Labor Department Should Reconsider Its Approach to Employment Security Automation

HRD-78-169: Published: Dec 28, 1978. Publicly Released: Dec 28, 1978.

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The Employment Security Automation Project has been proposed by the Department of Labor to coordinate the development, implementation, and operation of automated employment security systems nationwide. Labor believed that, by consolidating the automation activities of both the Employment Service and the Unemployment Insurance Service, greater efficiency and economy would be achieved. The project has experienced many problems since its inception. The estimated cost has risen and may go even higher, and the completion date has been extended 3 years and will probably need to be extended further. States have had difficulty in implementing their plans because of insufficient computer capacity and delays in acquiring new computers.

The chief problem is that the methods of automation advocated by Labor have not been properly planned, tested, or evaluated for state use throughout the country. Although Labor justified the project by citing the advantages in combining the independent approaches to automation into one concerted effort, it is not clear that any real benefits are accruing from this approach. There is a general lack of criteria as to what the project should accomplish in any given state, and as a result, each state has a unique approach to automation. There is also a lack of management control. The project requires the participation of four separate organizations within Labor's Employment and Training Administration, but no one office or individual had overall authority and responsibility. Labor plans to have an outside contractor evaluate the project's impact and it is estimated that it will take 2 years to complete the evaluation.

Matter for Congressional Consideration

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Matter: Pending completion of the study, Congress should appropriate no further funds for the project expansion. Congress should direct the Secretary of Labor to commit no further funds for expanding the project, and only such funds for continuing the project that the Secretary finds are absolutely essential for States that have already signed agreements.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: The Secretary of Labor should suspend the expansion of this project and direct that a comprehensive study be done to: establish measureable objectives; assess how successful the project has been in meeting these objectives; estimate the computer resources required; and estimate the project's total cost. No further expansion should take place unless and until the Secretary has adequate evidence from the study results that the project should continue. If the project continues, the Secretary should assign total project responsibility and authority to one office within the Department. The Secretary should: reevaluate the benefits that can be achieved from computerized job matching to determine whether it is cost effective and will result in more effective operations; review plans for such a reevaluation of computer matching to assure that other factors, such as major changes in the economy, and local office organizational and procedural changes that affect performance are identified and taken into account; review the concept of cost absorption to determine whether it is feasible; and evaluate the automation of routine Employment Service operations, other than job matching, for costs and benefits. In addition, the Secretary should: reevaluate the goal of installing computer terminals in all local offices to determine whether it is necessary and cost effective; provide States with appropriate assistance in design and implementation of automated systems if these systems are determined to be cost effective; evaluate the concept of cost recovery to determine whether staffing can be reduced while maintaining satisfactory levels of program quality control and service to claimants; and revise the methodology for preparing cost recovery schedules, to insure that the projected efficiencies are reasonable and can be achieved by the States.

    Agency Affected:


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