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United States Government Accountability Office: 
GAO: 

Report to the Ranking Member, Subcommittee on Highways and Transit, 
Committee on Transportation and Infrastructure, House of 
Representatives: 

September 2011: 

On-the-Job Training: 

Federal Highway Administration Needs to Strengthen Program Assessment: 

GAO-11-703: 

GAO Highlights: 

Highlights of GAO-11-703, a report to the Ranking Member, Subcommittee 
on Highways and Transit, Committee on Transportation and 
Infrastructure, House of Representatives. 

Why GAO Did This Study: 

The Federal Highway Administration’s (FHWA) on-the-job training 
program—-a relatively small part of the federal aid highway program—-
requires states to implement job training programs to provide 
traditionally underrepresented groups with opportunities in highway 
construction. To increase the effectiveness of state job training 
programs, FHWA grants up to $10 million annually for supportive 
services, such as job placement assistance. 

This report examines the extent to which (1) FHWA’s job training 
program enhances training and career opportunities for these groups, 
(2) FHWA oversees the job training programs, and (3) supportive 
services provide assistance to these programs. To address these topics 
GAO reviewed federal legislation, good management practices identified 
in prior GAO reports, FHWA documents, and proposals and reports 
submitted by states. GAO conducted an in-depth examination of these 
efforts in four states, and interviewed a cross-section of FHWA staff, 
state officials, and industry groups. 

What GAO Found: 

It is unclear the extent to which FHWA’s on-the-job training program 
enables women, minorities, and economically disadvantaged individuals 
to reach journey-level status in the highway construction trades, 
although stakeholders believe it can create some opportunities. FHWA’s 
decentralized management of the program—-in which state transportation 
agencies and FHWA’s division offices are generally responsible for 
program implementation-—has led to a wide range of practices. As a 
result, the types of training opportunities created by the program 
vary from state to state in terms of, for example, the length of 
training and the entities involved in providing training. In addition, 
the extent that state programs focus on creating training 
opportunities for traditionally underrepresented groups differs. The 
limited amount of usable information available on program results 
varies among states. As a result, FHWA does not know how well the 
program is doing, and GAO could not accurately determine how many 
trainees participate in the program or the demographics of those 
trainees; however, GAO estimates that several thousand likely 
participate in any one year. 

FHWA’s oversight approach does little to assess program results. FHWA 
lacks clear criteria that articulate what states are supposed to 
accomplish through their job training programs. While some broad 
program expectations are stipulated in guidance and regulations, FHWA 
acknowledges some of these are outdated. Furthermore, FHWA’s oversight 
approach does not determine the overall effectiveness of state 
programs or measure state progress. For example, although state 
transportation agencies are required to submit achievement information 
on an annual basis to FHWA division offices, states submitted this 
information using a wide range of different output terms and different 
demographic and trade classification categories. GAO has reported that 
program criteria are key aspects of results-oriented performance 
management. In the absence of clear federal criteria, state officials 
have relied on their own judgment to implement the program with little 
assurance that their programs meet federal standards for performance 
management. Some recent FHWA efforts may strengthen program oversight 
and results assessment. 

Through a separate program, FHWA provides funding for a variety of 
activities intended to increase the overall effectiveness of the on-
the-job training program, but its overall stewardship of the program 
is limited. FHWA’s supportive services program provides grants for 
locally tailored initiatives, such as skills training, child care, and 
career awareness events, that directly and indirectly link to job 
training programs. However, there is insufficient data to determine 
how effective these efforts have been in enhancing job training 
opportunities. Although FHWA has articulated the types of data states 
should collect and report, the agency does not know, and GAO could not 
determine, the number of participants in the supportive services 
program or its effect, in part because grantees do not always provide 
information about their program results. However, GAO estimated that 
there are about 10,000 people participating in any one year. 
Furthermore, past performance information is not required of 
applicants or scored during funding reviews. Given that many grantees 
are funded repeatedly, good management practices suggest that using 
past performance information can inform and improve recipient 
selection approaches. Program results are important for making 
budgetary and programmatic decisions. Without insight into program 
activities, FHWA cannot ensure that funding is used effectively. 

What GAO Recommends: 

GAO recommends that FHWA (1) strengthen on-the-job training program 
criteria, (2) create and implement an oversight approach for its job 
training program, and (3) evaluate the extent to which supportive 
services programs have met their goals and use this information to 
inform future funding decisions. The agency generally agreed with 
these recommendations and provided technical comments, which were 
incorporated as appropriate. 

View [hyperlink, http://www.gao.gov/products/GAO-11-703]. For more 
information, contact David J. Wise at (202) 512-2834 or wised@gao.gov. 

[End of section] 

Contents: 

Letter: 

Background: 

State Programs Provide a Range of Different Opportunities for 
Enhancing Skills and Vary in Their Results: 

FHWA's Oversight Approach Does Little to Assess Program Results: 

FHWA Provides Funding for Activities Supporting Job Training Programs, 
but Overall Stewardship is Limited: 

Conclusions: 

Recommendations for Executive Action: 

Agency Comments: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Some Financial Incentives and Penalties Are Available to 
Encourage On-the-Job Training Performance: 

Appendix III: Recovery Act Provided Some Job-Training Opportunities: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: State and Federal Entities Involved in Program Oversight and 
Their Program Responsibilities: 

Table 2: Select State Goals, Trade Categories, and Demography of 
Enrollments, 2009: 

Table 3: Supportive Services Frequently Proposed to FHWA, 2008 through 
2010: 

Figures: 

Figure 1: Entities Develop and Deliver Training in Different Training 
Environments: 

Figure 2: State Reports Included Various Types of Information in 2009: 

Figure 3: Demographics of Indirect Supportive Services Recipients, 
2010: 

Abbreviation: 

FHWA: Federal Highway Administration: 

[End of section] 

United States Government Accountability Office: 
Washington, DC 20548: 

September 7, 2011: 

The Honorable Peter A. DeFazio: 
Ranking Member: 
Subcommittee on Highways and Transit: 
Committee on Transportation and Infrastructure: 
House of Representatives: 

Dear Mr. DeFazio: 

By providing states with about $35 billion to $40 billion per year, 
the federal-aid highway program supports tens of thousands of high-
skill and high-wage jobs in the construction industry. Ensuring that 
these jobs are equally available to all Americans has long been an 
objective of the federal government. Specifically, following the 
enactment of the Federal Aid Highway Act of 1968, the federal 
government created an on-the-job training program to address the 
traditional underrepresentation of specific groups in the highway 
construction trades.[Footnote 1] In implementing this program, states 
may include an on-the-job training special provision in some federal-
aid highway construction contracts that requires contractors to 
provide training and skill enhancement opportunities targeted to 
women, minorities, and economically disadvantaged individuals. 
[Footnote 2] Although the program typically has just a few trainees 
per project--and is a relatively small part of the federal-aid highway 
program overall--the cumulative scope of the program has covered 
decades of federal-aid highway projects.[Footnote 3] Additionally, 
through a separate supportive services program, the U.S. Department of 
Transportation is authorized to grant up to $10 million per year to 
fund a range of grants and other services, such as job placement 
assistance, aimed at increasing the effectiveness of the on-the-job 
training program.[Footnote 4] Both of these programs are administered 
by the Federal Highway Administration (FHWA) within the U.S. 
Department of Transportation. 

With the recent economic recession and the subsequent persistence of 
high unemployment rates, the effectiveness of these decades-old job 
training programs became increasingly important. During the recession 
of 2007-2009, unemployment in the construction industry exceeded 10 
percent and unemployment for most of the groups targeted by the 
programs was above the national rate. For example, in 2009, 
unemployment among African Americans was nearly 15 percent compared to 
9.3 percent for the population as a whole. As Congress began oversight 
of the American Recovery and Reinvestment Act of 2009 (Recovery Act), 
concerns were raised in Congress that these programs may not be 
effectively helping vulnerable populations find training and jobs. In 
light of these concerns and given the sparse information already 
available on the results of FHWA's on-the-job training and supportive 
services programs, you asked us to review how well FHWA's two job 
training programs have been working. 

This report focuses on the extent to which (1) states' implementation 
of the FHWA on-the-job training program provides training and career 
enhancement opportunities for traditionally underrepresented groups to 
work on federal-aid highway projects, (2) FHWA has overseen the 
program and demonstrated results, and (3) the supportive services 
program established by FHWA has assisted state job training and 
apprenticeship programs. Additionally, in response to your interest, 
we gathered information on financial incentives and penalties states 
use to encourage contractors to provide job training and we present 
this information in appendix II. To address these topics we reviewed 
laws and regulations pertaining to these programs, reviewed FHWA 
guidance and good program practices identified in our prior reports, 
and analyzed proposals and reports from states on the activities 
planned and completed as a result of these programs. We also 
interviewed a cross-section of state transportation officials; 
representatives and members of industry groups, such as general 
contractors and unions; and FHWA program officials. Specifically, we 
interviewed officials in 11 states and examined how they implemented 
the job training programs and conducted oversight.[Footnote 5] We 
selected these states based on a variety of factors, including 
unionization, size and location, and the state's use of supportive 
services funds. For four of these states (Missouri, Pennsylvania, 
Texas, and Washington), we conducted a more in-depth examination of 
how they implemented and conducted oversight for these programs, 
taking into account the effect of variations in demographics; 
prevailing labor market conditions; how job training is structured 
within the state, including any unique practices; and the extent to 
which the state participates in the on-the-job training program and 
the supportive services program. The information gathered through 
these four in-depth reviews is intended to describe these unique 
programs and is not generalizable to all states or to other states 
with similar characteristics. We focused our review on program 
activities conducted from fiscal years 2008 through 2010. We also 
estimated the number of participants in these programs using available 
data in proposals and reports submitted to FHWA. The quality of the 
data reported by states to FHWA about the results of the programs' 
activities cannot be independently verified, but we determined that 
the data were of sufficient quality for our purposes, which were to 
assess the types of information collected by states and reported to 
FHWA and to provide illustrations of states' reported achievements. 

We conducted this performance audit from August 2010 through September 
2011 in accordance with generally accepted government auditing 
standards. Those standards require that we plan and perform the audit 
to obtain sufficient, appropriate evidence to provide a reasonable 
basis for our findings and conclusions based on our audit objectives. 
We believe that the evidence obtained provides a reasonable basis for 
our findings and conclusions based on our audit objectives. 
(Additional information on our scope and methodology is contained in 
appendix I.) 

Background: 

Building highways requires a diverse collection of skill sets and 
expertise. The highway construction industry is composed of a variety 
of different trades such as equipment operators, mechanics, truck 
drivers, ironworkers, carpenters, and cement masons. These trades are 
not specific to highway construction but also apply to other areas 
such as general building construction. Historically, many of these 
trades have been dominated by white males. Over the last 25 years, 
participation of women in the construction industry has been 
relatively stable, averaging around 8 to 10 percent. Among minority 
groups, while the percentage of African Americans participating in the 
construction workforce has been relatively constant (5 to 7 percent of 
the workforce), the proportion of Latinos in the industry has 
increased significantly and is estimated to comprise about a quarter 
of the construction workforce.[Footnote 6] 

In 1968, Congress authorized a job training program, which required 
that states receiving federal aid for highways implement 
apprenticeship and training programs that ensure equal employment 
opportunities without regard to race, color, creed, national origin, 
or sex. FHWA has targeted this job training program to women, 
minorities, and economically disadvantaged individuals to provide 
these groups with highway construction-related skills to reach journey-
level status.[Footnote 7] As a nondiscriminatory program, it cannot 
exclude any individual from participation. The Secretary of 
Transportation must certify that states have such a program in place. 
While the program does not have a distinct funding source, job 
training expenses on federal-aid highway projects are eligible for 
federal dollars, just like other project costs. According to FHWA 
officials, each state has discretion in how much or little to spend on 
this program, as well as how a contractor will be reimbursed, if at 
all, for training activities on its highway projects. 

State transportation offices are responsible for providing their state 
program's framework. Individual states establish overall training 
goals for the program such as articulating the number of training 
slots on selected federal-aid highway construction contracts they 
expect to award during the coming year. These state agencies also 
determine which federal-aid highway construction contracts will 
require that training is provided to a minimum number of trainees and 
thus which contracts include a training special provision. State 
transportation agencies--using on-site personnel such as contractor 
compliance specialists, engineers, and project inspectors--monitor and 
oversee contractors' adherence to job training requirements. 

Multiple FHWA offices are involved in the on-the-job training program. 
FHWA's Office of Civil Rights, located in the agency's headquarters 
office, provides leadership in setting policy for the program, and in 
this capacity has assigned oversight responsibilities to the FHWA 
division offices in each state and has established regulations for 
state transportation agencies to administer the program. This 
decentralized management structure--in which certain oversight 
responsibilities are assigned to division offices--is consistent with 
FHWA's approach for the federal-aid highway program in general. 
[Footnote 8] Among the primary responsibilities of the division 
offices are to review the annual goals submitted by the states and 
oversee whether states are meeting their annual job training goals by 
reviewing accomplishment reports and annual contractor training 
reports.[Footnote 9] FHWA division offices also play a role in 
assessing the efforts of both the individual contractors participating 
in this program and the states to meet their respective job training 
goals and requirements.[Footnote 10] FHWA's Resource Center also 
provides assistance to state transportation agencies and FHWA offices 
in implementing FHWA policy and programs by providing training on 
program requirements and other activities (see table 1). 

Table 1: State and Federal Entities Involved in Program Oversight and 
Their Program Responsibilities: 

State entities;: 

Entity: State transportation agency civil rights office; 
Responsibilities: 
* Develop job training goals for upcoming year; 
* Assign training goals to be included in highway construction 
contracts; 
* Approve contractor training plans; 
* Oversee contractors' efforts in providing training; 
* Review contractor reports on training and workforce; 
* Prepare annual accomplishment reports. 

Entity: State transportation agency onsite oversight personnel 
(contractor compliance specialists, engineers, and project inspectors); 
Responsibilities: 
* Evaluate contractor compliance with job training requirements; 
* Monitor the training program by tracking the number of training 
hours accrued by trainees and apprentices; 
* Monitor training progress by interviewing trainees and apprentices 
on the construction site. 

FHWA entities: 

Entity: Office of Civil Rights; 
Responsibilities: 
* Interpret job training statutes, issue regulations and other 
guidance, and set policy. 

Entity: Division offices; 
Responsibilities: 
* Review and approve annual job training goals proposed by states; 
* Review accomplishment reports from states; 
* Provide guidance to states about oversight of contractors; 
* Assist states in evaluation of contractor compliance with job 
training requirements, including approval of contractor training plans. 

Entity: Resource Center; 
Responsibilities: 
* Provide additional assistance, such as training, to the Office of 
Civil Rights, division offices, and state transportation agencies in 
implementing policy and programs. 

Source: GAO analysis of FHWA information. 

[End of table] 

While a state approves a contractor's training approach, the 
contractor is responsible for meeting a training requirement. If a 
contractor fails to meet the training requirement stipulated in the 
contract, the state transportation agency can withhold payments or 
limit the contractor's ability to bid on future contract 
opportunities. The amount of the sanctions or penalties will depend on 
the state transportation agency's contract administration procedures. 
For example, in Missouri, the state transportation agency may levy 
fines against contractors that do not fulfill their training 
requirements. 

Congress authorized the supportive services program in 1970 to 
supplement the on-the-job training program and support state 
transportation agency training programs by providing services to 
highway construction contractors and assistance to highway 
construction apprentices and trainees.[Footnote 11] According to FHWA, 
the main objectives of the program are to increase the overall 
effectiveness of each state job training program in connection with 
federal-aid highway projects and seek other ways to increase the 
training opportunities for women, minorities, and economically 
disadvantaged individuals. Depending on the needs and preferences in a 
specific state, services funded under this program may include basic 
training in the construction industry, stipends to support childcare 
or defray transportation costs for highway construction workers, 
transportation career awareness programs, and internships. FHWA is 
authorized to grant up to $10 million per year in this program. 

FHWA funds some supportive services through a discretionary grant 
program. From 2008 through 2010, FHWA awarded 153 grants totaling 
about $37 million to 37 states, the District of Columbia, Guam, and 
Puerto Rico for supportive services through the discretionary grant 
program.[Footnote 12] According to FHWA guidance, supportive services 
activities must be connected to a federal-aid highway construction 
project in order to be eligible for funding. State transportation 
agencies must submit a statement of work to FHWA that details how the 
grantee proposes to use the requested funding. The proposals are 
required to establish measurable goals for results, although FHWA 
permits wide variation in defining these goals. According to FHWA, 
proposed activities must target their efforts towards women, 
minorities, or economically disadvantaged individuals to receive 
funding. According to FHWA guidance, applications are reviewed by 
panels consisting of FHWA officials and scored using criteria to 
evaluate the content of the statement of work, including whether the 
statement of work has defined end dates, how the needs of the 
supportive services program would be addressed through the proposed 
activities, and a monitoring plan. FHWA requires each grantee to 
submit regular progress reports to the respective FHWA division 
offices as well as a final accomplishment report within 60 days of the 
program's completion, which provides information on previously 
established performance goals. According to FHWA officials, an interim 
accomplishment report is also requested from on-going activities when 
additional funding is requested during the annual grant solicitation 
process. 

FHWA also uses the supportive services funding for transportation- 
related education and internship opportunities. FHWA distributes some 
funding to summer transportation institutes (located at universities 
and colleges), which provide a curriculum designed to introduce 
secondary school students to careers in all modes of transportation 
and encourage them to pursue transportation-related courses of study 
at the university level. There is also a summer internship program, 
wherein FHWA selects and places students from various colleges and 
universities in internships at one of the U.S. Department of 
Transportation's modal agencies, such as FHWA, or at a state 
transportation agency. These programs are targeted at women, 
minorities, and economically disadvantaged individuals to provide 
hands-on experience and on-the-job training while working on current 
transportation-related topics and issues. 

State Programs Provide a Range of Different Opportunities for 
Enhancing Skills and Vary in Their Results: 

The overall extent that FHWA's on-the-job program has helped women, 
minorities, and the economically disadvantaged reach journey-level 
status in the highway construction trades is unclear, primarily 
because a limited amount of usable information is available on program 
results. However, based on the limited information that is available, 
state programs have created some new opportunities tailored to 
individual state circumstances. The skill enhancement opportunities 
provided by state programs vary across states by requiring different 
lengths of training, relying on a diversity of entities and training 
structures to deliver the training, and giving contractors various 
flexibilities in how and what skills they provide to individuals. 
Additionally, state programs have varying degrees of focus on reducing 
underrepresentation. While we cannot definitively report on how well 
women, minorities, and economically disadvantaged individuals are 
moving to journey-level status in highway construction, we can 
describe some of the approaches states have chosen to implement the 
program and make some observations about how the program has 
contributed to enhancing the career prospects of individuals from the 
targeted groups. 

Wide-ranging State Programs Provide Different Opportunities for 
Enhancing Skills: 

One way state programs differ in providing opportunities for enhancing 
skills is by providing different length training periods to 
participants. Contracts that road builders enter into with state 
transportation agencies require varying degrees of training that must 
be provided to trainees, yielding differing degrees of trade 
proficiency for participants, from a brief to extensive exposure to 
the trades. For example, in an effort to give as many individuals as 
possible some construction experience, Florida has adopted a program 
in which a contractor must provide each trainee with approximately 300 
hours of training. State officials explained that this program is 
intended to give trainees a brief exposure to a trade, not mastery of 
a craft. Florida reported that 288 people completed training through 
the program in 2009.[Footnote 13] Conversely, some states require 
contractors to have trainees substantively complete or graduate from 
training programs that may take multiple years--and thousands of 
training hours--to complete and provide trainees with a high level of 
work experience and a marketable credential, but that reach fewer 
people. For example, Texas, which employs this approach, graduated 57 
trainees in 2009.[Footnote 14] Other states, such as Missouri and 
Washington, fall in between these examples by requiring contractors to 
provide individual trainees with 400 to 1,000 hours on any given 
project, believing this is the minimum needed for meaningful skill 
acquisition. As a result of these different state approaches to the 
contract training requirement, trainees in different programs acquire 
different levels of job experience and trade proficiency to take with 
them when seeking subsequent employment. 

A second way state programs differ in providing opportunities for 
enhancing skills is in using different entities to deliver training. 
Depending on what is available in the state, some trainees participate 
in the on-the-job training program as part of preexisting training 
programs--such as apprenticeship programs--or training that was 
designed and managed by the contractor or an industry group (see 
figure 1). For largely unionized construction workforces, training is 
typically provided through apprenticeship programs.[Footnote 15] 
Apprenticeship programs vary in length depending on the trade, but are 
commonly about 4 years long and follow specified training steps, 
including meeting job site training time requirements and classroom 
instruction. As long as an individual is an apprentice, he or she 
could be hired to meet a contract training requirement. 

Figure 1: Entities Develop and Deliver Training in Different Training 
Environments: 

[Refer to PDF for image: 2 photographs] 

Captions: 

Prospective equipment operators learn the trade while an instructor 
looks on at a regional training facility in Washington state jointly 
managed by the operating engineers union and an industry association. 
If accepted into the apprenticeship program, individuals may become 
trainees on federal projects. 

Training also occurs at job sites under the direction of contractors 
within programs run by industry groups and state transportation 
agencies, such as at this federal-aid highway project in Texas, which 
supported an equipment operator trainee. 

Source: GAO. 

[End of figure] 

Contractors that are not unionized may use industry-sponsored 
apprenticeship programs, other training programs established by 
industry, or, in the absence of such programs, design their own 
training plans. For example, in Texas, trainees generally participate 
in a program established by the state chapter of the Associated 
General Contractors and the Texas Department of Transportation. 
[Footnote 16] Contractor-designed plans may be approved by the state 
transportation agency or FHWA division office officials, such as civil 
rights officials. These training plans are tailored to the individual 
project and the specific contract requirement; unlike an 
apprenticeship, these plans could include training in more than one 
trade. 

A third way state programs differ is in program structure; 
specifically, how much flexibility states give contractors in 
determining how to fulfill training requirements. For example, some 
states have implemented contractor-based programs that provide 
contractors with the flexibility to have trainees work on multiple 
projects. Typically, job training requirements are specific to 
individual federal-aid projects and, to successfully meet the terms of 
the contract, the contractor must meet this training requirement by 
the time the project is completed. In states with contractor-based 
programs, the state transportation agencies assign some contractors 
with a target number of workers that they are expected to train and 
the contractors have flexibility to decide on which federal-aid 
projects trainees will work to meet the requirement.[Footnote 17] 
Under this approach, trainees may work on more than one project, 
especially if one project does not have enough work for an individual 
to complete the required training. For example, Texas has adopted this 
contractor-based approach. In 2009, the Texas Department of 
Transportation assigned training goals to 19 of the largest 
contractors in the state based on the amount of work awarded to each 
contractor in the preceding year. Through our review of state reports 
and discussions with FHWA officials, we found that four additional 
states--Indiana, Iowa, North Carolina, and North Dakota--have also 
adopted this approach.[Footnote 18] 

Other state practices give contractors added flexibility. For example, 
Florida has established a system in which contractors can train 
individuals on state-funded projects that do not receive any federal 
funds and earn training credits that the contractor can later use to 
meet training requirements on federal-aid projects. Transportation 
officials in Florida indicated that trainees working on state projects 
must meet the same training and demographic standards as on federal-
aid projects. South Carolina also allows contractors to temporarily 
transfer trainees between projects and accumulate up to 25 percent of 
their required training hours from other projects. Contractors do not 
receive payment for any of the training hours received on other 
projects but these hours can count towards completion of the training 
requirement. State officials explained that contractors frequently 
take advantage of this option. 

The effect of these differences in training length, delivery, and 
program structure on the ultimate career enhancement of trainees is 
unclear. For example, some union, state, and apprenticeship program 
officials noted that apprenticeship programs provide workers with more 
structured training and connection to a specific trade than training 
delivered independently by contractors. One apprenticeship program 
official explained that program staff can help ensure that a trainee 
gets job opportunities. Similarly, according to U.S. Department of 
Labor officials, without the structure of an apprenticeship program, 
trainees may not be well positioned for long-term careers. 
Additionally, apprenticeship programs, by definition, provide a clear 
demarcation of when an individual moves from apprentice to journey- 
level. However, stakeholders also reported that a contractor who is 
solely responsible for a training plan could provide a wide variety of 
training cutting across multiple trades and directly related to the 
skills needed by the employer, better positioning a trainee for future 
opportunities with that contractor. In general, union and nonunion 
officials agreed that effective training is more likely to lead to 
employment if the training is directly linked to a specific job. 

Views also differ about what type of training program structure-- 
contractor-based or project-specific--is most effective. Proponents of 
contractor-based approaches, including officials with FHWA's Office of 
Civil Rights and Resource Center, stated that this structure creates a 
more solid relationship between the contractor and the trainee and 
helps ensure the trainee gets a sufficient number of hours and the 
most useful training, both of which improve ultimate employment 
outcomes. Conversely, some state transportation officials indicated 
that the project-specific approach has advantages, such as giving 
trainees more freedom to find employment with other contractors and 
giving contractors flexibility. 

Ultimately, stakeholders agreed that the effectiveness of these 
training activities in leading to jobs for participants depends 
heavily on the condition of the broader economy. As states face budget 
shortfalls, transportation funding is constrained, thus diminishing 
opportunities for training. Moreover, during economic slowdowns, 
contractors may be reluctant to bring in new employees as trainees. 
Given that unemployment in the construction industry was roughly 20 
percent in May 2010, potential trainees have faced strong competition 
in the labor market for scarce construction employment opportunities, 
according to officials from industry and labor groups. (See appendix 
III for information on the on-the-job training opportunities created 
by the Recovery Act.) 

State Programs Can Create Opportunities but Results Vary: 

Many states compile annual reports on their achievements. These 
reports generally show that state programs have led to a wide range of 
opportunities. However, these state accomplishment reports by 
themselves do not provide a clear and reasonably comprehensive picture 
of program achievement. Due to FHWA's oversight approach and the 
limitations of available information, the data collected and available 
from FHWA do not provide a clear picture of the program's results, 
limiting our assessment to state-specific illustrations and anecdotes. 
As with other federally-funded job training programs, such as those 
administered by the U.S. Department of Labor, tracking the career 
outcomes of individuals that receive training may be difficult because 
of the amount of resources and effort required to measure long-term 
outcomes. The implications of this difficulty are discussed later in 
this report. However, using available data, we nevertheless estimate 
that several thousand people are trainees in any given year 
nationally. Further, to provide more detailed illustrations of the 
training provided through the program, in those states we reviewed 
more closely, we found that most workers enrolled in the program were 
minorities and that there was a range of female participation (see 
table 2). For example, in Pennsylvania in 2009, all participants were 
either women (64 participants) or males from a minority group (90 
participants). 

Table 2: Select State Goals, Trade Categories, and Demography of 
Enrollments, 2009: 

State: Missouri; 
Annual goal and achievement: 
Annual goal: 
* 62 slots assigned to contracts[A]; 
Annual achievement: 
* 116 slots assigned[B]; 
Trade categories and demography of enrollments: 
Men: 154 men; 
* 151 minorities (60 laborers, 30 iron workers, 25 carpenters, 19 
equipment operators, 8 cement masons, 6 electricians, 1 painter, 1 
truck driver, and 1 project manager); 
* 3 whites (1 iron worker, 1 laborer, and 1 equipment operator); 
Women: 51 women; 
* 46 whites (21 equipment operators, 17 laborers, 4 iron workers, 3 
truck drivers, and 1 carpenter); 
* 5 minorities (3 laborers and 2 equipment operators). 

State: Pennsylvania; 
Annual goal and achievement: 
Annual state goal: 
* 60 slots assigned to contracts[A]; 
Annual achievement: 
* 154 slots assigned[B]; 
Trade categories and demography of enrollments: 
Men: 90 men; 
* 65 African Americans (39 laborers, 14 carpenters, 4 iron workers, 3 
operators, 3 linemen, and 2 cement masons); 
* 24 Latinos (16 laborers, 3 carpenters, 3 operators, 1 iron worker, 
and 1 cement mason); 
* 1 Native American (1 laborer); 
Women: 64 women; 
* 53 whites (34 laborers, 8 operators, 3 carpenters, 3 office 
managers, 2 truck drivers, 1 iron worker, 1 engineering intern, and 1 
lineperson); 
* 7 African Americans (5 carpenters, 1 laborer, and 1 engineering 
intern); 
* 2 Latinas (2 laborers); 
* 1 Native American (1 laborer); 
* 1 Asian American (1 laborer). 

State: Texas[C]; 
Annual goal and achievement: 
Contractor-based program: 
* Contractors selected: 19; 
* Annual goal: 61 positions; 
* Annual enrollments: 114; 
Recovery Act program[D]: 
* 186 projects assigned training requirements; 
* 199 trainees goal; 
* 156 enrollments; 
Trade categories and demography of enrollments: 
Men: 258 men; 
* 194 Latinos; 
* 42 whites; 
* 22 African Americans; 
Women: 12 women; 
* 9 whites; 
* 2 Latinas; 
* 1 African American. 

State: Washington; 
Annual goal and achievement: Washington did not establish goals in 
2009; 
Trade categories and demography of enrollments: 
Men: 48 men; 
* 16 Latinos (6 laborers, 5 equipment operators, 2 carpenters, 2 
ironworkers, and 1 electrician); 
* 10 American Indian/Alaskan Natives (4 equipment operators, 4 
laborers, 1 carpenter, and 1 electrician); 
* 9 whites (2 carpenters, 2 laborers, 2 equipment operators, 2 
electricians, and 1 cement mason); 
* 7 African Americans (4 laborers, 2 equipment operators, and 1 
carpenter); 
* 6 Asian/Pacific Islanders (3 equipment operators, 1 laborer,; 
* 1 ironworker, and 1 electrician); 
Women: 36 women; 
* 26 whites (10 equipment operators, 7 laborers, 5 carpenters, 2 truck 
drivers, and 2 electricians); 
* 3 African Americans (2 laborers and 1 carpenter); 
* 3 Asian/Pacific Islanders (2 carpenters and 1 laborer); 
* 2 American Indian/Alaskan Natives (1 equipment operator and 1 
carpenter); 
* 2 Latinas (1 carpenter and 1 equipment operator). 

Sources: GAO analysis of state data. 

Note: Enrollments may not equal slots assigned to contracts in any 
given year because some training programs and some construction 
projects may take more than one year. 

[A] By assigning slots to a contract, Missouri and Pennsylvania 
require the contractor to train a specified number of trainees, based 
on the states' estimate of how many trainees a project can support. 
Actual enrollment of trainees and training takes place subsequently. 

[B] Missouri and Pennsylvania noted that they exceeded their goal, in 
part, because of additional opportunities available on projects funded 
by the Recovery Act that were not expected at the time the annual goal 
was set. Missouri did not report results for these Recovery Act 
projects separately. Pennsylvania indicated that 61 of the 154 slots 
assigned were on Recovery Act-funded projects. 

[C] Texas did not report on trade categories. 

[D] Texas established separate project-specific training goals for 
Recovery Act-funded projects. 

[End of table] 

Additionally, program stakeholders told us that the job training 
program--by addressing ongoing barriers to employment for 
traditionally underrepresented groups--can create opportunities that 
would not have otherwise existed. For example, state officials in two 
states noted that without the program fewer minorities would work in 
highway construction, explaining that the construction industry 
continues to be dominated by informal personal networks and a handful 
of firms, making it difficult for traditionally underrepresented 
individuals to find career opportunities. Many program stakeholders 
see the program as a useful counter to these barriers. For example, 
one female journey-level equipment operator we spoke with in 
Washington state attributes her success in the trade to an opportunity 
the federal program provided in the 1980s. However, others noted that 
the program could unintentionally disadvantage some workers. For 
example, officials familiar with two states' training programs noted 
that contractor requests for women and minorities leave other 
potential workers with fewer job opportunities. 

Numerous officials noted that the success of the program depends 
largely on whether the contractor; the state project oversight 
personnel, such as project engineers and inspectors; and state 
transportation leadership are committed to it. According to some of 
these officials, if a contractor wants to create new training 
opportunities and sees value in diversifying the firm's workforce, 
then the program can have a positive impact. Similarly, according to 
FHWA officials, the visible commitment and support of top 
transportation leaders, a strong state civil rights office, and an 
understanding of the program's goals by construction engineers and 
field staff help the program succeed. Conversely, contractors that are 
not committed to the program may be able to find ways to fulfill a 
contractual training requirement without actually hiring trainees. For 
example, a contractor might be able to meet the requirement through 
the demonstration of a good faith effort--in which the contractor 
describes its unsuccessful attempts to find a suitable trainee--rather 
than through actual hiring. Though good faith efforts may be 
legitimate and thoroughly reviewed by oversight officials, in some 
cases, state officials responsible for approving such good faith 
efforts may accept them without scrutiny because they may not take the 
training requirement seriously or want to avoid potential legal issues 
with the contractor, according to a senior state official and a labor 
official. Additionally, some contractors may meet training 
requirements by upgrading the skills of employees that are already a 
part of their company's workforce. In these situations, the training 
requirement does little to create opportunities for underrepresented 
groups because contractor hiring practices are not changed. 

Contractors may have different agreements with unions that dictate 
their ability to specifically request--and for unions to provide-- 
apprentices that are women, minorities, or disadvantaged individuals 
in order to meet a training requirement. Likewise, a union may be 
limited in its ability to meet such requests if women and minorities 
are not available within their membership. To address these barriers, 
some contractors and unions have arrangements that help contractors to 
recruit new members to meet demographic goals for trainees. For 
example, one union and contractors in Pennsylvania allow for year-
round enrollment of women and minorities into one apprenticeship 
program instead of during shorter annual enrollment periods. 

State programs have varying levels of focus on women, minorities, and 
disadvantaged individuals in accepting trainees on projects with job 
training requirements. We generally found that the state 
transportation agencies we reviewed intended for trainees to be women 
or minorities; however, state programs varied in how rigorously they 
pushed contractors to hire trainees from these targeted groups. For 
example, states like Pennsylvania and Washington placed a strong 
emphasis on accepting trainees that were either women or minorities 
and rarely approved trainees not in these groups. Other states, 
however, enroll more nontargeted individuals. For example, in 2009, 
white men were 83 percent of trainees in Ohio. 

State programs target training opportunities toward either the highway 
construction labor force in general or try to target 
underrepresentation of women and minorities within specific trades. 
[Footnote 19] Some state programs focused on increasing opportunities 
for women and minorities more generally. For example, officials in 
southwestern states noted that some construction trades in the region 
are now predominantly Latino and many contract training requirements 
are fulfilled by Latino workers. When a contractor in those states 
hires a Latino trainee to work within a trade that is predominantly 
Latino, it meets the broad intent of the program by creating an 
opportunity for a minority group that has been historically 
underrepresented, but may not address current underrepresentation of 
other groups. In contrast, other states may encourage contractors to 
target training opportunities toward underrepresentation in specific 
trades, although officials acknowledged that this approach can be 
difficult. For example, an FHWA official explained that minorities and 
women were not underrepresented as laborers in King County, 
Washington, so the state tried to limit when a minority or woman could 
be hired as a laborer trainee and focus training positions in other 
trades in that geographic area. According to state officials in 
Florida and Washington, it can be difficult to address 
underrepresentation of demographic groups in specific trades because 
identifying such individuals can be a challenge for contractors. 
Additionally, the training requirement cannot exclude individuals, 
such as white men, from participation. 

Some states have implemented other approaches to give contractors 
flexibility in hiring trainees, although it is unclear if these 
flexibilities have led to increased opportunities for women and 
minorities. For example, in Ohio, contractors are not required to meet 
specific contract training requirements or an overall annual goal (as 
in contractor-based programs). Instead, state transportation officials 
explained that contractors are required to provide training on all 
federal-aid projects unless they can demonstrate that doing so is not 
feasible. In this approach, the contractor--not the state--makes the 
initial determination of whether a project is conducive to training. 
Although officials believe this approach has increased opportunities 
for longer term employment for trainees, only 17 percent of Ohio's 
2009 trainees were women or minorities, including trainees involved in 
Recovery Act projects.[Footnote 20] However, Florida also gives 
contractors flexibility in hiring trainees. In 2009, Florida reported 
that 8 percent of participants were women and 88 percent were 
minorities (both men and women). It is unclear if differences in how 
the states have structured their job training programs, state 
demographics, or other factors explain this difference. 

FHWA's Oversight Approach Does Little to Assess Program Results: 

FHWA has done little to assess its on-the-job training program 
nationally and has not determined whether states' efforts have led to 
increased opportunities for workers traditionally underrepresented in 
the highway construction workforce. Moreover, FHWA does not attempt to 
determine how effective division offices are in their oversight of 
states efforts. FHWA officials cited insufficient resources and higher 
priorities within the agency as reasons for the lack of national 
oversight. 

FHWA Has Not Established Clear Criteria For What States Should 
Accomplish: 

While FHWA has established regulations and broad guidelines for the 
program, the guidelines are vague and it is unclear what states should 
accomplish. The regulations and guidelines provide some assistance to 
state transportation agencies in implementing their job training 
programs. For example, FHWA regulations provide state transportation 
agencies with a list of general factors--such as local demographics 
and project size--to consider in selecting projects and determining 
the number of workers to be trained to fulfill contract requirements. 
Similarly, as required by statute, FHWA collects general types of 
information from states that enable the agency to judge compliance 
with the requirements of the on-the-job training program.]Footnote 21] 
States provide information to FHWA about the composition of the 
highway construction workforce and the results of their training 
program, indicating progress towards state goals. However, FHWA's 
regulations for the program were written in the 1970s and, according 
to FHWA officials and an industry official familiar with the program, 
have not been updated to reflect changes in program implementation. 
For example, the regulations provide that FHWA headquarters shall 
establish suggested annual minimum training goals for each state, but, 
in practice today, state goals are proposed by state transportation 
agencies and approved by FHWA division offices, or not set at all. 
FHWA Civil Rights officials told us that they have taken some early 
steps towards considering possible revisions of the regulations, 
including a change that would require state transportation agencies--
rather than FHWA headquarters--to propose annual training goals. 
[Footnote 22] Finally, the FHWA Resource Center, which provides a wide 
range of civil rights training and support to state transportation 
agencies and FHWA division offices, has developed materials that 
provide state transportation agencies with some program definitions 
and requirements. For example, the FHWA Resource Center has created 
general overview and frequently asked questions documents aimed at 
helping state transportation officials familiarize themselves with the 
program. 

While FHWA's current regulations and guidelines establish general 
requirements for states, they do not establish clear criteria for what 
states must do, what is optional, and the degree to which states can 
adapt their programs to their own circumstances. Instead, FHWA has 
left the interpretation of these regulations and guidelines, and 
subsequent program implementation, largely to state transportation 
agencies and FHWA division offices. For example, FHWA's regulations 
and guidelines list what factors should be considered in selecting 
projects and determining the number of trainees, but they do not 
explain how a state ought to consider factors like local demographics 
or project size when setting a contract requirement or how a state's 
goal should be determined. The lack of clear criteria can make program 
implementation more difficult for states. For example, Washington 
state transportation agency officials told us that the lack of 
criteria within the existing guidelines has made it difficult to 
structure their program and direct their efforts. 

Because FHWA has not established clear criteria, state transportation 
agencies rely on their own judgment in implementing their programs and 
key attributes of different state programs vary considerably, as 
previously discussed. A number of federal and state officials familiar 
with the program noted that some variation in how the program is 
implemented (1) allows for states to adapt the program to their own 
circumstances and preferences and (2) provides an opportunity for 
states and contractors to innovate. For example, as previously 
mentioned, some states have implemented contractor-based programs that 
provide contractors with flexibility to move trainees across multiple 
projects, while other states directly select which projects will 
provide on-the-job training. 

Although providing states with flexibility may have some benefits, 
such as allowing for state innovations, a lack of clear criteria for 
state programs prevents FHWA from having a basis to judge the 
effectiveness of the varying state programs, demonstrate program 
results, and identify and share best practices. We have reported that 
federal program standards that successfully address important and 
varied aspects of program performance are key aspects of a results 
oriented performance management.[Footnote 23] Thus, agencies should 
create a set of federal program goals and standards that address 
important dimensions of program performance that allow for the 
variation in individual state programs. Without federal program 
standards to unify a federal agency's efforts, division offices and 
states are left to interpret the regulations, structure their 
programs, and measure program achievements in whatever manner they 
deem reasonable. Consequently, there is no basis to judge whether 
varied state efforts are meeting federal standards for performance 
management. For example, without set criteria for how states may or 
may not structure their programs, it may be difficult to determine 
what program structures are appropriate or what innovations are 
successful and should be expanded. A lack of clear criteria about what 
the programs should accomplish could hinder the program's 
effectiveness in moving women, minorities, and economically 
disadvantaged individuals into journey-level positions. 

FHWA Does Not Assess States' Results: 

Although FHWA division offices receive results information from state 
transportation agencies annually, the type of information that states 
submit does not help determine the overall effectiveness of state 
programs. As previously mentioned, states are required to provide FHWA 
division offices with annual progress reports, also known as 
accomplishment reports, that describe states' and contractors' efforts 
to hire underrepresented individuals into the highway construction 
work force. These accomplishment reports should contain information 
about the previous year's accomplishments, such as the number, 
demography, and trades of trainees that contractors hired as well as 
the proposed goal for the following year. These reports may also 
contain information about the other actions the state has taken as 
part of its program. For example, South Carolina's 2008 accomplishment 
report included information on the state's update to its on-the-job 
training procedures manual. In addition to annual accomplishment 
reports, states also provide FHWA with highway construction workforce 
composition data, which summarize the number of individuals 
contractors have hired in specific demographic groups in specific job 
categories. This data provides a snapshot of the highway workforce for 
a period in July--typically a month with a high volume of highway 
construction activity--by trade and various demographic groups. 

However, FHWA lacks an understanding of the effectiveness of 
individual state programs and their results nationally for several 
reasons. First, it is difficult to determine the overall effectiveness 
of state programs because the accomplishment information that FHWA 
receives does not include all states and is of limited usefulness in 
determining how well a state is addressing underrepresentation. Based 
on our review, states that provided annual accomplishment reports on 
their training program's achievements almost all included some form of 
quantified results information. For example, of the 30 reports that 
describe 2009 program results, 29 included some quantified information 
on the state's accomplishment. These reports frequently included data 
on trainee enrollment, completion, and demographics. Of the 30 state 
reports, 18 included annual statewide goals; 17 of these 18 reports 
also included achievement data regarding whether the state met that 
goal or not. While a little more than half (17 of the 30) of the state 
reports we reviewed included the state's accomplishments and the 
annual statewide goal they were striving towards, FHWA could not 
assess whether 13 of those state transportation agencies successfully 
accomplished their goal. Very few of the annual reports we reviewed 
included information on the extent to which underrepresented groups 
participated in the program; the reports that did (2 of the 30) 
included cursory information. As FHWA has not provided states with 
clear criteria on how to complete these reports, states included the 
information they chose to or that was requested by their FHWA division 
offices. 

Second, states submit accomplishment information with a wide range of 
different output terms and different demographic and trade 
classification categories (see figure 2). For example, states may have 
listed their accomplishments in different output terms such as hours, 
enrollees, or graduates. Furthermore, even when states used similar 
terms--such as training "spots" assigned to highway construction 
projects--it was not clear that states were defining the term in the 
same way. This lack of consistency prevents comparisons between states 
or aggregation of accomplishment data across states. Besides different 
output terms, states also reported information using different 
demographic and trade classification categories. The 19 reports (out 
of 30) that provided demographic data for trainees in 2009 used 
different demographic categories. For example, Montana reported 
trainee demographics using the general category of minority whereas 
some other states reported more specific categories such as Latino, 
African American, Native American, Asian, or Pacific Islander. 
Additionally, some states included data on the trades of trainees, but 
these trades were not defined in the reports and may not necessarily 
be comparable. Twenty of 30 state reports contained trade data in 
2009; however, the reports used different trade categories. For 
example, Kansas reported trainees in multiple different equipment 
operator positions--scraper, crane, and tractor operator, for example--
whereas other states, such as Idaho, listed "operator" as one 
category. Consequently, though no fault of individual states, it is 
difficult to consolidate or compare the trade data in these reports. 

Figure 2: State Reports Included Various Types of Information in 2009: 

[Refer to PDF for image: illustrated table] 

Trainee data reported for 2009: 

State: Missouri; 
Specific trades: Yes; 
Demographics: 
Gender: [Check]; 
Minority/nonminority: [Check]; 
Specific races and ethnicities: [Empty]; 
Trainee status: 
Active[A]: [Check]; 
Carried over[B]: [Empty]; 
Voluntarily withdrew[C]: [Check]; 
Denied[D]: [Check]; 
New enrollee: [Check]; 
Graduated[E]: [Check]; 
Terminated: [Empty]. 

State: Pennsylvania; 
Specific trades: Yes; 
Demographics: 
Gender: [Check]; 
Minority/nonminority: [Empty]; 
Specific races and ethnicities: [Check]; 
Trainee status: 
Active[A]: [Check]; 
Carried over[B]: [Check]; 
Voluntarily withdrew[C]: [Empty]; 
Denied[D]: [Empty]; 
New enrollee: [Check]; 
Graduated[E]: [Check]; 
Terminated: [Empty]. 

State: Texas; 
Specific trades: No; 
Demographics: 
Gender: [Check]; 
Minority/nonminority: [Empty]; 
Specific races and ethnicities: [Check]; 
Trainee status: 
Active[A]: [Check]; 
Carried over[B]: [Empty]; 
Voluntarily withdrew[C]: [Empty]; 
Denied[D]: [Empty]; 
New enrollee: [Check]; 
Graduated[E]: [Check]; 
Terminated: [Check]. 

State: Washington; 
Specific trades: Yes; 
Demographics: 
Gender: [Check]; 
Minority/nonminority: [Empty]; 
Specific races and ethnicities: [Check]; 
Trainee status: [Empty]; 
Active[A]: [Check]; 
Carried over[B]: [Empty]; 
Voluntarily withdrew[C]: 
Denied[D]: [Empty]; 
New enrollee: [Check]; 
Graduated[E]: [Check]; 
Terminated: [Empty]. 

Source: GAO analysis of FHWA information. 

[A] "Active" refers to those trainees that are currently enrolled in 
the job training program and have not graduated. 

[B] "Carried over" refers to those trainees that did not graduate in 
2008 and are still receiving training in 2009. 

[C] "Voluntarily withdrew" refers to those trainees that decided to 
quit the job training program. 

[D] "Denied" refers to those trainees that applied for the job 
training program but for whatever reason the state transportation 
agency denied them job training. 

[E] "Graduated" includes trainees that have completed their assigned 
training, which could include reaching journey-level status. 

[End of figure] 

Third, states also submit FHWA highway construction workforce 
composition data, which provide a snapshot of the highway workforce 
for a period in July by trade and various demographic groups. However, 
the data that FHWA receives from states do not include useful 
information on which groups are underrepresented in which trades. 
According to a state official familiar with the program, the highway 
construction workforce composition data that states report do not 
separate the number of trainees and apprentices hired as a result of 
the training requirement versus those hired independently of the 
training requirement. In other words, the highway workforce 
composition data that states submit merge the number of trainees and 
apprentices who work on projects with training requirements as well as 
projects that do not have training requirements. State officials told 
us that some trainees and apprentices reported by states and 
contractors cannot be attributed to training requirements, but might 
have been on the job independently of any training requirements. As a 
result, the workforce composition data that states and contractors 
submit are not effective in capturing information on how well states 
and contractors are addressing underrepresentation within highway 
construction work trades. FHWA civil rights officials acknowledged 
that these data are insufficient and created a working group made up 
of FHWA division and state transportation agency officials to examine 
how this information could be improved. In April 2010, the working 
group implemented several changes to improve the highway construction 
workforce composition data collected from states, including revising 
the ethnic and racial categories and making the reporting forms easier 
to read. 

As a result of the limitations described previously, FHWA is not 
meeting governmentwide guidance, which states that management should 
track major agency achievements and compare these achievements to 
plans, goals, and objectives established under the Government 
Performance and Results Act of 1993.[Footnote 24] Also, managers need 
to compare actual performance to planned or expected results through 
the organization and analyze significant differences. These control 
activities are an integral part of an entity's planning, implementing, 
reviewing, and accountability for stewardship of government resources 
and achieving effective results.[Footnote 25] 

FHWA Does Not Assess How Well Its Division Offices Oversee States' 
Efforts and Results: 

Although FHWA division offices fulfill a number of important oversight 
responsibilities, FHWA does not have a clear overall understanding of 
how division offices are carrying out their oversight of the on-the-
job training program. As previously mentioned, FHWA headquarters 
relies heavily on division offices to provide oversight of state 
programs and to ensure that states establish apprenticeship and 
training programs that are targeted to move women, minorities, and 
disadvantaged individuals into journey-level positions. We found many 
instances in which civil rights staff in FHWA division offices 
provided oversight of state and contractor efforts to meet training 
requirements on federal-aid projects. Various FHWA division officials 
we spoke to, for example, reviewed contractor training and enrollment 
plans, approved new training classifications, provided direction to 
states in establishing appropriate annual goals, monitored and 
assessed state achievements by reviewing state reports, assisted 
states in assessing contractor compliance with training requirements, 
and recommended use of administrative tools and penalties against 
contractors not in compliance. 

However, it is unclear to what extent division offices are monitoring 
states primarily because FHWA has neither provided clear guidance on 
how divisions should carry out their oversight responsibilities nor 
has FHWA held division offices accountable in meeting performance 
criteria such as ensuring that state transportation agencies establish 
active training programs. In our review of various state programs, 
FHWA division offices executed their oversight responsibilities with 
different levels of rigor. For example, the FHWA division in Missouri 
told us that they were actively involved in reviewing contractor's 
good faith effort proposals. Conversely, some FHWA division offices 
had been lax in their oversight of state transportation agencies. For 
example, we found that FHWA division offices had allowed two states to 
go through extended periods without active training programs. These 
states have re-established their programs, in part, due to the 
insistence of the FHWA division offices. Previously, FHWA had allowed 
them to lapse without any objection.[Footnote 26] According to an FHWA 
official familiar with the program, New Mexico went through a period 
starting in the 1990s without a program and only reinstated training 
requirements in federal-aid highway contracts at the insistence of the 
FHWA division in 2009. The program may have been discontinued because 
a change in state leadership may not have considered the program a 
priority, according to an official. Similarly, Texas department of 
transportation officials told us the training program in Texas was 
formally established in 2006 and implemented in 2007 when a new civil 
rights program specialist came on board and said that Texas needed to 
develop it. They also stated that prior to that Texas had an optional 
program because the Texas FHWA division civil rights specialist did 
not require the state transportation agency to develop a training 
program. FHWA civil rights officials acknowledged that there may be 
instances of states lacking active training programs due to limited 
resources within the Office of Civil Rights to manage state programs 
and the low priority states may assign to these programs relative to 
other civil rights programs. 

In addition, some division offices did not adequately oversee states' 
annual training goal setting, a central component of existing program 
regulations and guidance, but one that some program stakeholders see 
as not valuable. Some division offices played key roles in helping 
states determine appropriate state goals while others were less 
rigorous in ensuring that the state transportation agency established 
appropriate goals. For example, an FHWA official familiar with 
Alabama's state program told us that the division office plays an 
active role in determining whether the training goal is reasonable by 
examining past reports and historical data and looking to see if the 
state transportation agency achieved its training goal the previous 
year. However, other states like Arizona, California, New Mexico, and 
Ohio, were exempted by their FHWA division offices from having to 
establish an annual statewide goal. The lack of consistent adherence 
to this requirement can be explained in part by the lack of clear 
criteria on how division offices should oversee state programs and 
differing views among program stakeholders about the usefulness of 
having state goals. While some state officials told us that setting 
state goals helps state transportation agencies track their progress, 
others--including officials from the Office of Civil Rights--stated 
that individual contract goals were sufficient and statewide goal 
setting did not add value. Currently, headquarters cannot and does not 
assess how well division offices oversee states' adherence in 
establishing a state goal because headquarters has not established 
clear criteria that all states must establish training goals. If FHWA 
headquarters were to strengthen criteria by requiring states to 
establish annual goals, then it would provide headquarters a basis--
specifically by determining how adequately divisions oversee states 
goal setting--upon which to assess whether division offices were 
consistently holding states to federal criteria. 

Although FHWA division offices execute a number of important oversight 
responsibilities to ensure that states and contractors meet training 
requirements on federal-aid projects, division office performance 
should be monitored by headquarters. We have reported that it is a 
useful practice to assess the oversight activities of division offices 
in order to monitor states' progress in meeting overall program 
objectives.[Footnote 27] In the absence of clear criteria on how 
division offices should oversee state programs and how to hold state 
transportation agencies accountable, FHWA will be unable to fully 
assess whether division offices are effective in ensuring that states 
meet program requirements. 

FHWA Cites Insufficient Resources and Higher Priorities as Reasons for 
Lack of National Oversight: 

The Office of Civil Rights focuses on policy while paying minimal 
attention to national program oversight in part because the office 
lacks the resources to provide adequate oversight to state 
transportation agencies, according to FHWA officials. The FHWA Office 
of Civil Rights only has one full-time equivalent employee that 
oversees both the on-the-job training and supportive services 
programs. Also, FHWA officials told us that the agency has provided 
little national oversight to state transportation agencies because it 
has placed a higher priority on other civil rights programs that are 
at higher risk--based on FHWA's corporate risk assessment--than the on-
the-job training program.[Footnote 28] FHWA identified higher risk 
programs as including the Disadvantaged Business Enterprise, Title VI 
of the Civil Rights Act of 1964, and the Americans with Disabilities 
Act programs. Because headquarters is responsible for overseeing these 
other civil right programs, FHWA has not been able to provide 
sufficient national oversight to the on-the-job training program, 
according to FHWA officials. Nevertheless, FHWA has recently 
undertaken several measures that may strengthen its oversight and 
assess program results. For example, FHWA surveyed all 52 division 
offices in 2011 and conducted baseline assessments of state civil 
rights offices in 2008 to gather basic information on the states. 
According to FHWA civil rights officials, the survey--which focused on 
the supportive services program--could identify training and workforce 
development issues that may need to be addressed by the division 
office. Additionally, FHWA officials have recently established what 
they describe as an informal partnership with the Department of Labor 
to explore how local career centers might assist tracking the results 
of the on-the-job training program and the supportive services 
program, among other things. 

Although limited resources and competing priorities are valid 
concerns, especially for a smaller program, FHWA's oversight approach 
needs to provide the agency with a basic assessment of how well the 
program has functioned on a national basis. In the absence of national 
oversight from headquarters, it is unclear what impact the program has 
beyond the individual state-level. 

FHWA Provides Funding for Activities Supporting Job Training Programs, 
but Overall Stewardship is Limited: 

FHWA grants about $10 million each year for supportive services that 
directly and indirectly support job training activities.[Footnote 29] 
However, even after considering the small size of the supportive 
services program, we found that FHWA's stewardship is limited. The 
agency collects some information on services provided, but does not 
always determine results achieved and does not routinely consider 
grantees' performance in making funding decisions. FHWA officials said 
they have few resources devoted to the program and results are 
sometimes difficult to aggregate. 

Supportive Services Provide Direct and Indirect Support to Training 
Programs, but It Is Unclear How Many People Receive Such Services: 

Currently, FHWA provides about $5 million to $6 million each year for 
services that directly support job training programs (through the 
discretionary grant program) and about $4 million each year for 
programs that indirectly support job training programs (through the 
discretionary grant program, summer institutes, and internships). 
Regarding the discretionary grant program, the agency typically 
provides funds to about 20 states each year, averaging about $240,000 
for each state.[Footnote 30] FHWA does not attempt to determine, and 
we could not establish, how many people are participating in the 
program since FHWA does not collect this information. From reviewing 
applications and considering the degree to which FHWA provided 
requested grant amounts, we estimate that roughly 2,000 people may 
have received some direct supportive services in any one year. 
[Footnote 31] FHWA officials noted that while they do not know how 
many individuals participate in the supportive services program, they 
estimated that several thousand individuals may receive services in a 
given year, depending upon the number of projects funded, as well as 
other factors. FHWA officials stated because these activities can vary 
considerably from state to state and they lack the resources needed to 
determine such a count, they have been unable to determine the total 
number of participants. 

We could not determine with any confidence how many people received 
supportive services through the discretionary grant program because 
FHWA has not collected this information. Also, we could not analyze 
the demographics of individuals served by this program.[Footnote 32] 
However, a rough indication of the services provided can be gleaned 
from states' applications for funding (see table 3). About three-
quarters of the states proposed to provide job placement and other 
outreach activities (e.g., referral services or employment counseling) 
and preapprenticeship type training (e.g., safety training, overviews 
of highway construction equipment, or training certifications). To a 
lesser extent, states proposed to provide life skills training, 
physical construction tools, transportation, remedial math or language 
training, and child care. For example, Arkansas proposed a variety of 
services to support a 20-person class for heavy equipment training and 
proposed providing tools, boots, transportation, and child care 
support to all participants employed on a federal-aid highway 
construction project. 

Table 3: Supportive Services Frequently Proposed to FHWA, 2008 through 
2010: 

Service: Job placement or other employer outreach activities; 
Percentage of grants including service: 79%. 

Service: Preapprentice or highway construction related training; 
Percentage of grants including service: 76. 

Service: Life skills training (including resumé writing, interviewing 
skills, financial and time management, ethics, etc.);
Percentage of grants including service: 49. 

Service: Boots, tools, and other job-related equipment; 
Percentage of grants including service: 35. 

Service: Transportation assistance; 
Percentage of grants including service: 30. 

Service: Remedial math or language training; 
Percentage of grants including service: 23. 

Service: Child care support; 
Percentage of grants including service: 23. 

Source: GAO analysis of FHWA data. 

Note: Based on GAO analysis of 141 of the 153 grants funded from 2008 
through 2010. 

[End of table] 

FHWA's discretionary grants also fund some activities that support job 
training indirectly. For example, a number of states have used 
supportive services funds for construction career days, which expose 
high school students to various areas of construction, including heavy 
highway construction, with the intent of increasing interest among 
women, minorities, or economically disadvantaged individuals in the 
transportation industry and highlighting potential career 
opportunities. Applying the same approach used to estimate the number 
of individuals receiving direct supportive services, we estimate that 
roughly 8,000 individuals, primarily through the construction career 
days, are exposed indirectly to highway construction jobs.[Footnote 33] 

Similarly, FHWA provides more than $2 million each year to 
universities through state transportation agencies for summer 
transportation institutes that expose students to the transportation 
industry broadly, not just highway construction.[Footnote 34] 
Activities include exposure to engineering and construction concepts, 
presentations by industry groups, and site visits to local 
transportation facilities, such as train stations and transportation 
simulators. We estimate that roughly 1,200 people participated in the 
activities in 2010 across 32 states, the District of Columbia, and 
Puerto Rico.[Footnote 35] Finally, FHWA funds about 100 internships 
each year at agencies within the U.S. Department of Transportation 
(e.g., Federal Transit Administration and Federal Railroad 
Administration) and at state transportation agencies, costing about 
$1.5 million annually.[Footnote 36] These internships expose students 
to transportation careers and encourage the pursuit of transportation- 
related studies in college.[Footnote 37] In the activities supported 
by the fiscal year 2010 summer institute and internship programs, we 
estimate that female and male participation in each program was 
relatively equal, and that a significant number of the participants 
served by these two programs were members of minority groups (see 
figure 3). While these activities can increase awareness of highway 
construction job opportunities and lead to future work force entries, 
the effect of these efforts, if any, may not be apparent for years 
since students typically return to school upon completion. They may 
not enter the workforce for a year or more, whether in construction or 
other transportation fields or in a nontransportation field. 

Figure 3: Demographics of Indirect Supportive Services Recipients, 
2010: 

[Refer to PDF for image: 2 vertical bar graphs] 

Percentage of participants: 

Participant responses: 

Ethnicity: 

African American; 
Summer transportation institute: 48; 
Internships: 25. 

White; 
Summer transportation institute: 18; 
Internships: 28. 

Latino; 
Summer transportation institute: 13; 
Internships: 12. 

Native American; 
Summer transportation institute: 8; 
Internships: 1. 

Asian American; 
Summer transportation institute: 8; 
Internships: 10. 

Other/Undisclosed; 
Summer transportation institute: 9; 
Internships: 25. 

Gender:    

Male; 
Summer transportation institute: 52; 
Internships: 46. 

Female; 
Summer transportation institute: 42; 
Internships: 54. 

Source: GAO analysis of DOT data. 

[End of figure] 

FHWA Does Not Attempt to Determine Effectiveness: 

FHWA has not used any of the information available to it to determine 
the overall effectiveness of its supportive services activities. FHWA 
does not track how many of the state grantees have achieved their 
goals in directly supporting on-the-job training. Although states are 
required to provide reports on their accomplishments to FHWA division 
offices, this information is not typically relayed to the FHWA 
officials making grant decisions. FHWA has only received about one- 
third of the final fiscal year 2008 accomplishment reports for the 
discretionary grant program, and FHWA officials noted that a low 
response rate is typical.[Footnote 38] Officials responsible for 
making the grant funding decisions explained that they do not 
routinely receive monthly or quarterly progress reports from the 
division offices but can request them on an as-needed basis. They also 
noted that occasionally, they request these reports to identify 
promising practices. However, these officials noted that they have 
limited tools to induce states to meet their reporting requirements. 
Furthermore, they explained that some states do not provide reports 
because of delays in awarding contracts, noting that often contracts 
are not in place by the time the reporting requirements have begun, 
and thus the states have no results to report. FHWA officials 
recognized that they did not have sufficient information on the 
results and the accomplishments of these programs, and surveyed the 
division offices in 2011 to obtain information on what grantees have 
accomplished and what approaches have worked well. As of August 2011, 
FHWA officials were still collecting and analyzing responses from the 
states, in part, due to additional time needed by the division offices 
to complete the survey as well as comply with additional reporting 
requirements for other FHWA programs. 

Moreover, FHWA has not established how state-reported data can be used 
to evaluate whether grantees have met FHWA's overall program 
objectives to increase the overall effectiveness of each state's job 
training program and enhance the training opportunities for women, 
minorities, and economically disadvantaged individuals. FHWA officials 
stated that they have not analyzed the extent to which grantees are 
achieving their performance goals, citing a variety of reasons, 
including a lack of resources and other competing programmatic 
priorities. FHWA officials anticipate that the survey, which they 
expect to complete in the summer of 2011, will provide much of the 
information needed to analyze the effectiveness of the program. 

Regarding indirect supportive services, FHWA officials noted that they 
have collected some data on the number and demographics of the 
individual attendees for the summer institute and student internship 
program, and further heard anecdotally that the indirect services 
provided (e.g., awareness programs) are effective in persuading 
students to consider a career in the transportation field. However, 
for reasons noted previously, FHWA lacks this information for the 
indirect activities supported by the discretionary grant program, even 
though the grant program receives a sizable portion of FHWA's 
supportive services funding. Moreover, FHWA officials do not track and 
do not know to what extent indirect supportive services are leading to 
jobs in the highway construction industry. Officials noted that they 
do not track the outcomes for a number of reasons, including privacy 
concerns with collecting data on minors. 

FHWA's past efforts to determine the effects that its supportive 
service funding provided have been limited, but we recognize that 
doing so is complicated. For programs designed to support diverse 
state or local activities, such as the supportive services program, 
finding common performance metrics to describe the overall program's 
effectiveness can be challenging. We have reported on options for 
building accountability provisions into grants that help balance 
states' flexibility to select a mix of activities and services that 
will best allow them to achieve a particular national outcome with 
accountability for achieving that outcome.[Footnote 39] These options 
include emphasizing results-based evaluation (e.g., workforce 
retention) in addition to examining output activities (e.g., the 
number of participants receiving a service). For example, under a 
results-oriented evaluation, FHWA could specify national goals and 
objectives, set up a process for establishing them, or adopt some 
combination of the two. FHWA officials requested results information 
through its survey of supportive services providers in the 
discretionary grant program. A results-orientation requires ongoing 
information. FHWA officials indicated that they plan to annually 
gather some of the basic information that was solicited from states in 
the current survey. In addition, FHWA states that it requires that 
grantees establish performance goals and measurable objectives for 
their proposed activities, and report on progress towards meeting 
these goals. However, this approach, to the extent it is employed, 
focuses on outputs rather than end results. 

Program results are important for making budgetary and programmatic 
decisions. High-level decision makers, such as Members of Congress and 
agency heads, need to know which programs are achieving their goals 
and objectives to make informed decisions about whether to expand, 
reduce, or maintain funded activities.[Footnote 40] Furthermore, 
agencies are responsible for ensuring that grantees use federal funds 
for eligible activities. In the absence of reported program results, 
FHWA cannot know whether funds have been used effectively and 
appropriately. 

FHWA Has Not Sufficiently Used Results to Inform Funding Decisions: 

FHWA often funds the same projects for supportive services year after 
year. For example, 17 of the 26 projects (65 percent) that received 
grants in fiscal year 2010 also received them in 2008, 2009, or both 
years.[Footnote 41] FHWA reviewers of discretionary grant applications 
are instructed to score the scope of the work, performance goals, 
objectives and measurements, budget summary, monitoring and evaluation 
plan, and reporting plan. However, past performance information is not 
required of applicants in the application nor is past performance one 
of the criteria scored during funding reviews. Furthermore, the 
solicitation issued to states does not request information from 
grantees about how they have used prior FHWA grants, or the resulting 
effectiveness of their activities. 

FHWA officials told us that they informally consider performance 
information when screening discretionary grant applications. For 
example, they stated that they may use data from the accomplishment 
reports to look for potential problems. In addition, officials noted 
that states whose accomplishment reports show positive results provide 
FHWA assurance that the state may be able to successfully implement 
additional programs, which can influence the state's chance of 
receiving funding in a subsequent year. 

However, as noted previously, FHWA decision makers have received a 
limited number of progress and final reports, which are the primary 
source of performance information for discretionary grants. 
Furthermore, FHWA decided to require only one final oversight report 
for four funding cycles occurring in fiscal years 2009 and 2010, which 
included two rounds of Recovery Act awards. FHWA officials stated that 
they made this decision in order to streamline the reporting 
requirements for grantees. Accordingly, FHWA has only received a few 
accomplishment reports for this period. As a result, FHWA will not be 
able to determine the effects of the individual award decisions until 
after all rounds of funding are complete, which, in some cases, will 
be 2 years after the decisions were made, following subsequent funding 
decisions by FHWA. 

Similarly, for the summer transportation institute program, FHWA 
reviews the annual reports submitted by states and informally assesses 
performance, and it considers past performance during its funding 
review to some degree. Like the discretionary grant program, many of 
these applicants are funded year after year. For example, 34 of the 53 
applicants (64 percent) funded in fiscal year 2010 were funded in each 
of the previous two fiscal years. According to FHWA officials, the 
division offices look at earlier annual reports to see if the same 
host site is soliciting funding for the subsequent year, and try to 
determine whether the host achieved its program objectives. However, 
like the grant program, past performance information is not required 
of applicants in the application and performance is not one of the 
criteria scored during funding reviews. Furthermore, the solicitation 
issued to states does not request information from grantees about how 
they have used prior FHWA grants and the resulting effectiveness of 
their activities. 

For the summer internship program, FHWA evaluates a prospective 
intern's performance through the student's academic and professional 
work history, which, among other things, entails a review of the 
applicant's resumé, references, and academic transcript. FHWA also 
surveys students at the end of the program to gather information on 
how well the program worked, and to suggest recommendations for how to 
address these issues in the future. 

Given that many of the activities funded through the program are 
funded repetitively, good practices suggest that the use of 
performance information can inform and improve recipient selection 
approaches, even for a smaller program.[Footnote 42] While the $10 
million provided annually through this program is much smaller than 
many other federal grant programs, integrating results information can 
help FHWA identify approaches that work or leverage good practices to 
improve the program, and decrease funding to poor or marginal 
performers (or encourage them to improve their performance). 

FHWA is considering whether to change the grant funding approach from 
discretionary to formula-based funding. However, using performance 
data could still help ensure accountability for results.[Footnote 43] 
Under the formula approach that FHWA is considering, each state would 
receive some supportive services funds, in contrast to the 20 or so 
states that receive funding each year under the current approach. 
Using performance data, FHWA could help states that have not 
participated in the program to more easily identify previously 
successful approaches to effectively implementing their own supportive 
services programs. The performance data could also be used to 
determine whether funds should be withheld from or provided 
conditionally to any currently low-performing states. FHWA hopes to 
implement the new funding approach in fiscal year 2012. 

Conclusions: 

FHWA's on-the-job training program and its counterpart, the supportive 
services program, represent decades-long federal initiatives to 
increase participation of women, minorities, and economically 
disadvantaged individuals in the highway construction industry. FHWA 
allows each state to tailor its job training activities to fit its 
unique demographic, geographic, and social characteristics, which can 
spur innovation and help states meet their needs. However, FHWA has 
not established clear criteria for what states must do, what is 
optional, the degree of flexibility states have in implementing their 
programs, and what they are intended to accomplish. Within state 
transportation agencies, FHWA, and state partners involved in the 
program, we found officials working toward the programs' success. 
However, FHWA does not know what these programs have accomplished or 
how effectively these activities have advanced the broader goal of 
bringing underrepresented individuals into the highway construction 
workforce, because FHWA has performed only limited assessments of 
these programs over their nearly 40-year history. We recognize that 
doing so may be difficult. FHWA's current activities--such as its 
survey regarding the supportive services program--are positive steps 
towards making such an assessment. 

While it is appropriate for FHWA headquarters to rely extensively on 
its division offices to oversee state on-the-job training programs, 
such a decentralized management approach does not relieve FHWA 
headquarters from the responsibility of providing leadership and a 
national perspective for its programs. Even though the on-the-job 
training and supportive services programs are relatively small 
compared to FHWA's other programs, we would still expect FHWA to 
conduct oversight to ensure program goals are met and at a scale 
appropriate for the size of the programs. A necessary first step is 
for the agency to establish clear criteria--existing program criteria 
are not clear--for states on what they are to accomplish and for its 
division offices on how they are to oversee state activities. These 
criteria could continue to allow for flexibility in state programs, as 
FHWA deems appropriate. In doing so, FHWA needs to provide guidance on 
state reporting that will lay the groundwork for national assessments 
of results. Likewise, evaluation of supportive services results could 
inform funding decisions. Such actions will result in FHWA being able 
to better ensure that program goals are being met and would allow them 
to improve program accountability. 

Recommendations for Executive Action: 

To establish accountability for meeting the programs' goal of 
increasing the participation of traditionally underrepresented groups 
in the highway construction workforce, we recommend that the Secretary 
of Transportation direct the FHWA Administrator to take the following 
three actions: 

* Strengthen criteria--through regulations, guidelines, or other 
mechanisms--so that states have a clear understanding of how the on- 
the-job training program should be implemented and the results state 
programs are intended to accomplish. 

* Create and implement an oversight mechanism that (1) holds states 
accountable for meeting federal training criteria and (2) clearly 
stipulates how FHWA will assess state program effectiveness, including 
what type of program achievement data states are to submit and how 
such data will be used. This oversight mechanism should include 
assessing the effectiveness of its division offices in overseeing 
state activities. 

* For the supportive services program, develop an approach to (1) 
evaluate the extent to which grantees have met their proposed annual 
goals and (2) integrate the results of this evaluation into FHWA's 
funding decisions for supportive services programs. 

Agency Comments: 

We provided a draft of this report to the Department of Transportation 
for review and comment prior to finalizing the report. The Department 
of Transportation generally agreed with the recommendations and 
provided technical comments, which we incorporated as appropriate. 

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies of this report 
to congressional committees with responsibilities for surface 
transportation issues, the Director of the Office of Management and 
Budget, the Secretary of Transportation, and the Administrator of the 
Federal Highway Administration. In addition, this report will be 
available at no charge on GAO's Web site at [hyperlink, 
http://www.gao.gov]. 

If you have any questions about this report, please contact me at 
(202) 512-2834 or wised@gao.gov. Contact points for our Offices of 
Congressional Relations and Public Affairs may be found on the last 
page of this report. GAO staff who made key contributions to this 
report are listed in appendix IV. 

Sincerely yours, 

Signed by: 

David J. Wise: 
Director, Physical Infrastructure Issues: 

Appendix I: Objectives, Scope, and Methodology:  

In this report, we assessed the Federal Highway Administration's 
(FHWA) on-the-job training program and the associated supportive 
services program. To do so, we focused on the extent to which (1) 
states' implementation of the FHWA on-the-job training program 
provides training and career enhancement opportunities for 
traditionally underrepresented groups to work on federal-aid highway 
projects, (2) FHWA has overseen the program and demonstrated results, 
and (3) the supportive services program established by FHWA has 
assisted state job training and apprenticeship programs. In response 
to your interest, we also gathered information on financial incentives 
and penalties states use to encourage contractors to provide job 
training. 

Additionally, for background, to get an understanding of historical 
participation in construction for women and minority groups between 
1985 and 2010, we analyzed data provided by the Department of Labor's 
Bureau of Labor Statistics on industry employment by race, ethnicity, 
and gender. While the data used are not strictly comparable over time 
due to changes in industry classifications systems, we used the data 
to describe a general trend in employment in the construction 
industry. We believe the data are sufficiently reliable for our 
purposes, which were to provide historical context on the industry. 

Implementation of Job Training Program:  

To determine how FHWA's on-the-job training program has provided 
training and career enhancement opportunities for traditionally 
underrepresented groups on federal-aid highway projects, we reviewed 
legislation, including the Federal Aid Highway Act of 1968, which 
authorized the program, and the Safe, Accountable, Flexible, Efficient 
Transportation Equity Act: A Legacy for Users; the program's 
implementing regulations; FHWA guidance such as its contract 
compliance manual; and our reports on performance management. We 
interviewed officials from FHWA's Office of Civil Rights and its 
Resource Center to understand the agency's overall program philosophy. 
In addition, to gain a basic understanding of how the program operates 
and its environment, we interviewed officials from FHWA division 
offices and state transportation agencies in 11 states.[Footnote 44] 
We selected these states based on a variety of factors, including 
unionization, the state's size, the extent to which a state had been 
awarded funding for supportive services and used workforce development 
funding, and geographic location. We further examined more closely how 
these programs were implemented in four of these states: Missouri, 
Pennsylvania, Texas, and Washington. We selected these states because 
they differed in demographics; unionization; how job training is 
structured within the state, including any unique practices; and the 
extent to which the state participates in the supportive services 
program. We also interviewed representatives from local chapters of 
industry groups, such as the Associated General Contractors, as well 
as members of local unions, including laborers, craft-workers, and 
heavy equipment operators. The information gathered through our review 
of state programs is intended to illustrate these programs; it is not 
generalizable to all states or to other states with similar 
characteristics. 

To develop an order of magnitude estimate of the number of individuals 
participating in the program in a given year we used information in 
annual accomplishment reports that states submitted to FHWA.[Footnote 
45] In making these calculations, we estimated the total number of 
participants from the sample of reports provided by FHWA. We also used 
this data, along with our interviews with FHWA and state 
transportation officials, to provide examples and illustrations of the 
type of data collected by the states for these programs, including 
activities implemented, the financial incentives and penalties used by 
states, and the extent to which the American Recovery and Reinvestment 
Act of 2009 (Recovery Act) provided job opportunities. While we cannot 
independently verify all of the data collected by the states and 
submitted to FHWA, because the data is used solely to provide context 
on the overall program, we believe the data is sufficiently reliable 
for our purposes. 

FHWA Oversight of Job-Training Programs: 

To assess how FHWA oversees job training programs to determine program 
achievement, we reviewed the program standards and outcome measures 
required in FHWA's regulations and program guidance and compared them 
to good management practices, such as the assessment of oversight 
activities we have identified in other programs.[Footnote 46] We also 
compared the information on training activities and program results 
contained in the state accomplishment reports to requirements detailed 
in FHWA regulations, guidance, and other instructions communicated to 
states.[Footnote 47] Because of the differences in how states 
collected and reported data, we were unable to compare the results 
across states. Accordingly, in order to understand trends, 
similarities, and differences across implemented programs we relied on 
interviews with FHWA and state transportation officials to provide 
examples of the type of oversight activities implemented by each 
state. The information we obtained from these officials is not 
generalizable across all state programs. 

Supportive Services Program: 

To determine the extent to which supportive services have assisted 
state job-training programs, we reviewed how FHWA has implemented and 
overseen the three components of the program: (1) the discretionary 
grant program, (2) the national summer transportation institute 
program, and (3) the summer transportation internship program for 
disadvantaged groups. We analyzed FHWA budget information to determine 
the amount of funding provided to the three programs. In order to 
assess the data's reliability, we interviewed department officials and 
reviewed departmental audit reports about the system which processes 
the data. We determined that this data was sufficiently reliable for 
our purposes. 

For the discretionary grant program, we analyzed legislation, such as 
the Federal Aid Highway Act of 1970, which authorized the program, 
regulations, and other FHWA guidance, such as FHWA's supportive 
services handbook. We reviewed the agency's approach to requesting and 
evaluating grant proposals for the program. Specifically, we analyzed 
program criteria for funding proposals and incorporating performance 
information by reviewing the agency's request for proposals, rating 
review sheet, and other information communicated to prospective 
applicants. We compared FHWA's use of performance information to good 
management practices that we have identified.[Footnote 48] We reviewed 
the 153 grant proposals that received funding from 2008 through 2010 
and categorized the activities receiving funding. In addition, we 
reviewed FHWA's guidance for reporting the results of programs. 
However, because FHWA could only provide about one-third of the annual 
grantee accomplishment reports for fiscal year 2008 and only a handful 
of reports for the following funding cycles, we were unable to 
determine the extent to which states complied with this guidance. 
[Footnote 49] In addition to FHWA officials, state transportation 
officials, and industry groups identified previously, we also 
interviewed supportive services grantees in Missouri, Pennsylvania, 
and Texas.[Footnote 50] These results are not generalizable to all 
states or to other states with similar characteristics. In order to 
estimate the number of individuals participating in the program in a 
typical year, we reviewed the goals in the funded proposals for 
activities proposed from fiscal years 2008 through 2010, excluding 
Recovery Act projects.[Footnote 51] We classified each of the 
activities as either directly supporting job-training or current 
trainees (such as preapprentice training, stipends for child care and 
transportation, and providing job-related equipment) or indirectly 
supporting job training (such as career day events). For each year, we 
added the numerical goals for each type of job training activity and 
averaged our results over the 3-year period. Our calculation 
represents a very rough estimate of the number of participants in this 
program. Finally, we reviewed FHWA's proposal to change how it 
distributes funds through the program. 

For the summer transportation institute program, we reviewed FHWA 
guidance and other documents on the program's history and 
implementation. We reviewed FHWA's request for proposals and 
evaluation criteria and compared the requirements for the use of 
performance information to the use of such information for programs 
that we have identified.[Footnote 52] In addition, we analyzed the 
results described in annual reports submitted by programs in 32 
states, the District of Columbia, and Puerto Rico for fiscal year 
2010. Specifically, we used these data to estimate the total number of 
participants in the program, and provide demographic information, such 
as ethnicity, gender, and education level, of the participants, as 
well as examples of the types of activities undertaken through this 
program. As the data was reported individually by each state, we 
limited our use of these data to background on the participants and 
believe these data are sufficiently reliable for this purpose. 
Finally, we interviewed officials from FHWA and two program sites to 
understand how FHWA selects, implements and oversees these programs. 

Similarly, for the student internship program, we reviewed FHWA 
guidance and other documents, including the program and evaluation 
criteria, and compared FHWA's use of performance information to good 
practices we have identified.[Footnote 53] We also reviewed FHWA's 
analysis of the results of the program, including demographic 
information about the participants, such as gender, ethnicity, 
proposed major, and location of the internship. We limited our use of 
these data to background on the participants and believe these data 
are sufficiently reliable for this purpose. We also interviewed FHWA 
officials to understand how the agency oversees and implements the 
internship program. 

We conducted this performance audit from August 2010 through
September 2011 in accordance with generally accepted government 
auditing standards. Those standards require that we plan and perform 
the audit to obtain sufficient, appropriate evidence to provide a 
reasonable basis for our findings and conclusions based on our audit 
objectives. We believe that the evidence obtained provides a 
reasonable basis for our findings and conclusions based on our audit 
objectives. 

[End of section] 

Appendix II: Some Financial Incentives and Penalties Are Available to 
Encourage On-the-Job Training Performance: 

While the on-the-job training program does not have a distinct funding 
source, job training expenses on federal-aid highway projects are 
eligible for federal dollars in the same way as the typical 80/20 
federal/state split of project costs. Each state has discretion in how 
contractors will be reimbursed for these training activities, if at 
all. Some states have tried to create financial incentives for 
contractors to perform job training, but these incentives are 
relatively small. For example, some states reimburse contractors for 
the hours of training performed. Reimbursement rates range from 80 
cents per hour, in Arizona for example, to $3.50 per hour in
Missouri, in the states we reviewed. Other states include the job 
training requirement as a bid item in the request for contract 
proposals, allowing contractors to name their price for meeting the 
requirement.[Footnote 54] Officials and contractors that we spoke with 
generally agreed that reimbursement rates were too low to be much of 
an incentive to contractors. Some contractors simply do not bother 
submitting the paperwork required to claim a reimbursement. Likewise, 
in cases in which job training is a bid item, we heard that 
contractors will commonly bid a minimal amount for this item, 
preferring to keep their overall price as low as possible to win the 
contract award. 

Financial incentives can also take a penalty form, although this 
approach appears to be less common. For example, Missouri has recently 
established a penalty system for nonperformance. In this system, the 
contractor will be held liable to pay $7 for every hour of training 
that should have been provided but was not. To date, the state has 
rarely levied such a penalty. On occasion, states may threaten to 
withhold contract payments if a contractor is not performing. In our 
interviews with state officials, we found this practice is rare and 
states are reluctant to do so. Officials noted that generally the 
threat to withhold funds is sufficient to correct problems. 

[End of section] 

Appendix III: Recovery Act Provided Some Job-Training Opportunities: 

Through the American Recovery and Reinvestment Act of 2009 (Recovery 
Act), the federal government provided states with additional funds for 
highway construction projects and the same general training 
requirements applied to these projects. However, to some extent, these 
projects may have been less conducive to training than projects funded 
through regular annual federal-aid highway apportionments. Because the
Recovery Act prioritized projects that could be completed quickly, 
many projects focused on resurfacing or other less complex and lengthy 
projects. Short projects tend to require few workers overall and less 
time per trade to complete, minimizing the opportunity to train 
workers on the project. In the four states we reviewed more closely, 
officials generally agreed that the Recovery Act-funded projects led 
to some job training opportunities, but these opportunities were 
generally shorter than regularly funded projects. 

Several states reported to FHWA that Recovery Act-funded projects 
employed trainees. Three of the 30 states we reviewed significantly 
increased their annual achievement due to Recovery Act funding. For 
example, more than half of the trainees in Texas worked on Recovery
Act-funded projects in 2009. Specifically, 156 individuals worked as 
trainees on 142 Recovery Act-funded projects. At the end of 2009, 101 
of these trainees remained actively enrolled in the program and 36 had 
graduated. In addition, some states made special efforts to ensure 
training occurred on Recovery Act projects. For example, Texas created 
a separate job training program for Recovery Act projects that 
assigned training goals to individual projects. Texas already had a 
contractor-based program in place, but wanted to directly track job 
training results that were associated with Recovery Act funding. 

[End of section] 

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact:  

David J. Wise, (202) 512-2834 or wised@gao.gov. 

Staff Acknowledgments:  

In addition to the contact named above, James Ratzenberger and Teresa
Spisak (Assistant Directors), John Stambaugh, Tina Paek, Matthew Voit, 
Dianne Blank, Elizabeth DeVan, Sara Ann Moessbauer, Amy Rosewarne,
and Crystal Wesco made key contributions to this report. 

[End of section] 

Footnotes: 

[1] Federal-Aid Highway Act of 1968, Pub. L. No. 90-495, § 22(a) (Aug. 
23, 1968). 

[2] A training special provision is a contract clause that states can 
use when implementing a training and apprenticeship program. The 
Federal Highway Administration’s regulations include a training 
special provision. Some states may simply adopt this language in their
contracts whereas other states have modified it. 

[3] The federal-aid highway program provides funding to states for 
highway and bridge projects, with the federal funding share generally 
80 percent. 

[4] Federal Aid Highway Act of 1970, Pub. L. No. 91-605, § 110 (Dec. 
31, 1970). 

[5] These states are Alabama, Arizona, California, Florida, Missouri, 
New Mexico, Ohio, Pennsylvania, South Carolina, Texas, and Washington. 

[6] Bureau of Labor Statistics, Current Population Survey Data, 1983–
2010. Data are not strictly comparable over time due to changes in 
industry classification systems. Specifically, the most recent major 
change in classification systems was introduced in 2003 and comparable 
data are only available back to 2000. However, despite these changes 
over time, data for the construction industry can be used to describe 
a general trend. In addition, persons whose ethnicity is identified as 
Hispanic or Latino may be of any race. 

[7] According to FHWA, a journeyman is capable of performing all the 
duties within a given job classification or craft. 

[8] The on-the-job training program is a part of the federal-aid 
highway program, a state administered, federally-funded program. FHWA 
has division offices in each state, the District of Columbia, and 
Puerto Rico, which perform the agency’s primary oversight of states. 

[9] State transportation agencies submit accomplishment reports, which 
may contain information about the previous year’s accomplishments such 
as the number and type of trainees and apprentices that completed the 
program as well as the proposed goal for the following year. Annual 
contractor training reports contain information submitted by 
contractors indicating the number of individuals in specific 
demographic groups in specific job categories. 

[10] When contractors do not meet their contract requirement for on-
the-job training, they are required to explain their good faith 
efforts to try to fulfill job training requirements. For example, a 
contractor may provide documentation to FHWA demonstrating that it 
reached out to community organizations or used other channels to 
solicit minority or female workers to fill the training position, but 
could not find enough trainees to meet requirements. In the event a 
state transportation agency does not attain its goal during a calendar 
year, the agency is required to inform FHWA of the reasons for its 
inability to meet the suggested minimum number of training slots and 
the steps to be taken to achieve the goal during the next calendar 
year. 

[11] Pub. L. No. 91-605, § 110. 

[12] The total funding over this period included $20 million provided 
by Congress in 2009 through the Recovery Act. 

[13] Due to the limited number of reports that were available with 
program results for 2010, we use data from 2009 reports throughout 
this report. 

[14] Florida and Texas both receive a relatively large amount of 
federal-aid highway funds. In fiscal year 2009, Florida and Texas were 
apportioned approximately $2 billion and $3.3 billion, respectively, 
out of about $39 billion overall for the nation. 

[15] The U.S. Department of Labor, or a designated state agency, 
approves and certifies apprenticeship programs, which may be 
administered by an employer or group of employers, a union, or 
cooperatively by unions and multiple employers. Additionally, some
states have their own apprenticeship training requirements. For 
example, Washington and California require contractors on state-funded 
public works projects to use apprentices for a specified percentage of 
the work. Contractors in these states may be required to meet both 
state and federal training requirements. 

[16] Associated General Contractors is a national trade association 
for contractors in all areas of construction except homebuilding. 

[17] FHWA division offices have provided some states with dispensation 
to structure their programs in this way. 

[18] Reports were not available for all states nor are reports 
required to indicate how the program is structured. Consequently, 
other states with contractor-based programs may exist. 

[19] Underrepresentation of specific groups may vary across trades and 
among states. However, as a result of demographic shifts, some 
targeted groups may no longer be underrepresented in some trades in 
some states, while other targeted groups in those trades may continue 
to experience underrepresentation. 

[20] In 2009, Ohio reported 918 female and minority trainees-—which is 
a number significantly above the participation levels other states 
generally reported—-and 5,302 trainees in total for Recovery Act 
projects. 

[21] 23 U.S.C. § 140(a). 

[22] FHWA officials told us that a working group is examining all the 
civil rights regulations, including on-the-job training. FHWA is 
obtaining comments and recommendations from civil rights specialists 
that would include substantive changes to the regulations and updating 
terminology. The Office of Civil Rights is currently working with the 
FHWA Office of Chief Counsel on this effort. 

[23] GAO, Agency Performance Plans: Examples of Practices That Can 
Improve Usefulness to Decisionmakers, [hyperlink, 
http://www.gao.gov/products/GAO/GGD/AIMD-99-69] (Washington, D.C.: 
Feb. 26, 1999). 

[24] GAO, Internal Control: Standards for Internal Control in the 
Federal Government, [hyperlink, 
http://www.gao.gov/products/GAO/AIMD-00-21.3.1] (Washington, D.C.: 
November 1999). 

[25] [hyperlink, http://www.gao.gov/products/GAO/AIMD-00-21.3.1]. 

[26] FHWA civil rights officials could not tell us why no actions were 
taken against states without active training programs because these 
events occurred before the officials started working at FHWA. 

[27] GAO, Large Truck Safety: Federal Enforcement Efforts Have Been 
Stronger Since 2000, but Oversight of State Grants Needs Improvement, 
[hyperlink, http://www.gao.gov/products/GAO-06-156] (Washington, D.C.: 
Dec. 15, 2005). 

[28] FHWA officials noted that their oversight approach is based on a 
corporate risk assessment, which takes into account risks associated 
with various agency activities, and allocates resources, including 
personnel, accordingly to mitigate these risks. 

[29] States also have the option of using up to half of 1 percent of 
apportioned funding from certain core programs of the federal-aid 
highway program to provide supportive services. While FHWA officials 
did not know how much funding has been used specifically to provide 
supportive services, they estimated that the states collectively 
obligate about $25 million per year from this source to provide 
workforce development activities. 

[30] From fiscal years 2008 through 2010, 37 states, the District of 
Columbia, Guam, and Puerto Rico have received these grants in at least 
one year; the largest was for about $1.5 million and the smallest was 
for about $7,000. These calculations include Recovery Act grants. 
Excluding Recovery Act grants, the average grant was about $180,000. 

[31] We derived this rough estimate by aggregating and averaging 
activities proposed for the 2008 through 2010 period. We excluded 
projects funded by the Recovery Act. 

[32] FHWA does not collect information on services actually provided, 
although states may include it in applications for future rounds of 
funding as evidence that they carried out prior periods’ activities as 
planned. We did not attempt to quantify this information because it is
likely subject to a higher level of uncertainty than the overall 
participation estimate. 

[33] We estimated the number of individuals receiving indirect 
supportive services by identifying and aggregating career awareness 
activities, such as construction career days, proposed and selected 
for funding between 2008 through 2010. We excluded projects funded by 
the Recovery Act. 

[34] Selected host sites are eligible to receive up to $65,000 in 
funding from FHWA, which is allocated from the $10 million in funding 
available for supportive services. 

[35] We estimated the total number of participants in the summer 
transportation institutes by aggregating demographic information 
reported by each institute to FHWA. Given limitations of available 
data, our estimates should be used only to provide a general 
understanding of participation levels. 

[36] We obtained this information from the reports submitted by the 
summer transportation institutes to FHWA and FHWA’s internal analysis 
of the 2010 summer internship program. Given limitations of available 
data, our estimates should be used only to provide a general 
understanding of participation levels. 

[37] Students may receive stipends up to $5,000 for their internship 
from FHWA. 

[38] FHWA required one final oversight report for four funding cycles 
occurring in fiscal years 2009 and 2010, which included two rounds of 
Recovery Act awards. Accordingly, FHWA has only received a few of 
accomplishment reports for this period. 

[39] GAO, Grants Management: Enhancing Performance Accountability 
Provisions Could Lead to Better Results, [hyperlink, 
http://www.gao.gov/products/GAO-06-1046] (Washington, D.C.: Sept. 29, 
2006). 

[40] Domestic Working Group, Grant Accountability Project, Guide to 
Opportunities for Improving Grant Accountability (October 2005). The 
Domestic Working Group consists of 19 federal, state, and local audit 
organizations and is chaired by the Comptroller General of the United 
States. The purpose of the group is to identify current and emerging
challenges of mutual interest and explore opportunities for greater 
collaboration within the intergovernmental audit community. 

[41] Similarly, during the first round of Recovery Act funding, FHWA 
only solicited proposals from applicants that were currently receiving 
supportive services funds to ensure that the Recovery Act money would 
be spent quickly (FHWA Memorandum from Allen Masuda to Division 
Administrators, Apr. 7, 2009). As a result, the agency awarded about 
$8 million to 23 existing programs. 

[42] [hyperlink, http://www.gao.gov/products/GAO-06-1046]. 

[43] According to FHWA officials, the FHWA Administrator can modify 
the supportive services program from a discretionary program to a 
formula grant program without congressional action. 

[44] These states were Alabama, Arizona, California, Florida, 
Missouri, New Mexico, Ohio, Pennsylvania, South Carolina, Texas, and 
Washington. 

[45] We reviewed 30 accomplishment reports prepared by the states, the 
District of Columbia, and Puerto Rico describing training activities 
conducted in fiscal year 2009. 

[46] [hyperlink, http://www.gao.gov/products/GA0-06-156], [hyperlink, 
http://www.gao.gov/products/GAO/AIMD-00-21.3.1], and [hyperlink, 
http://www.gao.gov/products/GAO/GGD/AIMD-99-69]. 

[47] FHWA was unable to provide the remaining 22 reports for fiscal 
year 2009. FHWA and the states in our review were only able to supply 
30 accomplishment reports by the time our work was substantially 
completed in June 2011. 

[48] [hyperlink, http://www.gao.gov/products/GA0-06-1046]. 

[49] FHWA provided two rounds of funding in fiscal year 2008, three 
rounds of funding in fiscal year 2009 (including two rounds funded by 
the Recovery Act), and one round of funding in fiscal year 2010. 

[50] We did not interview supportive services grantees in Washington 
because the state has not recently used FHWA supportive services funds. 

[51] We excluded Recovery Act projects because these projects were 
financed with a onetime funding amount of $20 million, and did not 
reflect a typical year. 

[52] [hyperlink, http://www.gao.gov/products/GA0-06-1046]. 

[53] [hyperlink, http://www.gao.gov/products/GA0-06-1046]. 

[54] Contractors—-whether unionized or not-—can pay reduced wages to 
trainees that are enrolled in certified apprentice programs. While 
trainees are presumably less productive than journey-level workers, 
this wage reduction does offer some financial benefit to eligible 
contractors. This benefit applies regardless of whether the apprentice 
is hired to meet a federal job training requirement or not. 

[End of section] 

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