oversight

The Results Act: Observations on Department of Labor's June 1997 Draft Strategic Plan

Published by the Government Accountability Office on 1997-07-11.

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

                     United States
GAO                  General Accounting Office
                     Washington, D.C. 20548

                     Health, Education, and
                     Human Services Division

                     B-277414

                     July 11, 1997

                     The Honorable Richard K. Armey
                     Majority Leader
                     House of Representatives

                     The Honorable John R. Kasich
                     Chairman, Committee on the Budget
                     House of Representatives

                     The Honorable Dan Burton
                     Chairman, Committee on Government Reform
                       and Oversight
                     House of Representatives

                     The Honorable Bob Livingston
                     Chairman, Committee on Appropriations
                     House of Representatives

                     Subject: The Results Act: Observations on Department of Labor’s
                     June 1997 Draft Strategic Plan

                     On June 12, 1997, you asked us to review the draft strategic plans
                     submitted by the cabinet departments and selected major agencies for
                     consultation with the Congress as required by the Government
                     Performance and Results Act of 1993 (the Results Act). This letter is our
                     response to that request concerning the Department of Labor (Labor).

                     Labor’s strategic plan consists of a department-level document, which it
                     designates as a “strategic plan overview,” supplemented by strategic plans
                     for 15 of its component offices or units. As agreed with your offices, this
                     letter includes our analysis of the overview and selected analyses of
                     individual plans. As you requested, we will provide additional detailed
                     analyses on individual plans submitted by the Employment and Training
                     Administration (ETA), the Occupational Safety and Health Administration
                     (OSHA), and the Employment Standards Administration (ESA) by the end of
                     July.


                     Our overall objective was to review and evaluate Labor’s draft strategic
Objectives, Scope,   plan overview, as submitted to congressional staff on June 11. As you
and Methodology      requested, we specifically (1) assessed compliance with the act’s




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requirements and the strengths and weaknesses of the elements of the
plan; (2) described Labor’s key statutory authorities and how they relate to
the mission and goals in the strategic plan; (3) identified Labor’s programs,
activities, and functions that are crosscutting in that they are similar to or
related to goals, activities, or functions of other agencies and assessed the
extent to which the plan reflects interagency cooperation; (4) discussed
the extent to which Labor’s management challenges were addressed in the
plan; and (5) described Labor’s capacity to provide reliable information
about performance.

As agreed, our assessment of the strategic plan overview was generally
based on our previous work. Our overall assessment of Labor’s draft
strategic plan overview was generally based on our knowledge of Labor’s
operations and programs, our numerous reviews of Labor, and other
existing information available at the time of our assessment. Specifically,
the criteria we used to determine whether Labor’s draft strategic plan
overview complied with the requirements of the Results Act were the
Results Act and the Office of Management and Budget’s (OMB) guidance on
developing the plans (Circular A-11, part 2). To make judgments about the
overall quality of the overview, we used our May 1997 guidance for
congressional review of the plans (GAO/GGD-10.1.16) as a tool. To determine
whether the plan contained information on interagency coordination and
addressed management problems previously identified, we relied on our
general knowledge of Labor’s operations and programs, and the results of
our previous reports. (See Related GAO Products at the end of this
correspondence.)

To describe Labor’s key statutory responsibilities and how they relate to
Labor’s mission and goals, we reviewed Labor’s overview strategic plan
and the supplemental unit plans. As requested, we coordinated our work
on Labor’s key statutory authorities and capacity to provide reliable
information with the Congressional Research Service and Labor’s
Inspector General, respectively.

In passing the Results Act, the Congress anticipated that several planning
cycles might be need to perfect the process of developing a strategic plan
and that the plan would be continually refined. Thus, our comments reflect
a “snapshot” of the status of the plan at a particular point. We recognize
that developing a strategic plan is a dynamic process and that Labor is
continuing to work to revise the draft with input from OMB, congressional
staff, and other stakeholders.




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             Labor, established as a Department in 1913, administers and enforces a
Background   variety of federal labor laws guaranteeing workers’ rights to a workplace
             free from safety and health hazards, a minimum hourly wage and overtime
             pay, family and medical leave, freedom from employment discrimination,
             and unemployment insurance. Labor also protects workers’ pension rights;
             provides job training programs; helps workers find jobs; works to
             strengthen free collective bargaining; and keeps track of changes in
             employment, prices, and other national economic measures.

             Labor’s diversity of functions is carried out by different offices in a
             decentralized organizational structure. It has 24 component offices or
             units, with over 1,000 field offices, to support its various functional
             responsibilities. (Fig. 1 shows the organizational structure of Labor.)
             However, its many program activities fall into two major categories:
             enhancing workers’ skills through job training and ensuring worker
             protection. A third category relates to developing economic statistics, such
             as the Consumer Price Index, which is used by business, labor, and
             government in formulating fiscal and monetary policy and in making
             cost-of-living adjustments.




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Figure 1: Department of Labor Organization




                                         In fiscal year 1997, Labor has an estimated budget of $34.4 billion and is
                                         authorized 16,614 full-time-equivalent staff-years. About three-fourths of
                                         Labor’s budget is composed of mandatory spending on income
                                         maintenance programs, such as the unemployment insurance program.


Results Act Requirements                 The Results Act requires virtually every executive agency to develop a
and OMB Guidance on                      strategic plan covering a period of at least 5 years from the fiscal year in
Preparing and Submitting                 which it is submitted. The act is aimed at improving program performance.
                                         It requires that agencies, in consultation with the Congress and other
Strategic Plans                          stakeholders, clearly define their mission and articulate a comprehensive
                                         mission statement that defines their basic purpose. It also requires that
                                         they establish long-term strategic goals, as well as annual goals linked to
                                         them. Agencies must then measure their performance against the goals
                                         they have set and report publicly on how well they are doing. In addition
                                         to monitoring ongoing performance, agencies are expected to perform



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                   evaluation studies of their programs and to use information obtained from
                   these evaluations to improve the programs.

                   OMB Circular A-11 provides additional guidance on the development of
                   agency strategic plans. The Circular strongly encourages agencies to
                   submit a single, agencywide strategic plan. It states, however, that an
                   agency with disparate functions, such as Labor, may prepare several
                   strategic plans for its major components or programs. When an agency
                   does prepare multiple strategic plans for component units, Circular A-11
                   further provides that these not be merely packaged together and submitted
                   as a single strategic plan because the size and detail of such a compilation
                   will reduce the plan’s usefulness. Moreover, the agency is to prepare an
                   agencywide strategic overview that will link individual plans by giving an
                   overall statement of the agency’s mission and goals.


                   To meet the Results Act requirement for an agency strategic plan, Labor
Results in Brief   elected to submit individual plans from various agency component units
                   supplemented by “a strategic plan overview” that addresses some Results
                   Act requirements at the agency level. However, Labor’s overview does not
                   meet OMB guidance to provide an agencywide strategic overview that links
                   individual strategic plans. Furthermore, while Labor’s strategic plan
                   overview contains a mission statement for the agency, as required, the
                   statement itself does not appear to be sufficiently descriptive of Labor’s
                   basic purpose. Labor’s strategic plan overview also does not appear to
                   meet the requirement contained in Circular A-11 that it contain an overall
                   statement of departmental goals. Instead, Labor has excerpted and listed
                   the goals contained in the component unit plans. For example, goals of
                   Labor component units responsible for workplace safety, such as OSHA and
                   the Mine Safety and Health Administration (MSHA), are summarized in the
                   worker protections section of the overview but are not integrated into an
                   overall agency goal.

                   Although Labor did not include agency goals in its strategic overview, the
                   Department set forth agencywide goals in recent congressional testimony.
                   For example, the Secretary cited as a goals equipping every working
                   American with the skills needed to find and hold a good job, and helping
                   people move from welfare to work. In addition, Labor’s strategic plan
                   overview is organized around three major categories—lifelong learning,
                   worker protections, and statistics—that could serve as the basis from
                   which to develop crosscutting departmental goals.




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Labor’s five areas of major statutory responsibility—employment and
training, health and safety in the workplace, pension and welfare benefits,
employment standards, and labor statistics—are covered in its draft
overview and supplemental unit plans. The goals stated in the overview
and in individual unit plans are consistent with Labor’s statutory
responsibilities. In addition, the mission statements cover all of Labor’s
major functions and operations.

Labor’s strategic plan overview recognizes the roles of other organizations,
such as other federal agencies and state and local governments, and the
importance of establishing partnerships in carrying out such functions as
ensuring safe and healthful workplaces. Labor’s overview could be
improved, however, by recognizing the importance of other participants,
namely the other 14 federal agencies involved in one major area of
responsibility—job training. The overview does not acknowledge that the
nation’s federally funded employment training system is a patchwork of
multiple programs, many of which are in departments and agencies other
than Labor; nor does it set forth goals pertaining to the development of a
cohesive, integrated, and coordinated system.

Finally, Labor’s capacity to provide reliable information for use in its
agencywide management is questionable. Its overview plan recognizes the
importance of additional information to ensure timely and sound
evaluations to assess agency progress in meeting goals. However, its
overview does not describe its strategy for ensuring that such information
is collected and used to assess progress and performance. In addition,
Labor’s overview plan does not discuss with any specificity how Labor
plans to use information technology to achieve its mission, goals, and
objectives; nor does the plan describe with sufficient clarity how Labor
intends to use information technology to improve performance and reduce
costs. Furthermore, Labor’s strategic overview plan could be improved by
including a discussion of its technology investment control process, a
process that can help agencies reduce the risk and maximize the net
benefits from their information technology investments.




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                       The Results Act requires that strategic plans include six components: (1) a
Labor’s Agencywide     mission statement, (2) goals and objectives, (3) approaches or strategies to
Plan Does Not          achieve the goals and objectives, (4) a discussion of the relationship
Contain All Elements   between long-term goals and annual performance goals, (5) key external
                       factors affecting goals and objectives, and (6) evaluations used to establish
Required by Results    goals and objectives. OMB Circular A-11 provides guidance to agencies
Act and OMB            submitting plans and, in particular, to agencies like Labor that comprise
                       disparate components or programs. As permitted by Circular A-11, Labor
Guidance               elected to submit individual plans from its different components,
                       supplemented by an agency-level document intended to be the strategic
                       plan overview.

                       Labor’s overview does not integrate information from individual strategic
                       plans of its components into a single agencywide strategic overview
                       document, as stated in OMB guidance. Rather it is a compilation of excerpts
                       from individual plans that does not identify strategic departmental goals.
                       The overview plan also does not include the other elements of a strategic
                       plan identified by the act, such as strategies to achieve goals and
                       evaluations used to establish goals. Further, a majority of the individual
                       unit plans did not include all the elements required by the act, such as the
                       approaches or strategies to achieve the goals or key factors affecting
                       goals.

                       The overview plan could be a more useful document if it included all the
                       elements identified by the act—for example, crosscutting strategies used
                       to achieve departmental goals. According to OMB guidance, strategic plans,
                       because of their scope and importance, may be the best basis for
                       developing a comprehensive and integrated approach to performance
                       management.

                       The Results Act and OMB guidance require a comprehensive mission
                       statement for the agency. Labor’s strategic plan overview articulates its
                       overall mission as helping “assure opportunity and security for American
                       workers and their families in the changing and competitive global
                       marketplace.” This mission statement could be improved if it were more
                       descriptive about what the agency does. As pointed out in Circular A-11,
                       the mission statement should define the basic purpose of the agency, with
                       particular focus on its core programs and activities. The mission statement
                       could communicate more about Labor’s purpose if it referred to such basic
                       responsibilities as job skills development, job placement, and worker
                       protection.




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Labor’s plan does not appear to meet the requirement related to agency
goals and objectives. Circular A-11 states that strategic plans should set
out general goals and objectives of the agency, which should elaborate on
“how the agency is carrying out its mission and very often will be
outcome-type goals.” Labor’s overview does not contain departmental
strategic goals; instead Labor has excerpted and listed the goals contained
in the component unit plans. The overview does not include
departmentwide, overarching goals that would facilitate Labor’s
functioning as a unified organization with central direction. Agencywide
goals are important to allow a future assessment of the agency’s
performance overall, as discussed in Circular A-11.

Although Labor does not include agencywide goals in its strategic
overview, it did set forth agencywide goals in congressional testimony. In
June 1997, the Secretary of Labor testified before the Subcommittee on
Human Resources, House Committee on Government Reform and
Oversight, on the issues and challenges facing Labor. In that testimony, the
Secretary stated five goals for addressing these challenges:

“One, equip every working American with the skills to find and hold good jobs, with rising
incomes throughout their lives; [t]wo, help people move from welfare to work; [t]hree,
assure that working Americans enjoy secure pensions when they retire; [f]our, guarantee
every American a safe, healthy workplace free of employment-related discrimination; and,
[f]ive, help working people balance work and family.”


The Secretary further stated that Labor’s 1998 budget request included the
resources needed to pursue these goals.

In addition, Labor organizes its strategic plan overview around three
programmatic categories: lifelong learning, worker protections, and
statistics. While identifying these three broad categories as its fundamental
areas of activity and responsibility, Labor does not develop them into
goals. Instead, each of these three sections in the overview merely
summarizes the missions, goals, and activities of individual component
units with responsibilities related to the overall category. The Secretary’s
stated goals and the three categories organizing the plan could serve as the
basis from which to develop overarching departmental goals that are
results oriented and set out the long-term programmatic, policy, and
management goals of the agency.

A few Labor unit-level officials have had preliminary discussions with
congressional staff to consult on their individual unit plans. However,




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                           neither officials from the Office of the Secretary of Labor or from the
                           Office of the Assistant Secretary for Administration and Management, the
                           office responsible for implementation of the Results Act, have consulted
                           with congressional staff regarding the strategic plan overview or individual
                           unit plans. This level of consultation would probably be useful in helping
                           the Congress and Labor to ensure a more complete understanding of
                           departmental goals and how those goals guide programmatic, policy, and
                           management decisions.


Labor’s Strategic Plan     Labor’s strategic plan consists of individual plans for 15 of its component
Contains 15 Unit/Subunit   offices or subunits and a strategic plan overview. Although Labor has 24
Plans                      offices/units, not all submitted strategic plans. Discretion is allowed by
                           Circular A-11, which states that agencies can submit strategic plans that
                           cover only major functions or operations; however, Labor provided no
                           indication as to why certain offices were included and others excluded.

                           Labor’s many program activities are carried out by its seven program
                           agencies. However, only six of these—the Bureau of Labor Statistics, ETA,
                           MSHA, OSHA, the Pension and Welfare Benefits Administration, and the
                           Veterans’ Employment and Training Service—submitted strategic plans.
                           The seventh, ESA, submitted separate plans for the four subunits under its
                           responsibility—the Office of Federal Contract Compliance Programs, the
                           Office of Workers’ Compensation Programs, the Office of Labor
                           Management Standards (OLMS), and the Wage and Hour Division (WHD).
                           However, it did not prepare an overall comprehensive plan that pulls
                           together the ESA strategy to be followed, as a single organizational unit, in
                           working toward achieving its desired results.

                           Two of Labor’s seven departmental staff and support offices also
                           submitted strategic plans—the Office of the Inspector General (OIG) and
                           the Office of the Chief Financial Officer (OCFO). Another support office, the
                           Office of the Assistant Secretary for Administration and Management
                           (OASAM), which has overall management responsibility for implementing
                           the Results Act, did not submit a strategic plan for its operations. Yet in
                           Labor’s overview plan, it was noted that the Department’s commitment to
                           the Results Act is specifically reflected in the strategic plans of OASAM, as
                           well as those of OIG and OCFO.




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Labor Has Traditionally    Labor’s draft strategic plan submission reflects the current Department
Operated With              management structure and operations; that is, the plan consists of a
Decentralized Management   number of discrete plans for carrying out Labor’s various responsibilities
                           largely independently and without a cohesive, overall plan. Our past work
Approach                   indicates that Labor traditionally has operated as a conglomeration of
                           individual agencies/units, each working largely independently of the other
                           and with limited central direction and control. Our 1985 report on the
                           overall management of Labor pointed out that Labor had no systematic,
                           departmentwide, long-range policy planning process.1 Instead,
                           departmental plans were essentially compilations of individual agencies’
                           2-year objectives. Furthermore, due to the lack of strong direction and
                           control, organizational components traditionally operated independently
                           with limited oversight from the Office of the Secretary. We recommended
                           a series of actions to deal with specific management problems, such as
                           developing a long-range planning process to help ensure that desired
                           program and policy decisions are achieved in a planned and orderly
                           fashion.

                           Labor has initiated actions in the past to develop more comprehensive
                           approaches to departmental management. The follow-up report to our
                           study of Labor’s overall management recognized action by the Secretary of
                           Labor to establish a system that integrated agency and departmentwide
                           goals and provided a mechanism for monitoring progress and providing
                           feedback to the component agencies.2 It appears that Labor may not have
                           continued this integrated management approach. Our 1996 report
                           containing information on the field offices supporting Labor pointed out
                           that Labor does not centrally maintain information on its components’
                           field office locations, staffing, and costs.3 Instead, each component
                           maintains such information itself and provides OASAM with information as
                           requested. Thus, in responding to our request for information we needed
                           for our 1996 study, OASAM had to go to individual components. To further
                           illustrate the decentralized nature of Labor’s management structure, OASAM
                           was uncertain, immediately after the Oklahoma City bombing, whether it
                           had field office staff located in the bombed federal building. To obtain this
                           information, Labor had to query staff in each of the major program


                           1
                             Strong Leadership Needed to Improve Management at the Department of Labor (GAO/HRD-86-12,
                           Oct. 21, 1985).
                           2
                             Department of Labor: Assessment of Management Improvement Efforts (GAO/HRD-87-27, Dec. 31,
                           1986).
                           3
                             Education and Labor: Information on the Departments’ Field Offices (GAO/HEHS-96-178, Sept. 16,
                           1996).



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                       divisions to ascertain whether the divisions had field offices in Oklahoma
                       City and the location of the offices.


                       We identified the following areas of major statutory responsibility for
Labor’s Plan           Labor: (1) employment and training, (2) health and safety in the
Addresses Statutory    workplace, (3) pension and welfare benefits, (4) employment standards,
Responsibilities       and (5) labor statistics. Labor has covered each of these in its draft
                       overview and supplemental unit plans, and the goals stated therein are
                       consistent with its statutory responsibilities.

                       As noted earlier, the overview plan does not contain agencywide goals or
                       strategies; rather, the goals and strategies in the plan are those of various
                       components of Labor. To determine whether the goals reflected Labor’s
                       statutory authority, we reviewed the individual unit plans as well as the
                       overview. We found that some of the goals for each of Labor’s component
                       agencies are established by law, either expressly or by implication; others,
                       while consistent with the law, cannot be directly linked to anything in the
                       laws dealing with Labor’s responsibilities. For example, OSHA’ s strategic
                       goal of “securing public confidence through excellence in the development
                       and delivery of its programs and services” is not based on specific
                       requirements in Labor statutes. Similarly, the goals of WHD, which include
                       “increase compliance with the laws and regulations administered and
                       enforced by WHD, increase customer satisfaction with the services
                       provided by WHD, and achieve a high performance workplace which
                       anticipates and is responsive to the needs of our customers and all our
                       employees,” are not based on specific statutory requirements.

                       Overall, the overview plan and supplemental unit plans cover all of Labor’s
                       major functions and operations. The enclosure discusses the goals and
                       related statutory responsibilities for each component/unit.


                       Labor is responsible for a diversity of functions, many of which are also
Description of         carried out, at least in part, by other federal agencies and involve the
Crosscutting Program   participation of state and local agencies as well as private sector
Activities             organizations. Labor’s strategic plan overview recognizes the roles of other
                       organizations and the importance of establishing partnerships in carrying
                       out some of these functions. For example, the overview points out, in the
                       worker protections area, that “OSHA does not have sole responsibility for
                       safety and health in the workplace. The Agency works closely with other




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                   partners in the Department, in the Federal government, with state and
                   local governments, and the private sector.”

                   Labor’s overview could be improved by recognizing the substantial
                   number of other participants involved in job training. The overview does
                   not acknowledge a key aspect of the nation’s federally funded employment
                   training system, namely, that it is not a cohesive, integrated, or
                   coordinated system. In 1995, we identified 163 employment training
                   programs spread across 15 federal departments and agencies, including
                   Labor.4 By recognizing in the overview the substantial number of the
                   nation’s job training programs that are outside its purview, Labor could
                   then discuss how its programs could fit in with a broader national job
                   training strategy and the coordination required to develop and implement
                   such a strategy. The coordination strategy could focus on identifying and
                   taking advantage of opportunities to realize efficiencies through
                   coordination and, possibly, consolidation. Passage of the recent welfare
                   reform legislation puts even greater demands on an employment training
                   system that appears unprepared to respond. Labor’s overview does
                   provide a general reference to “working closely with other agencies,
                   states, and communities to leverage our resources to address the special
                   needs of welfare recipients” but does not provide more detailed
                   information on what Labor will be doing.


                   The Results Act poses challenges to Labor to become more businesslike in
Labor Management   its operations. Labor’s strategic plan overview, however, does not fully
Challenges         address these challenges and how Labor plans to respond.

                   Managing in the “businesslike” manner envisioned by the Results Act will
                   be a substantial challenge for Labor, but the experiences of one of its
                   component agencies as a pilot could be helpful. OSHA, as one of the Results
                   Act’s pilot agencies, has been involved in a number of activities geared
                   toward making the management improvements intended by the Results
                   Act.5 It has been working to develop a comprehensive performance
                   measurement system that will focus on outcomes to measure its own
                   effectiveness. OSHA and state representatives have discussed the
                   application of this comprehensive system to OSHA’s monitoring of state

                   4
                   Multiple Employment Training Programs: Major Overhaul Needed to Create a More Efficient,
                   Customer-Driven System (GAO/T-HEHS-95-70, Feb. 6, 1995).
                   5
                    Under the Results Act, OMB designated approximately 70 pilot projects in performance measurement
                   for fiscal years 1994, 1995, and 1996. The pilot projects were to undertake the preparation of
                   performance plans and program performance reports for one or more of the major functions and
                   operations of the agency participating in the pilot.



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                      safety and health programs. Although not a requirement of the strategic
                      planning process, a discussion in Labor’s overview related to the
                      experiences gained from the OSHA pilot project—including lessons learned
                      and whether best practices or other lessons could be applied agencywide
                      or in units with similar functions—could be helpful in meeting the current
                      challenge of managing under the Results Act.


                      To efficiently and effectively operate, manage, and oversee its diversity of
Labor’s Capacity to   functions, Labor needs reliable data. In past work, we have identified
Provide Reliable      weaknesses in Labor’s information management practices. For example,
Information for       our review of Labor’s field offices demonstrated the lack of centrally
                      located information on key departmental functions, such as field office
Agency Management     locations, staffing, and costs. In our report on Labor’s Davis-Bacon Act
Is Questionable       wage determination process, we also identified limited computer
                      capabilities as a reason for the process’ vulnerability to use of fraudulent
                      or inaccurate data.6 We found a lack of both computer software and
                      hardware that could assist wage analysts in their reviews. The OIG also
                      cited areas in which Labor needed to improve its information management
                      practices, especially those used to support financial accounting systems.

                      Given these past findings, it is important for Labor to delineate in its plan
                      how it as an agency, along with specific unit initiatives, will produce the
                      requisite information to assess its progress. In its overview plan, Labor
                      recognizes that if it is to ensure timely and sound evaluations to assess
                      agency progress in meeting goals required by the act, additional
                      information may need to be obtained from its stakeholders. However, its
                      statement—“Resources for such information collection and evaluation
                      activities will need to be addressed”—does not describe its strategy for
                      ensuring that information from evaluations and other ongoing systems will
                      be collected and used to assess progress and performance.

                      Labor has made some efforts to improve its information management
                      systems; for example, it has appointed a Chief Information Officer.
                      However, this individual also serves as the Assistant Secretary for
                      Administration and Management, and questions have been raised about
                      whether an individual can fulfill both responsibilities.

                      As we have noted in our past work, sound application and management of
                      information technology to support strategic program goals must be an

                      6
                      Davis-Bacon Act: Process Changes Could Raise Confidence That Wage Rates Are Based on Accurate
                      Data (GAO/HEHS-96-130, May 31, 1996).



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                  important part of any serious attempt to improve agency mission
                  performance, cut costs, and enhance responsiveness to the public. Labor’s
                  overview plan does not discuss with any specificity how Labor plans to
                  use information technology to achieve its mission, goals, and objectives,
                  nor does the plan describe with sufficient clarity how Labor intends to use
                  information technology to improve performance and reduce costs.

                  According to its draft plan, Labor is focusing on “employing innovative
                  uses of technology.” The plan states that “DOL [Labor] is expanding the
                  use of the Internet to make standards and interpretations more accessible”
                  and is testing software to allow the public to comment electronically
                  through the Internet. Also, the plan states that Labor is developing expert
                  systems to assist employers in complying with regulatory standards.

                  In addition, Labor—like many other federal agencies—faces a major
                  challenge in managing information resources to ensure that information
                  technology tools and resources are consistent with the agency’s mission.
                  While Labor’s draft overview cites information technology initiatives, it
                  does not contain a discussion of Labor’s information technology strategy.
                  This strategy should include how Labor plans to address the “year 2000
                  problem,” which involves the need for computer systems to be changed to
                  accommodate dates beyond the year 1999. In addition, the information
                  technology strategy should contain information on how Labor plans to
                  comply with the Clinger-Cohen Act of 1996. The act calls for agencies to
                  implement a framework of modern technology management based on the
                  practices followed by leading private- and public-sector organizations that
                  have successfully used technology to dramatically improve performance
                  and meet strategic goals.


                  In commenting on a draft of this correspondence, officials at Labor
Agency Comments   generally disagreed with our observations. These disagreements related to
                  (1) an interpretation of what Labor’s strategic plan overview does or does
                  not include; (2) an interpretation of whether Labor’s strategic plan
                  overview adequately addresses what is required by the Results Act and
                  OMB guidance in preparing a strategic plan; and (3) whether it is
                  appropriate to include certain information in the overview, even though
                  such information is not required.

                  First, Labor officials disagreed with our statement that the overview does
                  not provide an agencywide strategic overview that links individual
                  strategic plans. These officials contend that the plan links individual



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strategic plans by presenting its major budget and program themes with
the appropriate agencies and their goals listed under each appropriate
theme. However, we believe that listing the three broad programmatic
categories and excerpting goals from individual plans and inserting them
under the appropriate category does not provide a sufficient linkage.

Second, Labor officials disagreed with our statement that the overview
does not include all the elements identified by the Results Act. In this
connection, Labor officials point out that agencies that use strategic
overviews are authorized by Circular A-11 to present them in either of two
forms; Labor officials say that although Labor used the second form, we
criticized the agency for failing to meet the requirement for the first form.
We believe, however, that Labor’s overview does not satisfy another
portion of Circular A-11 that applies regardless of which form is used: “The
overview links individual strategic plans by giving an overall statement of
the agency’s mission and goals.” We modified our correspondence to make
clearer the basis for our belief that the overview does not include all the
elements required by the Results Act and OMB guidance.

Third, officials at Labor disagreed with the appropriateness of including
certain information in the overview even though it is not required. For
example, they said that it is inappropriate to include a discussion of
management challenges and Labor’s capacity to provide reliable
information for Labor’s management. Our discussion of these two issues is
in direct response to this congressional request.

Finally, Labor officials did agree with some of our statements and agreed
to take corrective action. For example, they agreed to include an
explanation of why some Labor components prepared and submitted
strategic plans and others did not. Similarly, they agreed that the overview
did not include overarching goals and that these goals would be included
in future revisions of the plan.

We have incorporated Labor’s comments and made technical changes to
our correspondence where appropriate.


As arranged with your offices, unless you publicly announce its contents
earlier, we plan no further distribution of this correspondence until 30
days after its issue date. At that time, we will send copies to the Ranking
Minority Members of your Committees and to the Chairmen and Ranking
Minority Members of other Committees that have jurisdiction over



Page 15                             GAO/HEHS-97-172R Labor’s Draft Strategic Plan
B-277414




Department of Labor activities; the Secretary of Labor; and the Director,
Office of Management and Budget. We will also send copies to others on
request.

Please contact me at (202) 512-7002 if you or your staffs have any
questions concerning this letter. Major contributors to this letter were
Harriet C. Ganson, Assistant Director; Thomas N. Medvetz,
Evaluator-in-Charge; Robert Crystal, Assistant General Counsel; Julian P.
Klazkin, Senior Attorney; David B. Alston, Assistant Director; and Thomas
L. Davies, Senior Evaluator.




Carlotta C. Joyner
Director, Education and Employment Issues

Enclosure




Page 16                             GAO/HEHS-97-172R Labor’s Draft Strategic Plan
Page 17   GAO/HEHS-97-172R Labor’s Draft Strategic Plan
Enclosure

Goals and Statutory Responsibilities of
Labor’s Component Units

                          Labor’s five major areas of statutory responsibility—employment and
                          training, employment health and safety, pension and welfare benefits,
                          employment standards, and labor statistics—are discussed below.


Employment and Training   Labor’s major responsibilities in this area are covered by a number of
                          statutes administered by the Employment and Training Administration
                          (ETA) and the Veterans’ Employment and Training Service (VETS). Under
                          titles III and IX of the Social Security Act (42 U.S.C. 501, 1101), Labor
                          administers the Federal/State Unemployment Compensation Program. The
                          Wagner-Peyser Act (29 U.S.C. 49) provides authority for grants to states to
                          establish and maintain a system of local public employment offices.
                          Workers receive training and retraining under title III of the Job Training
                          Partnership Act (JTPA) (29 U.S.C. 1651) and other acts. Youth, adults, and
                          specific groups facing serious barriers to employment receive assistance
                          through grants to states under JTPA (29 U.S.C. 1501).

                          The mission of ETA, as expressed in the plan,7 is to provide support to the
                          public and private sectors in response to changes in the labor market,
                          ensure that Americans have access to the information and resources
                          necessary to compete successfully in the job market, and assist businesses
                          in gaining access to skilled workers and training resources to compete
                          successfully in a global economy.

                          ETA’s goals are to (1) “[i]mprove systems to enhance and leverage
                          investments in service delivery for youth, adults and employers, and to
                          improve the functioning of labor markets”; (2) “[a]ssure that America’s
                          youth, particularly at risk youth, acquire the knowledge, skills, and
                          abilities they need to earn a decent living”; (3) “[p]rovide adult
                          unemployed, disadvantaged and dislocated workers the services which
                          will help them find and hold good jobs at decent wages with career
                          potential”; (4) ensure that “[e]mployers value the public workforce
                          development system managed by ETA and its partners as being integral to
                          their competitiveness strategies and are among its primary investors and
                          customers”; and (5) “[i]n partnership with employees and their
                          representatives, achieve greater operating efficiency, provide better
                          services at reduced costs and increase customer satisfaction.”

                          The first goal is consistent with the purpose of JTPA, as well as with the
                          purpose of the Wagner-Peyser Act, which authorizes funding to establish

                          7
                           The word “plan” as used in this enclosure encompasses both the overview plan and the component
                          plans.



                          Page 18                                        GAO/HEHS-97-172R Labor’s Draft Strategic Plan
                        Enclosure
                        Goals and Statutory Responsibilities of
                        Labor’s Component Units




                        local public employment offices. The second and third goals reflect the
                        very purpose of JTPA, which is “to establish programs to prepare youth and
                        adults facing serious barriers to employment for participation in the labor
                        force . . .” (29 U.S.C. 1501). The fourth goal is consistent with various
                        statutes. The fifth goal is not based on a specific statutory requirement.

                        VETS’ goals are to provide (1) timely and fair resolution of complaints;
                        (2) employee development opportunities, supportive services, and job
                        openings; (3) timely and accurate information and direction to customers,
                        the Congress, and others regarding agency services and accomplishments;
                        (4) effective referrals of clients whose needs cannot be totally met by VETS
                        and its grantees; and (5) quality training to service provider staff.

                        VETS’ first goal is not based on a specific statutory requirement. The second
                        goal is specifically required under JTPA (29 U.S.C. 1721). Part of the third
                        goal is clearly envisioned in the statutory requirement that the Secretary
                        support outreach and public information activities to inform veterans
                        about services and jobs (29 U.S.C. 1721(a)(3)(c)). Reports of
                        accomplishments are to be included in an annual report to the Congress
                        (29 U.S.C.1579(d)). The fourth goal appears to come from the requirement
                        that Labor provide employment and training information to veterans that
                        is available under statutes and other provisions of law (29 U.S.C.
                        1721(a)(3)(C)). This is, in effect, a referral. The fifth goal is not based on a
                        specific statutory requirement.


Employment Health and   The Occupational Safety and Health Act (OSH Act) (29 U.S.C. 651), which is
Safety                  carried out by the Occupational Safety and Health Administration (OSHA),
                        and the Federal Mine Safety and Health Act (FMSHA) (30 U.S.C. 801), which
                        is carried out by the Mine Safety and Health Administration (MSHA),
                        establish Labor’s major statutory responsibilities in this area.

                        The plan quotes the following specific mission from the OSH Act: “Assure
                        so far as possible every working man and woman in the Nation safe and
                        healthful working conditions.” It then sets out separate strategic goals for
                        OSHA and MSHA. OSHA’s goals are to (1) “ensure healthful and safe working
                        conditions for all workers, as evidenced by fewer hazards, reduced
                        exposures, and fewer injuries, illnesses and fatalities”; (2) “change
                        workplace culture to increase employer and worker awareness of,
                        commitment to, and involvement with safety and health”; and (3) “secure
                        public confidence through excellence in the development and delivery of
                        its programs and services.” The first goal reflects purposes declared in the



                        Page 19                                   GAO/HEHS-97-172R Labor’s Draft Strategic Plan
                      Enclosure
                      Goals and Statutory Responsibilities of
                      Labor’s Component Units




                      OSH  Act. Although the act does not explicitly require Labor to reduce
                      hazards, exposures, injuries, illnesses, or fatalities, such a goal is
                      consistent with the overall purpose of the act. The second goal also
                      reflects purposes declared in the act, and it is driven by the act, but it does
                      not reflect a specific mandate. The third goal does not appear to be based
                      on specific provisions of law.

                      MSHA’s goals are to (1) “reduce the number, rate and severity of accidents
                      and injuries”; (2) “reduce recurring accidents and injuries”; (3) “reduce
                      high incidence miner illnesses”; (4) “address safety and health issues
                      resulting from technological changes in the mining industry”; and
                      (5) “develop and implement site-specific training programs.” Although the
                      act does not specifically require any reductions, the first three goals reflect
                      the overall purpose, including declared purposes, of FMSHA. The fourth goal
                      is generally consistent with the act in that it relates to miners’ safety and
                      health, but the act does not mention technological changes. The fifth goal
                      reflects various requirements in the act related to training.


Pension and Welfare   The Employee Retirement Income Security Act of 1974 (ERISA) (29 U.S.C.
Benefits              1001) establishes Labor’s major responsibilities in this area. The Pension
                      and Welfare Benefits Administration (PWBA) administers title I of ERISA. The
                      Pension Benefits Guaranty Corporation (PBGC) administers title IV of ERISA.

                      Under the plan, the mission of PWBA is to “protect the pension and welfare
                      benefits of the over 150 million participants and beneficiaries in private
                      sector employee benefit plans.” The goals of PWBA are to (1) “[e]nsure
                      workers get the information they need to protect their benefit rights”;
                      (2) “[a]ssist plan officials and service providers in understanding the
                      requirements of the relevant statutes in order to meet their legal
                      responsibilities”; (3) “[d]evelop policies and laws that encourage the
                      growth of employment-based benefit plans”; and (4) “[d]eter and correct
                      violations of the relevant statutes.” The first and fourth goals of PWBA are
                      statutory requirements. The second, although not specifically required by
                      statute, is consistent with ERISA. The third is stated in the law, which refers
                      only to “policies.”

                      The stated mission of PBGC is to protect participants’ benefits and promote
                      a healthy retirement system by encouraging continuation and maintenance
                      of private pension plans, protecting benefits, paying benefits in a timely
                      manner, and keeping costs and premiums low. The goals of PBGC are to
                      (1) “[p]rotect existing defined benefit plans and their participants, and



                      Page 20                                   GAO/HEHS-97-172R Labor’s Draft Strategic Plan
                       Enclosure
                       Goals and Statutory Responsibilities of
                       Labor’s Component Units




                       encourage new plans”; (2) “[p]rovide high quality services, and accurate
                       and timely payment of benefits to participants”; (3) “[s]trengthen financial
                       programs and systems”; and (4) “[i]mprove internal management support
                       operations.” The first and second goals reflect the purposes of ERISA. The
                       latter two are not based on specific statutory requirements.


Employment Standards   The following establish Labor’s major statutory responsibilities in this
                       area: the Fair Labor Standards Act (29 U.S.C. 201) and the Contract Work
                       Hours and Safety Standards Act (29 U.S.C. 327), which are carried out by
                       the Wage and Hour Division (WHD); acts such as the Davis-Bacon Act (40
                       U.S.C. 276a) and the Service Contract Act (41 U.S.C. 351), which establish
                       wage and other labor standards for government contracts also carried out
                       by WHD; and the Federal Employee’s Compensation Act (FECA) (5 U.S.C.
                       8101), the Longshore and Harbor Workers’ Compensation Act (33 U.S.C.
                       901), and the Black Lung Benefits Act (30 U.S.C. 901), which are carried
                       out by the Office of Workers’ Compensation Programs.

                       WHD’s  goals are as follows: (1) “increase compliance with the laws and
                       regulations administered and enforced by WHD”; (2) “increase customer
                       satisfaction with the services provided by WHD”; and (3) “achieve a high
                       performance workplace which anticipates and is responsive to the needs
                       of our customers and all our employees.” These goals are not based on
                       specific statutory requirements.

                       The goals of the Office of Workers’ Compensation Programs are as
                       follows: (1) ensure that “[u]nder the FECA, employees return to work
                       following a work injury at the earliest appropriate moment”; (2) ensure
                       that “[t]he FECA program, employing agencies, and Federal unions work as
                       partners to improve the delivery of Federal employees’ compensation
                       benefits”; (3) “[a]pply tools and technology to expand FECA program
                       capabilities and enhance program effectiveness”; (4) “[c]ontinue to
                       organize and support national union/management reengineering teams as
                       vehicles for broad based participation in decisions”; (5) “[p]romote a more
                       efficient Black Lung benefit delivery system”; (6) “[p]rovide a secure,
                       effective, efficient and prompt compensation and service delivery system
                       for the Longshore Program”; (7) “[e]nhance adjudicatory efficiency and
                       quality”; (8) ensure that “[i]njured FECA workers are served by a fair, swift,
                       and people-oriented compensation system”; (9) “create a leaner Black
                       Lung organization that delivers improved program services and eases
                       stakeholder burdens by reinventing and reengineering”; (10) “[i]nsure fair,
                       swift, cost-effective and people-oriented services for Black Lung



                       Page 21                                   GAO/HEHS-97-172R Labor’s Draft Strategic Plan
                   Enclosure
                   Goals and Statutory Responsibilities of
                   Labor’s Component Units




                   customers”; (11) “[r]educe the burden of reporting for Longshore’s
                   customers”; (12) “[e]nhance public awareness and voluntary compliance
                   with the provisions of the Longshore Act”; (13) “[m]aintain the fiscal
                   integrity of the FECA system and deliver cost-effective services”; and
                   (14) “[e]xercise fiscal responsibility in Black Lung while accomplishing the
                   mission.”

                   The first goal is not a specific statutory requirement but is consistent with
                   FECA, which allows Labor to require an injured employee to submit to a
                   physical examination as often as necessary (5 U.S.C. 8123). Goals two,
                   three, four, seven, eight, and thirteen are not linked to specific statutory
                   requirements but are consistent with the Secretary’s authority to
                   administer the FECA program (5 U.S.C. 8145). Goals five, nine, ten, and
                   fourteen deal with the Black Lung Program, and are not based on a
                   specific statutory requirement. Goals six, seven, eleven, and twelve all
                   relate to the Longshore and Harbor Workers’ Compensation Program. (As
                   noted above, goal seven also relates to FECA.) Although none of the goals is
                   required by law, each is consistent with the Longshore Act.


Labor Statistics   The Bureau of Labor Statistics carries out Labor’s responsibilities for
                   collecting, analyzing, and disseminating labor statistics. The law that
                   establishes Labor’s major statutory responsibilities in this area appears at
                   29 U.S.C. 1.

                   The Bureau’s mission, as stated in the strategic plan, is to provide
                   comprehensive and timely labor market information to the American
                   public, the Congress, other federal agencies, state and local governments,
                   business, labor, and every agency within Labor. The Bureau has
                   established two strategic goals: (1) “[p]roduce and disseminate timely,
                   accurate, and relevant information in [the Bureau’s] areas of expertise”
                   and (2) “[i]mprove accuracy, efficiency, and relevancy of [the Bureau’s]
                   program outputs through increased application of state-of-the-art
                   statistical techniques, economic concepts, technology, and management
                   processes.” The first goal clearly reflects a statutory mandate. The second,
                   although not specifically required by the applicable law, is consistent with
                   it.




                   Page 22                                   GAO/HEHS-97-172R Labor’s Draft Strategic Plan
Page 23   GAO/HEHS-97-172R Labor’s Draft Strategic Plan
Related GAO Products


              Veterans’ Employment and Training Service: Focusing on Program Results
              to Improve Agency Performance (GAO/T-HEHS-97-129, May 7, 1997).

              Department of Labor: Challenges in Ensuring Workforce Development and
              Worker Protection (GAO/T-HEHS-97-85, Mar. 6, 1997).

              Managing for Results: Using GPRA to Assist Congressional and Executive
              Branch Decisionmaking (GAO/T-GGD-97-43, Feb. 12, 1997).

              Information Technology Investment: Agencies Can Improve Performance,
              Reduce Costs, and Minimize Risks (GAO/AIMD-96-64, Sept. 30, 1996).

              Education and Labor: Information on the Departments’ Field Offices
              (GAO/HEHS-96-178, Sept. 16, 1996).

              Information Management Reform: Effective Implementation Is Essential
              for Improving Federal Performance (GAO/T-AIMD-96-132, July 17, 1996).

              Executive Guide: Effectively Implementing the Government Performance
              and Results Act (GAO/GGD-96-118, June 1996).

              Davis-Bacon Act: Process Changes Could Raise Confidence That Wage
              Rates Are Based on Accurate Data (GAO/HEHS-96-130, May 31, 1996).

              Employment Training: Successful Projects Share Common Strategy
              (GAO/HEHS-96-108, May 7, 1996).

              OSHA: Potential to Reform Regulatory Enforcement (GAO/T-HEHS-96-42,
              Oct. 17, 1995).

              Job Corps: High Costs and Mixed Results Raise Questions About
              Program’s Effectiveness (GAO/HEHS-95-180, June 30, 1995).

              Multiple Employment Training Programs: Information Crosswalk on 163
              Employment Training Programs (GAO/HEHS-95-85FS, Feb. 14, 1995).

              Executive Guide: Improving Mission Performance Through Strategic
              Information Management and Technology (GAO/AIMD-94-115, May 1994).




(205347)      Page 24                            GAO/HEHS-97-172R Labor’s Draft Strategic Plan
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