarded in October 2006. Since then we have made additional
competitive awards in the Long Term Care industry (as a sub-set of
health care), and the Energy and Skilled Trades sectors.
Question 25b. Why did it take a Congressional amendment to require
that funds spent under the Department's share of H-1B fees be spent in
connection with ``high growth'' industries and areas in which American
workers needed the skills demanded by those employers requesting H-1Bs?
Answer 25b. The Department of Labor provided technical assistance
to Congress in framing the use of H-1B fees to focus on high growth
industries broadly when language was included in 29 U.S.C. Sec. 2916a
to enable H-1B fees to be utilized to fund job training and related
activities to provide workers with skills and competencies in high
growth industry sectors broadly. Prior to the passage of appropriations
language in 2007 that limited the use of H-1B funds for training in the
occupations and industries for which employers use H-1B visas, ETA
chose to utilize the broader authority provided in the earlier
provision as part of the Administration's American Competitiveness
Agenda.
Question 25c. Given that the agency didn't make a major shift until
Congress required them to do so, does the agency still stand behind its
claim that it always intended to award grants competitively?
Answer 25c. As previously stated, ETA did not wait for a
congressional mandate to offer competitive High Growth awards. The
first competitive solicitation was announced in late 2004 with a second
competition in 2006.
Question 26a. Typically, pilot and demonstration projects like
those under the WIA authority under which your agency funded many of
these grants, are meant to test out an idea or demonstrate a particular
practice. As far as you understand it, what's the typical process for
planning and awarding grant projects, particularly those under the
umbrella of ``pilot and demonstration'' funding?
Answer 26a. Under ETA's recent Pilot, Demonstration, Research, and
Evaluation Process Improvement Plan, ETA has developed specific steps
for planning and awarding pilot and demonstration projects. The
planning process begins on July 1 every year with a review of:
ETA/DOL stated priorities (annual and long-term);
Recommendations contained in the ETA Five-Year Strategic
Research Plan;
Requirements of any statutorily required efforts;
Recommendations of agencies such as GAO;
Requests by other Federal agencies to co-fund projects;
and
Any unsolicited proposals that have merit.
In addition, ideas relating to these projects are solicited from
within the Office of Policy Development and Research and ETA Program
Offices. Project ideas are then captured in a draft Research and
Evaluation Agenda (spending plan) and submitted to ETA leadership for
approval. Once ETA leadership has approved projects on the agendas, the
approved projects are added to the annual Operating Plans. The
Operating Plans are submitted to the Office of Management and Budget
for review prior to transmittal to Congress. Once the Operating Plans
are transmitted to Congress, they are posted on ETA's Web site at
http://www.doleta.gov/reports/dre_oper_plans.cfm and the award process
begins. This process includes the development and issuance of
Solicitations for Grant Applications (SGAs). SGAs go through a multi-
level review and approval process that includes legal, program office,
and ETA executive leadership sign-off. Upon full ETA clearance, SGAs
are published for open competition for 45-60 days in the Federal
Register. Submitted applications for ETA SGAs are paneled, rigorously
reviewed and scored against the rating criteria published in the SGA.
Top scoring proposals that meet the eligibility criteria set forth in
the SGA are then awarded grants.
Question 26b. How does the process that ETA used to award these
grants, many of which were done noncompetitively and with an unclear
connection between the funds awarded and the statutory requirements for
the taxpayer dollars used, stand up to a transparent grant process?
Answer 26b. ETA made awards consistent with the statutory authority
for use of funds and DOL policies and procedures governing non-
competitive awards and applicable Federal procurement rules. ETA has
improved processes to require that grants acknowledge the source of
grant funds and the corresponding requirements associated with them and
ETA will continue to make grant award information available to the
public in compliance with the FFATA.
Question 26c. What ideas were these grants meant to collectively
demonstrate or test out?
Answer 26c. These grants were designed to model a demand-driven
approach to workforce development to ensure that workforce investments
are tailored to the jobs and skill needs of the labor market now and
into the future. The High Growth grants were designed to model
partnerships between the workforce system, employers and educators to
address the workforce challenges in high growth industry sectors, to
address the workforce challenges in those sectors, and to provide
education and career pathways for individuals and enable them to obtain
21st century skills for 21st century jobs.
WIRED was designed to demonstrate the relationship between economic
and workforce development, based on the principle that one could not
exist without the other, and that the workforce investment plays a
significant role in a region's economic development strategy. WIRED
also demonstrates the importance of life-long learning strategies and
entrepreneurial strategies in building the competitiveness of a region.
Finally and most importantly, WIRED set forth to showcase the
importance of integrating the economic, education and workforce
development systems across the traditional State, county, local,
workforce investment area and political jurisdictions in order to grow
and sustain a region's competitive advantage.
CBJTG is a competitive grant program that is designed to build the
capacity of community colleges to train workers in the skills required
to succeed in high-growth, high-demand industries, and to help
strengthen the partnerships between the public workforce investment
system and community colleges.
Question 27. You testified the intent behind these grant programs
was to ``foster demand-driven approaches across the workforce
investment system and increase opportunities for education and skills
training.'' How did the agency plan ahead for the awarding of grants
under these 3 programs to demonstrate their effectiveness?
Answer 27. The High Growth Job Training Initiative evolved in the
first year from a few individual early grants to the comprehensive
approach ETA designed and implemented in each of the industry sectors.
As the initiative grew, it became clear that we needed a structured
reporting and performance accountability process and that an evaluation
would be important. This resulted in a consistent quarterly reporting
process and tracking against common measures, as well as ETA's planning
for the evaluation that continues in progress today. Because the
Community Based Job Training grants have many similar features to the
High Growth grants, we utilized a similar approach to performance
accountability and we chose to wait until the first phase of the High
Growth evaluation was complete to design the CBJTG evaluation. With
WIRED, ETA incorporated the evaluation process from the outset so that
evaluators would be able to capture information on the new approach to
regional economic and talent development as it unfolded as well as at
the end. ETA also worked with WIRED grantees to both track common
measures where training occurs, but to also identify and track region-
specific metrics.
Question 28a. The Department seems to continually refer to these
``non-competitive'' grants as ``sole-source'' awards. But, it would
seem to me that there's a difference between those two terms--one
indicates a choice in how grants were awarded while the other indicates
that there is only one or a ``sole'' provider for these services. In
your opinion, what's the difference between the two terms? Why did the
Department choose to use the ``sole-source'' language to describe these
grants?
Answer 28a. Non-competitive refers to the process by which award
decisions were made, i.e. not determined by competition. Sole-source
refers to an award granted under the DLMS exception to competitive
procedures for discretionary grants and cooperative agreements [DLMS 2-
836 (G)(3)]. This provision allows such an exception when: ``Services
are available from only one responsible source and no substitute will
suffice; or the recipient has unique qualifications to perform the type
of activity to be funded.'' It was this justification ETA relied upon
to justify the awards and it was frequently supported by the DLMS
exception relating to cost effectiveness based on donated and matching
resources. The term ``sole source'' is also commonly used, less
precisely, to refer to any award to a single entity that did not go
through a competitive process whether or not it is considered to be the
``only responsible source'' under DLMS 2-836 (G)(3). Awards approved
under DLMS 2-836 (G)(4) (which covers an unsolicited proposal that is
unique or innovative and has outstanding merit) and DLMS 2-836 (G)(5)
(which covers situations where an activity will be conducted by an
organization using its own resources or those donated or provided by
third parties, and DOL support of the activity would be highly cost
effective) might be referred to in a short hand reference as a ``sole
source'' and in this sense the term is interchangeable with ``non-
competitive.''
Question 28b. Was there not more than one training provider
available in the country to perform the services under many of these
``sole-source'' grants?
Answer 28b. The High Growth initiative is much more than simply
choosing a training provider. It is about identifying innovative
approaches to workforce development and addressing the workforce
challenges in high growth industry sectors. The non-competitive grants
awarded in the first round were justified under DLMS procedures which
specify a number of allowable justifications as described above under
the response to Question #19.
Question 29a. The Department has a formal grant award and
management process to help ETA earmark grants in their roles as ETA
grantees--grantees that are characterized as noncompetitive and
guaranteed DOL funding only after submitting an acceptable project
proposal that is approved by ETA. This process is described in a desk
reference that includes advice for writing an earmark grant proposal
and for meeting financial and grants management requirements. It makes
clear that ETA grantees, both competitive and noncompetitive, must
follow the provisions of the law--in this case, the Workforce
Investment Act, the regulations, and appropriations law as well as OMB
requirements; and it provides guidance on a range of concerns,
including:
Linkages with the workforce investment system, stressing that it is
``vitally important'' that earmark grantees develop linkages and
partnerships with the workforce investment system; and
Evaluation requirements, requiring grantees to include an
evaluation of project results and outcomes, including identification of
the performance measure(s) that determine whether the project was
successful and the expected level of performance, the identification of
any significant product such as a training curriculum or report, and
for training and employment activities--the inclusion of WIA
performance measure similar to those used to assess adult, youth, or
dislocated worker program performance. In addition, each grantee is to
produce an evaluation report, including its cost in the project budget,
and describing the evaluation design, methodology, tasks, and who will
perform them.
Project sustainability: Since these non-competitive grants are
intended to demonstrate approaches, methods, or services and products
that will advance workforce development, each grantee is expected to
have a plan on sustaining successful elements of grant project after
its conclusion.
Did ETA give any consideration to at least building upon its
existing non-competitive grant award and management process for grants
under the initiatives? Please explain fully. It would seem to me that
at least there would have been some clearly articulated outcomes and
deliverables for each of these grants.
Answer 29a. ETA has developed and refined guidance for its
management of the unsolicited proposal process that is similar to pre-
existing guidance for earmark grantees.
ETA frequently provides technical assistance to those submitting
concept papers or unsolicited proposals to help them refine their
proposals. One important area of technical assistance includes further
defining outcomes and deliverables. This technical assistance could
also include information on the development and execution of capacity
building, curriculum development, career ladders, competency models,
and training. ETA also advises on the inclusion of necessary partners--
such as workforce system, business and industry, and education--and
leveraging of additional resources. In addition, if a proposal is
selected for potential funding, steps are taken in the grant making
process to further refine grant requirements, including adherence to
financial and administrative requirements, data collection methods and
tracking, and structuring an effective service delivery plan and
project management team.
Question 29b. It appears that you set a higher bar to help non-
competitive, congressionally committed organizations complete
applications to certain requirements and then formally review and
document those applications. How did ETA officials justify the
different processes and practices used for similar non-competitive
grants?
Answer 29b. ETA did not set a higher bar for different types of
organizations.
senator brown
Question 1a. Does DOL know how many people have received training
(or will receive) through the WIRED and High Growth Job Training
Initiative grants?
Answer 1a. HGJTI.--Since 2002, over 105,000 individuals have
completed training as a result of the High Growth Job Training
Initiative grants, and there are currently more than 65,000 enrolled in
training. In addition, the capacity building that has occurred as an
outcome of many of the grants, we have enabled a much broader impact
and the ability to train many more individuals.
WIRED.--Since each of the 39 regions has multiple strategies and
corresponding goals, ETA is working with WIRED regions to collect and
validate information on the number of individuals trained and will make
that information available to Congress.
It is important to note that WIRED grants were awarded at three
different times, so the data and outcome information for the second and
third generations of grants will be available on a staggered basis as
well.
Question 1b. Does DOL know what kinds of training people are
receiving?
Answer 1b. Grantees are providing a variety of types of training.
Some training involves a combination of classroom skills-based
instruction along with apprenticeships and internships developed with
employers.
For more information about High Growth grantees' projects: http://
www.doleta.gov/BRG/HGJTIGrantees/. For more information on WIRED
grantees' projects: http://www.doleta.gov/wired/.
Question 1c. What skills are they obtaining?
Answer 1c. The skills training provided varies by the grant, and
ranges from customer service and safety and health, to robotics,
advanced welding, and plastics engineering. In addition, some grants
provide for remedial training that enables individuals to access
occupational skills training, such as English as a second language or
foundational math and science competencies.
Question 1d. Are they getting a portable credential or industry
certification as a result of the training?
Answer 1d. ETA has emphasized the importance of industry-defined
portable credentials and certifications throughout these grants,
including through the solicitations. ETA has put in place a
standardized performance reporting and data collection system for High
Growth grants and is collecting information on the attainment of
credentials and certifications as of June 30, 2008. Data will be
available beginning in December 2008. For WIRED regions, regions have
been reporting on this measure on an individual basis, and ETA is in
the early stages of streamlining the collection in order to be able to
report aggregate totals across the grants.
Question 2. Does DOL know who is receiving training? That is, what
kinds of workers are receiving training? Dislocated workers? Low-skill
workers? Is DOL making efforts to ensure a full range of workers are
being served?
Answer 2. One of the industry identified workforce challenges that
arose in every industry sector was the need to find better ways to
access untapped labor pools as part of the worker pipeline, including
those with barriers to employment. As a result, ETA focused on
identifying grants that provided innovative solutions in this area and
training programs implemented by HGJTI grantees that targeted widely
varying populations. For example, some projects target entry-level
workers, while others seek to recruit incumbent workers, unemployed or
dislocated workers, or individuals with certain characteristics, such
as disadvantaged youth, individuals with basic skills deficiencies,
veterans, or minorities. Others targeted individuals who had indicated
or demonstrated interest and potential for entry into a particular
occupation or industry sector. Similarly, training programs implemented
by WIRED regions reach a broad spectrum of workers in accordance with
the use of H-1B fees as authorized under Sec. 414(c) of the American
Competitiveness and Workforce Improvement Act of 1998 (P.L. 105-277,
title IV), as amended.
Question 3. What is DOL doing to ensure that all key stakeholders
in an industry--including union representation--are represented in
funded partnerships?
Answer 3. Foundational strategic partnerships are a key feature of
all three grants--HGJTI, CBJTGs, and WIRED. For both High Growth and
CBJTGs, the foundational partnerships include, at a minimum, the
workforce system, business and industry and education. However,
depending on the workforce solution being implemented, other partners
are often important and may include unions, faith-based and community
organizations, foundations, and others. For example, one HGJTI was
awarded to 1199 Service Employees International Union. DOL noted in
response to the second IG report that it considers the grant to be
successful. SEIU's model is bridging a critical link between education
and workforce development. SEIU built on a Contextualized Literacy
Program that combines literacy and job training for low-level health-
care workers who have been out of school for a long period of time and
had difficulty passing entrance exams. SEIU had success in training (95
percent) and retaining (77 percent) their students and provided an
opportunity for individuals to enroll in Pre-LPN training that led to
certification and degrees.
The framework for WIRED requires a much broader set of partnerships
and networks due to focusing on regional economies that tend to be
larger geographically, and because WIRED is about systemically
integrating workforce development, education, and economic development.
Therefore, partnerships must include region-wide political leadership,
education at all levels, business and industry, economic developers,
the workforce investment system, foundations, and other community
leaders and organizations that are present in the region. ETA
continuously reinforces the need for sustained partnerships in the
context of these grants through technical assistance and promoting peer
to peer learning among grantees.
Question 4a. What is DOL doing to ensure that partnerships that are
receiving funding provide (or lead to) decent, good-paying jobs?
Answer 4a. Increasing the skills of workers to allow them to access
good jobs with good wages and career pathways is a fundamental goal of
all three grant programs. A key mechanism to ensure grants focus on
this outcome is ETA's requirement to report on entered employment,
retention, and wages for all individuals who are trained with grant
funds. In addition, ETA has promoted career pathways and ladders, as
well as credentials and certificates, to help ensure that grants focus
on getting people into careers with a clear path to next steps, as well
as getting people recognition for skills obtained that are transferable
across sectors.
Question 4b. Can DOL offer assurance that no funding going out
under these grants is subsidizing ``bad'' employers?
Answer 4b. The grant award and administration process includes
safeguards and oversight procedures to foster desired outcomes and
enforce Federal standards. Applicants are subject to an award clearance
process which may include a review of prior performance, certification
by a certified public accountant to ensure financial capability,
attestation that the applicant is not in arrears on Federal debt, pre-
award site visit, ETA closeout experience, and OIG audit experience. In
addition, our Federal Project Officers and other grant management staff
review quarterly certified financial reports, quarterly performance
reports, and conduct site visits as scheduled or determined by need.
Non-profit and public organizations receiving Federal funds are subject
to annual audit requirements in accordance with OMB Circular A-133,
Audits of States, Local Governments, and Non-Profit Organizations.
Question 5. Under the High Growth Job Training Initiative, DOL
determined which sectors would be targeted. Does this determination
vary regionally and/or locally? Should the identification of high
growth industries be determined at the local or regional level?
Answer 5. Given that the HGJTI was designed to model how State and
local partners could become more demand-driven by identifying the high
growth, high demand industries in their economies, it was never DOL's
intent to identify all high growth industry sectors in the economy.
Rather, the intent was to provide a framework for the process to be
used at the State and local levels, ETA strategically chose industries
that represent a variety of different sectors of the economy, all of
which have significant demand for workers. Industries fell into four
categories for inclusion as high growth, high demand: (1) industries
that are, or were at the time the grants were developed, experiencing
high growth, such as health care and financial services; (2) industries
that are transforming as a result of technology and innovation, such as
advanced manufacturing; (3) emerging industry sectors such as
biotechnology and geospatial technology; and, (4) those that are
critical to the foundation of any economy, such as energy and
transportation.
In making funding decisions, ETA has required the grantees to
demonstrate the demand for workers in the appropriate industry sector.
As DOL has transitioned to competitive solicitations, we have focused
more on industry sectors where nationwide shortages exist, such as
health care, energy, and the skilled trades. In the context of CBJTGs
and WIRED, the determination of high growth industry sectors is
determined at the regional or local level.
Question 6. Does DOL know if any of the grants have led to
industry-wide improvements, such as developing long-term plans to
develop skilled worker pipelines? How many partnerships receiving
funding have developed industry-wide skill standards and/or career
pathways?
Answer 6. Early on, ETA identified the development of worker
pipelines as a key focus area for workforce solutions. While the most
common output across grants is curriculum, 25 High Growth and Community
Based Job Training grantees have developed and completed 33 industry-
wide competency models and career ladders to date. These models and
ladders have been disseminated to the public workforce system via
workforce3one.org. We anticipate that number to grow since we are
tracking over 1,300 workforce solutions that will be produced by active
grantees. As these models and ladders become available, we will
continue to disseminate them to the public workforce system and provide
assistance to adapt and replicate these models.
Question 7. Can any of the industries receiving funding under these
grants demonstrate improvements to job quality through improving wages,
benefits, and/or working conditions as a result of receiving funding?
Have they been able to aggregate training and education needs across
firms within partnerships? Develop industry-wide shared curriculums?
Answer 7. Yes, ETA has funded grants that demonstrate effective
industry collaboration and improved results for participants. For
example:
i. CVS Caremark is a grantee who has increased wages. CVS
effectively placed 160 individuals in jobs through the CVS
Apprenticeship Program and Incumbent Worker Advancement Initiative and
107 of these individuals saw wage gains following their involvement in
the program.
ii. An example of shared curriculum is the National Institute for
Metalworking Skills (NIMS), a high growth grantee that created guides
for a training and apprenticeship program in the metalworking industry
that provides detailed curriculums for six metalworking occupations.
The guides help participants earn industry-recognized NIMS
certifications. Employer partners who were involved in the development
of the guides include Hydromat, Timken, Oberg Industries, Elray, OSMI,
Camcraft, Promold, Alcon, Morgal Machine Tool Company, Criterion,
DanlyIEM, Penn United, GMT, GOE, Western Air Products, Metric
Machining, Jergens, P-K Tool and Manufacturing, and Stolle Tool.
Question 8. Can DOL demonstrate that firms in partnerships
receiving funding are working together to address common organizational
and human resource challenges, such as: recruiting new workers,
implementing effective workplace practices, retaining dislocated and
incumbent workers, implementing a high-performance work organization,
recruiting and retaining women in nontraditional occupations, adopting
new technologies, and fostering experiential and contextualized on-the-
job learning? If so, how?
Answer 8. Recognizing the unique nature of each grant in terms of
the strategies they employ to address different workforce challenges,
ETA works to ensure that key stakeholders are working together to
address common organizational and human resource challenges. First, one
of the key criteria that is used to evaluate proposals for WIRED,
Community-Based Job Training and High-Growth Job Training Initiative
grantees is partnership among key stakeholders. Applicants receive
points based on the strength of the partnerships in their proposed
statements of work. Once awards have been made, ETA staff helps ensure
that partnerships are working together to implement projects through
the regular support they provide to grantees as they implement their
grants. As ETA staff assess the implementation of these grants, they
determine if the partnerships identified in statements of work are in
fact working together to implement the project, and can provide
technical assistance as necessary.
Finally, in July 2008, ETA implemented a standardized data
collection package that High Growth and Community-Based grantees use to
report their progress and outcomes. In terms of the results of
partnership-based activities, grantees must provide, in narrative form,
qualitative information pertaining to the partners roles, resources,
knowledge, and how they contribute to results.
[Whereupon, at 10:59 a.m., the hearing was adjourned.]