oversight

Workforce Training: Employed Worker Programs Focus on Business Needs, but Revised Performance Measures Could Improve Access for Some Workers

Published by the Government Accountability Office on 2003-02-14.

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

                United States General Accounting Office

GAO             Report to Congressional Requesters




February 2003
                WORKFORCE
                TRAINING
                Employed Worker
                Programs Focus on
                Business Needs, but
                Revised Performance
                Measures Could
                Improve Access for
                Some Workers




GAO-03-353
                                                 February 2003



                                                 WORKFORCE TRAINING

                                                 Employed Worker Programs Focus on
Highlights of GAO-03-353, a report to the
Ranking Minority Member, Senate                  Business Needs, but Revised
Committee on Health, Education, Labor
and Pensions, and Chairman,                      Performance Measures Could Improve
Subcommittee on 21st Century
Competitiveness, House Committee on              Access for Some Workers
Education and the Workforce



 Although training for employed                  Nationwide, two-thirds of the 470 local workforce boards responding to our
 workers is largely the responsibility           survey provided assistance to train employed workers, such as partnering
 of employers and individuals, the               with employers to develop training proposals or funding training. Nearly
 Workforce Investment Act (WIA)                  40 percent specifically budgeted or spent funds on training these workers.
 allowed state and local entities to             The number of boards that reported funding training for employed workers
 use federal funds for training
 employed workers. Similarly,
                                                 varied by state, but most states had at least one workforce board that
 welfare reform legislation created              targeted funds on such training. At the state level, all 16 states that GAO
 Temporary Assistance for Needy                  contacted also funded training for employed workers. These states and local
 Families (TANF) block grants and                workforce boards reported funding training that addressed specific business
 gave states greater flexibility to              and economic needs. Although many types of training for employed workers
 design training services for TANF               were funded, most often occupational training to upgrade skills, such as
 clients to help them obtain and                 learning new computer applications, and basic skills training, such as in
 retain jobs.                                    English and math, were emphasized and community or technical colleges
                                                 were most frequently used to provide these services.
 To better understand how the
 training needs of employed                      In targeting training specifically for low-wage workers, state and local
 workers, including low-wage
 workers, is publicly supported,
                                                 officials identified approaches to challenges that hindered individuals’ and
 GAO was asked to determine (1)                  employers’ participation in training. Officials developed approaches to
 the extent to which local areas and             address some of the personal issues that low-wage workers face that made
 states provide assistance to train              participating in training difficult. They also developed ways to gain support
 employed workers, including                     from employers who were reluctant to participate in low-wage worker
 funding training; (2) the focus of              training, such as by partnering with employers to develop career paths that
 such training efforts and the kind              help retain employees within companies. However, officials reported that
 of training provided; and (3) when              challenges to implementing successful training still exist. For example, they
 targeting training to low-wage                  explained that the WIA performance measure that tracks the change in adult
 workers, the approaches state and               earnings after 6 months could limit training opportunities for employed
 local officials identified to address           workers, including low-wage workers. The wage gain for employed workers
 challenges in training this
 population.
                                                 would not likely be as great as that for unemployed job seekers, and this
                                                 might provide a disincentive to enrolling employed workers into training
                                                 because their wage gain may negatively affect program performance.

 To improve the use of WIA funds                 Most states had at least one workforce board that reported funding training specifically for
 for employed worker training, GAO               employed workers in either program year 2000 or 2001.
 recommends that the Secretary of
 Labor review a current WIA
 performance measure for change in
 adult average earnings. Labor
 agreed with our recommendation
 and will evaluate performance
 measures to identify and address
 unintended disincentives for
 serving employed workers.
www.gao.gov/cgi-bin/GAO-03-353.

To view the full report, including the scope
and methodology, click on the link above.
For more information, contact Sigurd Nilsen at
                                                 Source: Analysis of GAO survey of local workforce boards.
(202) 512-7215 or nilsens@gao.gov.
Contents


Letter                                                                                         1
                       Results in Brief                                                        3
                       Background                                                              4
                       Most Local Workforce Boards, and All States Contacted, Provided
                          Assistance for Training Employed Workers                           10
                       Training for Employed Workers Focused on Addressing Business
                          Needs and Certain Workplace Skills                                 17
                       In Targeting Training to Low-Wage Workers, Officials Addressed
                          Several Challenges, though WIA Performance Measures Were an
                          Issue                                                              24
                       Conclusions                                                           30
                       Recommendation for Executive Action                                   31
                       Agency Comments                                                       31

Appendix I             Objectives, Scope, and Methodology                                     33



Appendix II            Workforce Boards’ Survey Information                                   38



Appendix III           Information on State Funding Sources                                   40



Appendix IV            Comments from the Department of Health and
                       Human Services                                                         41



Appendix V             Comments from the Department of Labor                                  43



Appendix VI            GAO Contacts and Staff Acknowledgments                                 45
                       GAO Contacts                                                          45
                       Staff Acknowledgments                                                 45

Related GAO Products                                                                          46




                       Page i                                      GAO-03-353 Workforce Training
Tables
          Table 1: WIA Performance Measures for Adults and Dislocated
                   Workers                                                          28
          Table 2: States in Telephone Interview Sample—Population and
                   Key Funding Sources                                              35
          Table 3: Site Visit States and Locations                                  37
          Table 4: Local Workforce Boards’ Survey Response Rate and
                   Number Targeting Funds for Employed Worker Training              38
          Table 5: Funding Sources Identified by Officials in 16 States That
                   Were Budgeted or Spent for Employed Worker Training
                   for WIA Program Years 2000 and/or 2001                           40


Figures
          Figure 1: Map of 50 States Showing Local Workforce Boards That
                   Reported Funding Training Specifically for Employed
                   Workers in Program Year 2000 or 2001                             12
          Figure 2: Key Sources of Federal Funding Used by Local Workforce
                   Boards That Funded Training for Employed Workers,
                   Program Year 2001                                                15
          Figure 3: Key Sources of Funding for Employed Worker Training
                   Used in Program Years 2000 and/or 2001 by 16 States We
                   Contacted                                                        17
          Figure 4: Economic Sectors Targeted by Local Workforce Boards
                   That Funded Training for Employed Workers in Program
                   Year 2001                                                        19
          Figure 5: Types of Training Funded by Local Workforce Boards
                   That Funded Training for Employed Workers in Program
                   Year 2001                                                        23
          Figure 6: Types of Training Providers Used by Local Workforce
                   Boards That Funded Training for Employed Workers in
                   Program Year 2001                                                24




          Page ii                                         GAO-03-353 Workforce Training
Abbreviations

ERA               Employment Retention and Advancement
ESL               English as a Second Language
HHS               Department of Health and Human Services
NAICS             North American Industry Classification System
TANF              Temporary Assistance for Needy Families
UI                Unemployment Insurance
WIA               Workforce Investment Act




This is a work of the U.S. Government and is not subject to copyright protection in the
United States. It may be reproduced and distributed in its entirety without further
permission from GAO. It may contain copyrighted graphics, images or other materials.
Permission from the copyright holder may be necessary should you wish to reproduce
copyrighted materials separately from GAO’s product.




Page iii                                                  GAO-03-353 Workforce Training
United States General Accounting Office
Washington, DC 20548




                                   February 14, 2003

                                   The Honorable Edward M. Kennedy, Ranking Minority Member
                                   Committee on Health, Education, Labor and Pensions
                                   United States Senate

                                   The Honorable Buck McKeon, Chairman
                                   Subcommittee on 21st Century Competitiveness
                                   Committee on Education and the Workforce
                                   House of Representatives

                                   Technological advances continue to transform the U.S. workforce and
                                   economy. To keep pace, workers must periodically improve their skills,
                                   and, as a result, training for employed workers has become an essential
                                   part of the new workplace. In fact, according to data from the U.S. Bureau
                                   of Labor Statistics, for almost 70 percent of all occupations, work-related
                                   training is the primary source of education or training. Such training can
                                   enable employed workers to advance in their jobs, opening up entry-level
                                   positions for others. Furthermore, low-wage workers who receive training
                                   can achieve wage gains leading to self-sufficiency—a goal of both welfare
                                   reform and the Workforce Investment Act (WIA).

                                   When the Congress passed WIA in 1998, it allowed state and local
                                   governments to use federal funds for training employed workers, instead
                                   of primarily funding services designed to help the unemployed. Similarly,
                                   welfare reform legislation in 1996 created Temporary Assistance for Needy
                                   Families block grants (TANF) that sought to move welfare recipients into
                                   jobs and gave states greater flexibility to design training services—
                                   including postemployment training—for TANF clients. Little is known,
                                   however, about the extent to which state and local governments are
                                   funding training for employed workers because options to train these
                                   workers under WIA and TANF are relatively new.

                                   To better understand how states and local areas are training employed
                                   workers, including low-wage workers, you requested that we determine
                                   (1) the extent to which local areas and states provide assistance to train
                                   employed workers, including funding training; (2) the focus of such
                                   training efforts and the kind of training provided; and (3) when targeting
                                   training to low-wage workers, the approaches state and local officials
                                   identified to address challenges in training this population.



                                   Page 1                                          GAO-03-353 Workforce Training
To respond to these questions, we obtained a national perspective on local
efforts to specifically fund training for employed workers using a mail
survey to all 595 local workforce investment boards that were created
under WIA to establish local workforce development policies. We received
responses from 79 percent of the workforce boards surveyed.1 To
determine how states provided assistance for training employed workers,
including low-wage workers, we conducted telephone interviews with
officials in 16 states who were responsible for workforce development,
economic development, and TANF funds used for education and training.2
We selected these states because, between 1998 and 2001, most of them
had used federal funds, such as demonstration grants, for training
employed workers. In obtaining information from state officials and local
workforce investment boards, we focused on program years 2000 and
2001.3 To obtain more in-depth information about the approaches state and
local officials use to address challenges in providing training specifically
for low-wage workers, we visited local areas in four of the states—Florida,
Texas, Oregon, and Minnesota; these were chosen from the states whose
officials we interviewed by telephone. We selected these states for site
visits largely because experts and others had identified them as having
specific efforts for training employed workers, especially initiatives to help
low-wage workers retain employment and advance in their jobs. We also
discussed efforts to train employed workers with officials from the
Departments of Labor, Health and Human Services (HHS), and Education,
and representatives of associations such as the National Governors’
Association, National Association of Workforce Boards, and the U.S.
Chamber of Commerce. We conducted our work from October
2001 through December 2002 in accordance with generally accepted
government auditing standards. For further information on our scope and
methodology, see appendix I.




1
We administered the survey to local workforce investment board directors in the 50
United States, the District of Columbia, and Puerto Rico.
2
 Although it is possible that state offices other than those we contacted could also use
some TANF funds to support training for employed workers, contacting additional offices
was outside of the scope of our work.
3
 A program year under WIA begins on July 1 of a year and ends on June 30 of the following
year. A program year is designated by the year in which it begins. Thus program year 2000
began on July 1, 2000, and ended on June 30, 2001.




Page 2                                                   GAO-03-353 Workforce Training
                   Nationwide, two-thirds of the 470 workforce boards responding to our
Results in Brief   survey provided assistance to train employed workers—and did so in a
                   variety of ways, such as partnering with employers to develop training
                   proposals or funding training; all 16 states that we contacted also funded
                   training for employed workers. Nearly 40 percent of workforce boards
                   specifically budgeted or spent funds to train employed workers, and a
                   greater percentage of workforce boards reported funding such training in
                   program year 2001 than in the previous year. The 16 states we contacted
                   all funded training for employed workers, and most of these states funded
                   such training from two or more offices; these offices included those
                   responsible for workforce development, economic development, and
                   TANF funds used for education and training. When more than one office
                   within a state funded training for employed workers, most state offices
                   reported coordinating these efforts both formally and informally. Few
                   states and local workforce boards were able to provide information on the
                   number of low-wage workers who participated in training because many
                   do not categorize training participants by wage or employment status.
                   Local areas and states most commonly funded training for employed
                   workers with federal resources, such as WIA and TANF funds.

                   States and local workforce boards focused their training initiatives for
                   employed workers on training that addressed specific business needs and
                   emphasized certain workplace skills. States and local workforce boards
                   often gave priority to training needed for certain economic sectors, such
                   as manufacturing and health care, or for occupations that were in demand,
                   such as certified nursing assistants. In Indiana, for example, the state
                   workforce office sponsored a high-skills, high-wage training initiative
                   designed to meet employers’ specific needs for skilled workers in
                   information technology, manufacturing, and health. Although states and
                   local workforce boards funded many types of training for employed
                   workers, they most often emphasized occupational training to upgrade
                   skills, such as learning new computer applications, and basic skills
                   training, such as in English and math. They most frequently used
                   community or technical colleges to provide these services.

                   In targeting training specifically for low-wage workers, state and local
                   officials addressed several challenges that hindered individuals’ and
                   employers’ participation in training. State and local officials also
                   addressed some of the personal issues that low-wage workers face—such
                   as limited English and literacy skills, childcare and transportation needs,
                   scheduling conflicts, and financial constraints—that made participating in
                   training difficult. State and local officials also developed a number of ways
                   to gain support from employers who were reluctant to participate in low-


                   Page 3                                           GAO-03-353 Workforce Training
             wage worker training, such as by partnering with employers to develop
             career paths that help retain employees within companies and by
             streamlining grant application paperwork. Despite attempts to address
             both worker and employer issues, challenges to implementing successful
             training still exist. For example, state and local officials reported that the
             WIA performance measure that tracks adult earnings gain, and certain
             funding requirements that accompany some federally funded training
             programs, may limit training opportunities for some low-wage workers.
             The wage gain for employed workers would not likely be as great as that
             for unemployed job seekers, and this measure might provide a disincentive
             to local boards to enroll employed workers into training, because lower
             wage gains could negatively affect their program performance.

             To improve the use of WIA funds for employed worker training, we
             recommend that the Secretary of Labor review the current WIA
             performance measure for changes in adult average earnings to ensure that
             it does not provide disincentives for serving employed workers, including
             low-wage workers. The Department of Labor agreed with our findings and
             recommendation. Labor also noted that as part of an evaluation of the WIA
             performance measurement system, a study for which they contracted in
             May 2002, performance measures would be evaluated so that unintended
             disincentives might be eliminated.


             Although training for employed workers is largely the responsibility of
Background   employers and individuals, publicly funded training seeks to fill potential
             gaps in workers’ skills. In recent years, the federal government’s role in
             training employed workers has changed. In 1998, WIA replaced the Job
             Training Partnership Act after 16 years and, in doing so, made significant
             changes to the nation’s workforce development approach. Before
             implementation of WIA, federal employment and training funds were
             primarily focused on helping the unemployed find jobs; the WIA legislation
             allowed state and local entities to use federal funds for training employed
             workers.4 TANF block grants to states also allowed more flexibility to
             states in serving low-wage workers and, like WIA funds, federal funding




             4
             Pub. L. No. 105-220 (1998). WIA is administered and funded at the federal level through the
             Department of Labor and traditionally administered through a state’s workforce structure.




             Page 4                                                   GAO-03-353 Workforce Training
                           authorized under TANF can now be used for training employed workers,
                           including low-wage workers.5


WIA Funding for Training   WIA funds provide services to adults, youth, and dislocated workers and
Employed Workers           are allocated to states according to a formula. States must allocate at least
                           85 percent of adult and youth funds to local workforce areas and at least
                           60 percent of dislocated worker funds to local workforce areas. For
                           training employed workers, the WIA funds used are from those
                           appropriated to provide services to all adults as well as dislocated
                           workers, funded at about $2.5 billion for program year 2001.6 WIA also
                           permits states to set aside up to 15 percent of WIA funds allocated for
                           adults, youth, and dislocated workers to their states to support a variety of
                           statewide workforce investment activities that can include implementing
                           innovative employed worker programs.7 These funds can also be spent for
                           providing assistance in the establishment and operation of one-stop
                           centers, developing or operating state or local management information
                           systems, and disseminating lists of organizations that can provide training.
                           In a previous GAO report, we reported that several states used these state
                           set-aside funds specifically for implementing employed worker training.8

                           WIA also required that all states and localities offer most employment and
                           training services to the public through the one-stop system—about
                           17 programs funded through four federal agencies provide services
                           through this system.9 For this system, WIA created three sequential levels


                           5
                            Pub. L. No. 104-193 (1996). TANF block grants to states were created under the Personal
                           Responsibility and Work Opportunity Reconciliation Act of 1996. TANF grants are
                           administered and funded at the federal level through the Department of Health and Human
                           Services and are generally part of a state’s human services structure.
                           6
                            In certain limited situations, dislocated worker funds can be used to provide services to
                           employed workers as long as they meet WIA’s definition of a dislocated worker.
                           7
                            For training current workers, Labor refers to training using WIA local funding as employed
                           worker training and training using WIA state set-aside funds as incumbent worker training,
                           to distinguish between the two funding sources. For the purposes of this report, however,
                           we refer to all training provided to current workers as employed worker training.
                           8
                            U.S. General Accounting Office, Workforce Investment Act: Better Guidance and Revised
                           Funding Formula Would Enhance Dislocated Worker Program, GAO-02-274 (Washington,
                           D.C.: Feb. 11, 2002).
                           9
                            Workforce development activities are coordinated through state and local workforce
                           investment boards—the majority of board members must come from the private sector.
                           The governor certifies local boards to, among other duties, select one-stop operators.




                           Page 5                                                     GAO-03-353 Workforce Training
                  of service—core, intensive, and training. The initial core services, such as
                  job search assistance and preliminary employment counseling and
                  assessment, are available to all adults and WIA imposes no income
                  eligibility requirements for anyone receiving these core services. Intensive
                  services, such as case management and assistance in developing an
                  individual employment plan, and training require enrollment in WIA and
                  generally are provided to persons judged to need more assistance. In order
                  to move from the core level to the intensive level, an individual must be
                  unable to obtain or retain a job that pays enough to allow the person to be
                  self-sufficient, a level that is determined by either state or local workforce
                  boards. In addition, to move from the intensive level to the training level,
                  the individual must be unable to obtain other grant assistance, such as
                  Department of Education grants, for such training services. Under WIA,
                  states are encouraged to involve other agencies besides workforce
                  development—including the agencies responsible for economic
                  development and the Department of Health and Human Services’ TANF
                  program—in the planning and delivery of services in the one-stop center
                  system.


WIA Performance   WIA performance measures are designed to indicate how well program
Measures          participants are being served by holding states and local areas accountable
                  for such outcomes as job placement, employment retention, and earnings
                  change. WIA requires the Department of Labor and states to negotiate
                  expected performance levels for each measure. States, in turn, must
                  negotiate performance levels with each local area. The law requires that
                  these negotiations take into account such factors as differences in
                  economic conditions, participant characteristics, and services provided.
                  WIA holds states accountable for achieving their performance levels by
                  tying those levels to financial sanctions and incentive funding. States
                  meeting or exceeding their measures may be eligible to receive incentive
                  grants that generally range from $750,000 to $3 million. States failing to
                  meet their expected performance measures may suffer financial sanctions.
                  If a state fails to meet its performance levels for 1 year, Labor provides
                  technical assistance, if requested. If a state fails to meet its performance
                  levels for 2 consecutive years, it may be subject to up to a 5 percent
                  reduction in its annual WIA grant.




                  Page 6                                           GAO-03-353 Workforce Training
TANF Funding for Training   In fiscal year 2000—the latest for which data are available—states
Employed Workers            reported spending $121.6 million in federal TANF funds specifically for
                            education and training.10 Prior to WIA, welfare reform legislation created
                            the TANF block grant, which provided flexibility to states to focus on
                            helping needy adults with children find and retain employment. The TANF
                            block grant is a fixed amount block grant of approximately $16.7 billion
                            annually. Although the TANF program was not required to be part of WIA’s
                            one-stop system, states and localities have the option to include TANF
                            programs. As we have previously reported,11 many are working to bring
                            together their TANF and WIA services. The TANF block grants allow
                            states the flexibility to decide how to use their funds—for example, states
                            may decide eligibility requirements for recipients, how to allocate funds to
                            a variety of services, and what types of assistance to provide. Work-related
                            activities that can be funded under TANF encompass a broad range of
                            activities including subsidized work, community service programs, work
                            readiness and job search efforts, as well as education and training
                            activities such as on-the-job training, vocational education, and job skills
                            training related to employment.

                            TANF funds available to states can be used for both pre- and
                            postemployment services. Because of the increased emphasis on work
                            resulting from welfare reform and time limits for receiving cash
                            assistance, state offices responsible for TANF funds may focus largely on
                            helping their clients address and solve problems that interfere with
                            employment, such as finding reliable transportation and affordable child
                            care, especially for those in low-paying jobs.




                            10
                             The $121.6 million in fiscal year 2000 expenditures for education and training includes
                            TANF funds available from fiscal years 1997, 1998, 1999, and 2000.
                            11
                              U.S. General Accounting Office, Workforce Investment Act: Implementation Status and
                            the Integration of TANF Services, GAO/T-HEHS-00-145 (Washington, D.C.: June 29, 2000)
                            and Workforce Investment Act: Coordination between TANF Programs and One-Stop
                            Centers Is Increasing, but Challenges Remain, GAO-02-500T (Washington, D.C.: Mar. 12,
                            2002).




                            Page 7                                                    GAO-03-353 Workforce Training
Other Federal Funds      In recent years, several federal demonstration or competitive grants were
Available for Training   available for training employed workers. For example, the Department of
Employed Workers         Labor’s Welfare-to-Work state and competitive grants12 were authorized by
                         the Congress in 1997 to focus on moving the hardest-to-employ welfare
                         recipients and noncustodial parents of children on welfare to work and
                         economic self-sufficiency. Overall, welfare-to-work program services were
                         intended to help individuals get and keep unsubsidized employment.
                         Allowable activities included on-the-job training, postemployment services
                         financed through vouchers or contracts, and job retention and support
                         services. In addition, shortly after WIA was enacted, Labor gave all states
                         an opportunity to apply for $50,000 planning grants for employed worker
                         training.13 States were instructed to develop policies and program
                         infrastructures for training employed workers and to indicate their
                         available resources, anticipated needs, and plans for measuring success.
                         The Secretary of Labor also awarded larger, 2-year competitive
                         demonstration grants, operating from July 1, 1999, to June 20, 2001, for
                         training employed workers.

                         In addition, HHS is supporting the Employment Retention and
                         Advancement (ERA) study of programs that promote stable employment
                         and career progression for welfare recipients and low-income workers. In
                         1998, for the planning phase of this project, HHS awarded 13 planning
                         grants to states to develop innovative strategies. HHS has contracted with
                         the Manpower Demonstration Research Corporation to evaluate 15 ERA
                         projects in eight states, comparing the outcomes of those who received
                         services with a control group that did not.14

                         About the same time as the enactment of WIA, the Congress passed the
                         American Competitiveness and Workforce Improvement Act of 1998,15


                         12
                          Six states—Idaho, Mississippi, Ohio, South Dakota, Utah, and Wyoming—did not
                         participate in the welfare-to-work state formula grant program. These states chose not to
                         participate for various reasons, including concerns about their ability to provide state
                         matching funds. Most states had at least one local service organization that received
                         competitive grant funds. See U.S. General Accounting Office, Welfare Reform: Status of
                         Awards and Selected States’ Use of Welfare-to-Work Grants, GAO/HEHS-99-40
                         (Washington, D.C.: Feb. 5, 1999).
                         13
                          States were not required to provide matching funds for this grant but only 29 states
                         applied—several did not use their grant funds or returned a part of the grant award.
                         14
                          The Manpower Demonstration Research Corporation is a nonprofit, nonpartisan social
                         policy research organization.
                         15
                          Pub. L. No. 105-277 (1998).




                         Page 8                                                    GAO-03-353 Workforce Training
                           which authorized some funding for technical skills training grants as part
                           of an effort to increase the skills of American workers. This legislation
                           raised limits on the number of high-skilled workers entering the United
                           States with temporary work visas, imposing a $500 fee on employers—
                           later raised to $1,000—for each foreign worker for whom they applied.16
                           Most of the money collected is to be spent on training that improves the
                           skills of U.S. workers. Labor awards the skill grants to local workforce
                           investment boards, thereby linking the skill grant program with the
                           workforce system. The workforce boards may use the funds to provide
                           training to both employed and unemployed individuals. In a previous GAO
                           report on these grants,17 we reported that, for grantees that collected
                           participant employment data (39 of 43 grantees), approximately three-
                           fourths of the skills training grant participants are employed workers
                           upgrading their skills.


State Funds for Training   In addition to being able to use WIA state set-aside funds for different
Employed Workers           activities including training employed workers, states can authorize funds
                           from other available sources, such as state general revenue funds or funds
                           related to unemployment insurance trust funds. States can also fund such
                           training in conjunction with other federal funding grants, such as the
                           Department of Housing and Urban Development’s Community
                           Development Block Grant. This grant can be used for economic
                           development activities that expand job and business opportunities for
                           lower-income persons and neighborhoods. These state training programs
                           serve primarily to help businesses address a variety of issues including
                           skill development, competitiveness, economic development, and
                           technological changes.

                           States can fund training for employed workers through various offices.
                           Workforce development offices have historically focused on training for
                           unemployed and economically disadvantaged individuals, while economic
                           development offices have typically focused on helping employers foster
                           economic growth for states. Economic development offices may also
                           provide employment and training opportunities to local communities,
                           generally by working with employers to meet skill shortages and long-term


                           16
                            The fee for employers who apply for H-1B visa workers expires on September 30, 2003.
                           17
                            U.S. General Accounting Office, High-Skill Training: Grants from H-1B Visa Fees Meet
                           Specific Workforce Needs, but at Varying Skill Levels, GAO-02-881 (Washington, D.C.:
                           Sept. 20, 2002).




                           Page 9                                                 GAO-03-353 Workforce Training
                            needs for qualified workers. States have more often subsidized training
                            tailored for businesses through their economic development offices,
                            according to reports published by the National Governors’ Association.18

                            Most of the local workforce boards reported that they provided assistance
Most Local Workforce        to train employed workers, including funding training, as did all 16 states
Boards, and All States      that we contacted. Two-thirds of the workforce boards responding to our
                            survey provided assistance to train employed workers in a variety of ways,
Contacted, Provided         and nearly 40 percent of the workforce boards specifically targeted funds
Assistance for              on training for these workers. Furthermore, a greater percentage of
                            workforce boards reported funding employed worker training in program
Training Employed           year 2001 than in program year 2000. The 16 states we contacted all funded
Workers                     training for employed workers and most of these states funded and
                            coordinated this training from two or more offices. Few states and local
                            workforce boards were able to provide information on the number of low-
                            wage workers who participated in training because many did not
                            categorize training participants by wage or employment status. Generally,
                            local areas and states funded training for employed workers with various
                            federal, state, local, or other resources, although WIA and other federal
                            funds were the most common sources of funding for this training.


Most Local Workforce        Two-thirds of the local workforce boards reported performing tasks that
Boards Supported Training   facilitated the provision of employed worker training, such as partnering
for Employed Workers        with employers to develop training proposals and providing individual
                            services to employed workers. For example, one workforce board helped
                            a local manufacturer obtain a state grant to retrain its employees through a
                            project to upgrade skills. Another workforce board helped a local
                            company by arranging English as a Second Language (ESL) classes for its
                            employees through a community college. Other workforce boards helped
                            employed workers establish individual training accounts with eligible
                            training providers. However, some workforce boards responded that they
                            did not specifically target training for employed workers because their
                            overall funds were so limited that such training was not a priority. Several
                            respondents explained that their clients were served based on need and
                            that individuals with jobs were not a priority for services because of the
                            sizeable unemployed population served by the workforce boards.


                            18
                             National Governors’ Association Center for Best Practices, Lessons from State
                            Demonstration Projects: A Guide to Incumbent Worker Training (Washington, D.C., 1999)
                            and A Comprehensive Look at State-Funded, Employer-Focused Job Training Programs
                            (Washington, D.C., 1999).




                            Page 10                                              GAO-03-353 Workforce Training
Nearly 40 percent of the local workforce boards responding to our survey
specifically targeted funds for employed worker training.19 The number of
boards that reported budgeting or spending funds on such training in
program years 2000 or 2001 varied by state. (See fig. 1.) Most states had at
least one workforce board that targeted funds for such training.20
Furthermore, a greater percentage of workforce boards reported funding
such training in program year 2001 than in the previous year. Of all the
workforce boards responding to our survey, 22 percent reported spending
funds specifically for training employed workers in 2000 and 31 percent
reported spending funds on training these workers in 2001. When they
funded training for employed workers, local workforce boards reported
doing so in a variety of ways. For example, in cooperation with the
economic development office, one workforce board in West Virginia
worked with local businesses to identify and fund training programs to
meet their business needs. At a workforce board we visited in Texas,
officials received a competitive state grant to fund employed worker
training to meet critical statewide industry needs in health care, advanced
technology, and teaching.




19
  Our survey asked local workforce boards to identify if they had, since July 1, 2000,
budgeted or spent any funding, including funding from federal, state, local or other sources,
to target training for employed workers. Other than asking for some general funding
information, economic sectors or industry clusters targeted, types of training, and
providers for employed worker training, we did not ask the boards to further describe how
the funds were spent. Some respondents did, however, provide additional comments on
their efforts to provide employed worker training.
20
  For additional information on the number of boards, by state, that targeted funds for
training employed workers, see app. II.




Page 11                                                    GAO-03-353 Workforce Training
Figure 1: Map of 50 States Showing Local Workforce Boards That Reported Funding Training Specifically for Employed
Workers in Program Year 2000 or 2001




Source: Analysis of GAO survey of local workforce boards.


                                                            Some local workforce boards that had not specifically targeted training for
                                                            employed workers were planning to become involved in such training or
                                                            had begun discussions about developing policies for this type of training.
                                                            For example, a workforce official in California cited plans to use
                                                            $95,000 from a federal grant to train employed workers in information
                                                            technology. Another workforce board, in Minnesota, planned to open a
                                                            training center for employed workers that would focus on business needs
                                                            within the local community, such as health care, and provide training
                                                            through a local community college.



                                                            Page 12                                        GAO-03-353 Workforce Training
States Funded Training   All of the 16 states we contacted funded training for employed workers. In
for Employed Workers,    most of the 16 states, training for employed workers was not limited to the
Usually through Two or   efforts of a single state office, but was funded by two or more state offices
                         with training responsibilities. In fact, in 8 states, all three offices we
More Offices             contacted funded training for employed workers. In addition to offices
                         responsible for workforce development, economic development, and
                         TANF funds used for education and training, state officials also identified
                         education departments—including those of higher education—within their
                         states as important funding sources for training employed workers. In
                         New York, for example, training funds were spread across about 20 state
                         agencies, according to one state official.

                         When more than one office within a state funded training for employed
                         workers, most state offices reported coordinating their training efforts
                         both formally and informally. Formal coordination methods that state
                         officials cited included workgroups and advisory boards (15 states),
                         memoranda of understanding or mutual referral agreements between
                         offices (12 states), or coordinated planning (12 states). For example,
                         Indiana’s economic development office noted that it had formal linkages
                         with the workforce office and that they collaborated on a lifelong learning
                         project.21 Offices in 9 of the 16 states also cited other means of
                         coordination, such as having common performance measures. For
                         example, Oregon’s workforce development office reported that state
                         agencies were held to a set of statewide performance measures. In
                         addition to these formal methods of coordination, all states cited informal
                         information sharing as a key means of coordination among offices within
                         their state. For example, an economic development official in one state
                         said he used his telephone speed dial to contact his workforce
                         development colleague, and a workforce development official in another
                         state told us she had frequent working lunches with the state official
                         responsible for TANF funds used for education and training.

                         In addition, in a few states, offices jointly administered training programs
                         within their states. In New York, for example, workforce development and
                         economic development offices comanaged a high-skill training grant
                         program for new and employed workers using $34 million in state general
                         revenue funds over 3 years. For this training program, begun in July


                         21
                           The mission of lifelong learning in this context is to develop the skills that workers need
                         to meet current and future work demands. In Indiana, this program was designed to
                         provide financial assistance to companies and organizations committed to expanding the
                         skills of their existing workers.




                         Page 13                                                     GAO-03-353 Workforce Training
2001, both offices reviewed training proposals, and the workforce
department created contracts and reimbursed companies for part of the
training costs. Similarly, in Pennsylvania, five departments—Labor and
Industry, Public Welfare, Community and Economic Development,
Education, and Aging—jointly administered an industry-specific training
grant initiative that primarily funded training for low-wage health care
workers. This joint effort represented a new approach for Pennsylvania,
because previously the economic development office was responsible for
training that was tailored, or customized, to employers. Under this joint
program, a state committee with representatives from each of the five
departments reviewed grant proposals and each agency funded a portion
of approved grants.

Finally, several states had reorganized their workforce responsibilities and
funding, either by consolidating workforce development and economic
development responsibilities or combining responsibilities for WIA and
TANF funds. For example, Montana and West Virginia transferred WIA
responsibilities and funding from the workforce office to the economic
development office. According to state officials, this approach was
intended to better align and integrate workforce and economic
development goals for the state. In Texas, the workforce commission—
which was created in 1995 to consolidate 10 agencies and 28 programs—
was responsible for WIA and TANF block grants, among others. In Florida,
a public-private partnership, governed by the state’s workforce board,
became responsible in October 2000 for all workforce programs and funds
in the state, including WIA, TANF, and Welfare-to-Work grant funds; this
shift was intended to create a better link between workforce systems and
businesses in the state.

Few state officials or local workforce boards were able to report the
number of low-wage workers who participated in training, for various
reasons. For example, some officials told us they did not categorize
training participants by wage. Other officials reported that, although they
targeted low-wage workers for training, they did not categorize training
participants by employment status. Although states we contacted could
not always provide us with the number of low-wage workers participating
in training, 13 of 16 states we contacted reported that they funded training
targeted to low-wage workers. Additionally, when WIA funds are limited,
states and local areas must give priority for adult intensive and training
services to recipients of public assistance and other low-income
individuals.




Page 14                                         GAO-03-353 Workforce Training
WIA and Other Federal   Local workforce boards reported that WIA and other federal funds were
Funds Were the Most     the most common source of funds used to support employed worker
Common Sources of       training. Federal funding for these training efforts included WIA funding—
                        both local and the state set-aside portion—TANF funds, and local Welfare-
Funding for Training    to-Work funds. (See fig. 2.) In addition, local boards described various
Employed Workers        other important funding sources such as Labor’s demonstration grants for
                        training employed workers and the federal skills training grants intended
                        to train workers in high-demand occupations.

                        Figure 2: Key Sources of Federal Funding Used by Local Workforce Boards That
                        Funded Training for Employed Workers, Program Year 2001

                        Percentage of boards
                        50

                        45

                        40

                        35

                        30

                        25

                        20

                        15

                        10

                         5

                         0
                                            fun t-




                                                                      loc -
                                                ds
                                 ds



                                               ds




                                                                         ds
                             fun l




                                                                     fun l
                                                                         o
                                  a




                                                                         a
                                        ide se




                                                                wo are-t
                              loc




                                            fun
                                      as ate
                             A




                                                                  rk
                                         NF




                                                                  lf
                         WI




                                        st




                                                              We
                                      TA
                                      A
                                   WI




                        Source: Analysis of GAO survey of local workforce boards.

                        Note: Percentages are based on 148 local workforce boards responding to our survey that reported
                        specifically targeting funds for employed worker training. Respondents were asked to identify all
                        applicable types of funding sources.


                        For those local workforce boards spending funds specifically for training
                        employed workers, their allocation of local WIA funds most often paid for
                        these training efforts, and more reported using local WIA funds in program




                        Page 15                                                        GAO-03-353 Workforce Training
year 2001 than in the previous year.22 However, while nearly all workforce
boards responding to our survey were aware that WIA allowed funds to be
used for training employed workers, some reported that there were too
many priorities competing for the WIA funds. Two local officials also
noted that the federal funds allocated to states under WIA—the state set-
aside funds—in their states were awarded competitively, which made it
difficult to consistently serve employed workers because they were
uncertain that they would receive these grants in the future.

Local workforce boards also combined funding from several sources—
including federal, state, local and foundation support—to train employed
workers. For example, one workforce board in Pennsylvania combined
$50,000 in funds from the state WIA set-aside with about $1.8 million from
the state’s community and economic development department to fund
such training. Although financial support from local entities or
foundations was available to a lesser extent, some workforce boards were
able to mix these with funds from other sources. For example, in
California, one workforce board funded training for employed workers
with a combination of foundation grants and fees for services from
training for employers in addition to TANF funds, Welfare-to-Work and
other competitive grants from Labor, and state funds.

States reported that WIA and other federal funds were the most common
sources of funding used for training employed workers. (See fig. 3.)
Twelve of the 16 states we contacted used three or more sources of funds
for this purpose. Of the 16 states we contacted, 13 used their WIA state set-
aside funds for training employed workers. For example, in Texas, nearly
$11 million was awarded competitively to 10 local workforce boards, and
the state projected that over 9,000 employed workers would receive
training. Eleven states also used TANF funds to train employed workers.
States also reported using state general revenue funds, funds related to
Unemployment Insurance (UI) trust funds, such as penalty and interest
funds or add-ons to UI taxes, and funds from other sources such as
community development block grants or state lottery funds. (See table in
app. III.)



22
  In our mail survey, year 2000 referred to the program year beginning July 1, 2000, and
ending June 30, 2001; year 2001 referred to the program year July 1, 2001, to the time that
the survey was completed—either several weeks prior to the end of the program year or
the end of that year, June 30, 2002. The surveys were mailed on April 24, 2002, and the
survey was closed on August 16, 2002.




Page 16                                                    GAO-03-353 Workforce Training
                      Figure 3: Key Sources of Funding for Employed Worker Training Used in Program
                      Years 2000 and/or 2001 by 16 States We Contacted

                       16      Number of states


                       14


                       12


                       10


                        8


                        6


                        4


                        2


                        0
                             fun t-




                                                               wo o
                                ds


                                 ds




                                                                    ds



                                                                    ce




                                                             gr on
                                                                    ts
                                                                      t




                                                                    rk
                                                          ue ral



                                                        ins men




                                                                    t
                         ide se




                                                                an
                                                               an
                             fun




                                                              fun




                                                                re




                                                                 ti
                                                      en ne




                                                             tra
                       as ate




                                                            lfa
                                                            ur
                                                             y
                                                  rev te ge
                          NF




                                                         plo




                                                         ns
                                                        We
                         st




                                                    mo
                       TA




                                                    em
                       A




                                                      a
                      WI




                                                   St




                                                 De
                                                 Un




                      Funding sources
                      Source: Analysis of GAO interviews with state officials in 16 states.



                      In their training initiatives for employed workers, states and local
Training for          workforce boards focused on training that addressed specific business
Employed Workers      needs and emphasized certain workplace skills. States and local
                      workforce boards gave priority to economic sectors and occupations in
Focused on            demand, considered economic factors when awarding grants, and funded
Addressing Business   training that was tailored or customized to specific employers. States and
                      local workforce boards focused most often on training provided by
Needs and Certain     community or technical colleges that emphasized occupational skills and
Workplace Skills      basic skills.




                      Page 17                                                                 GAO-03-353 Workforce Training
States and Local            Most of the 16 states we contacted focused on certain economic sectors or
Workforce Boards Often      occupations in which there was a demand for skilled workers.23 Twelve
Focused on Business         states had at least one office, usually the economic development office,
                            which targeted the manufacturing sector for training initiatives. States also
Needs in Funding Training   targeted the health care and social assistance sector (which includes
                            hospitals, residential care facilities, and services such as community food
                            services) and the information sector (which includes data processing,
                            publishing, broadcasting, and telecommunications). New York took a
                            sector-based approach to training by funding grants to enable employees
                            to obtain national industry-recognized certifications or credentials, such as
                            those offered through the computer software or plastics industries. Other
                            training programs focused on occupations in demand. For example, in
                            Louisiana, two state offices funded training that gave preference to
                            occupations with a shortage of skilled workers, such as computer
                            scientists, systems analysts, locomotive engineers, financial analysts,
                            home health aides, and medical assistants.

                            Of the 148 local workforce boards that specifically funded training for
                            employed workers in 2001, the majority of workforce boards targeted
                            particular economic sectors for training these workers. As with the states,
                            most often these sectors were health care or manufacturing. (See fig. 4.)
                            For example, workforce boards we visited in Florida, Minnesota, Oregon,
                            and Texas became involved in funding or obtaining funding for local
                            initiatives to train health care workers, such as radiographers and certified
                            nursing assistants, that hospitals needed.




                            23
                              In obtaining information from states and local boards on economic sectors, we used the
                            terms for these sectors as defined under the new North American Industry Classification
                            System (NAICS), which replaced the previous industry classification system starting in
                            1997. NAICS groups industries into 20 broad economic sectors, several of which are new.
                            Two of these new sectors are Information, consisting of 34 industries that produce
                            information and cultural products, disseminate information or products, and process data;
                            and Health Care and Social Assistance, consisting of 39 industries, most of them new, such
                            as diagnostic imaging centers and community food services.




                            Page 18                                                  GAO-03-353 Workforce Training
Figure 4: Economic Sectors Targeted by Local Workforce Boards That Funded
Training for Employed Workers in Program Year 2001

 Percentage of boards
 50

 45

 40

 35

 30

 25

 20

 15

 10

   5

   0
                                                erv ic,
                  ce




                                                        n




                                                       on




                                                       ce
                                                        s



                                                       de
                                                        s
                 ing
           ist nd




                                                erv d



                                                        d




                                                ur d
                                                    ice
                                                    ice
                                                    tio




                                           d s an



                                          ret le an




                                           ins e an
                                            l s tif
              an




                                                   an
                                                  tra
                                                   cti
     l a re a



             tur



                                                ma



                                        ica ien




                                       foo ation
                                               tru




                                              ail


                                                c
        fac




                                             sa
  cia ca




                                             or



                                      hn sc




                                            an
        ss




                                           ns




                                         ole
                           Inf
     nu




                                        Fin
so alth




                                         od
                                    ec al,



                                        Co
  Ma




                                      Wh
                                 d t on




                                     mm
 He




                             an ssi




                                  co
                                ofe




                               Ac
                             Pr




Economic sectors
Source: Analysis of GAO survey of local workforce boards.

Note: Thirteen of the 148 local workforce boards who said that they specifically funded worker training
did not specify whether they funded training in a specific economic sector. Percentages are based on
local workforce boards responding to our survey that reported specifically targeting funds for
employed worker training. Respondents were asked to identify all applicable sectors.


Some states considered local economic conditions, such as unemployment
rates, in their grant award criteria in addition to, or instead of, giving
priority to certain economic sectors and occupations. For example,
California’s Employment Training Panel must set aside at least $15 million
each year for areas of high unemployment. Similarly, in Illinois and
Indiana, the state economic development offices considered county
unemployment or community needs in awarding training funds. Florida’s
workforce training grants gave priority to distressed rural areas and urban
enterprise zones in addition to targeting economic sectors.

In addition, most state economic development offices (13 of 16) and more
than half of the state workforce development offices (9 of 16) we



Page 19                                                          GAO-03-353 Workforce Training
    contacted funded training that was tailored or customized to specific
    employers’ workforce needs. For economic development offices, such
    customized training was not new: these offices have typically funded
    training for specific companies as a means of encouraging economic
    growth within their states, and in some cases have done so for a long time.
    For example, California has funded training tailored to specific employers’
    needs since 1983 through its Employment Training Panel. This program
    spent $86.4 million in program year 2000 to train about 70,000 workers;
    nearly all of them were employed workers according to state officials.
    However, for many state workforce development offices, funding
    customized training was a shift in their approach to workforce training,
    one that could strengthen the links between employees and jobs. With
    customized training, local employers or industry associations typically
    proposed the type of training needed when they applied for funding and
    often selected the training providers. Examples of customized training
    initiatives sponsored by workforce development offices include the
    following:

•   In Indiana, the state workforce office has sponsored a high-skills, high-
    wage training initiative since 1998 to meet employers’ specific needs for
    skilled workers in information technology, manufacturing, and health. This
    effort is part of a statewide initiative for lifelong learning for the existing
    workforce.
•   In Hawaii, the workforce office established a grant program for employer
    consortiums to develop new training that did not previously exist in the
    state.
•   In Louisiana, the workforce office has funded a training program
    customized for employers who had been in business for at least 3 years. It
    required that the company provide evidence of its long-term commitment
    to employee training.

    In the states we contacted, many customized training programs required
    that grant applicants—usually employers—create partnerships with other
    industry or educational organizations. For example, Oregon’s workforce
    development office required local businesses to work with educational
    partners in developing grant proposals. One local workforce board we
    visited in Oregon collaborated with a large teaching hospital and its union
    to obtain funding for training hospital employees, and local one-stop staff
    partnered with nursery consortia and community colleges to obtain funds
    to upgrade the skills of agricultural workers. Similarly, in its high-skill
    training grant program, New York’s workforce development office
    required employers to form partnerships with labor organizations, a
    consortium of employers, or local workforce investment boards.



    Page 20                                           GAO-03-353 Workforce Training
                            In at least 11 of the 16 states we contacted, the programs also required
                            employers to provide matching funds for training employed workers,
                            which can help offset costs to the state for training as well as indicate the
                            strength of the employers’ commitment to training. States that had
                            requirements for matching funds—often a one-for-one match—included
                            Indiana, Minnesota, Montana, New Hampshire, New York, Oregon,
                            Pennsylvania, Tennessee, Texas, Utah, and West Virginia. Utah’s economic
                            development office required a lower match from rural employers, and
                            Indiana’s match varied case-by-case. Sometimes states required other
                            kinds of corporate investments as a condition for obtaining funds for
                            training employees. For example, in Tennessee, companies participating in
                            a job skills training program for high technology jobs were required to
                            make a substantial investment in new technology. In addition, several
                            states included certain requirements in their eligibility criteria to address
                            potential concerns about whether public funds were being used to fund
                            training that businesses might otherwise have funded themselves. For
                            example, in Louisiana and West Virginia, the workforce office requires
                            employers to provide evidence satisfactory to the office that funds shall be
                            used to supplement and not supplant existing training efforts.


Employed Worker Training    Although states reported funding many types of training for employed
Focused on Occupational     workers, occupational skills training and basic skills training were the
and Basic Skills Training   most prevalent.24 Fifteen of the 16 states we contacted funded
                            occupational skills training—such as learning new computer
Provided by Community       applications—for employed workers. In Tennessee, for example, the
and Other Colleges          economic development office spent more than $27 million of state funds in
                            program years 2000 and 2001 on a job skills training initiative for workers
                            in high-skill, high-technology jobs, according to a state official.25 Nearly all
                            states also reported funding basic skills training, including in basic math
                            skills and ESL, for employed workers with low levels of education. For



                            24
                              In addition to occupational skills and basic skills training, states frequently identified
                            conflict resolution/team building/negotiation (14 of 16 states) and productivity
                            enhancement or quality assurance training (14 of 16 states) as types of training they
                            funded. This emphasis may reflect the historic focus of states’ economic development
                            offices on skills training that fosters economic competitiveness and growth.
                            25
                              According to the state official we interviewed, a small portion of the unemployment
                            insurance fund is allocated to the department’s job skills training initiative. If the trust fund
                            falls below $750 million, this money is not allocated to training. Since January 2002, no
                            unemployment insurance funds were allocated to training since the fund has fallen below
                            that level.




                            Page 21                                                      GAO-03-353 Workforce Training
example, Texas funded ESL training in workplace literacy primarily for
Vietnamese and Spanish speaking workers participating in health care
training.

Local workforce boards also reported funding many types of training;
however, occupational skills training was most frequently provided to
employed workers. (See fig. 5.) For example, of the local workforce
boards that spent funds to train employed workers, in program year
2001, 90 percent funded occupational training to improve and upgrade
workers’ skills. Forty-seven percent of the local workforce boards also
funded, in program year 2001, basic skills training for employed workers.
The next most prevalent type of training funded for employed workers
was in soft skills, such as being on time for work, and 34 percent of local
workforce boards funded this type of training in program year 2001.




Page 22                                         GAO-03-353 Workforce Training
Figure 5: Types of Training Funded by Local Workforce Boards That Funded
Training for Employed Workers in Program Year 2001

Percentage of boards
100

 90

 80

 70

 60

 50

 40

 30

 20

 10

  0
                       ills




                                    ls



                                          ge ase




                                                                     n



                                                                    on
          ills




                                               nt


                                                              olu ct




                                                               em ty
                                                                     t
                                                             erv nt
       Sk al




                                                                  en
                                                                 tio
                                   kil




                                                           res nfli




                                                                   i
          n




                                            me




                                                          up me
                                                                isi


                                                          ha ctiv
                      sk
      tio




                                            C
                               ft s




                                                             Co



                                                       d s ge
                 sic
   pa




                                                              u
                                                            nc
                              So




                                                           od
                                           na




                                                     an ana
  cu



                 Ba




                                         ma




                                                        Pr
Oc




                                                       en
                                                        M




 Types of training
Source: Analysis of GAO survey of local workforce boards.

Note: Six of the 148 respondents who said that they specifically funded worker training did not specify
the types of training they funded. Percentages are based on local workforce boards responding to our
survey that reported specifically targeting funds for employed worker training. Respondents were
asked to identify all applicable types of training.


Community or technical colleges were often used to train employed
workers, according to both state and local officials we contacted. For
example, 78 percent of local workforce boards that spent funds to train
employed workers reported that community or technical colleges were
training providers in program year 2001. (See fig. 6.) State and local
workforce officials also cited using private training instructors and
employer-provided trainers, such as in-house trainers.




Page 23                                                            GAO-03-353 Workforce Training
                        Figure 6: Types of Training Providers Used by Local Workforce Boards That
                        Funded Training for Employed Workers in Program Year 2001

                         Percentage of boards
                         80


                         70


                         60


                         50


                         40


                         30


                         20


                         10


                          0
                                     vid -
                                            s




                                                           ols




                                                                                      rs


                                                                                 vid e
                                                                                     ers



                                                                                 gra n




                                                                               ers es
                                                                                        s



                                                                                      ns


                                                                                ns s
                                                                                     ms



                                                                                    ors




                                                                                       ia
                                                                              tru ng
                                   co or




                                                    sc nal
                                          ed




                                                                                 nd d




                                                                              iza d
                                  pro oyer
                                         ge




                                                                            pro rvic




                                                                                   itie




                                                                            co ter
                                                                            pro atio



                                                                          er r an




                                                                           an ase




                                                                                   ort
                                                                                  cto




                                                                           niv leg




                                                                                  tio
                                                                          ins raini
                                al ity




                                                       ho
                                                       tio
                                     lle




                                                                        or lus
                                                                                 e



                                                                               uc
                                    pl




                                                                      org ity-b
                             nic mun




                                                                      d u ol
                                                                     oth ute
                                                                              ve
                                                    ca




                                                                            As




                                                                              c
                                 Em




                                                                              t




                                                                   an ear c
                                                                           ed
                                                   Vo



                                                                           te




                                                                        mp




                                                                         try
                                                                        WI




                                                                        un
                        Te Com




                                                              iva




                                                                       ult




                                                                      us
                                                                     Co




                                                                    mm
                                                                    4-y
                                                                   Ad
                                                            Pr
                          ch




                                                                  Ind
                                                                 Co
                        Types of training providers
                        Source: Analysis of GAO survey of local workforce boards.

                        Note: Eight of the 148 respondents who said that they specifically funded worker training did not
                        specify the types of training providers used. Percentages are based on local workforce boards
                        responding to our survey that reported specifically targeting funds for employed worker training.
                        Respondents were asked to identify all applicable types of training providers.


                        In targeting training to low-wage workers, state and local officials
In Targeting Training   addressed several challenges that hindered individuals’ and employers’
to Low-Wage Workers,    participation in training. Workforce officials developed ways to address
                        the personal challenges low-wage workers faced that made participating in
Officials Addressed     training difficult. In addition, workforce officials we visited identified ways
Several Challenges,     to address employer reluctance to support training efforts. Despite
                        attempts to address these issues, however, challenges to implementing
though WIA              successful training still exist. For example, state and local officials
Performance             reported that the WIA performance measure that tracks adult earnings
Measures Were an        gain and certain funding requirements that accompany some federally
                        funded training programs, may limit training opportunities for some low-
Issue                   wage workers.




                        Page 24                                                          GAO-03-353 Workforce Training
Officials Found Ways to   State and local officials developed a number of approaches to overcome
Accommodate Low-Wage      some of the challenges faced by low-wage workers. They noted that many
Workers’ Needs            low-wage workers have a range of personal challenges—such as limited
                          English and literacy skills, childcare and transportation needs, scheduling
                          conflicts and financial constraints, and limited work maturity skills—that
                          made participating in training difficult. However, many officials also
                          reported several approaches to training low-wage workers.

                          Offering workplace ESL and literacy programs were some approaches
                          used by officials to address limited English and literacy skills among low-
                          wage workers. For example, one workforce board in Minnesota used a
                          computer software program to develop literacy among immigrant
                          populations. Another state workforce official in Oregon reported
                          customizing ESL to teach language skills needed on the job. In addition,
                          some of the employers we visited provided training to their employees in
                          their native language or taught them vocational ESL.26 Officials we visited
                          in Texas offered a 5-week vocational ESL course before the start of the
                          certified nursing assistant training program primarily to help prepare
                          Vietnamese and Spanish speaking students who were not fluent in English.

                          Many low-wage workers faced challenges securing reliable transportation
                          and childcare, particularly in rural areas and during evening hours. Several
                          state and local officials noted that assisting low-wage workers with
                          transportation and childcare enabled them to participate in training. One
                          program in Florida provided childcare and transportation to TANF-eligible
                          clients. In Minnesota, local officials told us that they provided
                          transportation for program participants. Participants used the agency’s
                          shuttle bus free-of-charge until they received their second paycheck from
                          their employer. After the second paycheck, the individual paid a fee for the
                          shuttle and was encouraged and supported in finding transportation on
                          their own.

                          Providing on-site, paid, or flexible training were methods used to address
                          scheduling conflicts and financial constraints experienced by low-wage
                          workers. Many workforce boards that identified approaches on our survey
                          cited various methods of providing training to low-wage workers that
                          helped officials address some of the challenges faced by low-wage



                          26
                            Vocational ESL refers to a type of English language training for speakers whose language
                          is not English that focuses on vocabulary used in specific vocations. For example,
                          vocational ESL for a certified nursing assistant would focus on medical terminology.




                          Page 25                                                  GAO-03-353 Workforce Training
                            workers. These methods included offering training at one-stops or through
                            distance learning and teleconferencing courses. For example, an employer
                            in California paid employees for 40 hours of work, but allowed 20 hours of
                            on-site training during that time. In addition, some hospitals permitted
                            flexible schedules for employees who sought additional training for career
                            advancement.

                            Offering additional assistance and incentives were approaches identified
                            by officials for improving low-wage workers’ limited work maturity skills
                            such as punctuality and appropriate dress. Officials we visited in Texas
                            reported that they helped low-wage workers develop better skills for
                            workplace behavior. For example, they helped clients understand the need
                            to call their employer if something unexpected happens, like a flat tire,
                            that prevents them from coming to work. In addition, another workforce
                            board in West Virginia reported that they provided a $50.00 incentive to
                            the employee for perfect attendance during the first 6 weeks of work.


Officials Identified Ways   State and local officials developed a number of ways to address the
to Gain Employer Support    concerns of employers who were reluctant to participate in low-wage
for Low-Wage Worker         worker training. According to state and local officials, employers’
                            reservations about participation stemmed from different concerns,
Training                    including the fears that better trained employees would find jobs
                            elsewhere. Officials reported that other employers were hesitant to
                            participate in low-wage worker training because of paperwork
                            requirements or the time and expertise they believed were involved in
                            applying for state training grants. Despite these concerns, state and local
                            officials identified approaches to encourage employer participation.

                            According to officials we contacted, some employers said that if their
                            employees participated in training, they would seek jobs elsewhere.
                            Officials addressed this perception by forming partnerships with
                            employers and educators and offering training that corresponded to
                            specific career paths within a company. For example, a workforce board
                            we visited in Oregon partnered with a local nursery, a landscaping
                            business, and a community college to train entry-level workers in
                            agriculture and landscaping to move up into higher-skilled and better
                            paying positions at the same company. These career paths also addressed
                            the concern, expressed by some employers, that too few employees were
                            qualified to fill positions beyond the entry level. Officials found other ways
                            to alleviate employers’ fears. Officials in Oregon encouraged trainees at a
                            hospital to stay with their current employer by requiring them to sign a
                            statement of intent regarding training. The hospital trained employees


                            Page 26                                          GAO-03-353 Workforce Training
                             after they signed an agreement that asked for a commitment that they
                             remain with the employer for a specific amount of time in return for
                             training.

                             State and local officials noted that some employers were also reluctant to
                             have their employees participate in government-funded training programs
                             because they believed that certain data collection and reporting
                             requirements were cumbersome. For example, state workforce officials
                             we contacted reported that some employers found it difficult to get
                             employees to fill out a one-page form regarding income as required to
                             determine eligibility for certain funds, such as TANF. In an effort to ease
                             the funding paperwork burden, state officials we contacted in West
                             Virginia were working towards reducing the application paperwork
                             required for employers to obtain worker-training dollars.

                             Workforce officials also reported that some employers were hesitant to
                             apply for federally funded training grants because they believed that they
                             did not have the time or the expertise to apply for such grants. To address
                             this, workforce officials we visited in Oregon worked with union
                             representatives and training providers to co-write training grant proposals.
                             The workforce officials we visited told us that the involvement of the
                             union was a key factor in the training initiative’s success. Prior to this
                             cooperative effort, the employer had not been responsive to workers’
                             needs and the involvement of the union helped to bridge the gap between
                             worker and employer needs.


Performance Measures         State and federal funding requirements—such as WIA performance
and Other Funding            measures, time limits, and participant eligibility—may limit training
Requirements May Limit       opportunities for some low-wage workers. Under WIA, performance
                             measures hold states accountable for the effectiveness of the training
Training Opportunities for   program. If states fail to meet their expected performance levels, they may
Low-Wage Workers             suffer financial sanctions. State funding regulations for some training
                             initiatives, such as TANF-funded projects, required the funds to be used
                             within a specific time period. Because local areas must wait for states to
                             allocate and disburse the funding, local officials sometimes had less than
                             1 year to use the funding. Finally, individuals are sometimes eligible for
                             services based on their income, especially for TANF or WIA local funds.
                             Depending on the level at which local areas set eligibility requirements,
                             some low-wage workers may earn salaries that are still too high to be
                             eligible for services provided by these training funds.




                             Page 27                                         GAO-03-353 Workforce Training
WIA established performance measures to provide greater accountability
and to demonstrate program effectiveness. These performance measures
gauge program results in areas such as job placement, employment
retention, and earnings change. (See table 1.) Labor holds states
accountable for meeting specific performance outcomes. If states fail to
meet their expected performance levels, they may suffer financial
sanctions; if states meet or exceed their levels, they may be eligible to
receive additional funds. A prior GAO report noted that the WIA
performance levels are of particular concern to state and local officials.27 If
a state fails to meet its performance levels for one year, Labor provides
technical assistance, if requested. If a state fails to meet its performance
levels for two consecutive years, it may be subject to up to a five percent
reduction in its annual WIA formula grant. Conversely, if a state exceeds
performance levels it may be eligible for incentive funds.

Table 1: WIA Performance Measures for Adults and Dislocated Workers

 Adults                     Definition
 Entered employment rate    Of those who did not have a job when they registered for
                            WIA, the percentage of adults who got a job by the end of
                            the 1st quarter after exit. This measure excludes
                            participants who are employed at the time of registration.
 Employment retention rate  Of those who had a job in the 1st quarter after exit, the
 at 6 months                percentage of adults who have a job in the 3rd quarter
                            after exit.
 Average earnings change in Of those who had a job in the 1st quarter after exit, the
 6 months                   postprogram earning increases as compared with pre-
                            program earnings
 Employment and credential Of those who received WIA training services, the
 rate                       percentage who were employed in the 1st quarter after
                            exit and received a credential by the end of the 3rd
                            quarter after exit.
Source: GAO.


State and local officials reported that the WIA performance measure that
tracks the change in adult earnings after six months could limit training
opportunities for employed workers, including low-wage workers. Some
workforce officials were reluctant to register employed workers for



27
  In this report, we noted that, as a result, only individuals who are most likely to be
successful might be served. In addition, we reported that the need to meet performance
measures might be the driving factor in deciding who receives WIA-funded services at the
local level. See U.S. General Accounting Office, Workforce Investment Act: Improvements
Needed in Performance Measures to Provide a More Accurate Picture of WIA’s
Effectiveness, GAO-02-275 (Washington, D.C.: Feb. 1, 2002).




Page 28                                                 GAO-03-353 Workforce Training
training because the wage gain from unemployment to employment tended
to be greater than the wage gain for employed workers receiving a wage
increase or promotion as a result of skills upgrade training. For example, a
state official from Indiana noted that upgrading from a certified nursing
assistant to the next tier of the nursing field might only increase a worker’s
earnings by 25 cents per hour. Yet, for the purposes of performance
measures, workforce boards may need to indicate a change in earnings
larger than this in order to avoid penalties. For example, one workforce
official from Michigan reported that the performance measure requires the
region to show an increase that equates to a $3.00 per hour raise. In a
previous GAO study, states reported that the need to meet these
performance measures may lead local staff to focus WIA-funded services
on unemployed job seekers who are most likely to succeed in their job
search or who are most able to make wage gains instead of employed
workers.28

Time limits for some funding sources were a challenge for some officials
trying to implement training programs, according to some state and local
workforce officials. In Florida, for example, officials we visited reported
that they had a state-imposed one-year time limit for using TANF funds for
education and training, which made it difficult for officials to plan a
training initiative, recruit eligible participants, and successfully implement
the training program. Similarly, state and local officials we contacted in
Oregon expressed frustration with the amount of effort required to ensure
the continuation of funding for the length of their training initiative. They
noted that funding for a one-year training grant for certified medical
assistants and radiographers expired seven months before the training
program ended. The local workforce board identified an approach to fund
the training for the remainder of the program by using other funding
sources. Although this workforce board was able to leverage other funds,
this solution is not always feasible.

Finally, several officials reported that eligibility requirements for the WIA
local funds are a challenge because they might exclude some low-wage
workers from training opportunities. States or local areas set the income
limit for certain employment and training activities by determining the
wage level required for individuals to be able to support themselves. When
funds are limited, states and local areas must give priority for adult
intensive and training services to recipients of public assistance and other


28
 See GAO-02-275.




Page 29                                          GAO-03-353 Workforce Training
              low-income individuals. Officials on several workforce boards said that
              these eligibility guidelines for their local areas, particularly the income
              limit, made it challenging to serve some low-wage workers. For example,
              local workforce board officials from California indicated that they would
              like more flexibility than currently allowed under state WIA eligibility
              requirements to serve clients who may earn salaries above the income
              limit. The officials noted that some workers in need of skills upgrade could
              not be served under WIA because they did not qualify based on their
              income. To address this challenge, officials we visited at a local workforce
              board in East Texas told us that they set the income limit high enough so
              that they can serve most low-wage workers in their area.


              As of program year 2001, many states and local workforce boards were
Conclusions   beginning to make use of the flexibility allowed under WIA and welfare
              reform to fund training for employed workers, including low-wage
              workers. They used WIA state set-aside funds and local funds, as well as
              TANF and state funds, as the basis for publicly funded training for
              employed workers. In addition, they considered business needs in
              determining how these funds were used to train employed workers.
              Consequently, training for employed workers could better reflect the skills
              that employers need from their workforce in a rapidly changing economy.
              In addition, such skills may help employees better perform in their jobs
              and advance in their careers.

              Training for employed workers is particularly critical for workers with
              limited education and work skills, especially those earning low wages. For
              such workers, obtaining training while employed may be critical to their
              ability to retain their jobs or become economically self-sufficient. While
              training low-wage workers involves particular challenges, workforce and
              other officials have developed ways to implement training initiatives for
              low-wage workers that may help mitigate some of these challenges. This is
              especially necessary in the economic downturn following the boom in the
              1990s when TANF and WIA were created.

              However, WIA’s performance measure for the change in average earnings
              may create a disincentive for states and local workforce boards to fund
              training for employed workers because employed workers, particularly
              low-wage workers, may be less likely than unemployed workers to
              significantly increase their earnings after training. To the extent that state
              and local workforce investment areas focus on unemployed workers to
              ensure that they meet WIA’s performance measure for earnings change—
              and thereby avoid penalties—employed workers, and especially low-wage


              Page 30                                           GAO-03-353 Workforce Training
                     workers, may have a more difficult time obtaining training that could help
                     them remain or advance in their jobs. As currently formulated, this
                     performance measure supports earlier federal programs’ focus on training
                     unemployed workers and does not fully reflect WIA’s new provision to
                     allow federally funded training for employed workers.


                     To improve the use of WIA funds for employed worker training, we
Recommendation for   recommend that the Secretary of Labor review the current WIA
Executive Action     performance measure for change in adult average earnings to ensure that
                     this measure does not provide disincentives for serving employed
                     workers. For example, Labor might consider having separate average
                     earnings gains measures for employed workers and unemployed workers.


                     We provided the Departments of Labor and Health and Human Services
Agency Comments      with the opportunity to comment on a draft of this report. Formal
                     comments from these agencies appear in appendixes IV and V.

                     Labor agreed with our findings and recommendation to review the current
                     WIA performance measure for change in the adult average earnings to
                     ensure that the measure does not provide disincentives for serving
                     employed workers. Labor stated that, in May 2002, the department
                     contracted for an evaluation of the WIA performance measurement system
                     and noted that one of the objectives of the evaluation is to determine the
                     intended and unintended consequences of the system. Labor believes that
                     GAO’s suggestion to have separate measures on earnings gains for
                     employed workers would be an option to consider for improving WIA
                     performance.

                     HHS also agreed with the findings presented in our report and noted that
                     the information in GAO’s report would help states develop and enhance
                     appropriate worker training programs, and provide services and supports
                     that address the barriers to such training.


                     As agreed with your offices, unless you publicly announce its contents
                     earlier, we plan no further distribution of this report until 30 days after its
                     issue date. At that time we will send copies of this report to relevant
                     congressional committees, and other interested parties. We will also make
                     copies available to others upon request. In addition, the report will be
                     available at no charge on the GAO Web site at http://www.gao.gov.



                     Page 31                                           GAO-03-353 Workforce Training
Please contact me on (202) 512-7215 if you or your staff have any
questions about this report. Other GAO contacts and staff
acknowledgments are listed in appendix IV.




Sigurd R. Nilsen
Director, Education, Workforce,
  Income Security




Page 32                                        GAO-03-353 Workforce Training
                       Appendix I: Objectives, Scope, and
Appendix I: Objectives, Scope, and
                       Methodology



Methodology

                       To provide the Congress with a better understanding of how states and
                       local areas were training employed workers, including low-wage workers,
                       we were asked to determine (1) the extent to which local areas and states
                       provide assistance to train employed workers, including funding training;
                       (2) the focus of such training efforts and the kind of training provided; and
                       (3) when targeting training to low-wage workers, the approaches state and
                       local officials identified to address the challenges in training this
                       population.

                       To obtain this information, we conducted a nationwide mail survey of all
                       local workforce investment boards, conducted semistructured telephone
                       interviews with state officials, and visited four states. We conducted a
                       literature search and obtained reports and other documents on employed
                       worker training from researchers and federal, state, and local officials. To
                       obtain information about the federal role in employed worker training, we
                       met with officials from the departments of Labor, Health and Human
                       Services (HHS), and Education. In addition, we interviewed researchers
                       and other workforce development training experts from associations such
                       as the National Governors’ Association, National Association of Workforce
                       Investment Boards, U. S. Chamber of Commerce, and American Society
                       for Training and Development.


Nationwide Survey of   To document local efforts to train employed workers, we conducted a
Local Workforce        nationwide mail survey, sending questionnaires to all 595 local workforce
Investment Boards      boards. We received responses from 470 boards, giving us a 79 percent
                       response rate. Forty-five states had response rates of 60 percent or more,
                       and 17 states, including all states with a single workforce board, had
                       response rates of 100 percent.1 The mailing list of local workforce boards
                       was compiled using information from a previous GAO study of local youth
                       councils,2 and directories from the National Association of Workforce
                       Investment Boards and the National Association of Counties. The survey
                       questionnaire was pretested with 6 local workforce boards and revised
                       based on their comments. Surveys were mailed on April 24, 2002, follow-
                       ups were conducted by mail and phone, and the survey closing date was
                       August 16, 2002. We reviewed survey questionnaire responses for


                       1
                       This includes Puerto Rico and the District of Columbia.
                       2
                       Workforce Investment Act: Youth Provisions Promote New Service Strategies, but
                       Additional Guidance Would Enhance Program Development, GAO-02-413 (Washington,
                       D.C.: Apr. 5, 2002).




                       Page 33                                                   GAO-03-353 Workforce Training
                           Appendix I: Objectives, Scope, and
                           Methodology




                           consistency and in several cases contacted the workforce boards to
                           resolve inconsistencies but we did not otherwise verify the information
                           provided in the responses. In the survey, we collected data for the WIA
                           program years 2000 (from July 1, 2000—June 30, 2001) and 2001 (from July
                           1, 2001-June 30, 2002) so that we could compare and perceive trends. We
                           analyzed these data by calculating simple statistics and by performing a
                           content analysis in which we coded responses to open-ended questions for
                           further analysis.

                           Because our national mail survey did not use probability sampling, there
                           are no sampling errors. However, the practical difficulties of conducting
                           any survey may introduce other types of errors, commonly referred to as
                           non-sampling errors. For example, differences in how a particular question
                           is interpreted, the sources of information available to respondents, or the
                           characteristics of people who do not respond can introduce unwanted
                           variability into the survey results. We included steps in both the data
                           collection and data analysis stages to minimize such non-sampling errors.
                           For example, survey specialists in combination with subject matter
                           specialists designed our questionnaire; we pretested the questionnaire to
                           ensure that questions were clear and were understood by respondents;
                           and to increase our response rate for the mail survey, we made a follow-up
                           mailing and called local workforce investment boards that did not respond
                           by a specified date.


Semistructured Telephone   To determine state efforts to train employed workers, including low-wage
Interviews                 workers, we conducted semistructured telephone interviews in
                           16 judgmentally selected states with state officials responsible for
                           workforce development, economic development, and TANF funds used for
                           education and training. We selected these states in part because they were
                           geographically dispersed and represented about one-half of the U.S.
                           population.

                           In addition, we selected these states because between 1998 and 2001, most
                           of them used federal funds available for training employed workers,
                           including demonstration and planning grants, which potentially indicated
                           the state’s interest in training these workers. Thirteen of the selected
                           states received States’ Incumbent Worker System Building Demonstration
                           Grants in 1998 from the Department of Labor; 10 of the selected states
                           were identified in previous GAO work as having used WIA state set-aside
                           funds for current worker training, and 8 of the selected states were among
                           those receiving Employment Retention and Advancement (ERA)



                           Page 34                                        GAO-03-353 Workforce Training
Appendix I: Objectives, Scope, and
Methodology




demonstration grants from the Department of Health and Human Services.
(See table 2.)

Table 2: States in Telephone Interview Sample—Population and Key Funding
Sources

                                                     States using       DOL states’
                                                              WIA incumbent worker       HHS ERA
                             Population               governor’s    system building demonstration
                           (April 1, 2000               set-aside    demonstration    grants, as of
    State                  Census data)                     funds grants, June 1998       fall 2001
    California               33,871,648                                                   X
    Florida                  15,982,378                   X               X               X
    Hawaii                    1,211,537                   X               X
    Illinois                 12,419,293                                                   X
    Indiana                   6,080,485                   X               X
    Louisiana                 4,468,976                                   X
    Minnesota                 4,919,479                                   X               X
    Montana                      902,195                  X               X
    New Hampshire             1,235,786                   X               X
                                                                            a
    New York                 18,976,457                   X               X               X
    Oregon                    3,421,399                   X               X               X
    Pennsylvania             12,281,054                                   X
    Tennessee                 5,689,283                   X               X               X
    Texas                    20,851,820                   X               X               X
    Utah                      2,233,169
    West Virginia             1,808,344                     X                          Xa
    Total                   146,353,303                     10                         13                            8
    Total U.S.
    population                281,421,906
Sources: U.S. Census Data; Workforce Investment Act: Better Guidance and Revised Funding Formula Would Enhance Dislocated
Worker Program (GAO-02-274, Washington, D.C.: Feb. 11, 2002); Manpower Demonstration Research Corporation, New Strategies to
Promote Stable Employment and Career Progression: An Introduction to the Employment Retention and Advancement Project
(Washington, DC: U.S. Department of Health and Human Services, Administration for Children and Families, February 2002); data from
Department of Labor.
a
These states were awarded DOL System-Building Incumbent Worker Demonstration Grants, June
1998, but returned all (West Virginia) or did not accept (New York) the funds.


In each state, we interviewed state officials responsible for workforce
development and economic development. We also interviewed state
officials responsible for TANF funds used for education and training to
obtain information about training for low-wage workers. To identify these
state officials, we initially called the state contact for the WIA program.
These officials then provided us with the names of officials or their
designees who represented workforce development and economic
development perspectives in their state. We similarly identified state
officials responsible for TANF funds used for education and training. Since



Page 35                                                                           GAO-03-353 Workforce Training
              Appendix I: Objectives, Scope, and
              Methodology




              states structure their programs and funding differently, sometimes state
              officials we interviewed were located in different agencies while others
              were located in different offices within the same agency. For this reason
              we used the term “office” throughout the report to represent their different
              perspectives.

              We used survey specialists in designing our interview questions and
              pretested them in several states to ensure that they were clear and could
              be understood by those we interviewed. In our interviews, we asked state
              officials for information about training efforts for the program year
              2000, which ended on June 30, 2001, and asked if there were any
              significant changes in program year 2001, which ended June 30, 2002. Our
              interviews with state officials were conducted between March and
              October 2002. In analyzing our interview responses from state officials, we
              calculated frequencies in various ways for all close-ended questions and
              arrayed and analyzed narrative responses thematically for further
              interpretation. We did not independently verify data, although we
              reviewed the interview responses for inconsistencies.


Site Visits   To obtain in-depth information about the challenges that local officials
              have experienced in developing and implementing training programs
              specifically for low-wage workers, and promising approaches they
              identified to address these challenges, we made site visits to four states–
              Florida, Minnesota, Oregon, and Texas. We selected these four states for
              site visits to provide geographic dispersion and because federal and state
              officials and other experts had identified these states as having specific
              efforts for training employed workers, especially initiatives to help low-
              wage workers retain employment and advance in their jobs. Furthermore,
              each of the four states received federal HHS Employment Retention and
              Advancement grants. In our view, these demonstration grants served as
              indications of the state’s interest in supporting job retention and
              advancement, including training, for low-wage workers. We visited a
              minimum of two localities in each state, representing a mix of urban and
              rural areas in most cases. We chose local sites in each state on the basis of
              recommendations from state officials about training initiatives with a low-
              wage focus. Teams of at least three people spent from 2 to 4 days in each
              state. Typically, we interviewed local officials, including employers, one-
              stop staff, local workforce board staff, and training providers such as
              community colleges and private training organizations. We toured training
              facilities and observed workers and students receiving training. We also
              obtained and reviewed relevant documents from those we interviewed.
              (See table 3.)


              Page 36                                          GAO-03-353 Workforce Training
Appendix I: Objectives, Scope, and
Methodology




Table 3: Site Visit States and Locations

 State                                       Local sites
 Florida                                     Jacksonville
                                             Palatka
 Minnesota                                   Minneapolis
                                             Shakopee, Chaska
 Oregon                                      Portland
                                             Clackamas County
 Texas                                       Ft. Worth, Dallas
                                             Kilgore, Tyler
Source: GAO.


We reviewed surveys and telephone interview responses for consistency
but we did not otherwise verify the information provided in the responses.
Our work was conducted between October 2001 and December 2002 in
accordance with generally accepted government auditing standards.




Page 37                                        GAO-03-353 Workforce Training
                                      Appendix II: Workforce Boards’ Survey
Appendix II: Workforce Boards’ Survey Information



Information

Table 4: Local Workforce Boards’ Survey Response Rate and Number Targeting Funds for Employed Worker Training

                                                                                     Of surveys
                                                                                        returned,
                                                                                      number of
                                                                                     boards that Percentage of boards
                                       Total             Total                   targeted funds that targeted funds for
                                    surveys           surveys       Percentage     for employed       employed worker
State                                   sent         returned         returned   worker training                training
Alabama                                    3                 3             100                  1                     33
Alaska                                     2                 2             100                  1                     50
Arizona                                   16               14               88                  1                      7
Arkansas                                  10                 9              90                  2                     22
California                                51               44               86                 16                     36
Colorado                                   9                 8              89                  4                     50
Connecticut                                8                 8             100                  6                     75
Delaware                                   1                 1             100                  0                      0
District of Columbia                       1                 1             100                  0                      0
Florida                                   24               21               88                 15                     71
Georgia                                   19                 9              47                  1                     11
Hawaii                                     4                 2              50                  1                     50
Idaho                                      6                 5              83                  1                     20
Illinois                                  26               19               73                  0                      0
Indiana                                   16               10               63                  4                     40
Iowa                                      16               15               94                  2                     13
Kansas                                     5                 4              80                  0                      0
Kentucky                                  11                 9              82                  1                     11
Louisiana                                 18               15               83                  5                     33
Maine                                      4                 4             100                  1                     25
Maryland                                  12                 7              58                  3                     43
Massachusetts                             16               13               81                  9                     69
Michigan                                  25               20               80                  5                     25
Minnesota                                 16               15               94                  4                     27
Mississippi                                6                 4              67                  1                     25
Missouri                                  14               14              100                  4                     29
Montana                                    2                 2             100                  0                      0
Nebraska                                   3                 2              67                  0                      0
Nevada                                     2                 2             100                  2                    100
New Hampshire                              1                 1             100                  1                    100
New Jersey                                17               13               76                  5                     38
New Mexico                                 4                 2              50                  1                     50
New York                                  33               21               64                 15                     71
North Carolina                            23               15               65                  2                     13
North Dakota                               1                 1             100                  0                      0
Ohio                                       8                 3              38                  1                     33
Oklahoma                                  12               11               92                  1                      9




                                      Page 38                                             GAO-03-353 Workforce Training
                                                                  Appendix II: Workforce Boards’ Survey
                                                                  Information




                                                                                                                                    Of surveys
                                                                                                                                       returned,
                                                                                                                                     number of
                                                                                                                                    boards that Percentage of boards
                                                                  Total                       Total                             targeted funds that targeted funds for
                                                               surveys                     surveys              Percentage        for employed       employed worker
 State                                                             sent                   returned                returned      worker training                training
 Oregon                                                               7                           6                     86                     4                     67
 Pennsylvania                                                        22                         17                      77                    10                     59
 Puerto Rico                                                         15                           8                     53                     4                     50
 Rhode Island                                                         2                           2                    100                     2                    100
 South Carolina                                                      12                         12                     100                    10                     83
 South Dakota                                                         1                           1                    100                     1                    100
 Tennessee                                                           13                         13                     100                     7                     54
 Texas                                                               28                         23                      82                    10                     43
 Utah                                                                 1                           1                    100                     0                      0
 Vermont                                                              1                           1                    100                     1                    100
 Virginia                                                            17                         13                      76                     2                     15
 Washington                                                          12                         10                      83                    10                    100
 West Virginia                                                        7                           6                     86                     3                     50
 Wisconsin                                                           11                           7                     64                     4                     57
 Wyoming                                                              1                           1                    100                     0                      0
 Totals                                                             595                        470                    79%                    184                   39%
Source: GAO survey of local workforce boards in the 50 United States, the District of Columbia, and Puerto Rico, August 2002.




                                                                  Page 39                                                                GAO-03-353 Workforce Training
                                                                        Appendix III: Information on State Funding
Appendix III: Information on State Funding                              Sources



Sources

Table 5: Funding Sources Identified by Officials in 16 States That Were Budgeted or Spent for Employed Worker Training for
WIA Program Years 2000 and/or 2001

                                      WIA 15%                                         State general        Funds related to        Demonstration
                                      state set                 Welfare-                   revenue          unemployment            grants -Labor          H-1B
 State                                   aside             TANF to-work                      funds              insurance                 or HHS           grant        Other
                                                                                                                                                     a
 California                                  3                        3                                                   3
                                                                                                                                                     a
 Florida                                     3                3
 Hawaii                                      3                3                                      3
 Illinois                                                             3                              3                                              3
 Indiana                                          3           3                                      3                       3                                               3
 Louisiana                                        3           3       3                                                      3                                               3
                                                                                                                                                     a
 Minnesota                                                    3                                      3
 Montana                                          3           3                                                                                                              3
 New Hampshire                                    3           3                                      3                       3                      3           3
                                                                                                                                                     a
 New York                                         3           3                                      3
 Oregon                                           3           3                                                                                     3                        3
 Pennsylvania                                     3           3       3                              3
                                                                                                                                                     a
 Tennessee                                        3                                                                          3
 Texas                                            3              3                                   3                       3                      3
 Utah                                                                                                3
 West Virginia                                    3                                                  3                                                                       3
 Total number
 of states                                       13             11                4                 10                        6                     4            1           5
Source: Analysis of GAO interviews with state officials in 16 states.
                                                                        a
                                                                         While these states were awarded Employment Retention and Advancement grants from HHS, state
                                                                        officials we contacted did not identify these grants as sources of funding for employed worker training.




                                                                        Page 40                                                           GAO-03-353 Workforce Training
             Appendix IV: Comments from the Department
Appendix IV: Comments from the
             of Health and Human Services



Department of Health and Human Services




             Page 41                                     GAO-03-353 Workforce Training
Appendix IV: Comments from the Department
of Health and Human Services




Page 42                                     GAO-03-353 Workforce Training
             Appendix V: Comments from the Department
Appendix V: Comments from the Department
             of Labor



of Labor




             Page 43                                    GAO-03-353 Workforce Training
Appendix V: Comments from the Department
of Labor




Page 44                                    GAO-03-353 Workforce Training
                  Appendix VI: GAO Contacts and Staff
Appendix VI: GAO Contacts and Staff
                  Acknowledgments



Acknowledgments

                  Sigurd R. Nilsen, Director (202) 512-7215
GAO Contacts      Joan T. Mahagan, Assistant Director (617) 565-7532


                  Natalie S. Britton, Ramona L. Burton, Betty S. Clark, Anne Kidd, and
Staff             Deborah A. Signer made significant contributions to this report, in all
Acknowledgments   aspects of the work throughout the assignment. In addition, Elizabeth
                  Kaufman and Janet McKelvey assisted during the information-gathering
                  segment of the assignment. Jessica Botsford, Carolyn Boyce, Stuart M.
                  Kaufman, Corinna A. Nicolaou, and Susan B. Wallace also provided key
                  technical assistance.




                  Page 45                                        GAO-03-353 Workforce Training
             Related GAO Products
Related GAO Products


             Older Workers: Employment Assistance Focuses on Subsidized Jobs and
             Job Search, but Revised Performance Measures Could Improve Access to
             Other Services. GAO-03-350. Washington, D.C.: January 24, 2003.

             High-Skill Training: Grants from H-1B Visa Fees Meet Specific
             Workforce Needs, but at Varying Skill Levels. GAO-02-881. Washington,
             D.C.: September 20, 2002.

             Workforce Investment Act: States and Localities Increasingly Coordinate
             Services for TANF Clients, but Better Information Needed on Effective
             Approaches. GAO-02-696. Washington, D.C.: July 3, 2002.

             Workforce Investment Act: Coordination between TANF Programs and
             One-Stop Centers Is Increasing, but Challenges Remain. GAO-02-500T.
             Washington, D.C.: March 12, 2002.

             Workforce Investment Act: Better Guidance and Revised Funding
             Formula Would Enhance Dislocated Worker Program. GAO-02-274.
             Washington, D.C.: February 11, 2002.

             Workforce Investment Act: Improvements Needed in Performance
             Measures to Provide a More Accurate Picture of WIA’s Effectiveness.
             GAO-02-275. Washington, D.C.: February 1, 2002.

             Workforce Investment Act: Better Guidance Needed to Address Concerns
             Over New Requirements. GAO-02-72. Washington, D.C.: October 4, 2001.

             Workforce Investment Act: Implementation Status and the Integration of
             TANF Services. GAO-/T-HEHS-00-145. Washington, D.C.: June 29, 2000.

             Welfare Reform: Status of Awards and Selected States’ Use of Welfare-to-
             Work Grants. GAO/HEHS-99-40. Washington, D.C.: February 5, 1999.




(130084)
             Page 46                                       GAO-03-353 Workforce Training
                         The General Accounting Office, the audit, evaluation and investigative arm of
GAO’s Mission            Congress, exists to support Congress in meeting its constitutional responsibilities
                         and to help improve the performance and accountability of the federal
                         government for the American people. GAO examines the use of public funds;
                         evaluates federal programs and policies; and provides analyses,
                         recommendations, and other assistance to help Congress make informed
                         oversight, policy, and funding decisions. GAO’s commitment to good government
                         is reflected in its core values of accountability, integrity, and reliability.


                         The fastest and easiest way to obtain copies of GAO documents at no cost is
Obtaining Copies of      through the Internet. GAO’s Web site (www.gao.gov) contains abstracts and full-
GAO Reports and          text files of current reports and testimony and an expanding archive of older
                         products. The Web site features a search engine to help you locate documents
Testimony                using key words and phrases. You can print these documents in their entirety,
                         including charts and other graphics.
                         Each day, GAO issues a list of newly released reports, testimony, and
                         correspondence. GAO posts this list, known as “Today’s Reports,” on its Web site
                         daily. The list contains links to the full-text document files. To have GAO e-mail
                         this list to you every afternoon, go to www.gao.gov and select “Subscribe to daily
                         E-mail alert for newly released products” under the GAO Reports heading.


Order by Mail or Phone   The first copy of each printed report is free. Additional copies are $2 each. A
                         check or money order should be made out to the Superintendent of Documents.
                         GAO also accepts VISA and Mastercard. Orders for 100 or more copies mailed to a
                         single address are discounted 25 percent. Orders should be sent to:
                         U.S. General Accounting Office
                         441 G Street NW, Room LM
                         Washington, D.C. 20548
                         To order by Phone:     Voice:    (202) 512-6000
                                                TDD:      (202) 512-2537
                                                Fax:      (202) 512-6061


                         Contact:
To Report Fraud,
                         Web site: www.gao.gov/fraudnet/fraudnet.htm
Waste, and Abuse in      E-mail: fraudnet@gao.gov
Federal Programs         Automated answering system: (800) 424-5454 or (202) 512-7470


                         Jeff Nelligan, managing director, NelliganJ@gao.gov (202) 512-4800
Public Affairs           U.S. General Accounting Office, 441 G Street NW, Room 7149
                         Washington, D.C. 20548