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entitled 'Workforce Training: Employed Worker Programs Focus on 
Business Needs, but Revised Performance Measures Could Improve Access 
for Some Workers' which was released on March 07, 2003.



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Report to Congressional Requesters:



United States General Accounting Office:



GAO:



February 2003:



Workforce Training:



Employed Worker Programs Focus on Business Needs, but Revised 

Performance Measures Could Improve Access for Some Workers:



GAO-03-353:



GAO Highlights:



Highlights of GAO-03-353, a report to the Ranking Minority Member, 

Senate Committee on Health, Education, Labor and Pensions, and 

Chairman, Subcommittee on 21st Century Competitiveness, House 

Committee on Education and the Workforce:



Why GAO Did This Study:



Although training for employed workers is largely the responsibility

of employers and individuals, the Workforce Investment Act (WIA)

allowed state and local entities to use federal funds for training

employed workers. Similarly, welfare reform legislation created

Temporary Assistance for Needy Families (TANF) block grants and

gave states greater flexibility to design training services for TANF

clients to help them obtain and retain jobs.



To better understand how the training needs of employed

workers, including low-wage workers, is publicly supported,

GAO was asked to determine (1) the extent to which local areas and

states provide assistance to train employed workers, including

funding training; (2) the focus of such training efforts and the kind

of training provided; and (3) when targeting training to low-wage

workers, the approaches state and local officials identified to 

address challenges in training this population.



What GAO Found:



Nationwide, two-thirds of the 470 local workforce boards responding 

to our survey provided assistance to train employed workers, such as 

partnering with employers to develop training proposals or funding 

training. Nearly 40 percent specifically budgeted or spent funds on 

training these workers. The number of boards that reported funding 

training for employed workers varied by state, but most states had at 

least one workforce board that targeted funds on such training. At 

the state level, all 16 states that GAO contacted also funded training 

for employed workers. These states and local workforce boards reported 

funding training that addressed specific business and economic needs. 

Although many types of training for employed workers were funded, most 

often occupational training to upgrade skills, such as learning new 

computer applications, and basic skills training, such as in English 

and math, were emphasized and community or technical colleges

were most frequently used to provide these services.



In targeting training specifically for low-wage workers, state and 

local officials identified approaches to challenges that hindered 

individuals’ and employers’ participation in training. Officials 

developed approaches to address some of the personal issues that 

low-wage workers face that made participating in training difficult. 

They also developed ways to gain support from employers who were 

reluctant to participate in low-wage worker training, such as by 

partnering with employers to develop career paths that help retain 

employees within companies. However, officials reported that 

challenges to implementing successful training still exist. For 

example, they explained that the WIA performance measure that 

tracks the change in adult earnings after 6 months could limit 

training opportunities for employed workers, including low-wage 

workers. The wage gain for employed workers would not likely be as 

great as that for unemployed job seekers, and this might provide a 

disincentive to enrolling employed workers into training because 

their wage gain may negatively affect program performance. 



Highlights Figure:



[See PDF for image]



[End of figure]



What GAO Recommends:



To improve the use of WIA funds for employed worker training, GAO

recommends that the Secretary of Labor review a current WIA

performance measure for change in adult average earnings. Labor

agreed with our recommendation and will evaluate performance

measures to identify and address unintended disincentives for

serving employed workers.



Contents:



Letter:



Results in Brief:



Background:



Most Local Workforce Boards, and All States Contacted, Provided 

Assistance for Training Employed Workers:



Training for Employed Workers Focused on Addressing Business Needs and 

Certain Workplace Skills:



In Targeting Training to Low-Wage Workers, Officials Addressed Several 

Challenges, though WIA Performance Measures Were an Issue:



Conclusions:



Recommendation for Executive Action:



Agency Comments:



Appendix I: Objectives, Scope, and Methodology:



Appendix II: Workforce Boards’ Survey Information:



Appendix III: Information on State Funding Sources:



Appendix IV: Comments from the Department of Health and

Human Services:



Appendix V: Comments from the Department of Labor:



Appendix VI: GAO Contacts and Staff Acknowledgments:



GAO Contacts:



Staff Acknowledgments:



Related GAO Products:



Tables:



Table 1: WIA Performance Measures for Adults and Dislocated Workers:



Table 2: States in Telephone Interview Sample--Population and Key 

Funding Sources:



Table 3: Site Visit States and Locations:



Table 4: Local Workforce Boards’ Survey Response Rate and Number 

Targeting Funds for Employed Worker Training:



Table 5: Funding Sources Identified by Officials in 16 States That Were 

Budgeted or Spent for Employed Worker Training for WIA Program Years 

2000 and/or 2001:



Figures:



Figure 1: Map of 50 States Showing Local Workforce Boards That Reported 

Funding Training Specifically for Employed Workers in Program Year 2000 

or 2001:



Figure 2: Key Sources of Federal Funding Used by Local Workforce Boards 

That Funded Training for Employed Workers, Program Year 2001:



Figure 3: Key Sources of Funding for Employed Worker Training Used in 

Program Years 2000 and/or 2001 by 16 States We Contacted:



Figure 4: Economic Sectors Targeted by Local Workforce Boards That 

Funded Training for Employed Workers in Program Year 2001:



Figure 5: Types of Training Funded by Local Workforce Boards That 

Funded Training for Employed Workers in Program Year 2001:



Figure 6: Types of Training Providers Used by Local Workforce Boards 

That Funded Training for Employed Workers in Program Year 2001:



Abbreviations:



ERA: Employment Retention and Advancement:



ESL: English as a Second Language:



HHS: Department of Health and Human Services:



NAICS: North American Industry Classification System:



TANF: Temporary Assistance for Needy Families:



UI: Unemployment Insurance:



WIA: Workforce Investment Act:



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February 14, 2003:



The Honorable Edward M. Kennedy, Ranking Minority Member

Committee on Health, Education, Labor and Pensions

United States Senate:



The Honorable Buck McKeon, Chairman

Subcommittee on 21st Century Competitiveness

Committee on Education and the Workforce

House of Representatives:



Technological advances continue to transform the U.S. workforce and 

economy. To keep pace, workers must periodically improve their skills, 

and, as a result, training for employed workers has become an essential 

part of the new workplace. In fact, according to data from the U.S. 

Bureau of Labor Statistics, for almost 70 percent of all occupations, 

work-related training is the primary source of education or training. 

Such training can enable employed workers to advance in their jobs, 

opening up entry-level positions for others. Furthermore, low-wage 

workers who receive training can achieve wage gains leading to self-

sufficiency--a goal of both welfare reform and the Workforce Investment 

Act (WIA).



When the Congress passed WIA in 1998, it allowed state and local 

governments to use federal funds for training employed workers, instead 

of primarily funding services designed to help the unemployed. 

Similarly, welfare reform legislation in 1996 created Temporary 

Assistance for Needy Families block grants (TANF) that sought to move 

welfare recipients into jobs and gave states greater flexibility to 

design training services--including postemployment training--for TANF 

clients. Little is known, however, about the extent to which state and 

local governments are funding training for employed workers because 

options to train these workers under WIA and TANF are relatively new.



To better understand how states and local areas are training employed 

workers, including low-wage workers, you requested that we determine 

(1) the extent to which local areas and states provide assistance to 

train employed workers, including funding training; (2) the focus of 

such training efforts and the kind of training provided; and (3) when 

targeting training to low-wage workers, the approaches state and local 

officials identified to address challenges in training this population.



To respond to these questions, we obtained a national perspective on 

local efforts to specifically fund training for employed workers using 

a mail survey to all 595 local workforce investment boards that were 

created under WIA to establish local workforce development policies. We 

received responses from 79 percent of the workforce boards 

surveyed.[Footnote 1] To determine how states provided assistance for 

training employed workers, including low-wage workers, we conducted 

telephone interviews with officials in 16 states who were responsible 

for workforce development, economic development, and TANF funds used 

for education and training.[Footnote 2] We selected these states 

because, between 1998 and 2001, most of them had used federal funds, 

such as demonstration grants, for training employed workers. In 

obtaining information from state officials and local workforce 

investment boards, we focused on program years 2000 and 2001.[Footnote 

3] To obtain more in-depth information about the approaches state and 

local officials use to address challenges in providing training 

specifically for low-wage workers, we visited local areas in four of 

the states--Florida, Texas, Oregon, and Minnesota; these were chosen 

from the states whose officials we interviewed by telephone. We 

selected these states for site visits largely because experts and 

others had identified them as having specific efforts for training 

employed workers, especially initiatives to help low-wage workers 

retain employment and advance in their jobs. We also discussed efforts 

to train employed workers with officials from the Departments of Labor, 

Health and Human Services (HHS), and Education, and representatives of 

associations such as the National Governors’ Association, National 

Association of Workforce Boards, and the U.S. Chamber of Commerce. We 

conducted our work from October 

2001 through December 2002 in accordance with generally accepted 

government auditing standards. For further information on our scope and 

methodology, see appendix I.



Results in Brief:



Nationwide, two-thirds of the 470 workforce boards responding to our 

survey provided assistance to train employed workers--and did so in a 

variety of ways, such as partnering with employers to develop training 

proposals or funding training; all 16 states that we contacted also 

funded training for employed workers. Nearly 40 percent of workforce 

boards specifically budgeted or spent funds to train employed workers, 

and a greater percentage of workforce boards reported funding such 

training in program year 2001 than in the previous year. The 16 states 

we contacted all funded training for employed workers, and most of 

these states funded such training from two or more offices; these 

offices included those responsible for workforce development, economic 

development, and TANF funds used for education and training. When more 

than one office within a state funded training for employed workers, 

most state offices reported coordinating these efforts both formally 

and informally. Few states and local workforce boards were able to 

provide information on the number of low-wage workers who participated 

in training because many do not categorize training participants by 

wage or employment status. Local areas and states most commonly funded 

training for employed workers with federal resources, such as WIA and 

TANF funds.



States and local workforce boards focused their training initiatives 

for employed workers on training that addressed specific business needs 

and emphasized certain workplace skills. States and local workforce 

boards often gave priority to training needed for certain economic 

sectors, such as manufacturing and health care, or for occupations that 

were in demand, such as certified nursing assistants. In Indiana, for 

example, the state workforce office sponsored a high-skills, high-wage 

training initiative designed to meet employers’ specific needs for 

skilled workers in information technology, manufacturing, and health. 

Although states and local workforce boards funded many types of 

training for employed workers, they most often emphasized occupational 

training to upgrade skills, such as learning new computer applications, 

and basic skills training, such as in English and math. They most 

frequently used community or technical colleges to provide these 

services.



In targeting training specifically for low-wage workers, state and 

local officials addressed several challenges that hindered individuals’ 

and employers’ participation in training. State and local officials 

also addressed some of the personal issues that low-wage workers face-

-such as limited English and literacy skills, childcare and 

transportation needs, scheduling conflicts, and financial constraints-

-that made participating in training difficult. State and local 

officials also developed a number of ways to gain support from 

employers who were reluctant to participate in low-wage worker 

training, such as by partnering with employers to develop career paths 

that help retain employees within companies and by streamlining grant 

application paperwork. Despite attempts to address both worker and 

employer issues, challenges to implementing successful training still 

exist. For example, state and local officials reported that the WIA 

performance measure that tracks adult earnings gain, and certain 

funding requirements that accompany some federally funded training 

programs, may limit training opportunities for some low-wage workers. 

The wage gain for employed workers would not likely be as great as that 

for unemployed job seekers, and this measure might provide a 

disincentive to local boards to enroll employed workers into training, 

because lower wage gains could negatively affect their program 

performance.



To improve the use of WIA funds for employed worker training, we 

recommend that the Secretary of Labor review the current WIA 

performance measure for changes in adult average earnings to ensure 

that it does not provide disincentives for serving employed workers, 

including low-wage workers. The Department of Labor agreed with our 

findings and recommendation. Labor also noted that as part of an 

evaluation of the WIA performance measurement system, a study for which 

they contracted in May 2002, performance measures would be evaluated so 

that unintended disincentives might be eliminated.



Background:



Although training for employed workers is largely the responsibility of 

employers and individuals, publicly funded training seeks to fill 

potential gaps in workers’ skills. In recent years, the federal 

government’s role in training employed workers has changed. In 1998, 

WIA replaced the Job Training Partnership Act after 16 years and, in 

doing so, made significant changes to the nation’s workforce 

development approach. Before implementation of WIA, federal employment 

and training funds were primarily focused on helping the unemployed 

find jobs; the WIA legislation allowed state and local entities to use 

federal funds for training employed workers.[Footnote 4] TANF block 

grants to states also allowed more flexibility to states in serving 

low-wage workers and, like WIA funds, federal funding authorized under 

TANF can now be used for training employed workers, including low-wage 

workers.[Footnote 5]



WIA Funding for Training Employed Workers:



WIA funds provide services to adults, youth, and dislocated workers and 

are allocated to states according to a formula. States must allocate at 

least 85 percent of adult and youth funds to local workforce areas and 

at least 60 percent of dislocated worker funds to local workforce 

areas. For training employed workers, the WIA funds used are from those 

appropriated to provide services to all adults as well as dislocated 

workers, funded at about $2.5 billion for program year 2001.[Footnote 

6] WIA also permits states to set aside up to 15 percent of WIA funds 

allocated for adults, youth, and dislocated workers to their states to 

support a variety of statewide workforce investment activities that can 

include implementing innovative employed worker programs.[Footnote 7] 

These funds can also be spent for providing assistance in the 

establishment and operation of one-stop centers, developing or 

operating state or local management information systems, and 

disseminating lists of organizations that can provide training. In a 

previous GAO report, we reported that several states used these state 

set-aside funds specifically for implementing employed worker 

training.[Footnote 8]



WIA also required that all states and localities offer most employment 

and training services to the public through the one-stop system--about 

17 programs funded through four federal agencies provide services 

through this system.[Footnote 9] For this system, WIA created three 

sequential levels of service--core, intensive, and training. The 

initial core services, such as job search assistance and preliminary 

employment counseling and assessment, are available to all adults and 

WIA imposes no income eligibility requirements for anyone receiving 

these core services. Intensive services, such as case management and 

assistance in developing an individual employment plan, and training 

require enrollment in WIA and generally are provided to persons judged 

to need more assistance. In order to move from the core level to the 

intensive level, an individual must be unable to obtain or retain a job 

that pays enough to allow the person to be self-sufficient, a level 

that is determined by either state or local workforce boards. In 

addition, to move from the intensive level to the training level, the 

individual must be unable to obtain other grant assistance, such as 

Department of Education grants, for such training services. Under WIA, 

states are encouraged to involve other agencies besides workforce 

development--including the agencies responsible for economic 

development and the Department of Health and Human Services’ TANF 

program--in the planning and delivery of services in the one-stop 

center system.



WIA Performance Measures:



WIA performance measures are designed to indicate how well program 

participants are being served by holding states and local areas 

accountable for such outcomes as job placement, employment retention, 

and earnings change. WIA requires the Department of Labor and states to 

negotiate expected performance levels for each measure. States, in 

turn, must negotiate performance levels with each local area. The law 

requires that these negotiations take into account such factors as 

differences in economic conditions, participant characteristics, and 

services provided. WIA holds states accountable for achieving their 

performance levels by tying those levels to financial sanctions and 

incentive funding. States meeting or exceeding their measures may be 

eligible to receive incentive grants that generally range from $750,000 

to $3 million. States failing to meet their expected performance 

measures may suffer financial sanctions. If a state fails to meet its 

performance levels for 1 year, Labor provides technical assistance, if 

requested. If a state fails to meet its performance levels for 2 

consecutive years, it may be subject to up to a 5 percent reduction in 

its annual WIA grant.



TANF Funding for Training Employed Workers:



In fiscal year 2000--the latest for which data are available--states 

reported spending $121.6 million in federal TANF funds specifically for 

education and training.[Footnote 10] Prior to WIA, welfare reform 

legislation created the TANF block grant, which provided flexibility to 

states to focus on helping needy adults with children find and retain 

employment. The TANF block grant is a fixed amount block grant of 

approximately $16.7 billion annually. Although the TANF program was not 

required to be part of WIA’s one-stop system, states and localities 

have the option to include TANF programs. As we have previously 

reported,[Footnote 11] many are working to bring together their TANF 

and WIA services. The TANF block grants allow states the flexibility to 

decide how to use their funds--for example, states may decide 

eligibility requirements for recipients, how to allocate funds to a 

variety of services, and what types of assistance to provide. Work-

related activities that can be funded under TANF encompass a broad 

range of activities including subsidized work, community service 

programs, work readiness and job search efforts, as well as education 

and training activities such as on-the-job training, vocational 

education, and job skills training related to employment.



TANF funds available to states can be used for both pre-and 

postemployment services. Because of the increased emphasis on work 

resulting from welfare reform and time limits for receiving cash 

assistance, state offices responsible for TANF funds may focus largely 

on helping their clients address and solve problems that interfere with 

employment, such as finding reliable transportation and affordable 

child care, especially for those in low-paying jobs.



Other Federal Funds Available for Training Employed Workers:



In recent years, several federal demonstration or competitive grants 

were available for training employed workers. For example, the 

Department of Labor’s Welfare-to-Work state and competitive 

grants[Footnote 12] were authorized by the Congress in 1997 to focus on 

moving the hardest-to-employ welfare recipients and noncustodial 

parents of children on welfare to work and economic self-sufficiency. 

Overall, welfare-to-work program services were intended to help 

individuals get and keep unsubsidized employment. Allowable activities 

included on-the-job training, postemployment services financed through 

vouchers or contracts, and job retention and support services. In 

addition, shortly after WIA was enacted, Labor gave all states an 

opportunity to apply for $50,000 planning grants for employed worker 

training.[Footnote 13] States were instructed to develop policies and 

program infrastructures for training employed workers and to indicate 

their available resources, anticipated needs, and plans for measuring 

success. The Secretary of Labor also awarded larger, 2-year competitive 

demonstration grants, operating from July 1, 1999, to June 20, 2001, 

for training employed workers.



In addition, HHS is supporting the Employment Retention and Advancement 

(ERA) study of programs that promote stable employment and career 

progression for welfare recipients and low-income workers. In 1998, for 

the planning phase of this project, HHS awarded 13 planning grants to 

states to develop innovative strategies. HHS has contracted with the 

Manpower Demonstration Research Corporation to evaluate 15 ERA projects 

in eight states, comparing the outcomes of those who received services 

with a control group that did not.[Footnote 14]



About the same time as the enactment of WIA, the Congress passed the 

American Competitiveness and Workforce Improvement Act of 

1998,[Footnote 15] which authorized some funding for technical skills 

training grants as part of an effort to increase the skills of American 

workers. This legislation raised limits on the number of high-skilled 

workers entering the United States with temporary work visas, imposing 

a $500 fee on employers--later raised to $1,000--for each foreign 

worker for whom they applied.[Footnote 16] Most of the money collected 

is to be spent on training that improves the skills of U.S. workers. 

Labor awards the skill grants to local workforce investment boards, 

thereby linking the skill grant program with the workforce system. The 

workforce boards may use the funds to provide training to both employed 

and unemployed individuals. In a previous GAO report on these 

grants,[Footnote 17] we reported that, for grantees that collected 

participant employment data (39 of 43 grantees), approximately three-

fourths of the skills training grant participants are employed workers 

upgrading their skills.



State Funds for Training Employed Workers:



In addition to being able to use WIA state set-aside funds for 

different activities including training employed workers, states can 

authorize funds from other available sources, such as state general 

revenue funds or funds related to unemployment insurance trust funds. 

States can also fund such training in conjunction with other federal 

funding grants, such as the Department of Housing and Urban 

Development’s Community Development Block Grant. This grant can be used 

for economic development activities that expand job and business 

opportunities for lower-income persons and neighborhoods. These state 

training programs serve primarily to help businesses address a variety 

of issues including skill development, competitiveness, economic 

development, and technological changes.



States can fund training for employed workers through various offices. 

Workforce development offices have historically focused on training for 

unemployed and economically disadvantaged individuals, while economic 

development offices have typically focused on helping employers foster 

economic growth for states. Economic development offices may also 

provide employment and training opportunities to local communities, 

generally by working with employers to meet skill shortages and long-

term needs for qualified workers. States have more often subsidized 

training tailored for businesses through their economic development 

offices, according to reports published by the National Governors’ 

Association.[Footnote 18]



Most Local Workforce Boards, and All States Contacted, Provided 

Assistance for Training Employed Workers:



Most of the local workforce boards reported that they provided 

assistance to train employed workers, including funding training, as 

did all 16 states that we contacted. Two-thirds of the workforce boards 

responding to our survey provided assistance to train employed workers 

in a variety of ways, and nearly 40 percent of the workforce boards 

specifically targeted funds on training for these workers. Furthermore, 

a greater percentage of workforce boards reported funding employed 

worker training in program year 2001 than in program year 2000. The 16 

states we contacted all funded training for employed workers and most 

of these states funded and coordinated this training from two or more 

offices. Few states and local workforce boards were able to provide 

information on the number of low-wage workers who participated in 

training because many did not categorize training participants by wage 

or employment status. Generally, local areas and states funded training 

for employed workers with various federal, state, local, or other 

resources, although WIA and other federal funds were the most common 

sources of funding for this training.



Most Local Workforce Boards Supported Training for Employed Workers:



Two-thirds of the local workforce boards reported performing tasks that 

facilitated the provision of employed worker training, such as 

partnering with employers to develop training proposals and providing 

individual services to employed workers. For example, one workforce 

board helped a local manufacturer obtain a state grant to retrain its 

employees through a project to upgrade skills. Another workforce board 

helped a local company by arranging English as a Second Language (ESL) 

classes for its employees through a community college. Other workforce 

boards helped employed workers establish individual training accounts 

with eligible training providers. However, some workforce boards 

responded that they did not specifically target training for employed 

workers because their overall funds were so limited that such training 

was not a priority. Several respondents explained that their clients 

were served based on need and that individuals with jobs were not a 

priority for services because of the sizeable unemployed population 

served by the workforce boards.



Nearly 40 percent of the local workforce boards responding to our 

survey specifically targeted funds for employed worker 

training.[Footnote 19] The number of boards that reported budgeting or 

spending funds on such training in program years 2000 or 2001 varied by 

state. (See fig. 1.) Most states had at least one workforce board that 

targeted funds for such training.[Footnote 20] Furthermore, a greater 

percentage of workforce boards reported funding such training in 

program year 2001 than in the previous year. Of all the workforce 

boards responding to our survey, 22 percent reported spending funds 

specifically for training employed workers in 2000 and 31 percent 

reported spending funds on training these workers in 2001. When they 

funded training for employed workers, local workforce boards reported 

doing so in a variety of ways. For example, in cooperation with the 

economic development office, one workforce board in West Virginia 

worked with local businesses to identify and fund training programs to 

meet their business needs. At a workforce board we visited in Texas, 

officials received a competitive state grant to fund employed worker 

training to meet critical statewide industry needs in health care, 

advanced technology, and teaching.



Figure 1: Map of 50 States Showing Local Workforce Boards That Reported 

Funding Training Specifically for Employed Workers in Program Year 2000 

or 2001:



[See PDF for image]



[End of figure]





Some local workforce boards that had not specifically targeted training 

for employed workers were planning to become involved in such training 

or had begun discussions about developing policies for this type of 

training. For example, a workforce official in California cited plans 

to use 

$95,000 from a federal grant to train employed workers in information 

technology. Another workforce board, in Minnesota, planned to open a 

training center for employed workers that would focus on business needs 

within the local community, such as health care, and provide training 

through a local community college.



States Funded Training for Employed Workers, Usually through Two or 

More Offices:



All of the 16 states we contacted funded training for employed workers. 

In most of the 16 states, training for employed workers was not limited 

to the efforts of a single state office, but was funded by two or more 

state offices with training responsibilities. In fact, in 8 states, all 

three offices we contacted funded training for employed workers. In 

addition to offices responsible for workforce development, economic 

development, and TANF funds used for education and training, state 

officials also identified education departments--including those of 

higher education--within their states as important funding sources for 

training employed workers. In New York, for example, training funds 

were spread across about 20 state agencies, according to one state 

official.



When more than one office within a state funded training for employed 

workers, most state offices reported coordinating their training 

efforts both formally and informally. Formal coordination methods that 

state officials cited included workgroups and advisory boards (15 

states), memoranda of understanding or mutual referral agreements 

between offices (12 states), or coordinated planning (12 states). For 

example, Indiana’s economic development office noted that it had formal 

linkages with the workforce office and that they collaborated on a 

lifelong learning project.[Footnote 21] Offices in 9 of the 16 states 

also cited other means of coordination, such as having common 

performance measures. For example, Oregon’s workforce development 

office reported that state agencies were held to a set of statewide 

performance measures. In addition to these formal methods of 

coordination, all states cited informal information sharing as a key 

means of coordination among offices within their state. For example, an 

economic development official in one state said he used his telephone 

speed dial to contact his workforce development colleague, and a 

workforce development official in another state told us she had 

frequent working lunches with the state official responsible for TANF 

funds used for education and training.



In addition, in a few states, offices jointly administered training 

programs within their states. In New York, for example, workforce 

development and economic development offices comanaged a high-skill 

training grant program for new and employed workers using $34 million 

in state general revenue funds over 3 years. For this training program, 

begun in July 2001, both offices reviewed training proposals, and the 

workforce department created contracts and reimbursed companies for 

part of the training costs. Similarly, in Pennsylvania, five 

departments--Labor and Industry, Public Welfare, Community and Economic 

Development, Education, and Aging--jointly administered an industry-

specific training grant initiative that primarily funded training for 

low-wage health care workers. This joint effort represented a new 

approach for Pennsylvania, because previously the economic development 

office was responsible for training that was tailored, or customized, 

to employers. Under this joint program, a state committee with 

representatives from each of the five departments reviewed grant 

proposals and each agency funded a portion of approved grants.



Finally, several states had reorganized their workforce 

responsibilities and funding, either by consolidating workforce 

development and economic development responsibilities or combining 

responsibilities for WIA and TANF funds. For example, Montana and West 

Virginia transferred WIA responsibilities and funding from the 

workforce office to the economic development office. According to state 

officials, this approach was intended to better align and integrate 

workforce and economic development goals for the state. In Texas, the 

workforce commission--which was created in 1995 to consolidate 10 

agencies and 28 programs--was responsible for WIA and TANF block 

grants, among others. In Florida, a public-private partnership, 

governed by the state’s workforce board, became responsible in October 

2000 for all workforce programs and funds in the state, including WIA, 

TANF, and Welfare-to-Work grant funds; this shift was intended to 

create a better link between workforce systems and businesses in the 

state.



Few state officials or local workforce boards were able to report the 

number of low-wage workers who participated in training, for various 

reasons. For example, some officials told us they did not categorize 

training participants by wage. Other officials reported that, although 

they targeted low-wage workers for training, they did not categorize 

training participants by employment status. Although states we 

contacted could not always provide us with the number of low-wage 

workers participating in training, 13 of 16 states we contacted 

reported that they funded training targeted to low-wage workers. 

Additionally, when WIA funds are limited, states and local areas must 

give priority for adult intensive and training services to recipients 

of public assistance and other low-income individuals.



WIA and Other Federal Funds Were the Most Common Sources of Funding for 

Training Employed Workers:



Local workforce boards reported that WIA and other federal funds were 

the most common source of funds used to support employed worker 

training. Federal funding for these training efforts included WIA 

funding--both local and the state set-aside portion--TANF funds, and 

local Welfare-to-Work funds. (See fig. 2.) In addition, local boards 

described various other important funding sources such as Labor’s 

demonstration grants for training employed workers and the federal 

skills training grants intended to train workers in high-demand 

occupations.



Figure 2: Key Sources of Federal Funding Used by Local Workforce Boards 

That Funded Training for Employed Workers, Program Year 2001:



[See PDF for image]



[End of figure]



Note: Percentages are based on 148 local workforce boards responding to 

our survey that reported specifically targeting funds for employed 

worker training. Respondents were asked to identify all applicable 

types of funding sources.



For those local workforce boards spending funds specifically for 

training employed workers, their allocation of local WIA funds most 

often paid for these training efforts, and more reported using local 

WIA funds in program year 2001 than in the previous year.[Footnote 22] 

However, while nearly all workforce boards responding to our survey 

were aware that WIA allowed funds to be used for training employed 

workers, some reported that there were too many priorities competing 

for the WIA funds. Two local officials also noted that the federal 

funds allocated to states under WIA--the state set-aside funds--in 

their states were awarded competitively, which made it difficult to 

consistently serve employed workers because they were uncertain that 

they would receive these grants in the future.



Local workforce boards also combined funding from several sources--

including federal, state, local and foundation support--to train 

employed workers. For example, one workforce board in Pennsylvania 

combined $50,000 in funds from the state WIA set-aside with about $1.8 

million from the state’s community and economic development department 

to fund such training. Although financial support from local entities 

or foundations was available to a lesser extent, some workforce boards 

were able to mix these with funds from other sources. For example, in 

California, one workforce board funded training for employed workers 

with a combination of foundation grants and fees for services from 

training for employers in addition to TANF funds, Welfare-to-Work and 

other competitive grants from Labor, and state funds.



States reported that WIA and other federal funds were the most common 

sources of funding used for training employed workers. (See fig. 3.) 

Twelve of the 16 states we contacted used three or more sources of 

funds for this purpose. Of the 16 states we contacted, 13 used their 

WIA state set-aside funds for training employed workers. For example, 

in Texas, nearly $11 million was awarded competitively to 10 local 

workforce boards, and the state projected that over 9,000 employed 

workers would receive training. Eleven states also used TANF funds to 

train employed workers. States also reported using state general 

revenue funds, funds related to Unemployment Insurance (UI) trust 

funds, such as penalty and interest funds or add-ons to UI taxes, and 

funds from other sources such as community development block grants or 

state lottery funds. (See table in app. III.):



Figure 3: Key Sources of Funding for Employed Worker Training Used in 

Program Years 2000 and/or 2001 by 16 States We Contacted:



[See PDF for image]



[End of figure]



Training for Employed Workers Focused on Addressing Business Needs and 

Certain Workplace Skills:



In their training initiatives for employed workers, states and local 

workforce boards focused on training that addressed specific business 

needs and emphasized certain workplace skills. States and local 

workforce boards gave priority to economic sectors and occupations in 

demand, considered economic factors when awarding grants, and funded 

training that was tailored or customized to specific employers. States 

and local workforce boards focused most often on training provided by 

community or technical colleges that emphasized occupational skills and 

basic skills.



States and Local Workforce Boards Often Focused on Business Needs in 

Funding Training:



Most of the 16 states we contacted focused on certain economic sectors 

or occupations in which there was a demand for skilled 

workers.[Footnote 23] Twelve states had at least one office, usually 

the economic development office, which targeted the manufacturing 

sector for training initiatives. States also targeted the health care 

and social assistance sector (which includes hospitals, residential 

care facilities, and services such as community food services) and the 

information sector (which includes data processing, publishing, 

broadcasting, and telecommunications). New York took a sector-based 

approach to training by funding grants to enable employees to obtain 

national industry-recognized certifications or credentials, such as 

those offered through the computer software or plastics industries. 

Other training programs focused on occupations in demand. For example, 

in Louisiana, two state offices funded training that gave preference to 

occupations with a shortage of skilled workers, such as computer 

scientists, systems analysts, locomotive engineers, financial 

analysts, home health aides, and medical assistants.



Of the 148 local workforce boards that specifically funded training for 

employed workers in 2001, the majority of workforce boards targeted 

particular economic sectors for training these workers. As with the 

states, most often these sectors were health care or manufacturing. 

(See fig. 4.) For example, workforce boards we visited in Florida, 

Minnesota, Oregon, and Texas became involved in funding or obtaining 

funding for local initiatives to train health care workers, such as 

radiographers and certified nursing assistants, that hospitals needed.



Figure 4: Economic Sectors Targeted by Local Workforce Boards That 

Funded Training for Employed Workers in Program Year 2001:



[See PDF for image]



[End of figure]



Note: Thirteen of the 148 local workforce boards who said that they 

specifically funded worker training did not specify whether they funded 

training in a specific economic sector. Percentages are based on local 

workforce boards responding to our survey that reported specifically 

targeting funds for employed worker training. Respondents were asked to 

identify all applicable sectors.



Some states considered local economic conditions, such as unemployment 

rates, in their grant award criteria in addition to, or instead of, 

giving priority to certain economic sectors and occupations. For 

example, California’s Employment Training Panel must set aside at least 

$15 million each year for areas of high unemployment. Similarly, in 

Illinois and Indiana, the state economic development offices considered 

county unemployment or community needs in awarding training funds. 

Florida’s workforce training grants gave priority to distressed rural 

areas and urban enterprise zones in addition to targeting economic 

sectors.



In addition, most state economic development offices (13 of 16) and 

more than half of the state workforce development offices (9 of 16) we 

contacted funded training that was tailored or customized to specific 

employers’ workforce needs. For economic development offices, such 

customized training was not new: these offices have typically funded 

training for specific companies as a means of encouraging economic 

growth within their states, and in some cases have done so for a long 

time. For example, California has funded training tailored to specific 

employers’ needs since 1983 through its Employment Training Panel. This 

program spent $86.4 million in program year 2000 to train about 70,000 

workers; nearly all of them were employed workers according to state 

officials. However, for many state workforce development offices, 

funding customized training was a shift in their approach to workforce 

training, one that could strengthen the links between employees and 

jobs. With customized training, local employers or industry 

associations typically proposed the type of training needed when they 

applied for funding and often selected the training providers. Examples 

of customized training initiatives sponsored by workforce development 

offices include the following:



* In Indiana, the state workforce office has sponsored a high-skills, 

high-wage training initiative since 1998 to meet employers’ specific 

needs for skilled workers in information technology, manufacturing, and 

health. This effort is part of a statewide initiative for lifelong 

learning for the existing workforce.



* In Hawaii, the workforce office established a grant program for 

employer consortiums to develop new training that did not previously 

exist in the state.



* In Louisiana, the workforce office has funded a training program 

customized for employers who had been in business for at least 3 years. 

It required that the company provide evidence of its long-term 

commitment to employee training.



In the states we contacted, many customized training programs required 

that grant applicants--usually employers--create partnerships with 

other industry or educational organizations. For example, Oregon’s 

workforce development office required local businesses to work with 

educational partners in developing grant proposals. One local workforce 

board we visited in Oregon collaborated with a large teaching hospital 

and its union to obtain funding for training hospital employees, and 

local one-stop staff partnered with nursery consortia and community 

colleges to obtain funds to upgrade the skills of agricultural workers. 

Similarly, in its high-skill training grant program, New York’s 

workforce development office required employers to form partnerships 

with labor organizations, a consortium of employers, or local workforce 

investment boards.



In at least 11 of the 16 states we contacted, the programs also 

required employers to provide matching funds for training employed 

workers, which can help offset costs to the state for training as well 

as indicate the strength of the employers’ commitment to training. 

States that had requirements for matching funds--often a one-for-one 

match--included Indiana, Minnesota, Montana, New Hampshire, New York, 

Oregon, Pennsylvania, Tennessee, Texas, Utah, and West Virginia. Utah’s 

economic development office required a lower match from rural 

employers, and Indiana’s match varied case-by-case. Sometimes states 

required other kinds of corporate investments as a condition for 

obtaining funds for training employees. For example, in Tennessee, 

companies participating in a job skills training program for high 

technology jobs were required to make a substantial investment in new 

technology. In addition, several states included certain requirements 

in their eligibility criteria to address potential concerns about 

whether public funds were being used to fund training that businesses 

might otherwise have funded themselves. For example, in Louisiana and 

West Virginia, the workforce office requires employers to provide 

evidence satisfactory to the office that funds shall be used to 

supplement and not supplant existing training efforts.



Employed Worker Training Focused on Occupational and Basic Skills 

Training Provided by Community and Other Colleges:



Although states reported funding many types of training for employed 

workers, occupational skills training and basic skills training were 

the most prevalent.[Footnote 24] Fifteen of the 16 states we contacted 

funded occupational skills training--such as learning new computer 

applications--for employed workers. In Tennessee, for example, the 

economic development office spent more than $27 million of state funds 

in program years 2000 and 2001 on a job skills training initiative for 

workers in high-skill, high-technology jobs, according to a state 

official.[Footnote 25] Nearly all states also reported funding basic 

skills training, including in basic math skills and ESL, for employed 

workers with low levels of education. For example, Texas funded ESL 

training in workplace literacy primarily for Vietnamese and Spanish 

speaking workers participating in health care training.



Local workforce boards also reported funding many types of training; 

however, occupational skills training was most frequently provided to 

employed workers. (See fig. 5.) For example, of the local workforce 

boards that spent funds to train employed workers, in program year 

2001, 90 percent funded occupational training to improve and upgrade 

workers’ skills. Forty-seven percent of the local workforce boards also 

funded, in program year 2001, basic skills training for employed 

workers. The next most prevalent type of training funded for employed 

workers was in soft skills, such as being on time for work, and 34 

percent of local workforce boards funded this type of training in 

program year 2001.



Figure 5: Types of Training Funded by Local Workforce Boards That 

Funded Training for Employed Workers in Program Year 2001:



[See PDF for image]



[End of figure]



Note: Six of the 148 respondents who said that they specifically funded 

worker training did not specify the types of training they funded. 

Percentages are based on local workforce boards responding to our 

survey that reported specifically targeting funds for employed worker 

training. Respondents were asked to identify all applicable types of 

training.



Community or technical colleges were often used to train employed 

workers, according to both state and local officials we contacted. For 

example, 78 percent of local workforce boards that spent funds to train 

employed workers reported that community or technical colleges were 

training providers in program year 2001. (See fig. 6.) State and local 

workforce officials also cited using private training instructors and 

employer-provided trainers, such as in-house trainers.



Figure 6: Types of Training Providers Used by Local Workforce Boards 

That Funded Training for Employed Workers in Program Year 2001:



[See PDF for image]



[End of figure]



Note: Eight of the 148 respondents who said that they specifically 

funded worker training did not specify the types of training providers 

used. Percentages are based on local workforce boards responding to our 

survey that reported specifically targeting funds for employed worker 

training. Respondents were asked to identify all applicable types of 

training providers.



In Targeting Training to Low-Wage Workers, Officials Addressed Several 

Challenges, though WIA Performance Measures Were an Issue:



In targeting training to low-wage workers, state and local officials 

addressed several challenges that hindered individuals’ and employers’ 

participation in training. Workforce officials developed ways to 

address the personal challenges low-wage workers faced that made 

participating in training difficult. In addition, workforce officials 

we visited identified ways to address employer reluctance to support 

training efforts. Despite attempts to address these issues, however, 

challenges to implementing successful training still exist. For 

example, state and local officials reported that the WIA performance 

measure that tracks adult earnings gain and certain funding 

requirements that accompany some federally funded training programs, 

may limit training opportunities for some low-wage workers.



Officials Found Ways to Accommodate Low-Wage Workers’ Needs:



State and local officials developed a number of approaches to overcome 

some of the challenges faced by low-wage workers. They noted that many 

low-wage workers have a range of personal challenges--such as limited 

English and literacy skills, childcare and transportation needs, 

scheduling conflicts and financial constraints, and limited work 

maturity skills--that made participating in training difficult. 

However, many officials also reported several approaches to training 

low-wage workers.



Offering workplace ESL and literacy programs were some approaches used 

by officials to address limited English and literacy skills among low-

wage workers. For example, one workforce board in Minnesota used a 

computer software program to develop literacy among immigrant 

populations. Another state workforce official in Oregon reported 

customizing ESL to teach language skills needed on the job. In 

addition, some of the employers we visited provided training to their 

employees in their native language or taught them vocational 

ESL.[Footnote 26] Officials we visited in Texas offered a 5-week 

vocational ESL course before the start of the certified nursing 

assistant training program primarily to help prepare Vietnamese and 

Spanish speaking students who were not fluent in English.



Many low-wage workers faced challenges securing reliable transportation 

and childcare, particularly in rural areas and during evening hours. 

Several state and local officials noted that assisting low-wage workers 

with transportation and childcare enabled them to participate in 

training. One program in Florida provided childcare and transportation 

to TANF-eligible clients. In Minnesota, local officials told us that 

they provided transportation for program participants. Participants 

used the agency’s shuttle bus free-of-charge until they received their 

second paycheck from their employer. After the second paycheck, the 

individual paid a fee for the shuttle and was encouraged and supported 

in finding transportation on their own.



Providing on-site, paid, or flexible training were methods used to 

address scheduling conflicts and financial constraints experienced by 

low-wage workers. Many workforce boards that identified approaches on 

our survey cited various methods of providing training to low-wage 

workers that helped officials address some of the challenges faced by 

low-wage workers. These methods included offering training at one-stops 

or through distance learning and teleconferencing courses. For example, 

an employer in California paid employees for 40 hours of work, but 

allowed 20 hours of on-site training during that time. In addition, 

some hospitals permitted flexible schedules for employees who sought 

additional training for career advancement.



Offering additional assistance and incentives were approaches 

identified by officials for improving low-wage workers’ limited work 

maturity skills such as punctuality and appropriate dress. Officials we 

visited in Texas reported that they helped low-wage workers develop 

better skills for workplace behavior. For example, they helped clients 

understand the need to call their employer if something unexpected 

happens, like a flat tire, that prevents them from coming to work. In 

addition, another workforce board in West Virginia reported that they 

provided a $50.00 incentive to the employee for perfect attendance 

during the first 6 weeks of work.



Officials Identified Ways to Gain Employer Support for Low-Wage Worker 

Training:



State and local officials developed a number of ways to address the 

concerns of employers who were reluctant to participate in low-wage 

worker training. According to state and local officials, employers’ 

reservations about participation stemmed from different concerns, 

including the fears that better trained employees would find jobs 

elsewhere. Officials reported that other employers were hesitant to 

participate in low-wage worker training because of paperwork 

requirements or the time and expertise they believed were involved in 

applying for state training grants. Despite these concerns, state and 

local officials identified approaches to encourage employer 

participation.



According to officials we contacted, some employers said that if their 

employees participated in training, they would seek jobs elsewhere. 

Officials addressed this perception by forming partnerships with 

employers and educators and offering training that corresponded to 

specific career paths within a company. For example, a workforce board 

we visited in Oregon partnered with a local nursery, a landscaping 

business, and a community college to train entry-level workers in 

agriculture and landscaping to move up into higher-skilled and better 

paying positions at the same company. These career paths also addressed 

the concern, expressed by some employers, that too few employees were 

qualified to fill positions beyond the entry level. Officials found 

other ways to alleviate employers’ fears. Officials in Oregon 

encouraged trainees at a hospital to stay with their current employer 

by requiring them to sign a statement of intent regarding training. The 

hospital trained employees after they signed an agreement that asked 

for a commitment that they remain with the employer for a specific 

amount of time in return for training.



State and local officials noted that some employers were also reluctant 

to have their employees participate in government-funded training 

programs because they believed that certain data collection and 

reporting requirements were cumbersome. For example, state workforce 

officials we contacted reported that some employers found it difficult 

to get employees to fill out a one-page form regarding income as 

required to determine eligibility for certain funds, such as TANF. In 

an effort to ease the funding paperwork burden, state officials we 

contacted in West Virginia were working towards reducing the 

application paperwork required for employers to obtain worker-training 

dollars.



Workforce officials also reported that some employers were hesitant to 

apply for federally funded training grants because they believed that 

they did not have the time or the expertise to apply for such grants. 

To address this, workforce officials we visited in Oregon worked with 

union representatives and training providers to co-write training grant 

proposals. The workforce officials we visited told us that the 

involvement of the union was a key factor in the training initiative’s 

success. Prior to this cooperative effort, the employer had not been 

responsive to workers’ needs and the involvement of the union helped to 

bridge the gap between worker and employer needs.



Performance Measures and Other Funding Requirements May Limit Training 

Opportunities for Low-Wage Workers:



State and federal funding requirements--such as WIA performance 

measures, time limits, and participant eligibility--may limit training 

opportunities for some low-wage workers. Under WIA, performance 

measures hold states accountable for the effectiveness of the training 

program. If states fail to meet their expected performance levels, they 

may suffer financial sanctions. State funding regulations for some 

training initiatives, such as TANF-funded projects, required the funds 

to be used within a specific time period. Because local areas must wait 

for states to allocate and disburse the funding, local officials 

sometimes had less than 1 year to use the funding. Finally, individuals 

are sometimes eligible for services based on their income, especially 

for TANF or WIA local funds. Depending on the level at which local 
areas 

set eligibility requirements, some low-wage workers may earn salaries 

that are still too high to be eligible for services provided by these 

training funds.



WIA established performance measures to provide greater accountability 

and to demonstrate program effectiveness. These performance measures 

gauge program results in areas such as job placement, employment 

retention, and earnings change. (See table 1.) Labor holds states 

accountable for meeting specific performance outcomes. If states fail 

to meet their expected performance levels, they may suffer financial 

sanctions; if states meet or exceed their levels, they may be eligible 

to receive additional funds. A prior GAO report noted that the WIA 

performance levels are of particular concern to state and local 

officials.[Footnote 27] If a state fails to meet its performance levels 

for one year, Labor provides technical assistance, if requested. If a 

state fails to meet its performance levels for two consecutive years, 

it may be subject to up to a five percent reduction in its annual WIA 

formula grant. Conversely, if a state exceeds performance levels it may 

be eligible for incentive funds.



Table 1: WIA Performance Measures for Adults and Dislocated Workers:



Adults: Entered employment rate; Definition: Of those who did not have 

a job when they registered for WIA, the percentage of adults who got a 

job by the end of the 1st quarter after exit. This measure excludes 

participants who are employed at the time of registration..



Adults: Employment retention rate at 6 months; Definition: Of those who 

had a job in the 1st quarter after exit, the percentage of adults who 

have a job in the 3rd quarter after exit..



Adults: Average earnings change in 6 months; Definition: Of those who 

had a job in the 1st quarter after exit, the postprogram earning 

increases as compared with pre-program earnings.



Adults: Employment and credential rate; Definition: Of those who 

received WIA training services, the percentage who were employed in the 

1st quarter after exit and received a credential by the end of the 3rd 

quarter after exit..



[End of table]



Source: GAO.



State and local officials reported that the WIA performance measure 

that tracks the change in adult earnings after six months could limit 

training opportunities for employed workers, including low-wage 

workers. Some workforce officials were reluctant to register employed 

workers for training because the wage gain from unemployment to 

employment tended to be greater than the wage gain for employed workers 

receiving a wage increase or promotion as a result of skills upgrade 

training. For example, a state official from Indiana noted that 

upgrading from a certified nursing assistant to the next tier of the 

nursing field might only increase a worker’s earnings by 25 cents per 

hour. Yet, for the purposes of performance measures, workforce boards 

may need to indicate a change in earnings larger than this in order to 

avoid penalties. For example, one workforce official from Michigan 

reported that the performance measure requires the region to show an 

increase that equates to a $3.00 per hour raise. In a previous GAO 

study, states reported that the need to meet these performance measures 

may lead local staff to focus WIA-funded services on unemployed job 

seekers who are most likely to succeed in their job search or who are 

most able to make wage gains instead of employed workers.[Footnote 28]



Time limits for some funding sources were a challenge for some 

officials trying to implement training programs, according to some 

state and local workforce officials. In Florida, for example, officials 

we visited reported that they had a state-imposed one-year time limit 

for using TANF funds for education and training, which made it 

difficult for officials to plan a training initiative, recruit eligible 

participants, and successfully implement the training program. 

Similarly, state and local officials we contacted in Oregon expressed 

frustration with the amount of effort required to ensure the 

continuation of funding for the length of their training initiative. 

They noted that funding for a one-year training grant for certified 

medical assistants and radiographers expired seven months before the 

training program ended. The local workforce board identified an 

approach to fund the training for the remainder of the program by using 

other funding sources. Although this workforce board was able to 

leverage other funds, this solution is not always feasible.



Finally, several officials reported that eligibility requirements for 

the WIA local funds are a challenge because they might exclude some 

low-wage workers from training opportunities. States or local areas set 

the income limit for certain employment and training activities by 

determining the wage level required for individuals to be able to 

support themselves. When funds are limited, states and local areas must 

give priority for adult intensive and training services to recipients 

of public assistance and other low-income individuals. Officials on 

several workforce boards said that these eligibility guidelines for 

their local areas, particularly the income limit, made it challenging 

to serve some low-wage workers. For example, local workforce board 

officials from California indicated that they would like more 

flexibility than currently allowed under state WIA eligibility 

requirements to serve clients who may earn salaries above the income 

limit. The officials noted that some workers in need of skills upgrade 

could not be served under WIA because they did not qualify based on 

their income. To address this challenge, officials we visited at a 

local workforce board in East Texas told us that they set the income 

limit high enough so that they can serve most low-wage workers in their 

area.



Conclusions:



As of program year 2001, many states and local workforce boards were 

beginning to make use of the flexibility allowed under WIA and welfare 

reform to fund training for employed workers, including low-wage 

workers. They used WIA state set-aside funds and local funds, as well 

as TANF and state funds, as the basis for publicly funded training for 

employed workers. In addition, they considered business needs in 

determining how these funds were used to train employed workers. 

Consequently, training for employed workers could better reflect the 

skills that employers need from their workforce in a rapidly changing 

economy. In addition, such skills may help employees better perform in 

their jobs and advance in their careers.



Training for employed workers is particularly critical for workers with 

limited education and work skills, especially those earning low wages. 

For such workers, obtaining training while employed may be critical to 

their ability to retain their jobs or become economically self-

sufficient. While training low-wage workers involves particular 

challenges, workforce and other officials have developed ways to 

implement training initiatives for low-wage workers that may help 

mitigate some of these challenges. This is especially necessary in the 

economic downturn following the boom in the 1990s when TANF and WIA 

were created.



However, WIA’s performance measure for the change in average earnings 

may create a disincentive for states and local workforce boards to fund 

training for employed workers because employed workers, particularly 

low-wage workers, may be less likely than unemployed workers to 

significantly increase their earnings after training. To the extent 

that state and local workforce investment areas focus on unemployed 

workers to ensure that they meet WIA’s performance measure for earnings 

change--and thereby avoid penalties--employed workers, and especially 

low-wage workers, may have a more difficult time obtaining training 

that could help them remain or advance in their jobs. As currently 

formulated, this performance measure supports earlier federal programs’ 

focus on training unemployed workers and does not fully reflect WIA’s 

new provision to allow federally funded training for employed workers.



Recommendation for Executive Action:



To improve the use of WIA funds for employed worker training, we 

recommend that the Secretary of Labor review the current WIA 

performance measure for change in adult average earnings to ensure that 

this measure does not provide disincentives for serving employed 

workers. For example, Labor might consider having separate average 

earnings gains measures for employed workers and unemployed workers.



Agency Comments:



We provided the Departments of Labor and Health and Human Services with 

the opportunity to comment on a draft of this report. Formal comments 

from these agencies appear in appendixes IV and V.



Labor agreed with our findings and recommendation to review the current 

WIA performance measure for change in the adult average earnings to 

ensure that the measure does not provide disincentives for serving 

employed workers. Labor stated that, in May 2002, the department 

contracted for an evaluation of the WIA performance measurement system 

and noted that one of the objectives of the evaluation is to determine 

the intended and unintended consequences of the system. Labor believes 

that GAO’s suggestion to have separate measures on earnings gains for 

employed workers would be an option to consider for improving WIA 

performance.



HHS also agreed with the findings presented in our report and noted 

that the information in GAO’s report would help states develop and 

enhance appropriate worker training programs, and provide services and 

supports that address the barriers to such training.



As agreed with your offices, unless you publicly announce its contents 

earlier, we plan no further distribution of this report until 30 days 

after its issue date. At that time we will send copies of this report 

to relevant congressional committees, and other interested parties. We 

will also make copies available to others upon request. In addition, 

the report will be available at no charge on the GAO Web site at http:/

/www.gao.gov.



Please contact me on (202) 512-7215 if you or your staff have any 

questions about this report. Other GAO contacts and staff 

acknowledgments are listed in appendix IV.



Signed by Sigurd R. Nilsen:



Sigurd R. Nilsen

Director, Education, Workforce,

 Income Security:



[End of section]



Appendix I: Objectives, Scope, and Methodology:



To provide the Congress with a better understanding of how states and 

local areas were training employed workers, including low-wage workers, 

we were asked to determine (1) the extent to which local areas and 

states provide assistance to train employed workers, including funding 

training; (2) the focus of such training efforts and the kind of 

training provided; and (3) when targeting training to low-wage workers, 

the approaches state and local officials identified to address the 

challenges in training this population.



To obtain this information, we conducted a nationwide mail survey of 

all local workforce investment boards, conducted semistructured 

telephone interviews with state officials, and visited four states. We 

conducted a literature search and obtained reports and other documents 

on employed worker training from researchers and federal, state, and 

local officials. To obtain information about the federal role in 

employed worker training, we met with officials from the departments of 

Labor, Health and Human Services (HHS), and Education. In addition, we 

interviewed researchers and other workforce development training 

experts from associations such as the National Governors’ Association, 

National Association of Workforce Investment Boards, U. S. Chamber of 

Commerce, and American Society for Training and Development.



Nationwide Survey of Local Workforce Investment Boards:



To document local efforts to train employed workers, we conducted a 

nationwide mail survey, sending questionnaires to all 595 local 

workforce boards. We received responses from 470 boards, giving us a 79 

percent response rate. Forty-five states had response rates of 60 

percent or more, and 17 states, including all states with a single 

workforce board, had response rates of 100 percent.[Footnote 29] The 

mailing list of local workforce boards was compiled using information 

from a previous GAO study of local youth councils,[Footnote 30] and 

directories from the National Association of Workforce Investment 

Boards and the National Association of Counties. The survey 

questionnaire was pretested with 6 local workforce boards and revised 

based on their comments. Surveys were mailed on April 24, 2002, follow-

ups were conducted by mail and phone, and the survey closing date was 

August 16, 2002. We reviewed survey questionnaire responses for 

consistency and in several cases contacted the workforce boards to 

resolve inconsistencies but we did not otherwise verify the information 

provided in the responses. In the survey, we collected data for the WIA 

program years 2000 (from July 1, 2000--June 30, 2001) and 2001 (from 

July 1, 2001-June 30, 2002) so that we could compare and perceive 

trends. We analyzed these data by calculating simple statistics and by 

performing a content analysis in which we coded responses to open-ended 

questions for further analysis.



Because our national mail survey did not use probability sampling, 

there are no sampling errors. However, the practical difficulties of 

conducting any survey may introduce other types of errors, commonly 

referred to as non-sampling errors. For example, differences in how a 

particular question is interpreted, the sources of information 

available to respondents, or the characteristics of people who do not 

respond can introduce unwanted variability into the survey results. We 

included steps in both the data collection and data analysis stages to 

minimize such non-sampling errors. For example, survey specialists in 

combination with subject matter specialists designed our questionnaire; 

we pretested the questionnaire to ensure that questions were clear and 

were understood by respondents; and to increase our response rate for 

the mail survey, we made a follow-up mailing and called local workforce 

investment boards that did not respond by a specified date.



Semistructured Telephone Interviews:



To determine state efforts to train employed workers, including low-

wage workers, we conducted semistructured telephone interviews in 

16 judgmentally selected states with state officials responsible for 

workforce development, economic development, and TANF funds used for 

education and training. We selected these states in part because they 

were geographically dispersed and represented about one-half of the 

U.S. population.



In addition, we selected these states because between 1998 and 2001, 

most of them used federal funds available for training employed 

workers, including demonstration and planning grants, which potentially 

indicated the state’s interest in training these workers. Thirteen of 

the selected states received States’ Incumbent Worker System Building 

Demonstration Grants in 1998 from the Department of Labor; 10 of the 

selected states were identified in previous GAO work as having used WIA 

state set-aside funds for current worker training, and 8 of the 

selected states were among those receiving Employment Retention and 

Advancement (ERA) demonstration grants from the Department of Health 

and Human Services. (See table 2.):



Table 2: States in Telephone Interview Sample--Population and Key 

Funding Sources:



State: California; Population: (April 1, 2000 Census data): 33,871,648; 

States using WIA governor’s set-aside funds: [Empty]; DOL states’ 

incumbent worker system building demonstration grants, June 1998: 

[Empty]; HHS ERA demonstration grants, as of fall 2001: X.



State: Florida; Population: (April 1, 2000 Census data): 15,982,378; 

States using WIA governor’s set-aside funds: X; DOL states’ incumbent 

worker system building demonstration grants, June 1998: X; HHS ERA 

demonstration grants, as of fall 2001: X.



State: Hawaii; Population: (April 1, 2000 Census data): 1,211,537; 

States using WIA governor’s set-aside funds: X; DOL states’ incumbent 

worker system building demonstration grants, June 1998: X; HHS ERA 

demonstration grants, as of fall 2001: [Empty].



State: Illinois; Population: (April 1, 2000 Census data): 12,419,293; 

States using WIA governor’s set-aside funds: [Empty]; DOL states’ 

incumbent worker system building demonstration grants, June 1998: 

[Empty]; HHS ERA demonstration grants, as of fall 2001: X.



State: Indiana; Population: (April 1, 2000 Census data): 6,080,485; 

States using WIA governor’s set-aside funds: X; DOL states’ incumbent 

worker system building demonstration grants, June 1998: X; HHS ERA 

demonstration grants, as of fall 2001: [Empty].



State: Louisiana; Population: (April 1, 2000 Census data): 4,468,976; 

States using WIA governor’s set-aside funds: [Empty]; DOL states’ 

incumbent worker system building demonstration grants, June 1998: X; 

HHS ERA demonstration grants, as of fall 2001: [Empty].



State: Minnesota; Population: (April 1, 2000 Census data): 4,919,479; 

States using WIA governor’s set-aside funds: [Empty]; DOL states’ 

incumbent worker system building demonstration grants, June 1998: X; 

HHS ERA demonstration grants, as of fall 2001: X.



State: Montana; Population: (April 1, 2000 Census data): 902,195; 

States using WIA governor’s set-aside funds: X; DOL states’ incumbent 

worker system building demonstration grants, June 1998: X; HHS ERA 

demonstration grants, as of fall 2001: [Empty].



State: New Hampshire; Population: (April 1, 2000 Census data): 

1,235,786; States using WIA governor’s set-aside funds: X; DOL states’ 

incumbent worker system building demonstration grants, June 1998: X; 

HHS ERA demonstration grants, as of fall 2001: [Empty].



State: New York; Population: (April 1, 2000 Census data): 18,976,457; 

States using WIA governor’s set-aside funds: X; DOL states’ incumbent 

worker system building demonstration grants, June 1998: X[A]; HHS ERA 

demonstration grants, as of fall 2001: X.



State: Oregon; Population: (April 1, 2000 Census data): 3,421,399; 

States using WIA governor’s set-aside funds: X; DOL states’ incumbent 

worker system building demonstration grants, June 1998: X; HHS ERA 

demonstration grants, as of fall 2001: X.



State: Pennsylvania; Population: (April 1, 2000 Census data): 

12,281,054; States using WIA governor’s set-aside funds: [Empty]; DOL 

states’ incumbent worker system building demonstration grants, June 

1998: X; HHS ERA demonstration grants, as of fall 2001: [Empty].



State: Tennessee; Population: (April 1, 2000 Census data): 5,689,283; 

States using WIA governor’s set-aside funds: X; DOL states’ incumbent 

worker system building demonstration grants, June 1998: X; HHS ERA 

demonstration grants, as of fall 2001: X.



State: Texas; Population: (April 1, 2000 Census data): 20,851,820; 

States using WIA governor’s set-aside funds: X; DOL states’ incumbent 

worker system building demonstration grants, June 1998: X; HHS ERA 

demonstration grants, as of fall 2001: X.



State: Utah; Population: (April 1, 2000 Census data): 2,233,169; States 

using WIA governor’s set-aside funds: [Empty]; DOL states’ incumbent 

worker system building demonstration grants, June 1998: [Empty]; HHS 

ERA demonstration grants, as of fall 2001: [Empty].



State: West Virginia; Population: (April 1, 2000 Census data): 

1,808,344; States using WIA governor’s set-aside funds: X; DOL states’ 

incumbent worker system building demonstration grants, June 1998: X[A]; 

HHS ERA demonstration grants, as of fall 2001: [Empty].



State: Total; Population: (April 1, 2000 Census data): 146,353,303; 

States using WIA governor’s set-aside funds: 10; DOL states’ incumbent 

worker system building demonstration grants, June 1998: 13; HHS ERA 

demonstration grants, as of fall 2001: 8.



State: Total U.S. population; Population: (April 1, 2000 Census data): 

; 281,421,906; States using WIA governor’s set-aside funds: [Empty]; 

DOL states’ incumbent worker system building demonstration grants, June 

1998: [Empty]; HHS ERA demonstration grants, as of fall 2001: [Empty].



[End of table]



Sources: U.S. Census Data; Workforce Investment Act: Better Guidance 

and Revised Funding Formula Would Enhance Dislocated Worker Program 

(GAO-02-274, Washington, D.C.: Feb. 11, 2002); Manpower Demonstration 

Research Corporation, New Strategies to Promote Stable Employment and 

Career Progression: An Introduction to the Employment Retention and 

Advancement Project (Washington, DC: U.S. Department of Health and 

Human Services, Administration for Children and Families, February 

2002); data from Department of Labor.



[A] These states were awarded DOL System-Building Incumbent Worker 

Demonstration Grants, June 1998, but returned all (West Virginia) or 

did not accept (New York) the funds.



In each state, we interviewed state officials responsible for workforce 

development and economic development. We also interviewed state 

officials responsible for TANF funds used for education and training to 

obtain information about training for low-wage workers. To identify 

these state officials, we initially called the state contact for the 

WIA program. These officials then provided us with the names of 

officials or their designees who represented workforce development and 

economic development perspectives in their state. We similarly 

identified state officials responsible for TANF funds used for 

education and training. Since states structure their programs and 

funding differently, sometimes state officials we interviewed were 

located in different agencies while others were located in different 

offices within the same agency. For this reason we used the term 

“office” throughout the report to represent their different 

perspectives.



We used survey specialists in designing our interview questions and 

pretested them in several states to ensure that they were clear and 

could be understood by those we interviewed. In our interviews, we 

asked state officials for information about training efforts for the 

program year 2000, which ended on June 30, 2001, and asked if there 

were any significant changes in program year 2001, which ended June 

30, 2002. Our interviews with state officials were conducted between 

March and October 2002. In analyzing our interview responses from 

state officials, we calculated frequencies in various ways for all 

close-ended questions and arrayed and analyzed narrative responses 

thematically for further interpretation. We did not independently 

verify data, although we reviewed the interview responses for 

inconsistencies.



Site Visits:



To obtain in-depth information about the challenges that local 

officials have experienced in developing and implementing training 

programs specifically for low-wage workers, and promising approaches 

they identified to address these challenges, we made site visits to 

four states-Florida, Minnesota, Oregon, and Texas. We selected these 

four states for site visits to provide geographic dispersion and 

because federal and state officials and other experts had identified 

these states as having specific efforts for training employed workers, 

especially initiatives to help low-wage workers retain employment and 

advance in their jobs. Furthermore, each of the four states received 

federal HHS Employment Retention and Advancement grants. In our view, 

these demonstration grants served as indications of the state’s 

interest in supporting job retention and advancement, including 

training, for low-wage workers. We visited a minimum of two localities 

in each state, representing a mix of urban and rural areas in most 

cases. We chose local sites in each state on the basis of 

recommendations from state officials about training initiatives with a 

low-wage focus. Teams of at least three people spent from 2 to 4 days 

in each state. Typically, we interviewed local officials, including 

employers, one-stop staff, local workforce board staff, and training 

providers such as community colleges and private training 

organizations. We toured training facilities and observed workers and 

students receiving training. We also obtained and reviewed relevant 

documents from those we interviewed. (See table 3.):



Table 3: Site Visit States and Locations:



State: Florida; Local sites: Jacksonville; Palatka.



State: Minnesota; Local sites: Minneapolis; Shakopee, Chaska.



State: Oregon; Local sites: Portland; Clackamas County.



State: Texas; Local sites: Ft. Worth, Dallas; Kilgore, Tyler.



[End of table]



Source: GAO.



We reviewed surveys and telephone interview responses for consistency 

but we did not otherwise verify the information provided in the 

responses. Our work was conducted between October 2001 and December 

2002 in accordance with generally accepted government auditing 

standards.



[End of section]



Appendix II: Workforce Boards’ Survey Information:



Table 4: Local Workforce Boards’ Survey Response Rate and Number 

Targeting Funds for Employed Worker Training:



State: Alabama; Total

surveys

sent: 3; Total

surveys

returned: 3; Percentage

returned: 100; Of surveys returned, number of boards that targeted 

funds for employed worker training: 1; Percentage of boards that 

targeted funds for employed worker training: 33.



State: Alaska; Total

surveys

sent: 2; Total

surveys

returned: 2; Percentage

returned: 100; Of surveys returned, number of boards that targeted 

funds for employed worker training: 1; Percentage of boards that 

targeted funds for employed worker training: 50.



State: Arizona; Total

surveys

sent: 16; Total

surveys

returned: 14; Percentage

returned: 88; Of surveys returned, number of boards that targeted funds 

for employed worker training: 1; Percentage of boards that targeted 

funds for employed worker training: 7.



State: Arkansas; Total

surveys

sent: 10; Total

surveys

returned: 9; Percentage

returned: 90; Of surveys returned, number of boards that targeted funds 

for employed worker training: 2; Percentage of boards that targeted 

funds for employed worker training: 22.



State: California; Total

surveys

sent: 51; Total

surveys

returned: 44; Percentage

returned: 86; Of surveys returned, number of boards that targeted funds 

for employed worker training: 16; Percentage of boards that targeted 

funds for employed worker training: 36.



State: Colorado; Total

surveys

sent: 9; Total

surveys

returned: 8; Percentage

returned: 89; Of surveys returned, number of boards that targeted funds 

for employed worker training: 4; Percentage of boards that targeted 

funds for employed worker training: 50.



State: Connecticut; Total

surveys

sent: 8; Total

surveys

returned: 8; Percentage

returned: 100; Of surveys returned, number of boards that targeted 

funds for employed worker training: 6; Percentage of boards that 

targeted funds for employed worker training: 75.



State: Delaware; Total

surveys

sent: 1; Total

surveys

returned: 1; Percentage

returned: 100; Of surveys returned, number of boards that targeted 

funds for employed worker training: 0; Percentage of boards that 

targeted funds for employed worker training: 0.



State: District of Columbia; Total

surveys

sent: 1; Total

surveys

returned: 1; Percentage

returned: 100; Of surveys returned, number of boards that targeted 

funds for employed worker training: 0; Percentage of boards that 

targeted funds for employed worker training: 0.



State: Florida; Total

surveys

sent: 24; Total

surveys

returned: 21; Percentage

returned: 88; Of surveys returned, number of boards that targeted funds 

for employed worker training: 15; Percentage of boards that targeted 

funds for employed worker training: 71.



State: Georgia; Total

surveys

sent: 19; Total

surveys

returned: 9; Percentage

returned: 47; Of surveys returned, number of boards that targeted funds 

for employed worker training: 1; Percentage of boards that targeted 

funds for employed worker training: 11.



State: Hawaii; Total

surveys

sent: 4; Total

surveys

returned: 2; Percentage

returned: 50; Of surveys returned, number of boards that targeted funds 

for employed worker training: 1; Percentage of boards that targeted 

funds for employed worker training: 50.



State: Idaho; Total

surveys

sent: 6; Total

surveys

returned: 5; Percentage

returned: 83; Of surveys returned, number of boards that targeted funds 

for employed worker training: 1; Percentage of boards that targeted 

funds for employed worker training: 20.



State: Illinois; Total

surveys

sent: 26; Total

surveys

returned: 19; Percentage

returned: 73; Of surveys returned, number of boards that targeted funds 

for employed worker training: 0; Percentage of boards that targeted 

funds for employed worker training: 0.



State: Indiana; Total

surveys

sent: 16; Total

surveys

returned: 10; Percentage

returned: 63; Of surveys returned, number of boards that targeted funds 

for employed worker training: 4; Percentage of boards that targeted 

funds for employed worker training: 40.



State: Iowa; Total

surveys

sent: 16; Total

surveys

returned: 15; Percentage

returned: 94; Of surveys returned, number of boards that targeted funds 

for employed worker training: 2; Percentage of boards that targeted 

funds for employed worker training: 13.



State: Kansas; Total

surveys

sent: 5; Total

surveys

returned: 4; Percentage

returned: 80; Of surveys returned, number of boards that targeted funds 

for employed worker training: 0; Percentage of boards that targeted 

funds for employed worker training: 0.



State: Kentucky; Total

surveys

sent: 11; Total

surveys

returned: 9; Percentage

returned: 82; Of surveys returned, number of boards that targeted funds 

for employed worker training: 1; Percentage of boards that targeted 

funds for employed worker training: 11.



State: Louisiana; Total

surveys

sent: 18; Total

surveys

returned: 15; Percentage

returned: 83; Of surveys returned, number of boards that targeted funds 

for employed worker training: 5; Percentage of boards that targeted 

funds for employed worker training: 33.



State: Maine; Total

surveys

sent: 4; Total

surveys

returned: 4; Percentage

returned: 100; Of surveys returned, number of boards that targeted 

funds for employed worker training: 1; Percentage of boards that 

targeted funds for employed worker training: 25.



State: Maryland; Total

surveys

sent: 12; Total

surveys

returned: 7; Percentage

returned: 58; Of surveys returned, number of boards that targeted funds 

for employed worker training: 3; Percentage of boards that targeted 

funds for employed worker training: 43.



State: Massachusetts; Total

surveys

sent: 16; Total

surveys

returned: 13; Percentage

returned: 81; Of surveys returned, number of boards that targeted funds 

for employed worker training: 9; Percentage of boards that targeted 

funds for employed worker training: 69.



State: Michigan; Total

surveys

sent: 25; Total

surveys

returned: 20; Percentage

returned: 80; Of surveys returned, number of boards that targeted funds 

for employed worker training: 5; Percentage of boards that targeted 

funds for employed worker training: 25.



State: Minnesota; Total

surveys

sent: 16; Total

surveys

returned: 15; Percentage

returned: 94; Of surveys returned, number of boards that targeted funds 

for employed worker training: 4; Percentage of boards that targeted 

funds for employed worker training: 27.



State: Mississippi; Total

surveys

sent: 6; Total

surveys

returned: 4; Percentage

returned: 67; Of surveys returned, number of boards that targeted funds 

for employed worker training: 1; Percentage of boards that targeted 

funds for employed worker training: 25.



State: Missouri; Total

surveys

sent: 14; Total

surveys

returned: 14; Percentage

returned: 100; Of surveys returned, number of boards that targeted 

funds for employed worker training: 4; Percentage of boards that 

targeted funds for employed worker training: 29.



State: Montana; Total

surveys

sent: 2; Total

surveys

returned: 2; Percentage

returned: 100; Of surveys returned, number of boards that targeted 

funds for employed worker training: 0; Percentage of boards that 

targeted funds for employed worker training: 0.



State: Nebraska; Total

surveys

sent: 3; Total

surveys

returned: 2; Percentage

returned: 67; Of surveys returned, number of boards that targeted funds 

for employed worker training: 0; Percentage of boards that targeted 

funds for employed worker training: 0.



State: Nevada; Total

surveys

sent: 2; Total

surveys

returned: 2; Percentage

returned: 100; Of surveys returned, number of boards that targeted 

funds for employed worker training: 2; Percentage of boards that 

targeted funds for employed worker training: 100.



State: New Hampshire; Total

surveys

sent: 1; Total

surveys

returned: 1; Percentage

returned: 100; Of surveys returned, number of boards that targeted 

funds for employed worker training: 1; Percentage of boards that 

targeted funds for employed worker training: 100.



State: New Jersey; Total

surveys

sent: 17; Total

surveys

returned: 13; Percentage

returned: 76; Of surveys returned, number of boards that targeted funds 

for employed worker training: 5; Percentage of boards that targeted 

funds for employed worker training: 38.



State: New Mexico; Total

surveys

sent: 4; Total

surveys

returned: 2; Percentage

returned: 50; Of surveys returned, number of boards that targeted funds 

for employed worker training: 1; Percentage of boards that targeted 

funds for employed worker training: 50.



State: New York; Total

surveys

sent: 33; Total

surveys

returned: 21; Percentage

returned: 64; Of surveys returned, number of boards that targeted funds 

for employed worker training: 15; Percentage of boards that targeted 

funds for employed worker training: 71.



State: North Carolina; Total

surveys

sent: 23; Total

surveys

returned: 15; Percentage

returned: 65; Of surveys returned, number of boards that targeted funds 

for employed worker training: 2; Percentage of boards that targeted 

funds for employed worker training: 13.



State: North Dakota; Total

surveys

sent: 1; Total

surveys

returned: 1; Percentage

returned: 100; Of surveys returned, number of boards that targeted 

funds for employed worker training: 0; Percentage of boards that 

targeted funds for employed worker training: 0.



State: Ohio; Total

surveys

sent: 8; Total

surveys

returned: 3; Percentage

returned: 38; Of surveys returned, number of boards that targeted funds 

for employed worker training: 1; Percentage of boards that targeted 

funds for employed worker training: 33.



State: Oklahoma; Total

surveys

sent: 12; Total

surveys

returned: 11; Percentage

returned: 92; Of surveys returned, number of boards that targeted funds 

for employed worker training: 1; Percentage of boards that targeted 

funds for employed worker training: 9.



State: Oregon; Total

surveys

sent: 7; Total

surveys

returned: 6; Percentage

returned: 86; Of surveys returned, number of boards that targeted funds 

for employed worker training: 4; Percentage of boards that targeted 

funds for employed worker training: 67.



State: Pennsylvania; Total

surveys

sent: 22; Total

surveys

returned: 17; Percentage

returned: 77; Of surveys returned, number of boards that targeted funds 

for employed worker training: 10; Percentage of boards that targeted 

funds for employed worker training: 59.



State: Puerto Rico; Total

surveys

sent: 15; Total

surveys

returned: 8; Percentage

returned: 53; Of surveys returned, number of boards that targeted funds 

for employed worker training: 4; Percentage of boards that targeted 

funds for employed worker training: 50.



State: Rhode Island; Total

surveys

sent: 2; Total

surveys

returned: 2; Percentage

returned: 100; Of surveys returned, number of boards that targeted 

funds for employed worker training: 2; Percentage of boards that 

targeted funds for employed worker training: 100.



State: South Carolina; Total

surveys

sent: 12; Total

surveys

returned: 12; Percentage

returned: 100; Of surveys returned, number of boards that targeted 

funds for employed worker training: 10; Percentage of boards that 

targeted funds for employed worker training: 83.



State: South Dakota; Total

surveys

sent: 1; Total

surveys

returned: 1; Percentage

returned: 100; Of surveys returned, number of boards that targeted 

funds for employed worker training: 1; Percentage of boards that 

targeted funds for employed worker training: 100.



State: Tennessee; Total

surveys

sent: 13; Total

surveys

returned: 13; Percentage

returned: 100; Of surveys returned, number of boards that targeted 

funds for employed worker training: 7; Percentage of boards that 

targeted funds for employed worker training: 54.



State: Texas; Total

surveys

sent: 28; Total

surveys

returned: 23; Percentage

returned: 82; Of surveys returned, number of boards that targeted funds 

for employed worker training: 10; Percentage of boards that targeted 

funds for employed worker training: 43.



State: Utah; Total

surveys

sent: 1; Total

surveys

returned: 1; Percentage

returned: 100; Of surveys returned, number of boards that targeted 

funds for employed worker training: 0; Percentage of boards that 

targeted funds for employed worker training: 0.



State: Vermont; Total

surveys

sent: 1; Total

surveys

returned: 1; Percentage

returned: 100; Of surveys returned, number of boards that targeted 

funds for employed worker training: 1; Percentage of boards that 

targeted funds for employed worker training: 100.



State: Virginia; Total

surveys

sent: 17; Total

surveys

returned: 13; Percentage

returned: 76; Of surveys returned, number of boards that targeted funds 

for employed worker training: 2; Percentage of boards that targeted 

funds for employed worker training: 15.



State: Washington; Total

surveys

sent: 12; Total

surveys

returned: 10; Percentage

returned: 83; Of surveys returned, number of boards that targeted funds 

for employed worker training: 10; Percentage of boards that targeted 

funds for employed worker training: 100.



State: West Virginia; Total

surveys

sent: 7; Total

surveys

returned: 6; Percentage

returned: 86; Of surveys returned, number of boards that targeted funds 

for employed worker training: 3; Percentage of boards that targeted 

funds for employed worker training: 50.



State: Wisconsin; Total

surveys

sent: 11; Total

surveys

returned: 7; Percentage

returned: 64; Of surveys returned, number of boards that targeted funds 

for employed worker training: 4; Percentage of boards that targeted 

funds for employed worker training: 57.



State: Wyoming; Total

surveys

sent: 1; Total

surveys

returned: 1; Percentage

returned: 100; Of surveys returned, number of boards that targeted 

funds for employed worker training: 0; Percentage of boards that 

targeted funds for employed worker training: 0.



State: Totals; Total

surveys

sent: 595; Total

surveys

returned: 470; Percentage

returned: 79%; Of surveys returned, number of boards that targeted 

funds for employed worker training: 184; Percentage of boards that 

targeted funds for employed worker training: 39%.



[End of table]



Source: GAO survey of local workforce boards in the 50 United States, 

the District of Columbia, and Puerto Rico, August 2002.



[End of section]



Appendix III: Information on State Funding Sources:



Table 5: Funding Sources Identified by Officials in 16 States That Were 

Budgeted or Spent for Employed Worker Training for WIA Program Years 

2000 and/or 2001:



State: California; WIA 15% state set aside: P; TANF: [Empty]; Welfare-

to-work: P; State general revenue funds: [Empty]; Funds related to 

unemployment insurance: P; Demonstration: grants -Labor or HHS: a; H-

1B: grant: [Empty]; Other: [Empty].



State: Florida; WIA 15% state set aside: P; TANF: P; Welfare-to-work: 

[Empty]; State general revenue funds: [Empty]; Funds related to 

unemployment insurance: [Empty]; Demonstration: grants -Labor or HHS: 

a; H-1B: grant: [Empty]; Other: [Empty].



State: Hawaii; WIA 15% state set aside: P; TANF: P; Welfare-to-work: 

[Empty]; State general revenue funds: P; Funds related to unemployment 

insurance: [Empty]; Demonstration: grants -Labor or HHS: [Empty]; H-1B: 

grant: [Empty]; Other: [Empty].



State: Illinois; WIA 15% state set aside: [Empty]; TANF: [Empty]; 

Welfare-to-work: P; State general revenue funds: P; Funds related to 

unemployment insurance: [Empty]; Demonstration: grants -Labor or HHS: 

P; H-1B: grant: [Empty]; Other: [Empty].



State: Indiana; WIA 15% state set aside: P; TANF: P; Welfare-to-work: 

[Empty]; State general revenue funds: P; Funds related to unemployment 

insurance: P; Demonstration: grants -Labor or HHS: [Empty]; H-1B: 

grant: [Empty]; Other: P.



State: Louisiana; WIA 15% state set aside: P; TANF: P; Welfare-to-work: 

P; State general revenue funds: [Empty]; Funds related to unemployment 

insurance: P; Demonstration: grants -Labor or HHS: [Empty]; H-1B: 

grant: [Empty]; Other: P.



State: Minnesota; WIA 15% state set aside: [Empty]; TANF: P; Welfare-

to-work: [Empty]; State general revenue funds: P; Funds related to 

unemployment insurance: [Empty]; Demonstration: grants -Labor or HHS: 

a; H-1B: grant: [Empty]; Other: [Empty].



State: Montana; WIA 15% state set aside: P; TANF: P; Welfare-to-work: 

[Empty]; State general revenue funds: [Empty]; Funds related to 

unemployment insurance: [Empty]; Demonstration: grants -Labor or HHS: 

[Empty]; H-1B: grant: [Empty]; Other: P.



State: New Hampshire; WIA 15% state set aside: P; TANF: P; Welfare-to-

work: [Empty]; State general revenue funds: P; Funds related to 

unemployment insurance: P; Demonstration: grants -Labor or HHS: P; H-

1B: grant: P; Other: [Empty].



State: New York; WIA 15% state set aside: P; TANF: P; Welfare-to-work: 

[Empty]; State general revenue funds: P; Funds related to unemployment 

insurance: [Empty]; Demonstration: grants -Labor or HHS: a; H-1B: 

grant: [Empty]; Other: [Empty].



State: Oregon; WIA 15% state set aside: P; TANF: P; Welfare-to-work: 

[Empty]; State general revenue funds: [Empty]; Funds related to 

unemployment insurance: [Empty]; Demonstration: grants -Labor or HHS: 

P; H-1B: grant: [Empty]; Other: P.



State: Pennsylvania; WIA 15% state set aside: P; TANF: P; Welfare-to-

work: P; State general revenue funds: P; Funds related to unemployment 

insurance: [Empty]; Demonstration: grants -Labor or HHS: [Empty]; H-1B: 

grant: [Empty]; Other: [Empty].



State: Tennessee; WIA 15% state set aside: P; TANF: [Empty]; Welfare-

to-work: [Empty]; State general revenue funds: [Empty]; Funds related 

to unemployment insurance: P; Demonstration: grants -Labor or HHS: a; 

H-1B: grant: [Empty]; Other: [Empty].



State: Texas; WIA 15% state set aside: P; TANF: P; Welfare-to-work: 

[Empty]; State general revenue funds: P; Funds related to unemployment 

insurance: P; Demonstration: grants -Labor or HHS: P; H-1B: grant: 

[Empty]; Other: [Empty].



State: Utah; WIA 15% state set aside: [Empty]; TANF: [Empty]; Welfare-

to-work: [Empty]; State general revenue funds: P; Funds related to 

unemployment insurance: [Empty]; Demonstration: grants -Labor or HHS: 

[Empty]; H-1B: grant: [Empty]; Other: [Empty].



State: West Virginia; WIA 15% state set aside: P; TANF: [Empty]; 

Welfare-to-work: [Empty]; State general revenue funds: P; Funds related 

to unemployment insurance: [Empty]; Demonstration: grants -Labor or 

HHS: [Empty]; H-1B: grant: [Empty]; Other: P.



State: Total number

of states; WIA 15% state set aside: 13; TANF: 11; Welfare-to-work: 4; 

State general revenue funds: 10; Funds related to unemployment 

insurance: 6; Demonstration: grants -Labor or HHS: 4; H-1B: grant: 1; 

Other: 5.



[End of table]



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



[A] While these states were awarded Employment Retention and 

Advancement grants from HHS, state officials we contacted did not 

identify these grants as sources of funding for employed worker 

training.



[End of section]



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



DEPARTMENT OF HEALTH AND HUMAN SERVICES:



ADMINISTRATION FOR CHILDREN AND FAMILIES Office of the Assistant 

Secretary, Suite 60C 370 LEnfant Promenade, S.W. Washington, D.C. 

20447:



DATE: February 4, 2003:



TO: Sigurd R. Nilsen, Director:



Education, Workforce, Income Security U.S. General Accounting Office:



FROM: Wade F. Horn, Ph.D. Assistant Secretary:



for Children and Families:



SUBJECT:Comments on the GAO Draft Report: “WORKFORCE TRAINING: Employed 

Worker Programs Focus on Business Needs, but Revised Performance 

Measures Could Improve Access for Some Workers” (GAO-03-353):



The Administration for Children and Families has reviewed and is 

providing general comments on the GAO Draft Report: “WORKFORCE 

TRAINING: Employed Worker Programs Focus on Business Needs, but Revised 

Performance Measures Could Improve Access for Some Workers.” We concur 

with the information provided in this document.



If you have any questions regarding our comments, please contact Mack 

Storrs, National Expert/Policy Advisor, Office of Family Assistance, on 

(202) 401-9289.



Attachment:



COMMENTS OF THE ADMINISTRATION FOR CHILDREN AND FAMILIES ON THE GAO 

DRAFT REPORT: “WORKFORCE TRAINING: EMPLOYED WORKER PROGRAMS FOCUS ON 

BUSINESS NEEDS BUT REVISED PERFORMANCE MEASURES COULD IMPROVE ACCESS 

FOR SOME WORKERS” (GAO-03-353).



General Comments:



The Administration for Children and Families (ACF) appreciates the 

opportunity to comment on the General Accounting Office’s (GAO) draft 

report on workforce training programs for employed workers.



The methodology is based on a mail survey of all local workforce 

investment boards, telephone interviews with 16 States and on-site 

visits in four States. The report describes the extent to which local 

workforce boards under the Workforce Investment Act (WIA) and State 

agencies under the Temporary Assistance for Needy Families (TANF) 

program provide training assistance to employed workers. The report 

also describes the focus of employed worker training, challenges to 

such training and innovative approaches to address the personal issues 

the low-wage workers face to participate in training. The GAO found 

that two-thirds of the local workforce boards help train employed 

workers and all 1.6 States fund training to help low-wage workers 

retain jobs, increase wages and achieve career advancement. Community 

or technical colleges are often used to provide occupational training 

to upgrade needed skills.



The GAO findings are consistent with State-reported data and anecdotal 

information obtained by ACF. Increasingly, States are expanding on the 

post-employment services offered to current and former TANF clients. 

Providing training to current and former low-wage TANF clients is often 

critical to help them rise out of poverty and become economically 

independent. ACF is committed to identifying what works and ensuring 

that more resources are devoted to helping States identify and 

implement effective practices_ The information in GAO’s report will 

help States develop and enhance appropriate worker training programs, 

and provide services and supports that address the barriers to such 

training.



GAO Recommendation:



GAO provided no specific recommendations for the TANF program. 



Agency Comment:



As indicated in our general comments, ACF concurs with the information 

provided.



[End of section]



Appendix V Comments from the Department of Labor:



U.S. Department of Labor:

Assistant Secretary for Employment and Training 

Washington, D.C. 20210:



Mr. Sigurd R. Nilsen:



Director, Education, Workforce and Income Security Issues U.S. General 

Accounting Office 441 G Street N.W. Washington, D.C. 20548:



Dear Mr. Nilsen:



Thank you for the opportunity to comment on the GAO draft report 03-

353, “Employed Worker Programs Focus on Business Needs, but Revised 

Performance Measures Could Improve Access for Some Workers.”:



The study objectives were to determine: 1) The extent to which local 

areas and states provide assistance to train employed workers including 

funds for training; 2) the focus of such training efforts and the kind 

of training provided; and 3) when targeting training to low wage 

workers, the approaches state and local officials identified to address 

challenges in training this population. The draft report recommendation 

on page 31 goes to the issue of addressing challenges in training this 

population.



The report recommends that the Secretary of Labor “review the current 

WIA measure for change in the adult average earnings to ensure that 

this measure does not provide disincentives for serving employed 

workers.” The recommendation further suggests that Labor might consider 

having separate average earnings gains measures for employed workers.



We agree with the GAO recommendation to review the performance measure 

on earnings gains for incumbent workers with an eye towards eliminating 

unintended disincentives. In May 2002, through a competitive 

procurement prior to the issuance of GAO’s draft report, the Employment 

and Training Administration engaged Social Policy Research Associates 

to conduct an “Evaluation of the WIA Performance Measurement System.” 

The major goals of the evaluation are to determine the effectiveness of 

measures and strategies that are in place, and to identify alternatives 

that might more effectively accomplish the aims of the performance 

measurement system. One of the objectives of the evaluation is to 

determine the intended and unintended consequences of the performance 

measurement system.



GAO’s suggestion to have separate measures on earnings gains for 

incumbent workers will be an option for DOL consideration in making 

improvements to WIA performance. This input, together with the findings 

from the evaluation, will be used in ETA’s continuing review of the 

performance measures of the workforce investment system.



If additional information is required, please don’t hesitate to contact 

me at (202) 693-2700.



Sincerely,



Signed by Emily Stover DeRocco:



Emily Stover DeRocco:



[End of section]



Appendix VI GAO Contacts and Staff Acknowledgments:



GAO Contacts:



Sigurd R. Nilsen, Director (202) 512-7215

Joan T. Mahagan, Assistant Director (617) 565-7532:



Staff Acknowledgments:



Natalie S. Britton, Ramona L. Burton, Betty S. Clark, Anne Kidd, and 

Deborah A. Signer made significant contributions to this report, in all 

aspects of the work throughout the assignment. In addition, Elizabeth 

Kaufman and Janet McKelvey assisted during the information-gathering 

segment of the assignment. Jessica Botsford, Carolyn Boyce, Stuart M. 

Kaufman, Corinna A. Nicolaou, and Susan B. Wallace also provided key 

technical assistance.



[End of section]



Related GAO Products:



Older Workers: Employment Assistance Focuses on Subsidized Jobs and Job 

Search, but Revised Performance Measures Could Improve Access to Other 

Services. GAO-03-350. Washington, D.C.: January 24, 2003.



High-Skill Training: Grants from H-1B Visa Fees Meet Specific Workforce 

Needs, but at Varying Skill Levels. GAO-02-881. Washington, D.C.: 

September 20, 2002.



Workforce Investment Act: States and Localities Increasingly Coordinate 

Services for TANF Clients, but Better Information Needed on Effective 

Approaches. GAO-02-696. Washington, D.C.: July 3, 2002.



Workforce Investment Act: Coordination between TANF Programs and One-

Stop Centers Is Increasing, but Challenges Remain. GAO-02-500T. 

Washington, D.C.: March 12, 2002.



Workforce Investment Act: Better Guidance and Revised Funding Formula 

Would Enhance Dislocated Worker Program. GAO-02-274. Washington, D.C.: 

February 11, 2002.



Workforce Investment Act: Improvements Needed in Performance Measures 

to Provide a More Accurate Picture of WIA’s Effectiveness. GAO-02-275. 

Washington, D.C.: February 1, 2002.



Workforce Investment Act: Better Guidance Needed to Address Concerns 

Over New Requirements. GAO-02-72. Washington, D.C.: October 4, 2001.



Workforce Investment Act: Implementation Status and the Integration of 

TANF Services. GAO-/T-HEHS-00-145. Washington, D.C.: June 29, 2000.



Welfare Reform: Status of Awards and Selected States’ Use of Welfare-

to-Work Grants. GAO/HEHS-99-40. Washington, D.C.: February 5, 1999.



FOOTNOTES



[1] We administered the survey to local workforce investment board 

directors in the 50 United States, the District of Columbia, and Puerto 

Rico. 



[2] Although it is possible that state offices other than those we 

contacted could also use some TANF funds to support training for 

employed workers, contacting additional offices was outside of the 

scope of our work.



[3] A program year under WIA begins on July 1 of a year and ends on 

June 30 of the following year. A program year is designated by the year 

in which it begins. Thus program year 2000 began on July 1, 2000, and 

ended on June 30, 2001. 



[4] Pub. L. No. 105-220 (1998). WIA is administered and funded at the 

federal level through the Department of Labor and traditionally 

administered through a state’s workforce structure. 



[5] Pub. L. No. 104-193 (1996). TANF block grants to states were 

created under the Personal Responsibility and Work Opportunity 

Reconciliation Act of 1996. TANF grants are administered and funded at 

the federal level through the Department of Health and Human Services 

and are generally part of a state’s human services structure.



[6] In certain limited situations, dislocated worker funds can be used 

to provide services to employed workers as long as they meet WIA’s 

definition of a dislocated worker.



[7] For training current workers, Labor refers to training using WIA 

local funding as employed worker training and training using WIA state 

set-aside funds as incumbent worker training, to distinguish between 

the two funding sources. For the purposes of this report, however, we 

refer to all training provided to current workers as employed worker 

training. 



[8] U.S. General Accounting Office, Workforce Investment Act: Better 

Guidance and Revised Funding Formula Would Enhance Dislocated Worker 

Program, GAO-02-274 (Washington, D.C.: Feb. 11, 2002).



[9] Workforce development activities are coordinated through state and 

local workforce investment boards--the majority of board members must 

come from the private sector. The governor certifies local boards to, 

among other duties, select one-stop operators.



[10] The $121.6 million in fiscal year 2000 expenditures for education 

and training includes TANF funds available from fiscal years 1997, 

1998, 1999, and 2000. 



[11] U.S. General Accounting Office, Workforce Investment Act: 

Implementation Status and the Integration of TANF Services, GAO/

T-HEHS-00-145 (Washington, D.C.: June 29, 2000) and Workforce 

Investment Act: Coordination between TANF Programs and One-Stop Centers 

Is Increasing, but Challenges Remain, GAO-02-500T (Washington, D.C.: 

Mar. 12, 2002).



[12] Six states--Idaho, Mississippi, Ohio, South Dakota, Utah, and 

Wyoming--did not participate in the welfare-to-work state formula grant 

program. These states chose not to participate for various reasons, 

including concerns about their ability to provide state matching funds. 

Most states had at least one local service organization that received 

competitive grant funds. See U.S. General Accounting Office, Welfare 

Reform: Status of Awards and Selected States’ Use of Welfare-to-Work 

Grants, GAO/HEHS-99-40 (Washington, D.C.: Feb. 5, 1999).



[13] States were not required to provide matching funds for this grant 

but only 29 states applied--several did not use their grant funds or 

returned a part of the grant award.



[14] The Manpower Demonstration Research Corporation is a nonprofit, 

nonpartisan social policy research organization.



[15] Pub. L. No. 105-277 (1998).



[16] The fee for employers who apply for H-1B visa workers expires on 

September 30, 2003.



[17] U.S. General Accounting Office, High-Skill Training: Grants from 

H-1B Visa Fees Meet Specific Workforce Needs, but at Varying Skill 

Levels, GAO-02-881 (Washington, D.C.: Sept. 20, 2002).



[18] National Governors’ Association Center for Best Practices, Lessons 

from State Demonstration Projects: A Guide to Incumbent Worker Training 

(Washington, D.C., 1999) and A Comprehensive Look at State-Funded, 

Employer-Focused Job Training Programs (Washington, D.C., 1999).



[19] Our survey asked local workforce boards to identify if they had, 

since July 1, 2000, budgeted or spent any funding, including funding 

from federal, state, local or other sources, to target training for 

employed workers. Other than asking for some general funding 

information, economic sectors or industry clusters targeted, types of 

training, and providers for employed worker training, we did not ask 

the boards to further describe how the funds were spent. Some 

respondents did, however, provide additional comments on their efforts 

to provide employed worker training.



[20] For additional information on the number of boards, by state, that 

targeted funds for training employed workers, see app. II. 



[21] The mission of lifelong learning in this context is to develop the 

skills that workers need to meet current and future work demands. In 

Indiana, this program was designed to provide financial assistance to 

companies and organizations committed to expanding the skills of their 

existing workers.



[22] In our mail survey, year 2000 referred to the program year 

beginning July 1, 2000, and ending June 30, 2001; year 2001 referred to 

the program year July 1, 2001, to the time that the survey was 

completed--either several weeks prior to the end of the program year or 

the end of that year, June 30, 2002. The surveys were mailed on April 

24, 2002, and the survey was closed on August 16, 2002.



[23] In obtaining information from states and local boards on economic 

sectors, we used the terms for these sectors as defined under the new 

North American Industry Classification System (NAICS), which replaced 

the previous industry classification system starting in 1997. NAICS 

groups industries into 20 broad economic sectors, several of which are 

new. Two of these new sectors are Information, consisting of 34 

industries that produce information and cultural products, disseminate 

information or products, and process data; and Health Care and Social 

Assistance, consisting of 39 industries, most of them new, such as 

diagnostic imaging centers and community food services. 



[24] In addition to occupational skills and basic skills training, 

states frequently identified conflict resolution/team building/

negotiation (14 of 16 states) and productivity enhancement or quality 

assurance training (14 of 16 states) as types of training they funded. 

This emphasis may reflect the historic focus of states’ economic 

development offices on skills training that fosters economic 

competitiveness and growth. 



[25] According to the state official we interviewed, a small portion of 

the unemployment insurance fund is allocated to the department’s job 

skills training initiative. If the trust fund falls below $750 million, 

this money is not allocated to training. Since January 2002, no 

unemployment insurance funds were allocated to training since the fund 

has fallen below that level. 



[26] Vocational ESL refers to a type of English language training for 

speakers whose language is not English that focuses on vocabulary used 

in specific vocations. For example, vocational ESL for a certified 

nursing assistant would focus on medical terminology. 



[27] In this report, we noted that, as a result, only individuals who 

are most likely to be successful might be served. In addition, we 

reported that the need to meet performance measures might be the 

driving factor in deciding who receives WIA-funded services at the 

local level. See U.S. General Accounting Office, Workforce Investment 

Act: Improvements Needed in Performance Measures to Provide a More 

Accurate Picture of WIA’s Effectiveness, GAO-02-275 (Washington, D.C.: 

Feb. 1, 2002).



[28] See GAO-02-275.



[29] This includes Puerto Rico and the District of Columbia.



[30] Workforce Investment Act: Youth Provisions Promote New Service 

Strategies, but Additional Guidance Would Enhance Program Development, 

GAO-02-413 (Washington, D.C.: Apr. 5, 2002).



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