oversight

Problems in Accomplishing Objectives of the Work Incentive Program (WIN)

Published by the Government Accountability Office on 1971-09-24.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

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Problems In Accomplishing
0 bjectives


Department  of Labor
Department  of Health,   Education,
  and Welfare




BY THE COMPTROLLER GENERAL
OF THE UNITED STATES

                                      SEPT.241971
                   COMPTROLLER     GENERAL     OF      THE   UNlTED    STATES
                                 WASHINGTON.    D.C.     20548




    B-164031(3)




,   To the President of the Senate and the
.   Speaker of the House of Representatives
           This report presents our findings    on problems in accom-
    plishing   the objectives   of the Work Incentive   Program (WIN).
’   The program is administered      by the Departments of Labor and             -‘;:
    Health, Education,     and Welfare.                                         i. ,’
         Our review was made pursuant to the Budget and Accounting
    Act, 1921 (31 U.S.C. 53), and the Accounting and Auditing Act
    of 1950 (31 U.S.C. 67).
          Copies of the report are being sent to the Director,
    Office of Management and Budget; the Secretary of Labor;
    and the Secretary of Health, Educa       and Welfare.



                                               Comptroller  General
                                               of the United States




                            50 TH ANNIVERSARY                    1921- 1971
COMPTROLLER GENERAL'S                PROBLEMS IN ACCOMPLISHING
REPORT TO THE CONGRESS               OBJECTIVES OF THE WORK INCENTIVE
                                     PROGRAM (WIN)
                                     Department   of Labor
                                     Department   of Health,   Education,
                                       and Welfare    B-164031(3)
DIGEST
N-w---
WHY THE REVIEW WAS MADE
        The Work Incentive      Program (WIN) was designed     to provide
        recipients   of welfare     under the Aid to Families    with
        Dependent Children       (AFDC) program with training    and    -
        sfiices    necessary    to move them from welfare     dependency
        to employment    at a living     wage.
        The General Accounting        Office      (GAO) reviewed     WIN because
        of the program's      cost-- $328 million       appropriated     for the
        first  4 years --and because of widespread             concern over
        AFDC welfare   rolls.       As of June 1970 the AFDC rolls
        had soared to 2.2 million          adults    who were receiving
        $391.2 million     a month.

FINDINGS AND CONCLUSIONS
        Results   of WIN operations
        WIN    has achieved      some success in training           and placing
        AFDC recipients        in jobs, which has resulted            in savings
        in welfare      payments in some cases.           The complete       results
        of the program cannot be determined               readily,      however,
        because of significant          shortcomings      in the management
        information       system for WIN.       Complete,     accurate,      and mean-
        ingful    information      was not generally        available     on program
        costs,    benefits,      or operations.
        Because of its limited         size in relation       to the soaring
        AFDC rolls,    WIN does not appear to have had any signifi-
        cant impact on reducing         welfare     payments.      The success
        of WIN is determined       largely      by the state      of the economy
        and the availability       of jobs for its enrollees.             WIN is
        not basically     a job-creation        program and, during       periods
        of high unemployment,        encounters       great difficulty     in
        finding   permanent    employment       for the enrollees.        (See
        p. 10.)




                                                         SEPT.241971
Tear Sheet
     Problems        in program    design
     WIN and -AFDC need to be changed if the overall               objective
     of encouraging    AFDC family        heads to seek employment         is
     to be realized.       Conditions       in Denver,   Colorado,    and
     Los Angeles,    California,      illustrate     what is wrong.
     Fathers        frequently      lose money by going to work because
     their       AFDC payments are discontinued             when they obtain
     full-time          employment,     regaardless    of their   wages.   Mothers,
     on the       other hand, continue           to receive    AFDC payments fol-
     lowing       their    employment,      and payments are reduced only
     after       certain     income levels      have been reached.
     The immediate     cutoff    of welfare     payments to AFDC families                  I


     with working    fathers     is unrealistic     and tends to discour-                  I


     age fathers   from seeking      employment.        GAO believes    that               I
     family  income should be the primary           criterion     for estab-
     lishing   AFDC eligibility,      irrespective       of whether   the
     family  head is male or female.            (See p. 24.)
     AFDC payments to mothers           are not reduced fairly          after
     they become employed.           In Los Angeles a mother with
     three   children      may continue     to receive     payments,     plus
     food stamps and free medical             and dental    care for herself
     and her children,        until   her earnings      exceed $12,888 a
     year.     (Medical     and dental     care may continue       even beyond
     this point      if the family      is medically      needy.)     In Denver
     a similar     family    may continue      to receive    benefits      until
     the mother's       income reaches      $9,000 a year.        (See p. 28.)
     The effectiveness         of sanctions       applied    against   persons
     who refuse      to participate         in WIN or to accept employment,
     without     good cause, appears questionable.                Local offi-              I


     cials    have been hesitant          to apply the sanctions        because            I

      such application       is administratively          time consuming      and
     penalizes     the entire       family,    not just the uncooperative
     individual.        (See p. 32.)
    Funding restrictions      have severely     limited    implementation
    of the special     work projects.      The projects     were provided
    by the law to subsidize       employment    for AFDC recipients
    who are considered     not suitable     for training     or who cannot                 I


    be placed in competitive        employment.       (See p. 35.)                         I




RECOMMENDATIONS OR SUGGESTIONS
    The Department     of Labor should improve  the management in-                    c;
    formation   system for WIN so that it will     provide  accurate
    and complete    data on program operations,    costs,  and bene-
    fits.
                                        2
                                                                                           ,
                   Data should be developed         consistently     both on a nation-
                   wide basis     and on individual       projects    and should be used
                   for managing and evaluating          the effectiveness      of WIN
                   operations     and for developing       estimates    of appropriation
                   needs.     (See p. 20.)

          AGENCY ACTIONS AND UNRESOLVED ISSUES
                   The Assistant       Secretary    of Labor for Administration             ad-
                   vised GAO that the Department           of Labor considered          the
                   report   a fair     and objective     appraisal     of some of the
                   major problems       confronting    WIN.     He said that,      although
I                  WIN activities       in Los Angeles and Denver were not neces-
I                  sarily   typical,      the Department's      experience    showed that
I                  the problems      faced by these cities         were universal,        to
                   varying    degrees.
                   The Assistant     Secretary    described    actions   being consid-
                   ered by the Department       for improving       the management in-
1                  formation    system for WIN and stated         that the proposed       -
                   Family Assistance      Plan/Opportunities        for Families  Program
                    (H.R. 1, 92d Cong., 2d sess.)          if enacted,   would correct
                   the four major problem areas cited           by GAO for considera-
                   tion by the Congress.         (See pp. 20 and 23.)

I
                   The Assistant     Secretary    also informed    GAO that the WIN
    I
                   sponsors    in both California      and Colorado   had indicated
                   their   general   agreement with the report,       although    Colo-
                   rado had offered      no comments on the section        of the
                   report   dealing   with program design.        (See p. 23.)
                  The Assistant     Secretary,   Comptroller,         Department     of
               ._ Health,   Education,     and Welfare    (HEW), also informed                    :'   -
                  GAO that HEW was in general         agreement       with GAO's conclu-
                  sions and recommendations        and stated       that the welfare
                  reform provisions      of the proposed       legislation       would
                  correct   many of the deficiencies         cited by GAO. (See
                  pp. 20 and 23.)
                   The State welfare    agencies          in California    and Colorado
                   also agreed generally     with         GAO's conclusions.      (See
                   p. 23.)
                   In August 1971 California           enacted   legislation       designed
                   to deal with the problem of continuing                 AFDC benefits     to
                   employed mothers with high earnings.                 California     also
                   took action    in August 1971 to make more State money
                   available   for special       work projects.         Since these actions
                   will   not be effective       until   October    1971, GAO is unable
                   to evaluate    their    results     at this time.

        Tear   Sheet                                  3
    MATTERS FOR CONSIDERATION BY THE CONGRESS
        Since the designs      of WIN and the AFDC program cannot be
        dealt with effectively        by administrative     action   alone,
        GAO believes   that the Congress,         during its current     delib-
        erations   on welfare    reform,   may wish to consider
          --making    family  income      and family      needs the principal
             criteria    upon which      AFDC eligibility        determinations
             are based, irrespective           of whether     the family      head
             is male or female or         whether    employment      accepted     by
             heads of families      is    full   time or part time (see
             P. 28);
          --adjusting       the welfare  cutoff provisions      with respect
             to both     dollar  payments and related      supplemental
             benefits      (see p. 32);
I         --examining       the present  penalty   provision  of WIN and
             enacting     legislation   which would strengthen    work
             incentive      and work re"quirements    (see p. 35); and
          --amending      the Social   Security    Act     to permit  the use
             of regular      WIN funds to subsidize          the wages of en-
             rollees    in special    work projects         (see p. 41).




                                          4
                           Contents
                                                                      Page
DIGEST                                                                  1
CHAPTER
   1      INTRODUCTION
              Scope of review
              Origin    of WIN
              Funding
              Operation    of WIN
   2      RESULTS OF WIN OPERATIONS                                    10
              Summary of program operations                            10
              Needed improvements        in WIN management
                information     system                                 15
                    Conclusions                                        20
                    Recommendation     to the Secretary    of
                      Labor                                            20
                   Agency comments                                     20
   3      PROBLEMS IN PROGRAM DESIGN                                   22
                    Agency comments                                    23
              Disincentive        for AFDC fathers        to seek
                 employment                                            24
                    Conclusions                                        27
                    Matter    for consideration         by the
                       Congress                                        28
              Welfare     payments to working         AFDC mothers
                 are not reduced in a realistic              manner
                 after    employment                                   28
                    Conclusions                                        31
                    Matter    for consideration         by the
                       Congress                                        32
              Questionable        effectiveness      of existing
                 sanctions      against      AFDC recipients
                 who refuse       employment                           32
                    Conclusions                                        34
                    Matter    for consideration         by the
                       Congress                                        35
              Limited     implementation        of special     work
                 projects     phase of WIN                             35
                     Conclusions                                       41
                    Matter     for consideration        by the
                       Congress                                        41
APPENDIX                                                                    Page
        I   Letter    dated July 8, 1971, from Assistant
               Secretary    for Administration,  Department
               of Labor,    to the General Accounting   Of-
               fice                                                         45

   II       Letter     dated August 18, 1971, from Assistant
               Secretary,      Comptroller,      Department    of
               Health,     Education,     and Welfare,      to the
               General Accounting         Office                            51

 III        Principal      officials       of the Departments     of
               Labor and Health,           Education,    and Welfare
               responsible         for the administration      of
               activities        discussed     in this report               55


                                ABBREVIATIONS
AFDC        Aid   to Families       with     Dependent      Children
GAO         General    Accounting          Office
HEW         Department     of Health,          Education,     and Welfare
WIN         Work Incentive       Program
COMPTROLLER GENERAL'S             PROBLEMS IN ACCOMPLISHING
REPORT TO THE CONGRESS            OBJECTIVES OF THE WORE INCENTIVE
                                  PROGRAM (WIN)
                                  Department   of Labor
                                  Department   of Health,   Education,
                                    and Welfare    B-164031(3)
DIGEST
------
WHY THE REVIEW WAS MADE
     The Work Incentive       Program (WIN) was designed     to provide
     recipients    of welfare     under the Aid to Families    with
     Dependent Children        (AFDC) program with training     and
     services   necessary     to move them from welfare     dependency
     to employment    at a living      wage.
     The General'Accounting         Office      (GAO) reviewed     WIN because
     of the program's       cost-- $328 million       appropriated     for the
     first  4 years --and because of widespread              concern over
     AFDC welfare    rolls.       As of June 1970 the AFDC rolls
     had soared to 2.2 million           adults    who were receiving
     $391.2 million      a month.

FINDINGS AND CONCLUSIONS
     Results   of WIN operations
     WIN has achieved         some success in training          and placing
     AFDC recipients        in jobs, which has resulted            in savings
     in welfare      payments in some cases.           The complete       results
     of the program cannot be determined               readily,      however,
     because of significant          shortcomings      in the management
     information       system for WIN.       Complete,     accurate,      and mean-
     ingful    information      was not generally        available     on program
     costs,    benefits,      or operations.
     Because of its limited         size in relation       to the soaring
     AFDC rolls,    WIN does not appear to have had any signifi-
     cant impact on reducing         welfare     payments.      The success
     of WIN is determined       largely      by the state      of the economy
     and the availability       of jobs for its enrollees.            WIN is
     not basically     a job-creation        program and, during      periods
     of high unemployment,        encounters       great difficulty     in
     finding   permanent    employment       for the enrollees.        (See
     p. 10.)
     Problems        in program     design
     WIN and AFDC need to be changed if the overall                objective
     of encouraging    AFDC family        heads to seek employment         is
     to be realized.       Conditions       in Denver,   Colorado,    and
     Los Angeles,    California,      illustrate     what is wrong.
     Fathers        frequently     lose money by going to work because
     their       AFDC payments are discontinued             when they obtain
     full-time         employment,     regardless      of their   wages.    Mothers,
     on the       other hand,      continue     to  receive    AFDC  payments    fol-
     lowing       their    employment,      and   payments   are  reduced   only
     after       certain     income levels      have been reached.
     The immediate     cutoff    of welfare      payments to AFDC families
     with working    fathers     is unrealistic      and tends to discour-
     age fathers   from seeking      employment.         GAO believes    that
     family  income should be the primary            criterion     for estab-
     lishing   AFDC eligibility,       irrespective       of whether   the
     family  head is male or female.             (See p. 24.)
     AFDC payments to mothers          are not reduced fairly          after
     they become employed.          In Los Angeles       a mother with
     three children       may continue     to receive     payments,     plus
     food stamps and free medical            and dental    care for herself
     and her children,       until    her earnings     exceed $12,888 a
     year.     (Medical    and dental     care may continue       even beyond
     this point     if the family      is medically      needy.)     In Denver
     a similar    family    may continue      to receive    benefits      until
     the mother's      income reaches      $9,000 a year.        (See p. 28.)
    The effectiveness         of sanctions       applied    against   persons
    who refuse      to participate         In WIN or to accept employment,
    without     good cause, appears questionable.                Local offi-
    cials    have been hesitant          to apply the sanctions        because
    such application        is administratively          time consuming      and
    penalizes     the entire       family,    not just the uncooperative
    individual.        (See p. 32.)
    Funding restrictions      have severely     limited    implementation
    of the special     work projects.      The projects     were provided
    by the law to subsidize       employment    for AFDC recipients
    who are considered     not suitable     for training     or who cannot
    be placed in competitive        employment.       (See p. 35.)

RECOMMENDATIONS OR SUGGESTIONS
     The Department     of Labor should improve  the management in-
     formation   system for WIN so that it will     provide  accurate
     and complete    data on program operations,    costs,  and bene-
     fits.
                                         2
     Data should be developed        consistently      both on a nation-            ,
     wide basis and on individual          projects    and should be used
     for managing and evaluating         the effectiveness       of WIN
     operations     and for developing      estimates     of appropriation
     needs.     (See p. 20.)

AGENCY ACTIONS AND UNRESOLVED ISSUES
     The Assistant       Secretary    of Labor for Administration             ad-
     vised GAO that the Department           of Labor considered          the
     report   a fair     and objective     appraisal     of some of the
     major problems       confronting    WIN.     He said that,      although
     WIN activities       in Los Angeles and Denver were not neces-
     sarily   typical,      the Department's      experience    showed that
     the problems      faced by these cities         were universal,        to
     varying    degrees.
     The Assistant     Secretary     described    actions   being consid-
     ered by the Department        for improving       the management in-
     formation    system for WIN and stated          that the proposed
     Family Assistance      Plan/Opportunities         for Families  Program
      (H.R. 1, 92d Cong., 2d sess.)           if enacted,   would correct
     the four major problem        areas cited     by GAO for considera-
     tion by the Congress.          (See pp. 20 and 23.)
     The Assistant    Secretary    also informed    GAO that the WIN
     sponsors   in both California      and Colorado   had indicated
     their   general  agreement with the report,       although    Colo-
     rado had offered     no comments on the section        of the
     report   dealing  with program design.        (See p. 23.)
     The Assistant     Secretary,   Comptroller,         Department    of
     Health,   Education,     and Welfare     (HEW), also informed
     GAO that HEW was in general         agreement with GAO's conclu-
     sions and recommendations        and stated       that the welfare
     reform provisions      of the proposed       legislation      would
     correct   many of the deficiencies         cited     by GAO. (See
     PP. 20 and 23.)
     The State welfare    agencies          in California    and Colorado
     also agreed generally     with         GAO's conclusions.      (See
     p. 23.)
     In August 1971 California            enacted   legislation       designed
     to deal with the problem of continuing                  AFDC benefits     to
     employed mothers with high earnings.                  California     also
     took action     in August 1971 to make more State money
     available    for special       work projects.         Since these actions
     will    not be effective       until   October    1971, GAO is unable
     to evaluate     their    results     at this   time.

                                        3
MATTERS FOR CONSIDERATION BY THE CONGRESS
    Since the designs      of WIN and the AFDC program cannot be
    dealt with effectively        by administrative     action   alone,
    GAO believes   that the Congress,         during its current     delib-
    erations   on welfare    reform,   may wish to consider
      --making    family  income      and family      needs the principal
         criteria    upon which      AFDC eligibility        determinations
         are based, irrespective           of whether     the family      head
         is male or female or         whether    employment      accepted     by
         heads of families      is    full   time or part time (see
         PO 28);
      --adjusting       the welfare  cutoff provisions      with respect
         to both     dollar  payments and related      supplemental
         benefits      (see p. 32);
      --examining       the present  penalty  provision   of WIN and
         enacting     legislation   which would strengthen    work
         incentive      and work requirements    (see p. 35); and
      --amending      the Social   Security    Act     to permit   the use
         of regular      WIN funds to subsidize          the wages of en-
         rollees    in special    work projects         (see p. 41).




                                      4
                                                                               CHAPTER 1

                                                                       INTRODUCTION

        The Work Incentive         Program,      authorized      by title    II
of the Social       Security     Amendments of 1967 (42 U.S.C. 630), is
designed      to provide     certain     recipients       of assistance      under the
Aid to Families        with Dependent Children             program with training
opportunities       and with such supportive              services     as are neces-
sary to move them from welfare                dependency       to economic self-
sufficiency      through     meaningful       jobs.      WIN represents      an
attempt     to mitigate      the very costly         effects     of growing AFDC
rolls.      Trends in AFDC are illustrated                in the following       graph.
                                                                            NATIONAL TREND IN AFDC                                                                     UONTHLY
                 -A\.=<‘N                                                                                                                                             DIYMENTS
                23                                                                                                                                                -               IbC


                22                                                                                                                                                        -       440


                21                                                                                                                                                        -       620


                                                                                                                                                                          -       400


                                                                                                                                                                          -       380


                 18                                                                                                                                                       -       360


                                                                                                                                                                          -       340


                                                                                                                                                                          -       320


                                                                                                                                                                          -       300




                                                                                                                                                                          -       260

                                                                                                                                                                          -       240




                  8                                                                                                                                                       -        160




                  6




                                                                                                                                                                          -       60




                      II          11                 11                11            11           11           11           11            11           11             1       I   0
                      I      7*   1      7   l   1          7     01          7.1           7*1          7.1          7*1          7 91          7-1          7
                      1961        1962               1963              1964          1965         1966         1967         1968          1969         1970
                                                                FIRSTAND            SEWZNTHMONTHOF                    EACHYEAR
       WIN   is   administered      at the Federal       level    jointly    by the
Department      of Labor and HEW.          In  each  State     the   State   employ-
ment service,       under contract        with the Department           of Labor,   is
the prime manpower sponsor             for WIN.     State     and local     welfare
agencies     are responsible,        p ursuant    to HEW guidelines,          for
referring      all appropriate       AFDC recipients        to nearby State
employment      service     offices    for enrollment       in WIN and for pro-
viding    welfare     supportive     services.
SCOPE OF REVIEW
       We reviewed    certain      aspects   of WIN operations     at the
national   headquarters       offices     of the Department     of Labor and
HEW and at local      WIN and AFDC offices        in Denver and Los
Angeles   for the period        from the program's     inception     in July
1968 through     June 30, 1970.
       Our review was directed      to three basic objectives:           (1)
to determine     whether a satisfactory     management information
system had been developed       for WIN, which would provide         the
Congress and program managers with reasonably            complete    ac-
curate   and meaningful   data on program operations,        program
costs , and program benefits,        (2) to evaluate   the principal
design characteristics     of the program,      and (3) to evaluate
program administration.
       The results    of our review under the first     two objectives
are presented      in this  report:  our findings  concerning   program
administration,      which are less significant,    are being reported
on separately      to the Department    of Labor and to HEW.
ORIGIN OF WIN
       WIN is the successor     program to the Community Work and
Training   program which was started        in 1962 and was discontin-
ued on June 30, 1968, and the work experience           and training
program which was started        in 1964 and was discontinued        on
June 30, 1969.      The former program was authorized       by the 1962
amendments to the Social       Security    Act (42 U.S.C.  609), and the
latter   was authorized    by title     V of the Economic Opportunity
Act of 1964 (42 U.S.C.       2921).
       Experience    under these two earlier            programs     indicated
that providing      effective     assistance       to welfare    recipients
would require      a much greater       effort     than was possible         under
these programs,       and therefore       a new work training          program was
authorized     under the Social       Security       Amendments of 1967.           The
new program,      WIN, is designed        especially      for AFDC recipients,
to provide     all the services       and opportunities         necessary      to
move recipients       of AFDC from welfare           dependency    to stable


                                           6
employment at a living   wage.     WIN provides   a comprehensive
program of training,   education,    work experience,   child    care,
and other supportive   assistance.
FUNDING
        From WIN's inception      through      June 30, 1971, Federal       funds
appropriated      for WIN totaled      $327.7 million.         The Social
Security      Act limits  Federal    participation        in WIN program
costs to 80 percent.         The remainder        must be provided     by the
States     and may be in cash or in kind,           including,    but not
limited     to, plant,   equipment,     and services.
        The allocation        of Federal     funds to the States           is based
on several      factors,      including    the States'      abilities        to pro-
vide matching        funds or services         amounting    to 20 percent          of
the total     costs.      Other factors        include   the States'         AFDC
case loads,       sizes and locations          of the work experience             and
training    programs      replaced      by WIN, the States'          capacities        to
expand operations,          the States'      WIN performances         during      pre-
vious years,        and the States'       amounts of carry-forward              funds
from prior      fiscal    years.
      The Federal  monies appropriated       for WIN since its incep-
tion are shown below by year and by Federal          agency.  The
amounts do not include    the appropriations      for AFDC benefits
and services   to WIN enrollees.
                     Department
Fiscal                    of
 year                   Labor                          HEW                       Total
                                               (000 omitted)
 1968                 $     9,000                  $ 1,000                    $ 10,000
 1969                     105,500                   12,000                     117,500
 1970                      85,140                   16,860                     102,000
 1971                      60,000                   38,000                      98,000
Total                 $259,640                     $67,860                    $327,500

OPERATION OF WIN
        The operation   of WIN starts   with the local       welfare     agency
where the AFDC population       is screened      to identify    those indi-
viduals    who seem appropriate     for enrollment      in WIN.      These
persons    are referred   to the local    office    of the State employ-
ment service.
         HEW regulations       (45 CFR 220.35)   require   the prompt re-
ferral     to the State       employment service    by the welfare   agencies
of each       appropriate   individual,        aged 16 or over, who is re-
ceiving       AFDC or who lives      in the same household         as an AFDC
recipient        and whose needs are taken into account             in determin-
ing the       AFDC payment,      Within    the framework    of the HEW regu-
 lations,      the State welfare        agencies   are responsible     for de-
 fining     the types of persons who are considered              to be appro-
priate      for referral    to WIN.
         HEW regulations         require       that the States'         definitions         of
types of persons          appropriate           for referral       must include         unem-
ployed     fathers      and dependent youths,                aged 16 and over, who
are not substantially              full-time        in school,       at work, or in
training      and for whom there are no educational                      plans under
consideration         for implementation              within     3 months.       HEW
regulations        state    also that the welfare                agency must refer
to the State employment service                     any other individual            consid-
ered in determining            the AFDC assistance              payment who, on a
voluntary      basis,     requests         referral      to the employment          service,
unless     the agency determines                that such participation             will   be
detrimental        to the welfare            of the person or the family.
         After    a person is referred           to the local          State employment
service,        WIN officials        are required        to determine         whether    the
person referred          should be enrolled.             If    the   person    is   accepted
for enrollment,          arrangements        are made to provide            him with
testing,       counseling,      orientation,        basic education,           work ex-
perience,       vocational      training,       on-the-job        training,      and/or
job-placement         services.        If education,          work experience,         and/or
training       are needed to make the enrollee                   employable,      these
services       are supposed to be completed                 in about 1 year.
         If an enrollee      obtains     a job, the first      90 to 180 days
of employment       constitute      the "job entry period"        during    which
he remains enrolled          in WIN. During        this period    supportive
follow-up     services,      such as counseling,        medical   care, and ad-
ditional     education,      are provided      as required.      An enrollee
who successfully        completes      the job-entry     period   is terminated
from WIN and is considered             a success for WIN reporting          pur-
poses.
        If the enrollee       loses or leaves a job during          the job-
entry     period   and does not obtain        another    one, WIN personnel
try to get him to return           to WIN training.         If these attempts
fail,     the enrollee     is terminated      from WIN and his case is
considered       unsuccessful     for reporting      purposes.     The overall
objective       of WIN is to help each enrollee           to obtain    and re-
tain employment.
      The process    by which an enrollee      is to achieve     his
employment    goal is described  in an "employability         plan."                       This
plan,  developed   by the employment     service,   specifies      the

                                               8
education,      training, and other services               that the     person    needs
to enable     him to achieve his employment                goal.
        WIN personnel    who provide    services      directly     to the
enrollee    and who decide what outside           services      he needs (usu-
ally education      and/or vocational      training)       are organized   into
teams consisting      generally    of five members.            Each team member
specializes     in a different     type of service         for the same group
of enrollees.
        WIN's services         to its enrollees           are categorized         according  to
their    employability--         category      I services       are for individuals
who are to be immediately               placed     into employment,          category     II
services     are for individuals            who are not job-ready              and for
whom training        is a prerequisite           to regular        employment,       and
category     III provides         subsidized       employment       in special      work
projects     with public         or nonprofit        private     organizations        for
enrollees      who cannot benefit            from training         offered     in
category     II or for whom jobs in the open market cannot be found.
WIN legislation          provides     that category          II services       not last
more-than      an average of 1 year.
        As of October   1970 special   work projects   of a significant
size had been established       in only one State,    West Virginia,
although    the Department    of Labor was attempting    to establish
similar    projects   in other States.




                                            9
                                    CHAPTER 2

                            RESULTS OF WIN OPERATIONS
        Although       WIN appears to have achieved        some success in
training      and placing     AFDC recipients      in jobs during      its
first    2 years of operation,        which has resulted        in savings
in welfare       payments in individual       cases, the complete          results
of WIN cannot be determined           readily    because of significant
shortcomings         in the management information         system for WIN.
Complete,       accurate,    and meaningful    information      is not gen-
erally     available      on program costs,    benefits,      or operations.
       Because of its limited     size in relation    to the soaring
AFDC rolls      and because of other reasons,     WIN does not appear
to have had any significant       impact on reducing     AFDC payments.
The success of WIN is governed in significant           measure by the
state    of the economy and by the availability       of jobs for the
persons    trained    through WIN. WIN is not basically       a job-
creation     program and, during    periods  of high unemployment,
encounters      great difficulty  in finding   permanent   employment
for its enrollees.
       During the first      2 years of WIN operations,        information
reported    by HEW showed that the national          AFDC case load in-
creased by 761,000 cases-- from 1,397,OOO cases in July 1968
to 2,158,OOO cases in June 1970.             During the same period
total    monthly   AFDC payments increased        by $153.7 million--
from $237.5 million       in July 1968 to $391.2 million          in June
1970.     The number of adults      receiving     AFDC increased     during
this period      by 793,000-- from 1,407,OOO to 2,200,OOO.
STJMMARYOF PROGRAM OPERATIONS
         Presented    below is a summary of the results    of WIN opera-
tions,      as reported    by HEW and the Department   of Labor, for the
period      from program inception    through  June 30, 1970.
       Information       is presented   both on a nationwide     basis and
on individual       projects     in Los Angeles County and Denver
County.      Following      the summary are our comments on the short-
comings of this        information    and our recommendations     for im-
provements      in the overall      management information    system.
Nationwide     operations
        The total   federally   funded costs of WIN, as reported by
the Department     of Labor and HEW, for the first    2 years of
operations     were as follows.


                                        10
.

                                                          Fiscal      year
                                                         1969          1970                Total
                                                                    (000 omitted)
    Costs funded by the Department
      of Labor:
         On-the-job    training                     $       791      $       604      $     1,395
         Institutional      training                    21,740           59,715            81,455
         Work experience        and orien-
            tation                                       5,037              8,268          13,305
         Work projects                                       55                283             338
         Employability      planning,      job
            placement,     and follow-up                 3,428              8,838          12,266
         Program direction         and
            evaluation                                   2,105              5,219           7,324
                Total                                   33,156           82,927           116,083
    Costs     funded by HEW:
            Child care                                   4,218           18,443            22,661
                Total   costs                       $37,374          $101,370         $138,744

         The results  of WIN's operations,  as reported    to the Depart-
    ment of Labor by the State WIN sponsors   from inception     through
    June 30, 1970, are summarized below.
    AFDC recipients      enrolled  in WIN                                                 173,257
    Terminations    from WIN:
         Obtained   jobs                                           15,071
         Quit without     good cause                               15,654
         Quit for good cause                                       47,977                  78,702
    Enrollees      at June      30,   1970                                                 94,555

           Of the 78,702 persons             who had terminated              from    WIN, 15,071     I

    or   19 percent,  had obtained            jobs.
         Savings  resulting     from WIN's elimination    or reduction
    of AFDC payments,     as reported   to the Department   of Labor by
    the State WIN sponsors,       are summarized  below.




                                               11
                                                                          Inception
                                             Year ended                     through
                                            June 30, 1970              June 30, 1970
Cases in which     AFDC pay-
  ments were:
     Terminated                                     17,572                    21,770
     Reduced                                         8,934                    10,316
          Total                                     26,506                    32,086

One month's     dollar   savings
  from:
     Terminations      of AE'DC pay-
        ments                                 $1,734,726                $2,266,497
     Reductions      in AFDC pay-
        ments                                      681,300                   751,018

          Total   monthly    savings          $2,416,026                $3,017,515

        The dollar    amounts shown above were the aggregate           of
1 month's     savings    applicable  to all WIN participants        whose
AFDC payments had been reduced or eliminated.               Subsequent
months'    savings    are not included,     and no official     estimates
have been made of the total         cumulative   welfare    savings    at-
tributable     to WIN.
WIN operations     in Los Angeles
       From June 1968 to June 1970, the AFDC case load in Los
Angeles     County increased   by 86 percent--from      75,956 cases in
June 1968 to 141,437 cases in June 1970.            During this same
period    monthly    AFDC payments increased     by 105 percent--from
$14.3 million      in June 1968 to $29.3 million      in June 1970.
During    fiscal   year 1970
      --the   AFDC case load      increased        by 39,000      cases;
      --WIN-Los  Angeles was budgeted     for           6,200     program     slots
         (maximum authorized enrollment);
      --WIN-Los     Angeles reported    that        6,432 enrollees          had
         terminated      from the program,          of whom about          20 percent
         were reported      to have obtained         jobs;
      --1,149   AFDC cases were reported     as closed,     or the               AFDC
         payments had been reduced,    following    participation                  in
         WIN: and
      --the   unemployment     rate    increased       from     4 to   5.5 percent.


                                       12
Because of its limited     success rate   (20 percent) and limited
size  (6,200 slots),   WIN-Los   Angeles has not had a significant
impact on the AFDC case load in Los Angeles County.
        The growth of AFDC in Los Angeles County and the success
of WIN-Los     Angeles were relatable,           in significant      part,    to
conditions     within    the local      economy.     During much of the
period     of WIN's operations,         there has been a slowdown in the
Los Angeles economy and an increase                in the unemployment        rate
from 4.2 percent       in December 1969 to 7.3 percent             in December
1970.      The economic slowdown and rising             unemployment      have
been attributed       primarily       to the cutbacks      in defense,     aero-
space, and related         industries.
        Because program costs for WIN-Los            Angeles    for fiscal       years
1969 and 1970 had not been compiled              by the State employment
service     in the manner prescribed          by the Department        of Labor,
we developed       estimates     on the basis of information           available
from the State employment            service.    We estimated      that the
Federal      (Department     of Labor and HEW) costs of WIN-Los
Angeles totaled         $9,890,960,     or $1,595 a slot,     for fiscal        year
1970.     Estimated      Federal    costs of WIN-Los Angeles         from its
inception      in September      1968 through    June 30, 1970, totaled
 $14,282,700.
        The Department     of Labor and HEW require               that unemployed
fathers    receiving    AFDC payments be referred               to WIN within       30
days after     being granted       the welfare       payments and that they
be given preference        in filling      WIN slot openings.             Because of
these requirements,        most of the persons            enrolled     during    the
first    months of WIN operations          in Los Angeles were unemployed
fathers.      This situation       also occurred        in fiscal      year 1970
because of the large backlog            of people awaiting            enrollment
and the limited      slot openings        available.
WIN ooerations         in   Denver
      From June 1968 to June 1970, the AFDC case load in Denver
County for family      heads increased     by about 34 percent--from
6,342 cases in June 1968 to 8,505 cases in June 1970.               During
the same period     the monthly    AF'DC payments increased     by about
28 percent --from     $l,llO,OOO    in June 1968 to $1,426,000      in
June 1970.     During fiscal     year 1970
       --the   AFDC case        load   in Denver    increased    by 1,700     cases:
       --WIN-Denver         was funded     for   800 program    slots    (maximum
          authorized        enrollment);




                                           13
       --WIN-Denver   reported 673 enrollees  terminated     from the
          program,  of whom about 26 percent  were reported      to
          have had jobs at the time of termination;      and
       --218 AFDC cases were reported     as closed,      or welfare
          payments had been reduced,  following      participation             in
          WIN.
         Although      WIN has not had a substantial       impact on the
overall      AFDC case load in Denver or on the number of female-
headed AFDC families,            the number of father-headed        AFDC
families       decreased     from 440 in September     1968, when WIN was
instituted,        to 405 in June 1970.      Also the rate of terminations
from AFDC because of employment of the fathers                 increased      from
42 percent        during   the 18-month period    immediately       preceding
WIN's inception          in Denver to 55 percent     during    the first      18
months of WIN's existence.
      In accordance     with Department       of Labor and HEW require-
ments, WIN-Denver      has given enrollment         priority    to AFDC
unemployed    fathers.     As a result,     most of the enrollees        in the
first   3 months of the program were men.               In Denver,  however,
no backlog   of persons awaiting        enrollment        in WIN has occurred
and about two thirds       of the enrollees       since the first     3 months
have been women.
     WIN's success in        reducing   Denver's   father-headed      AFDC
case load is related        directly  to the large proportion         of the
AFDC fathers    who have     enrolled   in WIN.   As of June 30, 1970,
260 of the 405 father        heads of AFDC families        (64 percent)
were enrolled    in WIN,     while only 452 of the 8,237 female heads
of AFDC families    (5.5     percent)  were enrolled.
        We believe     that the success of WIN-Denver has been at-
tributable,       at least in part,     to metropolitan        Denver's   diver-
sified      economy.     Denver metropolitan      nonagricultural       employ-
ment for 1970 was distributed            as follows.

                                                             Percent
      Wholesale      and retail                                 24.6
      Government                                                19.2
      Service     and miscellaneous                             18.4
      Manufacturing                                             17.9
      Transportation        and public   utility                 7.4
      Contract     construction      and mining                  6.4
      Finance                                                    6.1
                                                              100.0



                                       14
     Particularly        noteworthy     has been the growth and stability
of employment       in the metropolitan       area over a period       of about
10 years.     In January      1960 total     employment    was reported     to
be 367,800,     but it grew to 515,100 by March 1970.              During     this
same period     the unemployment        rate has ranged from a low of
2.9 percent      for 1969 to 4.2 percent         for 1963.    For the first
18 months of WIN operations           in Denver,     unemployment    remained
at an average of 2.9 percent.              In December 1970 the unemploy-
ment rate was 3.9 percent.
        The Federal  costs recorded    by the State employment     ser-
vice and the local     welfare   agency for WIN-Denver    from its
inception    in September 1968 through      June 30, 1970, totaled
$1,047,050,    which constitutes    about 74 percent   of the total
costs .
NEEDED IMPROVEMENTS
IN WIN MANAGEMENT INFORMATION            SYSTEM

       Substantial     improvements     are needed in the management
information      system used by the Department       of Labor and HEW
 for WIN, to provide       reasonably     complete and accurate data on
program operations       to program managers and to the Congress.
Our comments below concern the limitations            of data available
on program costs,       enrollee    terminations,   and program benefits.
Program    costs
         Costs of operating        the WIN program have not been compiled
and reported         accurately    by the Department     of Labor.      Two sig-
nificant      shortcomings      are (1) the omission       from program cost
reports      of costs paid by State and local           welfare    agencies   from
Federal,      State,     and local    AFDC funds and (2) the failure        of
some States       to report     WIN costs on the accrued-expenditure
basis required         by the Department      of Labor.      An accrued expendi-
ture occurs when goods or services              are delivered      to the State
employment       service     or a WIN enrollee.
         A significant      part of the cost of the WIN program con-
sists     of payments to enrollees           for training-related          expenses,
such as transportation,            child    care, and incidentals.           The
Federal      share of child-care         expenses is paid with WIN funds,
but the other training-related               expenses     are paid from welfare
service      funds supplied      to the local       welfare     agencies    by State
and local       governments     and by HEW's AFDC program.              The State
and local       welfare   agencies      have not been required          by HEW to
identify       such costs applicable         to the WIN program or to record
and report        on them separately,        except    for child     care.
       We estimated      that    the WIN-related      costs which local        welfare
agencies   had paid,       but   had not reported      in the WIN cost

                                        15
reports,     amounted to about 16 percent      of the total recorded
WIN costs     (Federal  and non-Federal)     in Denver and about 26
percent    in Los Angeles.    Because these costs have not been
considered     by the Department     of Labor, the reported   costs of
WIN are significantly      understated.
       With regard    to the accounting        basis    for reporting     WIN
costs , Department      of Labor instructions         require   each State WIN
sponsor    to report    both the total      and the Federal       share of their
WIN-accrued     expenditures       each month.     We noted that the Cali-
fornia    State employment       service   had been reporting        as the
Department     of Labor's     share of monthly       WIN costs the Federal
share of the State's         disbursements     for WIN instead       of accrued
expenditures.
        The Federal   share of the costs of the State employment
service    shown in the regular      State-wide     financial     reports
totaled    about $17.2 million     for fiscal      years 1969 and 1970;
however,    the State employment service         developed    estimates
indicating     that the Department      of Labor's     share of State-wide
WIN costs,     on an accrued-expenditure        basis,    for this period
was about $27.9 million.
        The Department    of Labor's   share of accrued expenditures
reported     for WIN-Los Angeles operations     totaled  about $5.1
million    through    June 30, 1970.    On the basis of the State's
estimate     of its accrued expenditures,     however,  we estimated
that the accrued expenditures        for WIN-Los Angeles were about
$9.3 million      through  June 30, 1970.
      WIN-Denver   program costs were reported      as of June 30,
1970, in accordance      with Department  of Labor instructions.
Prior  to that date, however,      the monthly statements      submitted
for WIN-Denver    operations   had not been reported     consistently
on an accrual    basis.
        So that both the program managers and the Congress will
be fully     informed  as to the cost of operating       WIN, we believe
that cost reports      on WIN should show all Federal,         State,  and
local    expenditures   for the program,   including     those paid from
Federal    AFDC funds,    and should be prepared     consistently     on an
accrual    basis.
Terminations     from WIN
        Our tests    in Denver and Los Angeles have shown that
improvements      are needed in the quality           and type of information
being accumulated          on terminees      from WIN.   In certain   instances
reasons      for enrollees'      terminations     were not recorded     on a
sufficiently      definitive       or accurate    basis to permit   meaningful


                                      16
analysis.     The form prescribed     by the Department    of Labor and
used by WIN-Denver      and WIN-Los Angeles   for recording    termina-
tion information     did not always show clearly     the circumstances
causing   the termination,     and, in a number of instances,      the
reasons recorded     on the form did not coincide      with reasons
shown in the enrollees'      case files.
       Department      of Labor regulations         require     that each time
an enrollee      terminates      from WIN, an Individual           Termination
Record be prepared.           The form provides         a choice of reasons for
showing the cause of the termination,                 the terminee's       wages if
he is employed,        and a summary of the WIN components               in which
he has participated.            The form lists      a number of possible
reason-categories         for indicating      the cause of the termination
plus an "other"        category     for terminations        where the cause is
for some reason other than those listed.
        Of all WIN-Denver       terminations       reported      through     March 31,
1970, 23 percent        (167 terminations)         were described          as other
on the Individual        Termination       Record.     Analysis       of the termi-
nations    showed that many could have been classified                      more ac-
curately    in one of the reason-categories                provided      for on the
Individual     Termination      Record and that,         in many other instances,
more explicit      and definitive        reason-categories           were needed on
the Individual      Termination       Record to properly           inform    program
managers as to the reasons            for the terminations.
        In Los Angeles our examination    of a random sample of 100
Individual    Termination  Records   (of 589 terminations      of March
1969 enrollees     between March 1969 and March 1970) showed that
20 percent    had reasons shown on the Individual        Termination
Record that were inconsistent      with information      in the case
files,
       In commenting       on the inconsistencies          in the reasons for
termination,       the chief    of California's        WIN program stated
that the Department          of Labor's    definitions       of the reason-
categories      for termination       were inadequate        and confusing   to
field    staff.      He stated    also that a reason-category           was needed
for volunteers        for WIN who subsequently          withdrew.
        We believe    that the Department     of Labor needs to reex-
amine the format of the Individual          Termination       Record and to
ensure that it provides        for reasonably    definitive      data on the
reasons    for WIN terminations.       The Department       should also
reemphasize      to the States    the need to prepare       this   record
carefully     and accurately.




                                         17
                                                                                 .   .

Welfare   savings    and other    accomplishments
        Savings    in AFDC payments that have resulted         from     WIN
enrollees'      obtaining     jobs are not computed in a manner          which
permits     a realistic      comparison   of this program benefit        with
program costs.          Also there is not always a relationship
between this benefit          as reported   and the operations     of    WIN.
         Savings    in AFDC payments following    AFDC recipients'       par-
ticipation        in WIN are summarized   and reported    to Department
of Labor headquarters         on the WIN Monthly    Program Activity
Summary for each WIN project.           The number of cases in which
the AFDC payments have been eliminated           or reduced are also
reported      on the Monthly Program Activity       Summary.     Savings
are not reported         for an employed WIN participant      until   he has
completed       the job-entry   period  and is terminated     from the
program.
        The Department      of Labor requires   that only 1 month's
welfare    savings    be computed for each WIN terminee        whose AFDC
payments have been reduced or eliminated            and reported    to
Department      headquarters.     Since no projection     is made of total
savings,    the amounts reported       are of limited   value either   in
assessing     the benefits     of WIN or in comparing     the benefits   with
program costs.
        In computing     savings   in AFDC payments for a l-month
period,     the payments for 2 different          months are considered,
one payment before        the WIN enrollee       has obtained    a job and
one after      he has obtained     a job.      Department    of Labor instruc-
tions     do not specify     which 2 months should be used in making
this    computation,     and, in WIN-Los Angeles          and WIN-Denver,
there has been considerable          variation      as to which 2 months
have been used.
        In Denver the payment for the month in which the person
enrolled    in WIN is compared with the payment for the month in
which his job-entry       period    is completed.      There is frequently
a time lag of 1 year or more between these 2 months.                   This
time lag permits      the AFDC payments to be affected           by events
not related     to WIN participation       and results     in inaccurate
savings    being reported.       In Los Angeles the above method was
used at times,     but no single      method was used consistently.
       WIN personnel,      instead  of obtaining  the actual   amounts
from the welfare        agency, sometimes estimated     the amounts of
the AFDC payments.         As a result   of these disparities,    the
monthly   savings     in AFDC payments reported     by the State employ-
ment services     for Los Angeles and Denver were neither         accurate
nor consistent      for the two areas.


                                      18
        Department       of Labor officials         agreed that savings        in AFDC
payments for a l-month             period,    even if accurately        determined,
were of limited          usefulness      in assessing     overall    benefits     under
WIN. They stated           that projecting        the monthly welfare         savings,
and possibly        other benefits,        into the future        to determine
overall     program benefits         would present       problems.      They stated,
however,      that,    if such projection         could be made, it would
result    in more useful         management information.
         Another     shortcoming      in present      procedures      for reporting
savings      in AFDC payments is the Department                 of Labor's    pre-
sumption       that all reductions           and eliminations       of AFDC payments
following        a recipient's       participation       in WIN are related         to
the operation         of the program.            This presumption       is not always
realistic.         For example,        female AFDC family        heads who become
ineligible        for AFDC payments because they get married                  or be-
cause their        youngest     child     becomes 18 years old would be
included       on the WIN Monthly           Program Activity       Summary as cases
in which the welfare            payment was eliminated.
        We believe    that benefits       should not be claimed    for WIN
where    such benefits     are not     clearly   the result  of the program.
       To better     assess the results   of WIN, we compared the
average WIN-Denver         costs through June 1970 with the average
savings    in AFDC payments for employed WIN enrollees.        Our
comparison     assumed that AFDC payments would remain constant
and that the employed enrollees'         wages would remain the same
after   their    terminations.
       As of June 30, 1970, 218 WIN-Denver           enrollees   had com-
pleted   the job-entry      period  and had been reported       as success-
ful terminees     and 105 enrollees       were in the job-entry      period.
On the basis of WIN-Denver         experience    to that date, we esti-
mated that,    of the 105 enrollees,         58 would complete    the job-
entry period    successfully.
      If there were 276 successful        WIN terminees   (218 plus 58)
as of June 30, 1970, the total        program costs allocable     to
all WIN-Denver   terminees     and the 105 enrollees    in the job-
entry period   would have been $985,000       and the average cost
for each successful     terminee   would have been $3,569.
        We determined    that the actual        reductions    in AFDC payments
attributable      to the employment       of 59 of the 218 WIN terminees
at June 30, 1970, were equivalent             to an average monthly       re-
duction      of $230 for each father        and $93 for each mother.
Based on these reductions          in AFDC payments and an average
cost for each successful         termination       of $3,569,   the total
costs would be recoverable           in about 16 months for each suc-
cessful      AFDC father   and in about 38 months for each successful
AFDC mother.

                                           19
                                                                                           .   ”




        Data was not available        at the time of our review on how
long the successful         WIN terminees     retained     their    jobs or
whether     the savings     in AFDC payments continued           long enough to
allow the WIN program costs to be fully                recovered.       Records
showed, however,        that 84 percent     of all employed WIN ter-
minees through       March 31, 1970, were under 45 years of age,
indicating      a potential    for long-term       employment.
Conclusions
      Data which has been compiled      to date on WIN appears to
us to be generally   insufficient   either    for management purposes
or for evaluating  program effectiveness.
        Substantial     efforts      need to be made by the Department                of
Labor to improve        the management information              system for WIN.
Reasonably      complete      and accurate       operating    data on costs,
benefits,      and results       of program operations          are essential       to
provide     the basis     for considering          such matters      as desirable
levels    of funding,       relative     effectiveness       of approaches       to
the employment       problems       of the poor,       and returns     of benefits
for costs incurred.
Recommendation   to the
Secretary   of Labor
        We recommend that the Secretary         of Labor improve the
management information         system for WIN so that it will          provide
accurate      and complete    data on program operations,        costs,     and
benefits.       We recommend also that such data be developed
consistently      both on a nationwide      basis and on individual
projects      and be used for managing and evaluating          the effec-
tiveness      of WIN operations     and for developing    estimates       of
appropriation      needs.
Agency    comments
         In his letter       of July 8, 1971 (see app. I),             the Assistant
Secretary       of Labor for Administration            informed     us that the
Department        agreed that an effective         information       system was a
critical      element     in the improvement       of program management and
performance         and that cost reporting         for WIN did not satisfy
informational         needs.    He stated,     however,      that,   if the enact-
ment of the Family Assistance              Plan (in the form of H.R. 1 as
passed by the House of Representatives)                    appeared imminent,
redesign      of the WIN cost-reporting           system should be deferred
in favor of incorporating            the system improvements             that we
suggested       into the new Family Assistance              Plan/Opportunities
for Families         Program information       system.



                                          20
        With regard to         the reporting       of enrollees'     status,    the
Assistant       Secretary      described     certain     steps which had been
taken to improve the             timeliness     and accuracy     of project     status
reporting       after   our    review.      He indicated,      however,    that
further      improvement       might be required         in the Individual      Ter-
mination       Record and      in reporting       savings    in AFDC payments
attributable         to WIN.
         The Assistant        Secretary        stated    that instructions       for
completing       reports      on welfare         savings    would be reviewed:        that
the reporting        of welfare        savings       as part of a general        project
status     might not be adequate;                and that an examination         would
be made of alternative              possibilities          for gathering     this type
of information,          including       follow-up       and evaluation      studies.
He stated      also that,        although        the Department     had attempted        to
identify     welfare       savings     on program reports,           there was no
guarantee      that local        welfare       agencies     would supply     this infor-
mation to local          employment        offices      because the agencies,         in
many cases, were so overburdened                     and understaffed      that they
did not have time           to develop         extra    data.
       The State employment    service    agencies   of California  and
Colorado   both expressed   general    agreement   with GAO's findings
regarding   the need for substantial       improvements   in the WIN
management information     system.
         In his letter    of August 18, 1971, commenting           on a draft
of this     report    (see app. II) the Assistant        Secretary,     Comp-
troller,      HEW, noted that House bill        1, which would establish
the Family Assistance        Plan/Opportunities       for Families      Program,
would require       the Secretary    of Labor to conduct        continuous
evaluation      and research    on the effectiveness       of the program.




                                            21
                                     dHAPTER 3

                        PRCBLEiJTS   IN   BROGM     DESIGN
                       we--




         The designs     of WIN and the AFDC program need to be changed
in certain      respects      if the overall       objective       of providing
realistic     encouragenat         asld opportunities         to AFDC family      heads
to seek employment          is to be realized.           Under present        laws and
implementing       regulations     B the following         conditions     were evident
in Denver and Los Angeles.
       --Welfare     payments to AFDC fathers             were discontinued
          immediately       after the fathers        had obtained       employment
           (35 hours a week or over))           regardless        of wages
          earned;    such persons frequently            incurred     a loss of
          income by accepting         low-paying      jobs.     AFDC mothers)
          on the other hand, continued             to receive       AFDC
          payments     following    their    employment,        and the
          payments were reduced only after                certain    income
          levels   had been reached.
         We believe   that the cutoff        of welfare      payments to
         AFDC fathers    immediately      after    they obtain
         employment   of 35 hours a week or more, regardless
         of the amount of their        wages, is unrealistic;         that
         it results   in a disincentive         for AFDC fathers      to
         seek employment;       and that family       income should be
         the primary    criterion     for establishing        AFDC
         eligibility,    irrespective      of whether      the family
         head is a father       or a mother.
      --Welfare     payments to AFDC mothers were not reduced
         in a realistic        manner after        they had become employed.
         In Los Angeles an AFDC mother with three children
         may continue        to receive      welfare     payments,  plus
         such supplementary          benefits      as food stamps and
         free medical        and dental      care for herself      and her
         children,     until    her earnings         exceed $12,888 a
         year.     Medical     and dental       care may continue      even
         beyond this point         in Los Angeles if the families
         are medically        needy.
         In Denver this same type of family         could continue
         to receive      AEDC payments and benefits     until    the
         mother’s     income reached $9,000 a year.        We
         believe    that more realistic    cutoff   points    need
         to be established       both for AFDC payments and for
         supplementary      benefits  e




                                          22
         --The effectiveness     of sanctions     provided   in the Social
            Security    Act and applied   against    persons who refused    to
            participate    in WIN or to accept employment,        without  good
            cause, appeared questionable.
         --Funding      restrictions      imposed by the legislation
            authorizing        WIN severely    limited the implementa-
            tion of the special         work projects    provided    for in
            the law.
        In August 1971 California     enacted legislation      designed
to deal with the problem of continuing         AFDC benefits     to
employed mothers with high earnings.          California    also took
action    in August 1971 to make more State money available             for
special     work projects.    Since these actions      will not be
effective     until   October 1971, we are unable to evaluate         their
results     at this   time.
Agency     comments
        In commenting     on this section       of our report     (see app. I),
the Assistant      Secretary    of Labor for Administration           agreed
with us that problems        in the basic design of WIN could not be
dealt with effectively         by administrative       action   alone.     He
offered    various   comments on how House bill           1 would affect
the four major areas discussed           in this    report.
        The Assistant      Secretary     of Labor stated        that the
California    employment       service     agency agreed that the disparity
in welfare    payments to men and women was a disincentive                   to men
and provided      an overlong       stay on welfare      for the women and
that California        would recommend Federal         legislation      that
provided    a realistic      cutoff     point   as to the length       of time a
person remained         on the AFDC rolls        after   employment.
        The Assistant          Secretary        of Labor stated     also that the
California         employment       service       agency agreed that sanctions,        as
mandated and administered,                  had not been an effective         means to
either     motivate      enrollees        to remain in the program or remove
families       from the welfare           rolls     when an enrollee      refused   to
participate.           California’s         county welfare     departments,      he
stated,      found the sanctions              cumbersome and time consuming
for their        limited     staffs      and imposed them on very few enrollees
terminated         from WIN without           good cause.
     The State of Colorado   employment               service     agency    did   not
comment on this section   of the report.




                                        23
       In    commenting       on this      part         of    our    report   [see    app.    II),
the   Assistant       Secretary,        Comptroller,                HEW, stated      that    HEW
was   in    general    agreement        with      our        conclusions      and    recommen-
dations and that the welfare reform provisions  of House bill                                        1
would correct many of the deficiencies  that we cited in the
design of the AFDC program.
       The executive   director of the State welfare agency for
Colorado stated that our report was objective       and had outlined
the constraints     on WIN which led to less than generally   desired
results.
      The California   State welfare agency was basically        in agree-
ment with our findings     but noted that making family income
the primary criterion     for determining  AFDC eligibility,       although
theoretically    sound, might result in adding cases to the
AFDC roles.     The agency is opposed to such changes when they
add cases to the AFDC roles.       The agency supports our other
conclusions,   which regarded changes in sanction procedures,
Federal subsidy of special work-project      salaries,      and AFDC
cutoff provisions.
DISINCENTIVE FOR AFDC FATHERS
TO SEEK EMPLOYMENT
       The Social Security Act (42 U.S.C. 607(b)) provides that
AFDC payments may be provided,      at the option of each State, to
families   in which the father has been unemployed for at least
30 days.     California  and Colorado are among the 23 States which
have elected to provide AFDC payments to such families.        This
provision    has the effect of stopping a family's   AFDC payments
if the father becomes employed.
       Under HEW regulations   (35 CFR 233.100), the States may
prescribe   the exact point at which employment occurs, but it
may not be less than 30 hours a week or more than 35 hours a
week. California     and Colorado have chosen 35 hours a week.
If a father works only part-time     and is therefore  not considered
to be employed, his family's     AFDC payment is reduced on the
same basis as a female-headed family's.       (See page 28.)
      Our comparison of the total family income realized by
average-size  AFDC families  in Los Angeles and Denver before
and after the fathers accepted employment of 35 hours a week
or more showed that, when the fathers accepted employment,
the families  sustained a loss averaging $54 to $65 a month.




                                               24
This loss of income was a%%ributable     to the fact tha% %he
number of hours worked by the fathers,      rather     than family
income or.need,   was the determining  factor      for establishing
AFDC eligibility.
       0ur specific      findings       in Los Angeles      and Denver     were
as follows.
Los Angeles
        At the time of our review,        in Los Angeles       County the typical
AFDC family,     headed by an unemployed          father,   included
both parents     and four children.         According     to the local     welfare
agency,    this type of family      wa s entitled       to monthly   welfare
benefits     of $447, consisting     of cash ($282),        food stamps
($80) t and medical     and dental     care ($85).
        As shown below,     a typical     father    must     earn $626 a
month ($3.61 an hour,        or $7,512 a year),        to      realize net income
equal to the value of the welfare             benefits       that he may receive
without     working.    Work-related      expenses are         based on allowances
established       by the local    welfare    agency.


      Gross wages from          employment      at
        $3.61 an hour
              Less payroll         deductions                            74
      Net take-home       pay                                        552
              Less work-related         expenses     :
                Standard      allowance     for
                   incidentals                           $25.00
                Transportation        allowance           80.00      105
      Net income      equivalent        to welfare
         benefits                                                   $447


       We selected    as a sample group the 980 peoDle enrolled        in
WIN-Los Angeles during       March 1969 and ascertained      for those
who obtained     employment    through    March 31, 1970, the effects
on the group’s     average family      income.   We found that the
employed fathers      in the group earned an average gross of $3.15
an hour in a 40-hour       workweek     ($546 a month, or $6,549 a year)
during   June 1970.     The average net income after      payroll




                                           25
                                                                        .

deductions    of $59 and work-related expenses of $105 was $382,
QF $65 a month less than the value of welfare benefits    that
the family would have received had the father not entered
into full-time    employment.
     Presented below is an actual case which further   illustrates
the economic loss and the disincentive for AFDC fathers to
become employed full time.
     A father,   aged 33, with six dependents, including     a wife,
     began receiving   AFDC payments in California    in February
     1969. His family's     AFDC payment was $318 a month and
     the family was entitled    to benefits  in the form of food
     stamps worth $90 a month and medical and dental care
     worth an additional    $90 a month--a total entitlement    to
     welfare benefits    of $498 a month.
     The father was enrolled in WIN in March 1969 and became
     employed in September 1969 at a salary of $500 a month.
     His net monthly income, after payroll     deductions of $37
     and deductions of $105 for work-related     expenses, amounted
     to $358, or $140 a month less than the value of his AFDC
     benefits  which were discontinued.     His participation    in
     WIN was terminated in March 1970. In June 1970, 9 months
     after he began working, his salary was still        $500 a month
     and his net income was still     $358 a month.
       The average loss in income of $65 a month resulting      from
the acce tance of full-time     work was much greater than the
loss of P19 a month that a typical     father could incur as a
sanction    for refusing, without good cause, to participate      in
WIN or to accept employment. (See p. 32 for discussion       of
sanctions.)
     HEW regional  officials agreed that there was an inequity
to male AFDC family heads who obtained full-time  employment.
Denver
      IR Denver County the typical   AFDC family, headed by an
unemployed father,   included both parents and three children.
Such a family was entitled    to monthly welfare benefits  of
$407, consisting   of cash ($2851, food stamps ($70), and
medical care ($52).




                                 26
       As shown below the father      of a typical   AFX famiiy in
Denver had to earn a gross wage of $2 .S3 an hour ($492 a
month # or $5,904 a year)     to realize   net income equal to the
;rnlue of the welfare   benefits    that he received    without working.
      Gross wages from         employment           at $2.84   an
        hour                                                        $492
              Less payroll        deductions                          55

      Net take-home      pay                                         437
              Less work-related      expenses:
                Allowance     for transporation
                   and incidentals                                    30
      Net income     equivalent        to welfare        benefits   $407


        Our review of a random sample of 72 of the 226 AFDC
fathers     who had obtained      full-time     employment    through    March 31,
1970, showed that the average gross wage for employed male
WIN participants        was $ 2.48 an hour ($430 a month, or $5 160 a
year) e Average net income after             payroll   deductions     of $38
and work-related        expenses of $39 was $353, or $54 a month less
than the value of welfare          benefits.       The loss in income of
$54 a month by accepting          full-time     employment    was slightly
more than the loss of $50 a month that the typical                   male would
incur     as a sanction     for refusing,     without    good cause, to
participate      in WIN or to accept employment.             (See page 33.)
      Officials       of the local  welfare    agency in Denver stated
that AFDC fathers         should be provided    an income supplement
to prevent      their   incurring  a financial     loss by obtaining  full-
time employment.
Conclusions
       It is not consistent       with the overall      objectives     of WIN
and the AFDC program that AFDC families            should incur       an
economic    loss when the father       terminates    his family’s      welfare
dependency     through   employment.      This condition      produces    not
only an inequity       to the family     but also a disincentive         for
family   heads to either      seek or accept full-time          work.
      More equitable    rules   apply to fathers     taking  only part-
time employment     and to mothers who are heads of AFDC families.
(See p. 28.)     When these persons     accept employment,      the
AFDC payments are reduced on a graduated          basis related      to the
amount of employment      income earned.     Thus, by taking      into


                                               27
n   .




        co
        N
        We have found,       for example,     that a typical       AFDC mother in
Los Angeles can earn up to $579 a month ($6,948                    a year) before
any reduction       is made in her welfare           payments and up to $1,074
a month ($12,888        a year) before       her welfare      payments are
terminated.        She may still     qualify      for medical     and dental
benefits     after    achieving   this    income level      under California’s
program for the medically          needy.       In Denver a typical        AFDC
mother can earn up to $207 a month ($2,484                   a year) before     any
reduction      is made in her monthly welfare             payment,    and she
can earn up to $750 a month ($9,000                 a year) before     her
welfare     payment is terminated.
      The average yearly    earnings   of all employed persons    in
the Los Angeles   area during     1969 was about $8,000 and in Denver
about $7,100 according    to information     compiled  by the
Department  of Commerce.     Data on average family     income in
these areas is not available       from the Department    of Commerce.
      The main reason for the difference   in welfare   cutoff points
in Los Angeles and Denver is that determinations      by State and
local welfare   agencies vary as to family   needs and the allow-
ances for work-related   expenses.
        At the time of our review,        the typical    AFDC family      headed
by a female in Los Angeles County consisted              of a mother and
three children.       A family    of this    size was entitled        to monthly
welfare    benefits   worth $348 ($4,176        a year),   consisting     of
AFDC payments,      ($2211,   a food stamp bonus ($70))          and medical
and dental     care ($57).
       We selected       a sample group of working            mothers   from the 980
persons    enrolled      in WIN-Los Angeles during            March 1969, who
subsequently       obtained      employment,      to determine     the effect,
if any, of their         employment       on the amount of their        AFDC
payment . The earnings            history      of this   group showed that in
June 1970 these employed mothers were earning                     an average of
$433 a month ($5,198            a year).       The typical    mother at this
level    of earnings       continued      to receive     her full    AFDC benefits,
giving    her a total       monthly      earnings     and AFDC payments of $654
 ($7,848   a year),      a food stamp bonus of $24 a month, and
medical    and dental       care worth $57 a month.
        Following       is an illustration       of how the amount of
supplemental         AFDC payment would be determined        for this
typical      female family       head upon becoming employed;      the deter-
mination       is based on the assumption          that two of the children
require      child-care     service      while the mother is working.




                                        29
                                                                Monthly
AFDC standard      “needs”    amount    (note    a>              $285
                                                                 --
AFDC payment                                                     $221

Gross wages from        employment     at
  $2.50 an hour                                                  $433
     Less payroll       deductions                                 54
Net take-home     pay                                             379
Less income exclusions            and work-
   related     expenses:
        Exclusion       ($30 plus one third
           of the remainder         of
           gross wages]                               $164
        Standard     allowance      for
           food and incidentals                         25
        Transportation,        including
           car mainten ante                             80
        Chi 1 d care                                   107

    Total                                                         376
Net pay for computation         of
  supplemental welfare         pay

Supplemental  welfare  pay (the amount
  by which the standard    needs amount
  exceeds net take-home pay less
  exclusions,   except that payment
  may not be greater   than the
  AFDC payment)                                                  $221




a
 The standard      “needs” amount is established              by the State welfare
 agency as the amount needed by a family           to         obtain  the basic
 necessities     of life.   Limitations   on State            and local   funding
 prevent     the standard  needs amount’s    being           paid in Los Angeles.




                                            30
        The total     economic value    of employment     income and welfare
benefits    received      by the family    in the fore oing illustration
is equivalent       to monthly    gross earnings    of I 735 ($8,820     a year),
consisting     of wages of $433 and welfare         benefits    of $392 ($3,624
a year) --AFDC payment of $221, a food stamp bonus of $24, and
free medical       and dental    care of $57.     The mother increased
her income,       as a result    of working,    by $121 a month, considering
her work-related         expenses of $266 a month.
        Presented       below is an actual   case in Los Angeles which
further     illustrates       the effects  of economic work incentives
on female heads of AFDC families:
      A woman, aged 23, with one dependent                  daughter    applied     for
      AFDC assistance          in September       1968, which was granted.          Her
      total    AFDC benefits        amounted to $239 a month, consisting
      of an AFDC payment of $148, $41 in food stamps,                      and $50
      in medical        and dental      care,     She enrolled    in WIN-Los
      Angeles in March 1969 and became employed in July 1969 at
      a salary      of $500 a month.           After   she became employed,
      her AFDC benefits           were reduced to $218 a month--the
      food stamp bonus was reduced to $20.                    Thus her gross
      monthly     income totaled          $718 a month.       The woman ‘s partici      -
      pation    in WIN was terminated             in November 1969.        In June
      1970 her salary          was $600 a month, an increase            of $100
      over a l-year         period.       In September    1970 she still        was
      receiving      AFDC benefits          of $218 a month.       Thus she had
      a gross income of $818 a month from employment                      and AFDC
      benefits     p or a net income of $469 a month after                 deducting
       $139 for payroll          deductions      and $210 for work-related
      expenses)       including      child    care, as allowed       by the local
      welfare     agency.
        The AFDC payment was not reduced in this           case because,
after    deducting   from the $600 gross earnings        the work
incentive     (income exclusion)     of $220, work-related      expenses of
$210, and payroll       deductions   of $139 only $31 remained       to
meet the family’s       needs of $208--the    amount determined      by
the State welfare       agency.    The unmet needs were $177, but the
welfare    agency could pay only $148.
Conclusions
      The provisions   of the Social        Security    Act, as administered
by State and local   welfare      agencies,    have permitted       working
AFDC mothers to receive      continuing      welfare    payments beyond
the point   at which they have achieved           income parity,     with per-
sons not on welfare,     This situation         raises   a question     as to




                                            31
the need for providing      the continuing    welfare     assistance  re-
quired   under the presently    prescribed     procedures     as well as
a question    of equity in relation      to persons not on welfare.
        Although     we recognize     the need for providing          financial
incentives        to AFDC mothers who seek employment,             we believe
that such incentives           should be limited      to ensuring       a reason-
able level       of income to be determined          by the individual
States     on the basis of existing          economic conditions.            A
readjustment        of the statutory      provisions     governing      the com-
putation      of welfare     payments to working        AFDC mothers       is
desirable       for establishing      a realistic     cutoff    point     at which
welfare      payments to working        mothers should be terminated.
Matter    for   consideration     by the     Congress
      Because females heading AFDC families         may now receive
AFBC benefits    well beyond the point      at which they achieve
income parity    with persons who are not eligible        for welfare,
the Congress may wish to consider        adjusting   the welfare    cut-
off provisions     with respect   to both dollar    payments and re-
lated  supplemental     benefits.
 UESTIONABLE EFFECTIVENESS OF
AFDC RECIPIENTS
WHO REFUSE EMPLOYMENT
       On the basis of our observations             in Los Angeles          and Denver
Counties,     we believe    that the effectiveness            of the existing
sanctions     provided   for in title     XI of the Social          Security
Amendments of 1947 and applied           against      AFDC recipients         who
refuse    to accept employment without           good cause appears question-
able e Local officials         have been hesitant         to apply these sanc-
tions    because their     application    is administratively             time
consuming     and because the sanctions          penalize       an entire     AFDC
family    and not just     an uncooperative       individual.
        The Social      Security      Act (42 U.S.C. 601 and 602) requires
that?    before    receiving      Federal    funds for AFDC, a State must
submit     and have approved by the Secretary             of HEW, a plan which
provides     that,    if a person referred         to WIN by a local     welfare
agency refuses,         without     good cause, to participate        in WIN or to
accept employment          in which he is able to engage, that person’s
needs shall       not be taken into consideration           in determining       the
needs of the family.             The State plan must provide        also that
aid for the dependent            children    in the family    be paid to another
individual      who is interested         in or concerned     with the




                                        32
welfare     of %he children      or be paid directly         to persons     furnish-
ing food, living         accommodations,     or other goods or services             to
the chi Idrew e The plan must provide             further      that the refusing
person’s     needs be included       for a period      of 60 days after        he
 refuses    WIN participa%ion       or employment,      if during      that period
he accepts      counseling    aimed at persuading         him to participate
 in WIN,     During the GO-day period,         the familyPs        needs are to
be met by payments to someone other than the refusing                      person.
 In California      and Colorado     sanctions    are considered         to be
 applicable     only to fathers.
      Sanctions    prescribed     by WIN legislation        are in two parts.
One part is an economic sanction            in that the local       welfare
agency termina%es       the father’s    share of the family’s          AFDC
payment . In Los Angeles,         however’,     elimination    of the father’s
share of the AFDC payment results             in a reduction     of only $19
a month.     In Denver the elimination           of the father’s      share of
the AFDC payment results        in a reduction         of about $50 a month
in a typical    case, because the payment varies             proportionately
for most family      expense categories         as family   members are added
to or deleted    from the compu%ation.
       The second par% of the sancltions    involves   so-called
vendor payments,     under which about half    of a family’s     AFDC
payment is withheld     by %he welfare   agency %o pay certain
family   expenses direc%ly.     This par% of the sanction       provides
assurance    %ha% the fami%ygs needs are met and also serves as
a mild economic sanction      in %hat %he amount of money controlled
by %he family    is reduced.
Los Angeles
        At the %ime of our field        review,    there were 10 local     WIN
offices    in Los Angeles Coun%y.          In the 5 offices     where we
reviewed     %he use of sanctions,       we found that 329 AFDC fathers
had refused     to par%icipa%e     in WIN. We selected         107 of these
329 AFDC fa%hers %o ascertain           wha% sanctions    had been applied.
In 55 cases %he father’s        share of the family       welfare     payment
 ($19) had been discontinued         (in 10 of these cases, part of
the family’s      AFDC payment was being made via payments to ven-
dors);in     24 cases sanctions      were not considered       applicable;
and in 28 cases %he local        agencies?      records  were no% clear       as
to what had happened.
     Although       %he threat   of punitive actions  may help persuade
some fathers      to participate    in WIN or to accept employment,
who otherwise       might no% have done so, we found %hat, of the




                                          33
55 fathers  whose share of the AFDC payment had been discontin-
ued, only four had reentered    the program.    The punitive  actions
in the remaining    51 or 93 percent,   of the cases were apparently
ineffective   in getting the fathers   back into the program.
       Local welfare        agency representatives           advised    us that
it was difficult          to arrange for vendor payments e The most
common use of this part of the sanctions                   was the payment of
a welfare     recipient’s        rent directly       to his landlord;        but,
because this       arrangement        resulted     in the landlord’s       receiving
the rent one month after              it was due, it was generally            unaccept-
able to most landlords.               As for terminating       the father’s        share
of the welfare         payment,     local    welfare    agency   representatives
stated    that they were reluctant              to do so because it resulted
in a hardship        to the children         by forcing    the family      to live
on a lower income,          although      the family?s     needs remained the
same if the father          continued       to live    at home.
Denver
        Through July 1970 no AFDC payments had been reduced in
Denver,     although   as of March 1, 1970, 94 males had refused    to
participate       in WIN. Direct   vendor payments had been arranged
for six of their       families  up to July 1970.
     Officials        of the Denver Department       of Welfare          told us
that they did        not favor the application       of penalties           to
AFDC recipients         because such action    would:
               --Impose      financial     hardship    on the family       by
                  forcing      a reduction     in living    standards.
               --Create    family   tension  and bring pressure             on
                  the father     to leave the family   unit.
               --Not necessarily      stimulate  the fatherPs
                  willingness     to participate   in WIN because
                  money alone does not always motivate
                  AFDC recipients.
               --Create      additional,  tedious, and costly
                  clerical     work for the local  welfare
                  agency     in the case of vendor payments.
Conclus ions
        Our reviews     in Los Angeles   and Denver have revealed
significant      problems   in the application     of the legislative
provisions     which seek to penalize       AFDC fathers  who refuse,




                                          34
without   good cause 0 to participa%e       in WIN or to accept
employment.      The local welfare     agencies   in the %wo cities
have been reluc%an% to apply such penalties            and have advanced
some valid    reasons against    their   enforcement.
       The reduction       of the family’s       monthly welfare      payments by
only about $19, as applied           by the Los Angeles welfare           agency,
has no% been of sufficien%            magnitude     to motiva%e noncooperating
faehers 0 Larger welfare          reductions       (such as the reduction        by
$50 a month by the Denver welfare               agency) would penalize        the
entire   family    in si%ua%ions where the fa%her continued                to live
with the family        or might cause a breakup           of the family    unit.
Also the threatened          loss of welfare      benefits     for noncooperation
must be balanced         against  the loss of income suffered            when a
father   accepts     full-%ime    employment,       which,   as se% forth     in
our precedin       discussion      (see p* 24) ) has averaged         $65 in Los
Angeles and 54 in Denver.
      The additional      sanction     of making direct       payments to
vendors,   rather    %han making      %he entire     AFDC payment to a
fami By, requires     additional      administrative     effort     on the part
of the local welfare         agency   and depends on the cooperation
of the vendor,     which cannot       always be readily       obtained.
        These problems     encountered     in Los Angeles    and Denver
can be expected       to exist,    in varying    degrees o in o%her
communities     throughout      the country   and raise    a question   as
to the effectiveness        of the sanctions      provided   in the
legislation.
Matter    for   consideration     by the    Congress
       In its deliberations        on proposed    reforms     of the     exist-
ing welfare    system,    the Congress may wish to consider               the
experience    gained under the present         penalty     provision      of WIN
and to explore     the feasibility       of enacting     legislation        which
would strengthen      work incentive       and work requirements.
LIMITED IMPLEMENTATION OF SPECIAL-
 ORX-PRO=     PHASE OF WIN
       The-special       work projects    phase of WIN has been imple-
mented in only a limited           number of localities         and not on
a nationwide       basis.     Special  work projects       provide     subsidized
employment with public          or nonprofit    private      employers     for
AFDC recipients        who are not considered        suitable      for training
or who cannot be placed          in competitive      employment.




                                           35
         The  lag    in   implementing         special      work    projects      has been
caused primarily            by a funding         problem.        The authorizing
legislation        limits      the use of WIN funds for this phase of
WIN to administrative               expenses.          The additional        funds needed
for wage subsidies             must be provided           from Federal,         State,    and
local     AFDC funds or from other State and local                          sources.
Neither      California        nor Colorado         has indicated         a willingness
to supply       such funds.           This has resulted           in certain       persons--
who normally         would have been assigned                to special        work projects--
being assigned          to regular        training       component for which they are
not well suited.
        As of June 30, 1970, special           work projects      were under way
in only four States          at seven WIN projects.         At that time
neither     California      nor Colorado    had any persons       enrolled       in
special     work projects,       although   California     previously      had
undertaken       a small pilot      project  in San Luis Obispo County,
California,       which was terminated       during    June 1970.       Officials
in California         and Colorado     told us that special       work projects
 generally    had not been implemented           in these States      because
the funding       arrangements      which were required       could not be
accomplished        readily    and were undesirable.
       Regarding    the      types of programs  to be carried                out   in WIN,
the   Social   Security        Act (42 U,S.C. 632), states:
       “[b]    Such programs     shall    include,    but shall       not be
       limited    to,’ (1) a program placing          as many individ-
       uals as is possible        in employment,        and utilizing
       on-the-job       training  positions       for others,      (2) a
       program of institutional           and work experience          train-
       ing for those individuals            for whom such training
       is likely      to lead to regular        employment,     and



        These different        programs   are referred      to as categories              I,
II,    and III,    respectively.        Categories    I and If are for
enrollees       who either     are job-ready      or can be made job-ready
with an average of about 1 year of work experience,                     educa-
tion,    training,      and counseling;      category   III     is for enrollees
who are not job-ready            and cannot be made job-ready          with an
average of about 1 year of such assistance.                     The objective
in each case is to enable an AFDC recipient                   to obtain     full-
time employment         and to be self-supporting.
      Enrollees       in special     work projects    are paid regular
wages by public         or nonprofit     private   employers.     The employers
are reimbursed        by the State at an agreed-upon          percentage   of




                                           36
the wages paid.     The employee’s    gross wages are determined
by the employer but must be at least         equal to the minimum
wage * Negotiations    with employers     regarding    the percentage
of wages that they are to be reimbursed           are conducted   by WIN
personnel,    The State of California       permits   a maximum reim-
bursement  of 45 percent;    Colorado    ha; no limitation.
        The Social     Security  Act provides     for the creation         in
each    State of a wage-subsidy        pool from which employers           are
paid     for keeping    category   III WIN enrollees     employed.         The
act    provides    also that the welfare      agency pay into the          Pools
from    AFDC funds,     the lesser    of the familyfs    basic AFDC        pay-
ment     or 80 percent     of the enrollee’s    gross wages.
        The Social  Security    Act requires     that the family       of a
participant     in a special   work project      receive     a minimum
net pay, after     deducting    all work-related        expenses,   that is
at least    equal to the AFDC payment which the family              would
otherwise    hawe received   plus 20 percent        of the participant’s
gross wages for working       in the project.         If the actual     net
pay is less than this prescribed          minimlam, the local       welfare
agency is required      to pay the family       a supplement      in the
amount of the difference       D
       As shown in the following         illustration,          a local   welfare
agency would have to pay the amount of the AFDC payment into
the wage-subsidy    pool and, in the typical                case, would also
have to pay the family       a supplement.             (This example is based
on the typical    composition      of a male-headed            AFDC family     in
Los Angeles and on work-related             expense allowances          and the
hourly   wage of $2.42 for a pilot           special       work project    in
San Luis Obispo County,       California.)




                                          37
                                                         Monthly
AFDC welfare    payment                                    $282

Gross wages from.special        work project   at
  $2,42 an hour                                            $420

     Less payroll       deductions                           27

Net take-home     pay                                       393
     Less work-related        expenses                      136
Net pay for     computation    of welfare   supplement      257

Minimum pay --the amount of the AFDC payment
  plus 20 percent of gross wages                            366

Supplemental AFDC payment--the amount by
  which the minimum pay exceeds net pay                     109
AFDC payment to the wage subsidy pool--the
  amount of the AFDC payment or 80 percent
  of gross wages ($3361, whichever is less                  282

     Total payment from AFDC funds by
       focal, welfare agency                               $391



     As shown in        the above illustration,   the effect of fund-
ing arrangements        required by the Social Security Act is that
it is more costly         for the head of an AFDC family to be enrolled
in a special work        project  than to maintain the family on AFDC.
Los Angeles
      California law, as applied in Los Angeles County, limits
the total payment from AFDC funds in each case to the amount
of the regular AFDC payment to the family.    Under this policy
the supplemental   AFDC payment to the family of the participant
in a special work project is deducted from the AFDC payment
into the wage-subsidy pool.    Because this policy provides
inadequate income to the wage-subsidy pool, it causes a deficit
in the pool, as illustrated   below.




                                     38
                                                               Monthly
AFDC welfare       payment                                      $282

Gross wages from special         work project      at
  $2.42 Em hour                                                  $420
      Less payroll       deductions                                   27
Net take-home pay                                                 393
          Less work-related     expenses                          136
Net pay for       computation    of welfare     supplement        257
Minimum pay-- the amount of the AFDC payment
  plus 20 percent   of gross wages                                366
Supplemental AFDC payment--the amount by which
  the minimum pay exceeds net pay                                 109
AFDC payment to         the wage subsidy pool--the
  AFDC payment        less the supplemental payment,
  or 80 percent         of gross wages ($336),
  whichever is        less                                        173
Wage subsidy due to employer--maximum allowable
  is 45 percent of gross wages (see p.     I                      189
Deficit      in wage-subsidy     pool                            $
                                                                 --   16




        The deficit  would be decreased if wages were increased;
but, until the wages reach $3.29 an hour, there would continue
to be a deficit     in the pool.   It seemed unlikely       to us that
employment could be found for any appreciable            number of AFDC
recipients    in special work projects     that would pay as much
as $3.29 an hour. For instance,       the average starting       wage paid
to former WIN-Los Angeles enrollees        in program categories       I
and II was about $2.65 an hour for men. Also WIN-Los Angeles
officials    advised us that the maximum 45-percent         subsidy
rate made it very difficult      to interest    eligible    employers in
Los Angeles in sponsoring special work projects.




                                        39
Denver
        Colorado     has not established    a policy   of limiting      total
payments      from AFDC funds to the amount of the regular             AFDC
payment to a family.         State welfare    agency officials      in
Colorado     have expressed     deep concern,    however,    over the
possibility       that AFDC costs would be higher         if the heads of
families     were enrolled    in special   work projects       than if
they remained        on AFDC and did not work.
       Although      our review showed that a deficit              in the wage-
subsidy     pool would be very unlikely            in Denver,      the director
of employment        of the Colorado       Department     of Labor and Employment
stated    that he believed        that he would be solely            responsible      for
any deficits        which might occur if special           work projects         were
implemented.         The director     stated    further     that he would not
accept this       responsibility      and that special         work projects
would not be implemented            in Colorado      under the current
funding     requirements.
        Although    special     work projects     were not implemented        in
Colorado,      we were told by the Colorado           State WIN Coordinator
that the City and County of Denver Parks and Recreation                      Depart-
ment would be willing           to pay SO percent      of the wages of AFDC
recipients       employed in special       work projects     if suitable
transportation        to the work sites       could be arranged      for them.
Other public       organizations      also expressed      a positive    interest
in employing       AFDC recipients       in such projects.
        In our discussions         with various        officials       directly
responsible       for the Denver AFDC and WIN operations,                      we were
advised     repeatedly       of the need for special             work projects
to assist       AFDC recipients       not qualified          for regular        competi-
tive    employment.        WIN officials       also advised          us that there
were a number of AFDC recipients                 enrolled       in program category
II who would probably            be assigned      to special         work projects       if
they were available.             WIN officials        advised       us further     that
these persons        require     a disproportionately             large amount of
category      II services      in the form of extensive               counseling      and
lengthy     periods     of basic education          and that it was unlikely
that these services           would be successful.
        The director    of the Denver Department                 of Welfare      indicated
that    he strongly   favored   the establishment                of special      work pro-
jects    and emphasized     the following    potential             benefits.




                                            40
         --Accomplishment         of necessary         public     works   projects.
         --Development       of positive        work    habits.
         =--Stimulating      the participant,           in some instances,
            to exercise      his initiative        in     locating more
            satisfactory       work.
Conclusions
        Most State and local            agencies    have not implemented           the
special-work-projects            phase of WIN, which is intended                to
provide     subsidized      employment       to those AFDC recipients             who
are not qualified        for regular         WIN training      and job-placement
programs.        Our inquiries        in the States       of California        and
Colorado      revealed   that such projects           were not undertaken
in those States        mainly because of funding             problems;       the
law and regulations           limited     the funds available          from Federal
sources --only       AFDC assistance         funds were available          for this
program --and State and local               agencies    were not able or
willing     to provide      the required        non-Federal     funding.
        Because there was an absence of special                   work projects,
some WIN participants              were enrolled      in regular     training     for
which they were not suited.                 These enrollees       generally     re-
quire     a disproportionate           share of WIN resources          in the form
of extensive        counseling       and lengthy      periods    of basic educa-
tion,     although     they apparently          are not able to benefit
significantly        from these services.             The resources       used in
attempting       to train      persons who are not suited            for training
could be more effectively               applied     to special    work projects
designed       to furnish       employment      to such persons.         To permit
such use of WIN appropriated                 funds,   however,     a change in
the authorizing          legislation       of WIN would be necessary.
Matter      for   consideration      of the      Congress
       To overcome existing          funding      problems    and to facilitate
the implementation          of special       work projects     contemplated       in
the legislation         authorizing      the WIN program,         the Congress
may wish to consider           amending the applicable            provision    of
the Social      Security     Act to permit        the use. of funds appropriated
for regular      WIN training       activities       for subsidizing        wages
payable    to WIN participants           enrolled      in special     work projects-




                                           41
      The proposed Family Assistance Plan/Opportunities   for
Families Program which would be established   by House Bill 1,
as it passed the House of Representatives   on June 22, 1971,
would eliminate   this problem by allowing a direct Federal
reimbursement to the employer.




                              42
APPENDIXES




       43
                                                                         APPENDIX I
                                                                             Page 1
                         U.S. DEPARTMENT              OF LABOR
                  OFFICE OF TEE ASSISTANT SECRETARY FOR ADMINISTRATION
                                 WMHI~GTON,    D.C.   20210




 JUL 8     1971


Mr. Henry Eschwege
Associate Director
Civil Division
United States General
  Accounting Office
Washington, D.C. 20548
Dear Mr, Eschwege:
We have reviewed the draft      General Accounting Office report entitled
t'Problems in Accomplishing     Objectives of Work Incentive (WIN) Program,"
This report has been thoroughly analyzed and is considered a fair and
objective appraisal of some of the major problems confronting the WIN
program.   While the study was limited to Los Angeles, California  and
Denver, Colorado, not necessarily typical WIN projects,  program
experience has shown that the problems outlined here are universal
to varying degrees.
Internal studies conducted by the Department have produced substantially
the same conclusions as those reached by the GAO. The thrust of this
report, the program problems cited, the major recommendations and most
of the secondary recommendations are consistent with those reported by
Auerbach Associates in their evaluations of the WIN Program and by
Analytic Systems, Incorporated in the analysis of the WIN Termination
Data. These reports included the same areas of study as the GAOreport.
We endorsed the findings and recommendations presented by these two
technical assistance contractors to the Department.
This GAOreport was directed to findings and recommendations in two
general areas: the management information system and the program
design. The following are the Department*s comments in which we also
take cognizance of the comments of the two State employment security
agencies where the GAO conducted their review.
1.   The Management Information      System
GAOpoints out that,complete,  accurate and meaningful infoxxnation was
generally not available on program costs, program benefits,  or program




                                          45
.APPENDIX I
     Page 2
-2-



operations. GAO recommends that the Secretary     of Labor should improve
the management information system for WIN.
The Department of Labor in cooperation with HEWhas specific responsibility
in the development, implementation, and operation of the WIN management
information system. We feel that it is appropriate for GAOto have given
this area specific attention,    for an effective information system is a
critical   element in the improvement of program management and performance,
The first segment of the discussion of the system dealt with the problems
involved with cost reporting.   It is the joint responsibility of the
Department and HEMto compile the complete cost of the program. At the
present time, the Department compiles on an accrued expenditure basis
the DOLts cost of operating the WIN program and reports this information
to HEM.
We are concerned with and aware of the problems encountered in this area.
Cost reporting in WIN has not satisfied       information needs. The cost
 reporting areas which the GAOreport cited, particularly        costs at the
project level, have been de-emphasized by the Department. Steps need
to be taken to insure the retention of project level WIN cost data
either through the extant financial      report system or by including cost
 information in monthly project status reporting.        As the GAOreport
points out, this type of information is essential to effective        program
management at all levels.     We f'urther feel that efforts should be made
to improve the availability     of WIN cost data at the sub-project (component)
level.     The system, as presently designed, can provide this type of
information.     If enactment of the Family Assistance Plan appears imminent,
redesign of the WIN cost reporting system should be deferred in favor of
incorporating    the system improvements suggested by GAOinto the new
FAp/OFP information system.
The second segment dealt with project status reporting.     Subsequent to
the time period covered in the GAOreport, several steps have been taken
to improve the timeliness and accuracy of project status reporting.      We
are moving to decentralize   processing of reporting documents to the
regional offices.    This step will result in closer monitoring of reporting,
both for accuracy and delinquency.     The current project status system,
using the ~~-516 form, does provide detailed information on project
operations.   The system has been in place for one year, and we feel
provides significant   data on the efficiency   of project management and
on the movement of enrollees through the program. The GAOreview was
concluded in June 190 and at that time the 516 system was still     being
implemented. Data gathered subsequently shows improvement both in
level of detail, accuracy and timeliness.



                                      46
                                                                       APPENDIX I
    *   -3-
                                                                           Page 3
.




        We are examining the definitions  used in the MA-101 and 104 systems in
        order to clarify data elements. Problems with the M-104 termination
        report outlined in this review will be corrected.    We intend to ask
        regions and states for suggestions for improvements and will issue new
        instructions.   The VtheP category for terminations will be redefined
        in order to eliminate excessive numbers of terminations    reported in
        this category.
        The instructions     for completing reports on welfare savings will be
        reviewed. The system of having welfare savings reported as part of
        a general project status system may not be adequate. We therefore
        will examine alternative     possibilities  for gathering this type of
        information,    including follow-up and evaluation studies.    It should
        be noted that, although we have attempted to identify welfare savings
        on our program reports, there is no guarantee that local welfare
        agencies will supply this information to local employment offices.
        We have found in many cases that they are so overburdened and
        understaffed that they do not have the time to develop "extra" data.
        The following comments concerning the GAO findings regarding the
        management information system were received by the Department from
        California   and Colorado:
              California  - 'We agree that the management information system is
        inadequate and recommend that HEWand DOL reporting requirements be
        made identical   and consolidated."  As an example, HEWreports those
        removed from welfare due to WIN, even in the case of unsuccessful
         completions, while DOL reports only on those who complete "job entry"
        successfklly.
        We agree that welfare costs should be considered part of overall WIN
        costs.   California has instituted   a joint information system of both
        welfare and manpower WIN expenditures.      The costs, when audited, are
        used in computing overall costs of the program for State purposes
        even though not requiredby      DOLandHEW.
        Because the State Department of Finance auditors asked us to use the
        cash basis of financial reporting and the GAOauditors requested
        reporting on an accrual basis, we are following the prescribed accounting
        methods for governmental agencies which is a combination of encumbrance,
        accrual, and cash accounting.
        California agrees that the DOL reporting form for terminations     is
        inadequate and has suggested modifications  to DOL that wcxild make the
        form 104 more accurate.   California  recommends that a standardized
        method for projecting welfare savings be required.


                                            47
 APPEND1 X I
     Page 4

-4-




      Colorado - '+Wni.le the need to study WIN program operations and
to gather information about these operations for presentation to the
Congress is appreciated, we feel that it should be recognized that
because of the relative newness of an extremely complex and large-
scale program, it could not reasonably be expected to be found without
problems and need for change. Considering the GAOreport and its
purpose in the light of a need to review the structure of the WIN
program and the organization and procedures for its implementation,
we are in general agreeDent with the findings and recommendations
of the GAO report."
Colorado notes that the report stated that the costs of operating
the WIN program have not been compiled and reported accurately by
DOL. They arther    state that this should include HEWwhich has the
responsibility of providing data on WIN-related cost which local welfare
agencies have paid but is not reported in the WIN cost reports.
Colorado agrees that the definition  of reasons for terminations were
inadequate and confusing; however, since May 1970, when the revised
WIN Information System Manual became available,   WIN State staff have
made efforts to obtain more accurate reporting.    The State further
believes that a comprehensive termination reporting form with more explicit
reporting instructions  would be of considerable assistance.
2.    Program Design
The CA0 report makes reference to the fact that the program design
for WIN and Aid to I%mi.lies with Dependent Children (AFDC) needs to
be changed in certain respects if the overall. objective     of providing
realistic  encouragement and opportunities   to AFDC family heads to
seek employment is to be realized.     The Department concurs that since
the problems with the basic design cannot be dealt with effectively
by administrative  action alone, Congress during its deliberations      on
welfare reform may wish to consider four major areas of the WIN
program.
The Department's   comments concerning these four major areas are:
       (a) HR 1, the new welfare reform bill reported out of the House
Committee on Ways and Means with amendments on May 26, 1971, provides
that a person in a family eligible    for benefits under the Family
Assistance Plan will always receive more income through working than
not working.   In computing a family's earnings for benefit purposes,
the first $720 of earnings and one-third of the remainder is excluded.
For example, if the head of a family of four were earning $2,000 per
year, his total income with benefits would be $3,567 a year if he
continued working.   This would be $1,167 more than if he did not work.

                                       48
                                                                              APPEWIX        I
                                                                                  Page       5
-5-




        (b) The provisions     of RR 1 call for a Federal redetermination
of benefit    levels on a quarterly      basis and reapplication     for benefits
by families     if they need to participate     in the program beyond a period
of two years.       Federal benefits   will be gradually     reduced on a uniform
national    scale as family income increases.        For example, benefit       payments
would decrease gradually       for a family of four until       an earning level of
$4,320 is reached,        These Federal benefit   level determinations       are
unaffected    by the addition     or reduction  of supplemental     benefits    by
States.

       (c) HR 1 provides    for strong Federal penalties     for refusal   to
take manpower services    and/or emplomy            family members determined
available  for such.    Ref'usal will  result   in reduction   of benefits   of
$800 per year for each of the first       two family members, $@O for each
of the next three,    $300 for each of the next two, and $200 for the
next such member.

        (d) The Administrationrs        proposed welfare      reform legislation
calls for a major public service employment program (200,000 training
opportunities      in the first   year),,     Public service employment is to
provide employment for those unable to obtain employment or to be
effectively     placed in training      programs.    It will be developed through
grants or contracts      with public or nonprofit        private    agencies.    The
Secretary     of Iabor shall provide for the cost of providing             such
employment to an individual        at the rate of lOC$ the first          year,
not more than 7546 the second year, and not more than 5C$ the third
year. The status of individuals            placed in PSE will be reviewed at
least once each six months.          PSE is intended to be a transitional
period prior to movement into unsubsidized             employment.

California  commented that they agree that the disparity      of welfare
payments to men and women is a disincentive      to men and provides    an
overly long stay on welfare   for the women. They recommend Federal
legislation  that provides  a realistic  cut-off   point as to the length
of time a person remains on AFDC after    employment.

California      agrees that sanctions,     as presently    mandated and administered,
have not been an effective         means to either    motivate  enrollees     to remain
in the program or remove families          from welfare    when the enrollee       refises
to participate.         County welfare  departments,    finding   the vendor payment
and counseling       process cumbersome and time consuming for their            limited
staff,     impose sanctions    on very few of these enrollees        terminated      from
WIN for lack of good cause.

California  agrees to the need for special            work projects      and acknowledges
the funding difficulties  which seriously           limit  their    use.

Colorado~s  reply to the Department          did not comment on the Program
Design phase of the GAO report.
                                             49
 APPEND1 X I
      Page 6
-6-




The Administration         and the Congress are thoroughly       familiar    with the
problems of implementing          and operating    the WIN program.       Most of these
problems have been addressed in the Welfare Reform legislation                     now
under consideration         in the Congress.      The four major areas, noted in
the GAO report     and recommended for consideration          by Congress, have
been considered      and corrected       in RR 1 as amended, which was recently
enacted by the House of Representatives.              Other operating      problems
which can be identified          or minimized   through administrative        direction
are receiving     priority     attention    by both Departments.

We appreciate     the opportunity    to review and comment on this report
in draft   form.     The findings   and recommendations    presented     should
be of consideratble      assistance    to us in our effort    to efficiently
administer    the WIN program.




                                             50
                                                                                        APPENDIX II
                      OFfleG OF 7?ifi                                                        Page 1
                  THE/SECRETARY      OF    HEALTH.    EDUCATION,        AND   WELFARE
                                  WASHINGTON.         D.   C.   20201




or. Philip   Charam
Associate   Director,    Civil Division
United States     General Accounting    Office
Washington,    D.C.     20548

Dear Mr.    Charam:
The Secretary   has asked me to respond to the draft    report
on the GAO Review of Problems in Accomplishing     Objectives
of the Work Incentive    (WIN) Program. The Department      is in
general  agreement with the conclusions   and recommendations
therein.
The comments of the California        State Department       of Social
Welfare   and the Colorado    State Department       of Social     Services
are attached.     The States   generally    concur in the- findings
and recommendations.       The State of California,         however,
expressed    some doubts regarding      the advisability      of certain
changes to the Aid to Families       with Dependent Children
Program outlined     in the report    as a matter       for considera-
tion by the Congress.
It should be noted that the welfare            reform provisions     of
H.R. 1 correct       many of the deficiencies        cited  in the report.
Concerning    the need for an adequate management information
system,    the bill    requires    the Secretary     of Labor to conduct
continuous    evaluation      and research    on the effectiveness      of
the Opportunities        for Families    Program,    and to submit an
annual report       to the Congress.
In addition,       H.R. 1 combines strong          work incentives      with
reasonable      work requirements.          All recipients     --with   specific
exceptions    --would     be required     to register      for manpower
services,     training,      or employment,      as appropriate.        Failure
to do so would result           in a reduction      of the family's      bene-
fits   of $800 per year.          The incentive       for work is contained
in a provision        which permits     recipients       to retain    a portion
of their     benefits     until   their   income reaches a cut-off
point,    thus making it always more profitable                to work.




                                                 51
APPENDIX II
       Page   2                      -2.

Breakeven    points  under H.R. 1 would also be more realistic
than under the WIN Program.          A family        of four would be able
to earn up to $4,140 per year before              benefits     were termi-
nated;   the maximum earnings       permitted        would be $5,940 for
a family    of eight or more.       Eligibility        and benefit    levels,
for both male-and      female-headed       families,      would be related
to family     income rather    than number of hours worked.
We appreciate    the    opportunity        to review   the   draft   report
prior  to issuance      of the final         report.
                                           Sincerely   yours,



                                           Assistant   Secretary,     Comptroller
Attachment




                                           52
                                                                                 APPENDIX If
                                                                                          Page    3

                                 DEPARTfilEMT
                                           OFSCCIALSERWCES
                                          1575 SHER!.lAN STREET                                CON F. SHEA
                                        DENVER, COLORADO    80203                           Executive Director



                                            June   10, 1971




xr.    James R. Eiirress
Regional Commissioner
Social and Rehabilitation     Service
Department   of Health,   Education,  and Welfare
Federal Office   Building   - 19th and Stout Streets
Denver, Colorado     80202

Dear Mr. Burress:

              We have carefully       reviewed with great interest             the draft        of the
 report   prepared by the General Accounting             Off' rce on the WIN Programs in
'Djnver ani! Los Angeles.         Tnis 1s a very uLjk.iili-<s          report ::hc:Ch nll+‘inPs
                                                                                       - ---.
 the positives     and negatives      of the WIN Program and the constraints                    which
have led to less than generally             desired   results.         It is urged that the
results     of this audit be given most serious               consideration      in any future
 legis 1atiOiI , policy,      and program development          related     to manpower develop-
ment and training        p rograms originating      at the Federal level.

                We appreciate    having had the opportunity.to              review    the draft       of
this   report     prior   to its submittal  to Congress.




                                                   Executive    Director

CFS:DIA:lr

cc:    Charline     J. Birkins




                                           53
nPYENnTX   IX
                                                                   APPENDIX III


                                    PRINCIPAL OFFICIALS OF
                                  THE DEPARTMENT
                                               QF LABORAND
              THE DEPARTMENT
                           OF HEALTH, EDUCATION, AND WELFARE
                             RESPONSIBLEFOR THE ADMINISTRATION OF
                               ACTIVITIES DISCUSSEDIN THIS REPORT
                                                             Tenure of office
                                                           From               -To

                                      DEPARTMENTOF LABOR
SECRETARYOF LABOR:
    James D. Hodgson                               July         1970      Present
    George P. Shultz                               Jan.         1969      June      1970
    W. Willard Wirtz                               Sept.        1962      Jan.      1969
ASSISTANT SECRETARYFOR
  MANPOWER:
     Malcolm R. Love11                             July         1970      Present
     Arnold R. Weber                               Feb.         1969      July      1969
     Stanley H. Ruttenberg                         June         1966      Jan.      1969
MANPOWER  ADMINISTRATOR:
    Paul J. Fasser, Jr.                            Oct.         1970      Present
    Malcolm R. Love11                              June         1969      July      1970
    J. Nicholas Peet                               Feb.         1969      June      1969
    William Kolberg (acting)                       Jan.         1969      Feb.      1969
    Stanley H. Ruttenberg                          Jan.         1965      Jan.      1969
                DEPARTMENT
                         OF HEALTH, EDUCATION, AND WELFARE
SECRETARYOF HEALTH, EDUCATION,
  AND WELFARE:
    Elliot  L. Richardson                          June         1970      Present
     Robert H. Finch                               Jan.         1969      June      1970
    Wilbur J. Cohen                                Mar.         1968      Jan.      1969
ADMINISTRATOR, SOCIAL AND
  REHABILITATION SERVICE:
     John D. Twiname                               Mar.         1970      Present
     Mary E. Switzer                               Aug.         1967      Mar.      1970

U.S   GAO,   Wash.,   D.C.

                                              55
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