oversight

Major Management Challenges and Program Risks: Department of Labor

Published by the Government Accountability Office on 1999-01-01.

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

                United States General Accounting Office

GAO             Performance and Accountability
                Series




January 1999
                Major Management
                Challenges and Program
                Risks
                Department of Labor




GAO/OCG-99-11
GAO   United States
      General Accounting Office
      Washington, D.C. 20548

      Comptroller General
      of the United States



      January 1999
      The President of the Senate
      The Speaker of the House of Representatives

      This report addresses the major management challenges
      confronting the Department of Labor. It also addresses
      corrective actions that Labor has taken or initiated on
      these challenges—including actions to foster the
      adoption of alternative strategies for enforcing workplace
      regulations—and further actions that are needed.

      Labor has made progress in addressing some of the
      challenges we have identified, but further action is
      needed. For example, Labor has recognized and
      corrected some, but not all, of the data limitations that
      inhibit its ability to adequately assess the impact of its
      activities. We recognize that Labor’s diverse mission and
      decentralized management structure add to the difficulty
      of its efforts. Although Labor has made progress in
      coordinating efforts across its multiple offices through its
      strategic planning process, Labor needs to be more
      proactive in engaging all agencies with collateral
      responsibilities relating to Labor’s missions. Labor has
      made progress in fostering the adoption of alternative
      enforcement strategies, such as by providing some
      regulatory compliance information from many of its
      associated agencies through a Web site. However, Labor
      needs to work more effectively with workers and
      employers to develop other regulatory approaches.
      Finally, Labor and its component offices have made
progress in identifying the Year 2000 issue, making it a
departmental priority, and developing contingency plans
to respond to potential failures. However, as it learns
more about the readiness of its state partners for the year
2000, Labor may need to update these plans.

This report is part of a special series entitled the
Performance and Accountability Series: Major
Management Challenges and Program Risks. The series
contains separate reports on 20 agencies—one on each of
the cabinet departments and on most major independent
agencies as well as the U.S. Postal Service. The series
also includes a governmentwide report that draws from
the agency-specific reports to identify the performance
and management challenges requiring attention across
the federal government. As a companion volume to this
series, GAO is issuing an update to those government
operations and programs that its work has identified as
“high risk” because of their greater vulnerabilities to
waste, fraud, abuse, and mismanagement. High-risk
government operations are also identified and discussed
in detail in the appropriate performance and
accountability series agency reports.

The performance and accountability series was done at
the request of the Majority Leader of the House of
Representatives, Dick Armey; the Chairman of the House
Government Reform Committee, Dan Burton; the
Chairman of the House Budget Committee, John Kasich;
the Chairman of the Senate Committee on Governmental
Affairs, Fred Thompson; the Chairman of the Senate



             Page 2              GAO/OCG-99-11 Labor Challenges
Budget Committee, Pete Domenici; and Senator Larry
Craig. The series was subsequently cosponsored by the
Ranking Minority Member of the House Government
Reform Committee, Henry A. Waxman; the Ranking
Minority Member, Subcommittee on Government
Management, Information, and Technology, House
Government Reform Committee, Dennis J. Kucinich;
Senator Joseph I. Lieberman; and Senator Carl Levin.

Copies of this report series are being sent to the
President, the congressional leadership, all other
Members of the Congress, the Director of the Office of
Management and Budget, the Secretary of Labor, and the
heads of other major departments and agencies.




David M. Walker
Comptroller General of
the United States




            Page 3             GAO/OCG-99-11 Labor Challenges
Contents



Overview                                               6

Major                                                 13
Management and
Performance
Issues
Related GAO                                           36
Products
Performance and                                       39
Accountability
Series




                  Page 4   GAO/OCG-99-11 Labor Challenges
Page 5   GAO/OCG-99-11 Labor Challenges
Overview



                       The Department of Labor has primary
                       responsibility for ensuring that America’s
                       businesses have workers with the training
                       needed to be competitive in today’s global
                       economy, providing temporary income
                       support and job search assistance to
                       workers who have lost their jobs, ensuring
                       that workplaces are safe and free from
                       hazards, and ensuring that workers are
                       treated fairly. Labor’s fiscal year 1999 budget
                       of about $37 billion supports a staff of about
                       17,000 and over 1,000 field offices across the
                       country that carry out Labor’s program
                       activities. Over the years, our work has
                       called for more efficient and effective use of
                       Labor’s resources to accomplish its mission.
                       While Labor has been making changes to
                       more effectively carry out its
                       responsibilities, it still faces a number of
                       significant performance and management
                       challenges that need to be overcome.


The Challenges

Labor Lacks            Labor lacks adequate information to assess
Accurate and           whether many of its programs are operating
Reliable Information   efficiently and are producing intended
to Assess Program      results. For example, data reported by the
Performance
                       $1 billion Job Corps program on the


                       Page 6               GAO/OCG-99-11 Labor Challenges
                      Overview




                      percentage of participants who complete
                      their vocational training and obtain jobs
                      related to that training are misleading and
                      overstate the program’s results. Thus, it is
                      difficult to have confidence in Labor’s
                      assertions of program effectiveness. In
                      addition, because some of Labor’s
                      responsibilities are fragmented or
                      duplicated, either within the Department or
                      by activities in other federal departments,
                      obtaining overall information on the impact
                      of the entire federal effort is particularly
                      difficult. For example, even though the
                      Congress enacted legislation to consolidate
                      aspects of the nation’s employment training
                      system, separate programs that are focused
                      on the same population, each with its own
                      outcome and performance data, remain in
                      Labor and other departments. Information
                      on the performance of the collective federal
                      effort is not available.


Decentralization      Labor has shown limited capacity to
Intensifies Labor’s   effectively coordinate the activities of the
Coordination          many units at the federal, state, and local
Challenge             levels that share responsibility for
                      implementing worker protection laws and
                      various workforce development programs.
                      This coordination task is imposing;
                      management responsibility is dispersed


                      Page 7              GAO/OCG-99-11 Labor Challenges
                    Overview




                    across 22 Labor Department offices, at least
                    14 entities in other federal agencies, and
                    numerous state organizations. Recent
                    legislative and program changes affecting
                    key Labor functions call for increased
                    coordination to determine whether services
                    are being delivered effectively. As our work
                    has demonstrated, such coordination has not
                    always occurred. For example, we reported
                    in 1998 that the lack of effective
                    coordination can result in farmworker
                    children working in violation of the law.


Alternative         Labor also faces major challenges in the
Enforcement         enforcement of its many workplace
Strategies Could    mandates—from family and medical leave to
Leverage Labor’s    occupational safety and health. To this point,
Limited Resources
                    Labor has not effectively leveraged its
                    limited resources by using alternative
                    enforcement strategies. For example, in
                    previous work we found that billions of
                    dollars in federal contracts had been
                    awarded to employers found to be violating
                    workplace safety and health standards. To
                    address this situation, we have
                    recommended that the Occupational Safety
                    and Health Administration (OSHA) do a better
                    job of sharing information on the health and
                    safety records of contract employers with
                    federal contracting officers throughout the


                    Page 8              GAO/OCG-99-11 Labor Challenges
                    Overview




                    government. We have also stressed that
                    labor law enforcement could be better
                    served through greater service orientation,
                    such as by improving communication
                    between agency compliance officers and the
                    regulated community and increasing
                    employers’ and workers’ accessibility to
                    compliance information. To its credit, Labor
                    now provides some regulatory compliance
                    information from many of its associated
                    agencies through a Web site. However, Labor
                    needs to work more effectively with workers
                    and employers to develop other regulatory
                    approaches that show promise in enabling
                    agencies to perform their statutory missions
                    more effectively and at less cost to
                    taxpayers, such as placing greater
                    responsibility on workers and individual
                    employers to maintain safe and healthful
                    workplaces.


Year 2000 Problem   The inability of some Labor computer
Could Jeopardize    systems to properly distinguish between the
Benefits Payments   years 2000 and 1900 is potentially a critical
and Economic        challenge, putting at risk unemployment
Statistics
                    insurance benefits payments and the timely
                    issuance of economic statistics. Labor makes
                    extensive use of complex information
                    technology to support its mission; without
                    effective, up-to-date information technology,


                    Page 9              GAO/OCG-99-11 Labor Challenges
               Overview




               Labor cannot ensure the income security of
               millions of workers or generate crucial
               national economic data. Adding to the
               complexity of this challenge is the fact that
               these data rely on many information systems
               outside Labor. The Unemployment
               Insurance program, for example, is jointly
               administered by Labor and the states. Each
               state uses its own information systems to
               pay benefits to laid-off workers—an
               estimated $24 billion in benefits to roughly
               8 million unemployed workers in fiscal year
               1999—and to collect state unemployment
               taxes from employers. Should states’
               systems fail to operate properly because of
               Year-2000-related failures, both benefits
               payments and tax collections could be
               jeopardized.


Progress and   Labor has made progress in addressing some
Next Steps     of the challenges we have identified, but
               further action is needed. Labor has made
               progress in recognizing and correcting the
               data limitations that inhibit its ability to
               adequately assess the impact of its activities
               and has improved its performance planning
               efforts, but it has much additional ground to
               cover. We recognize that Labor’s diverse
               mission and decentralized management
               structure add to the difficulty of its efforts.


               Page 10              GAO/OCG-99-11 Labor Challenges
Overview




However, through its focus on defining
intended outcomes, devising strategies to
achieve those outcomes, and establishing
measurement systems to assess progress,
the Government Performance and Results
Act of 1993, commonly known as the Results
Act, offers Labor a mechanism to address
some of these basic management challenges.

Labor needs to continue to broaden its
approach to strategic management. Although
Labor has made progress in coordinating its
efforts through its strategic planning
process, Labor needs to be more proactive in
engaging all agencies with collateral
responsibilities relating to Labor’s missions.
This includes Labor component offices;
other federal agencies; as well as state, local,
and private sector organizations. Labor has
made progress in fostering the adoption of
alternative enforcement strategies, such as
by providing some regulatory compliance
information from many of its associated
agencies through a Web site. However, Labor
needs to work more effectively with workers
and the employer community to develop
other regulatory approaches. Finally, Labor
and its component offices have made
progress in addressing the Year 2000 issue,
making it a departmental priority and
developing contingency plans to respond to


Page 11              GAO/OCG-99-11 Labor Challenges
Overview




potential failures. However, during 1999,
Labor may need to update its contingency
plans as it learns more about the readiness
of its state partners for the year 2000.




Page 12             GAO/OCG-99-11 Labor Challenges
Major Management and Performance
Issues


            Established as a department in 1913, Labor
            has primary responsibility for overseeing the
            nation’s job training programs and for
            enforcing a variety of federal labor laws.
            Labor’s mission is defined as helping
            workers find jobs and helping employers
            find workers; protecting the retirement and
            health care benefits of workers and
            improving their working conditions;
            strengthening free collective bargaining; and
            tracking changes in employment, prices, and
            other national economic measurements. The
            Congress provided Labor with a budget of
            about $37 billion for fiscal year 1999 and
            funded nearly 17,000 staff to pursue Labor’s
            mission. About three-fourths of Labor’s
            budget consists of mandatory spending on
            income maintenance programs, such as the
            Unemployment Insurance and Black Lung
            programs.

            Labor’s diverse functions are carried out
            through a decentralized organizational
            structure by 22 component offices and more
            than 1,000 field offices that support Labor’s
            various functional responsibilities. Many of
            these responsibilities fall into two major
            categories: enhancing workers’ skills
            through job training and ensuring worker
            protection. A third category involves
            developing economic statistics. Within this


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Major Management and Performance
Issues




decentralized organizational structure, some
individual programs for which Labor is
responsible are further decentralized, in that
state and local agencies administer the
programs with funding and oversight
provided by Labor.

Labor’s workforce development
responsibilities are housed in the
Employment and Training Administration
and the Veterans’ Employment and Training
Service. These agencies administer job
training programs authorized by the Job
Training Partnership Act (JTPA), such as
those for economically disadvantaged adults
and youth—including Job Corps—and for
workers who lose their jobs because of plant
closings or downsizing. While Labor directly
administers the Job Corps program, state
and local agencies administer other JTPA
programs. The Congress passed legislation in
August 1998 that will make major changes to
the nation’s workforce development system,
such as requiring that one-stop career
centers be established nationwide to
facilitate the access of job seekers and
employers to assistance, consolidating a
number of programs, and streamlining the
structure of job training programs.




Page 14                GAO/OCG-99-11 Labor Challenges
Major Management and Performance
Issues




Four agencies are responsible for most of
Labor’s worker protection programs: the
Employment Standards Administration, the
Pension and Welfare Benefits
Administration, OSHA, and the Mine Safety
and Health Administration. These agencies
operate a number of programs intended to
protect the wages and health and safety of
workers. For example, the Employment
Standards Administration has responsibility
for administering the Davis-Bacon Act,
which requires that workers on federally
funded construction projects be paid the
wages that the Secretary of Labor
determines to be prevailing in the locality.
OSHA protects workers by establishing and
enforcing standards that cover a variety of
threats to workplace safety and health.

Labor’s Bureau of Labor Statistics (BLS) is
the principal fact-finding agency for the
federal government in the field of labor
statistics. BLS produces important economic
indicators, such as the Consumer Price
Index (CPI). The CPI is used by business,
labor, and government in formulating fiscal
and monetary policy and is also used as the
basis for cost-of-living adjustments for
payments made under many government
programs, including Social Security.



Page 15                GAO/OCG-99-11 Labor Challenges
                 Major Management and Performance
                 Issues




                 Over recent years, both the Department’s
                 Inspector General and we have conducted
                 various program evaluations of Labor’s
                 workforce development and worker
                 protection activities and its preparations for
                 the information technology challenges
                 associated with the year 2000. In addition to
                 these evaluations, we have reviewed Labor’s
                 strategic and performance planning efforts
                 required under the Results Act. In response
                 to our work, Labor has implemented a
                 number of changes to improve its
                 performance. However, Labor still faces
                 important challenges in such areas as the
                 availability and reliability of certain program
                 performance data, coordination among
                 various entities, and the Year 2000 issue that
                 prevent its programs from achieving as large
                 an impact as they otherwise could.


Labor Lacks      Labor lacks accurate and reliable
Accurate and     information needed to effectively assess
Reliable         whether many of its programs are producing
Information to   their intended results and to determine
Assess Program   whether its resources are being used
                 effectively. For Labor, this issue is
Performance
                 particularly important, because many of its
                 activities are fragmented or duplicated either
                 within the Department or by other
                 departments or state or local governments.


                 Page 16                GAO/OCG-99-11 Labor Challenges
Major Management and Performance
Issues




Thus, major challenges facing Labor include
determining how to provide consistent
outcome information across multiple
programs with similar objectives, ensuring
that Labor’s outcome information is
accurate, and monitoring program
implementation. In addition, Labor needs to
rely less on its component offices and the
Office of Inspector General (OIG) to ensure
the reliability and validity of program
performance data.

Our work has shown that when multiple
programs address similar objectives, the
Department lacks the complete information
needed to evaluate performance. For
example, while the Workforce Investment
Act consolidated several programs for youth,
Job Corps and a separate youth training
program will continue to provide
employment assistance to disadvantaged
youth separately. Yet Labor does not have an
approach to assess how well youth are being
served by its programs. Similarly, numerous
programs are providing assistance to
disadvantaged adults. States are providing
employment assistance to welfare recipients
through their federal grants from the
Department of Health and Human Services
(HHS), from Labor’s welfare-to-work grant
program, and through programs funded by


Page 17                GAO/OCG-99-11 Labor Challenges
Major Management and Performance
Issues




JTPA,yet a comprehensive assessment of
whether welfare recipients are better off as a
result of this assistance is lacking. Thus,
Labor cannot determine whether certain
approaches are more effective, or if some
segments of the population remain unserved.

Relatedly, we have identified a lack of
consistent data on Labor and other agencies’
employment-focused programs for the
disabled. Those programs that collected data
on program outcomes—such as on whether
participants got jobs and kept them; what
wages participants were paid; and whether
participants received employee benefits,
such as health insurance—used different
definitions for key data. The programs also
had different eligibility criteria, paperwork
requirements, software, and confidentiality
rules, which limit Labor’s ability to compare
performance among programs.

We are also concerned that some
information that Labor reports is misleading
and overstates program results. For
example, job placement and other outcome
information reported by the Job Corps
program may be inaccurate. One of our
studies showed that about 15 percent of the
job placements in our sample were
potentially invalid. We found in another


Page 18                GAO/OCG-99-11 Labor Challenges
Major Management and Performance
Issues




study that, while Labor reported that
48 percent of program participants
nationwide had completed vocational
training, only 14 percent had completed all
requirements of their vocational training
curricula. We also questioned Labor’s
assertions concerning the number of
participants reported to have obtained a job
related to their training.

While Labor has made progress in
recognizing and correcting its data
limitations, it agrees that significant
challenges remain. Labor needs to provide
more explicit information on how it intends
to correct problems with its performance
measurement data and successfully
implement those strategies. Doing so would
give the Congress and others more
assurance that these data will, in fact, be
credible and provide a reasonable basis for
measuring Labor’s progress toward
achieving its goals.

Data problems also affect Labor’s ability to
monitor program activities. For example,
Labor lacks data to monitor and improve its
performance in processing agricultural
employers’ applications for certification to
bring nonimmigrant “guestworkers” into the
country when there is a shortage of domestic


Page 19                GAO/OCG-99-11 Labor Challenges
Major Management and Performance
Issues




workers. Even though some crops have very
short harvest times—which makes timely
certifications critical—our analysis showed
that in fiscal year 1996 Labor issued
certifications after statutory deadlines at
least one-third of the time.

Finally, Labor’s reliance on OIG audits to
ensure data quality and accuracy is
misplaced. The OIG can play an important
role in ensuring that transactions and other
data that support performance measures are
properly processed, recorded, and
summarized to prepare performance
information in accordance with Labor’s
performance plan, but the OIG’s actions
cannot substitute for Labor’s own attention
to quality data.

A departmentwide strategy aimed at
ensuring the integrity, reliability, and
completeness of critical management and
program performance data would help Labor
better achieve its mission. Such a strategy
could include identifying the data that are
critical to achieving Labor’s mission and
ensuring that these data reflect the actions
of all Labor’s programs as well as the effects
of programs in other agencies; developing
data verification and validation procedures
to ensure that significant errors, including


Page 20                GAO/OCG-99-11 Labor Challenges
                   Major Management and Performance
                   Issues




                   bias, are not introduced during data
                   collection, maintenance, or processing;
                   developing procedures to control data
                   quality; and developing procedures specific
                   to the data required for performance
                   measures proposed in Labor’s performance
                   and strategic plans. In addition to increasing
                   the Department’s level of confidence in its
                   data, such a strategy would enhance the
                   credibility of Labor’s data, including the
                   performance information reported under the
                   Results Act, outside the Department.


Key Contact        Carlotta C. Joyner, Director
                   Education and Employment Issues
                   Health, Education, and Human Services
                     Division
                   (202) 512-7014
                   joynerc.hehs@gao.gov


Decentralization   Labor’s decentralized structure and the
Intensifies        numerous federal, state, and local partners
Labor’s            that share responsibility for Labor’s
Coordination       programs complicate its efforts to effectively
Challenge          coordinate the many programs it oversees.
                   Not only does Labor itself have 22 offices,
                   many of which have overlapping
                   responsibilities, but for many of its
                   programs, such as job training, enforcement,


                   Page 21                GAO/OCG-99-11 Labor Challenges
Major Management and Performance
Issues




and data collection, Labor must work with
state and local governments or
nongovernmental organizations that often
manage the programs on a day-to-day basis.
As a result, the need for coordination,
communication, and cooperation among
Labor and its partners is vital to ensuring
that program services are delivered
efficiently. While Labor’s strategic and
performance plans acknowledged the need
for coordination among some of its partners,
such as in job training, the plans generally
lacked detail on how such coordination will
be achieved, especially given the rapidly
changing environment with regard to job
training.

Labor’s decentralized structure poses
numerous challenges for internal
coordination. Almost 15 years ago, we
reported that Labor’s component offices
operated independently and did not
consistently adhere to central policies, and
just recently we reported that Labor still
operated as a set of individual components.
In fact, as recently as 1996, Labor did not
centrally maintain any information on the
number or location of its field offices.
Although this decentralized organizational
structure may allow Labor more flexibility to
meet a variety of needs and focus resources


Page 22                GAO/OCG-99-11 Labor Challenges
Major Management and Performance
Issues




in the field, this structure makes adopting
good management practices, including
coordination, much more difficult. In fact,
we noted in 1998 that Labor’s strategic and
performance plans appeared to be driven by
its organizational structure rather than by
Labor’s overall mission. Labor subsequently
revised its plans to better reflect its mission
and provided some information on the
relationships among all of its program
activities. However, it remains to be seen
whether these new goals will foster better
coordination than has traditionally been the
case.

The decentralization of responsibilities for
key functions, such as job training and
worker protection, also complicates external
coordination. In the past, we found that job
training was carried out by 15 federal
agencies, including Labor, as well as by
numerous other organizations, associations,
and community colleges. Recent legislative
changes regarding the delivery of job
training services pose an even greater
challenge for coordination. These changes
have placed more responsibility at the state
and local levels for identifying who should
be trained, what types of training are
needed, and how training dollars should be
allocated to best serve particular


Page 23                GAO/OCG-99-11 Labor Challenges
Major Management and Performance
Issues




populations. In addition, the 1996 welfare
reform legislation and Labor’s
welfare-to-work grant program created in
1997 have affected the nation’s job training
system in ways that are just now beginning
to emerge. With welfare reform’s emphasis
on job placement, the demand for job
training and placement assistance is likely to
be affected, and efficient delivery of
assistance requires that Labor-administered
programs be well integrated with
HHS-administered programs for economically
disadvantaged parents. Similarly, the
Labor-administered welfare-to-work grant
program requires a high level of
communication and integration between
Labor and HHS as well as between job
training and welfare agencies at the state
and local levels.

The patchwork of workforce protections,
along with the number of federal and state
agencies responsible for enforcing these
laws, is another activity heavily dependent
upon effective coordination. However, Labor
has demonstrated limited capacity to follow
established coordination procedures that
were designed to ensure that the laws are
adequately enforced. For example, Labor
established procedures for referring
potential cases, conducting joint inspections,


Page 24                GAO/OCG-99-11 Labor Challenges
              Major Management and Performance
              Issues




              and exchanging information with key federal
              enforcement agencies both within Labor
              (such as OSHA) and outside Labor (such as
              the Immigration and Naturalization Service);
              these procedures were also to be used when
              working with state labor agencies
              responsible for enforcing state child labor
              laws. However, in 1998, we found that these
              procedures were not being followed and
              there were no controls in place to alert
              Labor of any lack of coordination. One result
              of this lack of coordination is that
              farmworker children could be working in
              violation of the law. As Labor moves forward
              with its plans to significantly increase its
              enforcement of workplace protections, it
              needs to take greater advantage of
              opportunities to enhance coordination with
              federal and state partners.


Key Contact   Carlotta C. Joyner, Director
              Education and Employment Issues
              Health, Education, and Human Services
                Division
              (202) 512-7014
              joynerc.hehs@gao.gov




              Page 25                GAO/OCG-99-11 Labor Challenges
                   Major Management and Performance
                   Issues




Alternative        Labor faces a formidable challenge in
Enforcement        enforcing basic workplace protections, from
Strategies Could   ensuring that workers receive at least a
Leverage Labor’s   minimum wage, to allowing parents to take
Limited            leave to spend time with their newborn
                   children, to protecting workers from
Resources
                   occupational hazards. Labor must enforce
                   these protections in millions of workplaces
                   employing millions of workers throughout
                   the nation. Given the breadth of these
                   mandates and the scope of its enforcement
                   task, Labor needs to more effectively
                   leverage its limited resources beyond
                   traditional inspections, citations, and fines
                   by using alternative enforcement strategies.

                   One area that could benefit from an
                   alternative enforcement strategy is federal
                   contract compliance. For example, we found
                   that billions of dollars in federal
                   contracts—$38 billion in fiscal year
                   1994—were awarded to employers already
                   found to be violating workplace safety and
                   health standards. Many federal agencies
                   across the government already have the
                   authority to debar or suspend federal
                   contractors for violating safety and health
                   regulations and could use this authority to
                   influence contractors to undertake remedial
                   measures to improve workplace conditions.
                   However, agency officials responsible for


                   Page 26                GAO/OCG-99-11 Labor Challenges
Major Management and Performance
Issues




awarding contracts have had no way of
knowing which federal contractors have
violated safety and health standards.
Consequently, it is possible that even
contractors that have been assessed high
penalties by OSHA for willful or repeat
violations could be given additional federal
contracts.

To address this issue, we made a series of
recommendations to Labor to facilitate its
sharing health and safety inspection
information with federal contracting officers
during the procurement process. This would
enable agencies to ensure that they
contracted only with those firms that were
“responsible”—that is, in compliance with
applicable laws and regulations under the
Occupational Safety and Health Act. While
having taken some actions to improve access
to health and safety inspection data, Labor
could do more to help other agencies obtain
and use this information during the contract
procurement process, for example, by
developing procedures to periodically
transmit data on contractors’ safety and
health records to agency contracting
officers.

In the past, we have also noted that federal
labor law enforcement and regulation efforts


Page 27                GAO/OCG-99-11 Labor Challenges
Major Management and Performance
Issues




could be better served if Labor developed a
greater service orientation, such as by
improving employer, worker, and union
access to information; strengthening the role
of workers and employers in compliance;
and improving communication between
agency compliance officers and the
regulated community. For example, many
employers—both large and small—as well as
union representatives have reported that
they have experienced difficulty obtaining
accurate and complete information from
regulatory agencies and that they are rarely
confident that they know all the laws and
regulations that they need to comply with.
Labor has made some effort to address this
issue by making available a variety of
pamphlets as well as a small business
handbook that summarizes the laws Labor
enforces, clarifies an employer’s duties, and
identifies the appropriate Labor office to
contact for answers to questions and other
assistance. Labor has also created an
Internet Web site that provides interactive
expert advice on workplace laws in a format
that mimics the interaction an individual
might have with a human expert. Called
Employment Laws Assistance for Workers
and Small Business, the system provides
manufacturers and other employers with
advice on such issues as workplace safety


Page 28                GAO/OCG-99-11 Labor Challenges
Major Management and Performance
Issues




and the Family and Medical Leave Act. Labor
also offers employers opportunities to attend
seminars that provide technical assistance
on how to comply with federal laws and
regulations.

Labor has also attempted to enhance the role
of workers and employers in facilitating
labor law compliance through OSHA’s effort
to develop a work site safety and health
program standard, although the standard has
not yet been issued. Labor has halted its
cooperative health and safety compliance
programs, like the Maine 200 program, in
response to a federal court order.

Disseminating information could facilitate
voluntary compliance with federal labor
laws and regulations by responsible
businesses and make workers and
employers more knowledgeable about
regulation. Nevertheless, more could be
done. For example, no one federal agency,
including Labor—the primary entity
responsible for the enforcement of
workplace laws and regulations—has
compiled a comprehensive set of the federal
laws applicable to employers. In addition,
Labor could enhance the usefulness of its
current information dissemination efforts by
including in pamphlets or at its Web site


Page 29                GAO/OCG-99-11 Labor Challenges
                Major Management and Performance
                Issues




                links to complementary or additional state
                labor laws, where applicable.


Key Contact     Carlotta C. Joyner, Director
                Education and Employment Issues
                Health, Education, and Human Services
                  Division
                (202) 512-7014
                joynerc.hehs@gao.gov


Year 2000       The rapidly approaching year 2000 presents
Problem Could   a sweeping and urgent challenge for virtually
Jeopardize      every organization, public and private, that
Benefits        uses computers. The management and
Payments and    systems conversion activities that are taking
                place are probably the largest and most
Economic
                complex projects many agencies have ever
Statistics      undertaken. For this reason, we have
                designated the Year 2000 computing problem
                a high-risk area for the federal government.
                If agencies’ systems are not Year 2000
                compliant on or before January 1, 2000, the
                potential impact could be significant.
                Because Labor shares the responsibility with
                others, including state governments, to
                deliver services, the systems compliance
                issues Labor faces are especially challenging.
                According to Labor officials, billions of
                dollars in benefits payments to Americans,


                Page 30                GAO/OCG-99-11 Labor Challenges
Major Management and Performance
Issues




such as unemployment insurance, as well as
systems that produce labor and economic
statistics used by both public and private
organizations could be at significant risk of
disruption.

One program susceptible to Year 2000
difficulties is the Unemployment Insurance
program. The Congress established the
Unemployment Insurance program to
provide partial income assistance to
temporarily unemployed workers with
substantial work histories. The program is a
federal-state partnership. Within overall
federal guidelines, state employment
security agencies (SESA) operate the
Unemployment Insurance programs in
accordance with their own state priorities
and unemployment compensation laws.
Therefore, each SESA levies and collects its
own payroll taxes, places the receipts in a
trust fund, and determines the level and
duration of benefits and the conditions for
benefit eligibility. Labor is responsible for
maintaining the fiscal integrity of the
program, including the individual state
program trust funds. In fiscal year 1998,
states collected $22 billion in state
unemployment insurance taxes. During
fiscal year 1999, the program will pay an
estimated $24 billion to about 8 million


Page 31                GAO/OCG-99-11 Labor Challenges
Major Management and Performance
Issues




workers. Because each of the 53 SESAs (one
for each state, the District of Columbia,
Puerto Rico, and the Virgin Islands) uses its
own computer systems to operate its
program, Labor faces a particularly complex
challenge.

In September 1998, both Labor’s Inspector
General and we reported that Labor could
experience significant Year 2000 problems
with the Unemployment Insurance program
even before January 1, 2000, because states’
unemployment insurance systems involve
benefit date calculations that extend 1 year
into the future. For example, claims filed in
January 1999 will have a benefit year ending
in January 2000. We noted that Labor was
encouraging states to address the
Year-2000-related vulnerabilities of their
unemployment insurance systems and was
helping fund their efforts to address these
problems.

We also reported that other systems at Labor
were at risk. For example, more than
one-third of the systems Labor identified as
mission-critical were concentrated within
one of its component agencies: BLS. Among
other important indicators, BLS produces the
CPI—the principal source of information
concerning trends in consumer prices and


Page 32                GAO/OCG-99-11 Labor Challenges
Major Management and Performance
Issues




inflation in the United States. Should the CPI
system fail, other federal programs—such as
the Social Security program, which uses the
CPI to adjust payments to recipients—could
be affected. We noted that the CPI schedule
for replacement was very tight. Eight other
systems at BLS were scheduled for
replacement. In general, system replacement
is a high-risk activity, especially given the
long history of difficulties federal agencies
have experienced in delivering planned
systems on time. As a result, we are
concerned that BLS’ systems may not be
ready in time.

In light of the Year 2000 challenges facing
Labor, and because it appeared that some
SESAs could experience systems failures as
early as January 1999, in September 1998, we
reported that it was imperative that Labor
develop realistic contingency plans to ensure
the continuity of core business processes.
Such contingency plans, we noted, needed to
be formulated to respond to two types of
failures: those that can be predicted (for
example, systems renovations that are
already far behind schedule) and those that
are unforeseen (such as systems that fail
despite having been certified Year 2000
compliant, or those that are not corrected by
January 1, 2000, despite having appeared to


Page 33                GAO/OCG-99-11 Labor Challenges
Major Management and Performance
Issues




be on schedule). In addition, because Labor
depends on data provided by its program
partners, contingency plans need to consider
all critical core business processes and
supporting systems of the partners as well.
In September 1998, we reported that Labor
had drafted contingency plans for key
benefits processes and supporting systems
and was expecting to complete plans for
other business areas and supporting systems
by the end of the year. Labor needs not only
to complete these plans but also to
continually update them as more becomes
known about Labor’s partners’ readiness for
the year 2000.

Because the unemployment insurance
systems are susceptible to Year 2000 failure
during 1999, Labor will gain valuable
experience in dealing with its Year 2000
challenge early. Labor can use the lessons it
learns—such as whether its contingency
planning efforts were adequate—in dealing
with its remaining Year 2000 challenges.
Moreover, on the basis of its experience,
Labor can play an important leadership role
in helping other federal agencies prepare for
their Year 2000 challenges.




Page 34                GAO/OCG-99-11 Labor Challenges
              Major Management and Performance
              Issues




Key Contact   Joel C. Willemssen, Director
              Civil Agencies Information Systems
              Accounting and Information Management
                Division
              (202) 512-6408
              willemssenj.aimd@gao.gov




              Page 35                GAO/OCG-99-11 Labor Challenges
Related GAO Products



Accurate and       Job Corps: Links With Labor Market
Reliable           Improved but Vocational Training
Information        Performance Overstated (GAO/HEHS-99-15,
                   Nov. 4, 1998).

                   Department of Labor: Further Strategic
                   Planning and Data Quality Refinements
                   Would Assist in Oversight (GAO/T-HEHS-98-249,
                   Sept. 28, 1998).

                   Job Corps: Vocational Training Performance
                   Data Overstate Program Success
                   (GAO/T-HEHS-98-218, July 29, 1998).

                   Managing for Results: Agencies’ Annual
                   Performance Plans Can Help Address
                   Strategic Planning Challenges (GAO/GGD-98-44,
                   Jan. 30, 1998).

                   Job Corps: Need for Better Enrollment
                   Guidance and Improved Placement
                   Measures (GAO/HEHS-98-1, Oct. 21, 1997).


Decentralization   Child Labor in Agriculture: Changes Needed
and Coordination   to Better Protect Health and Educational
                   Opportunities (GAO/HEHS-98-193, Aug. 21, 1998).

                   Results Act: Observations on Labor’s Fiscal
                   Year 1999 Performance Plan
                   (GAO/HEHS-98-175R, June 4, 1998).


                   Page 36              GAO/OCG-99-11 Labor Challenges
              Related GAO Products




              Department of Labor: Strategic Planning and
              Information Management Challenges Facing
              the Department (GAO/T-HEHS-98-88, Feb. 5,
              1998).

              The Results Act: Observations on
              Department of Labor’s June 1997 Draft
              Strategic Plan (GAO/HEHS-97-172R, July 11,
              1997).

              Strong Leadership Needed to Improve
              Management at the Department of Labor
              (GAO/HRD-86-12, Oct. 21, 1985).


Alternative   Business Regulation: California
Enforcement   Manufacturers Use Multiple Strategies to
Strategies    Comply With Laws (GAO/HEHS-98-208, Sept. 30,
              1998).

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

              Occupational Safety and Health: Violations
              of Safety and Health Regulations by Federal
              Contractors (GAO/HEHS-96-157, Aug. 23, 1996).

              Workplace Regulation: Information on
              Selected Employer and Union Experiences
              (GAO/HEHS-94-138, June 30, 1994).


              Page 37                GAO/OCG-99-11 Labor Challenges
            Related GAO Products




            Occupational Safety and Health: Options for
            Improving Safety and Health in the
            Workplace (GAO/HRD-90-66BR, Aug. 24, 1990).


Year 2000   Year 2000 Computing Crisis: Progress Made
Problem     at Department of Labor, but Key Systems at
            Risk (GAO/T-AIMD-98-303, Sept. 17, 1998).




            Page 38                GAO/OCG-99-11 Labor Challenges
Performance and Accountability Series



             Major Management Challenges and Program
             Risks: A Governmentwide Perspective
             (GAO/OCG-99-1)

             Major Management Challenges and Program
             Risks: Department of Agriculture
             (GAO/OCG-99-2)

             Major Management Challenges and Program
             Risks: Department of Commerce
             (GAO/OCG-99-3)

             Major Management Challenges and Program
             Risks: Department of Defense (GAO/OCG-99-4)

             Major Management Challenges and Program
             Risks: Department of Education
             (GAO/OCG-99-5)

             Major Management Challenges and Program
             Risks: Department of Energy (GAO/OCG-99-6)

             Major Management Challenges and Program
             Risks: Department of Health and Human
             Services (GAO/OCG-99-7)

             Major Management Challenges and Program
             Risks: Department of Housing and Urban
             Development (GAO/OCG-99-8)




             Page 39            GAO/OCG-99-11 Labor Challenges
Performance and Accountability Series




Major Management Challenges and Program
Risks: Department of the Interior
(GAO/OCG-99-9)

Major Management Challenges and Program
Risks: Department of Justice (GAO/OCG-99-10)

Major Management Challenges and Program
Risks: Department of Labor (GAO/OCG-99-11)

Major Management Challenges and Program
Risks: Department of State (GAO/OCG-99-12)

Major Management Challenges and Program
Risks: Department of Transportation
(GAO/OCG-99-13)

Major Management Challenges and Program
Risks: Department of the Treasury
(GAO/OCG-99-14)

Major Management Challenges and Program
Risks: Department of Veterans Affairs
(GAO/OCG-99-15)

Major Management Challenges and Program
Risks: Agency for International Development
(GAO/OCG-99-16)




Page 40                  GAO/OCG-99-11 Labor Challenges
Performance and Accountability Series




Major Management Challenges and Program
Risks: Environmental Protection Agency
(GAO/OCG-99-17)

Major Management Challenges and Program
Risks: National Aeronautics and Space
Administration (GAO/OCG-99-18)

Major Management Challenges and Program
Risks: Nuclear Regulatory Commission
(GAO/OCG-99-19)

Major Management Challenges and Program
Risks: Social Security Administration
(GAO/OCG-99-20)

Major Management Challenges and Program
Risks: U.S. Postal Service (GAO/OCG-99-21)

High-Risk Series: An Update (GAO/HR-99-1)




The entire series of 21 performance and
accountability reports and the high-risk
series update can be ordered by using
the order number GAO/OCG-99-22SET.




Page 41                  GAO/OCG-99-11 Labor Challenges
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