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Performance and Reporting

Testimony: Implementation of the Workforce Investment Act

JULY 1, 1999

Mr. Chairman and Members of the Subcommittee:

     Thank you for the opportunity to appear before you today to discuss the implementation of the Workforce Investment Act of 1998. Today, I would like to provide an overview of the steps we have taken to date, all of which were designed to provide States and local communities the tools and information they need to design and implement new workforce investment systems that meet their unique needs. I will also identify the next steps in the implementation process as well as identify some of the key issues we have encountered as part of this process to date.


     The Workforce Investment Act (WIA), the first major reform of the nation's job training system in over 15 years, was signed into law by President Clinton approximately eleven months ago. In the past, the employment and training system was often duplicative and fragmented, and lacked a sufficient focus on the needs of its customers, both workers and employers, to accomplish a realignment of skill demands and worker supply. The WIA was a response to this reality. The enactment of this legislation is the culmination of a successful bi-partisan effort on the part of the Administration and Congress to design a revitalized system that provides workers with the information, advice, job search assistance, education, training, and support they need to get and keep good jobs, and that provides employers with skilled workers. This delivery system is being designed with the participation of employers, labor organizations, and education and community groups, which have a large stake in its success. The implementation of the WIA has been my priority and that of the Employment and Training Administration since the date of enactment. We are working with and encouraging States and local communities to seize this momentous opportunity for reform by thinking expansively and designing a customer-focused, comprehensive delivery system.

     Today, the Department has approved, in whole or in part, plans received from 9 States to begin implementing the reforms contained in the Act, and I know your Chairman, Senator Jeffords, is proud that Vermont is among them. All States must fully implement by July 1, 2000. However, it is important to note that every State, including States that have not yet submitted plans, are taking important steps towards reform. Later this morning, we will hear from one of those States, Minnesota, which is in the process of building a strong foundation for its new workforce investment system.

     The seven key reform principles that we identified during the legislative process remain our guiding points in this implementation phase, as we emphasize to our State and local partners that the implementation of WIA should bring about dramatic reforms, not simply business as usual. These principles are:

    1.     Streamlined Services through a One-Stop delivery system, which integrates a variety of programs at the street level to make their services more accessible for individuals and businesses alike.

    2.     Empowering Individuals, which is done in several ways. First, eligible individuals will have financial power through the use of Individual Training Accounts (ITAs) to obtain training at qualified institutions. Second, individuals will be empowered with information on the performance of training providers, through a system of consumer reports. This information is essential to ensuring informed training choices, and will be available to all One-Stop customers. Third, individuals will be empowered through a nationwide labor market information system, the expert advice, guidance, and support available through the One-Stop system, and the activities of the participating partners.

    3.     Universal access to services that allows any individual to access certain core employment-related services such as information about job vacancies, career options, or how to conduct a job search, write a resume, or interview with an employer.

    4.     Increased accountability for results by States, local, and training providers. This is achieved by working with the States to establish challenging performance measures and holding States and local communities accountable for meeting those measures. High levels of performance will be rewarded with incentive awards while continuous failure to perform may result in financial sanctions. Individual training providers will also face increased accountability as customers, empowered by ITAs, select training based on performance information available through the consumer reports system. In addition, training providers are required to meet State-established performance levels to be eligible to receive funds.

    5.     A strategic role for Local Boards and the private sector, through the creation of business-led Local Workforce Investment Boards (Local Boards) that are focused on strategic planning, policy development and oversight, rather than program administration.

    6.     State and local flexibility, which is provided by allowing States and local communities to build on existing reforms and to implement innovative, comprehensive workforce investment systems tailored to meet local needs.

    7.     Improved youth programs that tie activities and services more closely to labor market needs, create a strong connection between academic and occupational learning, and provide activities geared specifically toward youth development and provide the follow-up services that are central to the development of an effective youth program. An emphasis will be placed on the coordination of youth activities and the creation of a comprehensive network of youth programs that includes programs administered by a variety of agencies including the Departments of Labor, Education, and Housing and Urban Development. A youth council will be established under the Local Board in each local area to improve coordination among programs and youth-serving organizations, conduct strategic planning for youth programs, identify eligible providers for youth services, and conduct oversight of youth programs.

     One of the important efforts in support of these key principles has been the development, in cooperation with the States, of America's Career kit, a group of Internet tools that help American workers and employers navigate the labor market, exercise informed choice in their workforce decisions and make training decisions linked to occupations that are experiencing skill shortages. Five elements make up America's Career Kit:

  •      America's Job Bank, which is the largest and most frequently visited electronic job bank in the country, listing almost 1 million job vacancies that are updated on a daily basis, including significant numbers of vacancies in high tech occupations from major corporations and small businesses nationwide.

  •      America's Talent Bank, which allows American job seekers to post their resumes, and registered employers to electronically search resumes to find suitable candidates for job openings. America's Talent Bank now lists about 350,000 resumes, and that number is increasing daily.

  •      America's Career InfoNet, which provides career-related information, such as employer trends, for any job seeker, employer, school or career counselor.

  •      America's Learning eXchange, which provides information about available education and training opportunities, places where individuals and companies can readily find appropriate, already developed education and training courses; and

  •      O*NET, which is currently in the testing stage, and which will provide comprehensive information on job requirements and worker competencies for workers, employers, instructors, students and career counselors.

     This effort illustrates how partnerships between agencies and different levels of government can assist in developing more accessible, customer-friendly products and services for use in the workforce investment system that will enhance employment and training opportunities for American workers.


A Consultative Process

     The common thread throughout all of our implementation efforts is the emphasis on including our Federal, State and local partners, as well as other key stakeholder groups -- such as the employer community and organized labor -- in the discussions and deliberations in every phase of the implementation process. Shortly after enactment, the Department published and widely circulated a "plain English" summary of the Act in order to quickly raise awareness of the new reforms. The consultation process began in September 1998, with the publication of a Federal Register notice soliciting public comments on all aspects of implementation. That same month we established an interactive website (http:\\ designed to provide up-to-date information on our efforts, as well as to collect feedback and comments from the public. In October 1998, we published in the Federal Register, a White Paper entitled "Implementing the Workforce Investment Act of 1998," which outlined our vision for the new workforce investment system and provided a basis for the development of the Interim Final Regulations.

     Throughout the fall of 1998, we held a series of "Implementation Panels" with State and local practitioners. The purpose of these panels was to solicit input on whether we should issue regulations on various legislative provisions, and if regulations were needed, what language the regulations should contain. These panels were held at both the regional level and the national level.

     In addition, a total of 12 town hall meetings were held in 11 cities across the country (Boston, New York, Philadelphia, Atlanta, Chicago, Dallas, Kansas City, Denver, San Francisco, Seattle, and the District of Columbia). These meetings provided all interested individuals an opportunity to learn about the Act and the implementation process, as well as an opportunity to offer comments on specific issues of concern. Well over 1,200 individuals attended these town hall meetings, representing a variety of organizations ranging from veterans' organizations to regional planning organizations.

     Over the past eleven months, we have also held regular briefings for the staff of various intergovernmental organizations, such as the National Governor's Association, the National League of Cities, the U.S. Conference of Mayors, the National Association of Counties, and the Interstate Conference of Employment Security Agencies. The briefings have proven to be an effective way of both receiving input from, and providing information to, State and local partners. Similar meetings also have been held with representatives of the business and organized labor communities. We have also held regular briefings with the staff of the House and Senate authorizing committees to keep them apprised of our efforts and of specific issues as they arise.

     Since enactment, the Department has also been working closely with a variety of Federal agencies, including the Department of Education. Examples of this coordination include: (1) the issuance of joint guidance on implementation from the Employment and Training Administration, the Office of Vocational and Adult Education, and the Office of Special Education and Rehabilitative Services; (2) the participation of officials representing the Department of Education, Health and Human Services, and Housing and Urban Development in Department of Labor-sponsored training sessions; and (3) the convening of a number of interagency meetings to discuss a variety of issues related to implementation.

Development of Regulations

     The Interim Final Regulations, covering most aspects of titles I, III and V of the Workforce Investment Act were published in the Federal Register on April 15, 1999. We believe that the participatory manner in which these regulations were developed reflects the spirit of partnership and flexibility that is inherent in the Act. Through the mechanisms of public participation mentioned above, we were able to seek input from key stakeholders on proposed regulatory strategies. This process proved to be highly effective. In addition, each of the Federal agencies responsible for administering mandatory or additional One-Stop partner programs provided input into the development of the regulations.

     In order to train State and local staff on the new requirements, the Department held six two-day training sessions on the regulatory issues in five different cities around the country (Atlanta, Philadelphia, Chicago, Los Angeles and Dallas). Attendees could select from a variety of subject-specific workshops on topics such as administration, transition, governance and adult/dislocated worker services. Over 2,000 individuals attended these sessions, and the feedback from the sessions was very favorable.

     The format, and the substance, of the Interim Final Rule reflects the Administration's commitment to regulatory reform, and to writing regulations that are user friendly, in plain English, and in a question and answer format to make them easier to use. Further, in order to provide greater flexibility for State and local partners, the regulations do not include all of the procedures mandated under the Job Training Partnership Act (JTPA). As a result, they are only half as long as the regulations they will replace.

     The Interim Final Regulations are open for public comment for a total of 90 days. The comment period officially closes on July 14, 1999. We expect to receive a large number of comments. We will be reviewing the comments received and will brief all of the key stakeholders on our analysis prior to developing Final Regulations.

State Planning Process

     One of the innovative provisions contained in the WIA is the requirement that each Governor submit a five-year strategic State Workforce Investment Plan (State Plan) to the Secretary of Labor which includes title I of WIA as well as the Wagner-Peyser Act. The plan is to describe statewide workforce investment activities, explain how the requirements of the Act will be implemented, and outline how special population groups will be served.

     On February 25, 1999, the Department published State Planning Guidance in the Federal Register which provided instructions on how to develop State Plans. The guidance emphasizes the importance of having working partnerships in place between the Governor, local elected officials, Local Boards and other partners in the workforce investment system. In addition, the guidance stresses that the State Plan -- with a statewide vision, goals, policies, criteria and measures -- should become a living document, a management tool that Federal, State and local partners will use to guide the evolution of the workforce investment system and to assess progress toward State goals.

     In order to allow for maximum flexibility, we are allowing States to implement WIA at any time between July 1, 1999 and July 1, 2000. As a result, we will be accepting State Plans for review on a "rolling" basis up to April 1, 2000. In addition, States that are not ready to fully implement WIA, but wish to begin implementing parts of WIA prior to July 1, 2000, are authorized to submit a transition plan to the Department. An approved transition plan allows a State to implement specific portions of WIA during the transition period leading up to full implementation. To date, a total of 13 States have submitted State Plans to the Department.

     States also have the option of submitting a unified plan under section 501 of WIA. This provision allows a State to submit a single plan for up to 14 Federal education and training programs. Six of the 13 plans received were unified plans. A workgroup comprised of staff from the Departments of Labor, Education, Health and Human Services, Housing and Urban Development, and the Social Security Administration have developed and implemented a coordinated review process for unified plans. In addition, at the encouragement of the Executive Office of the President and the National Partnership for Reinvention of Government, these Federal agencies are beginning the process of developing clearer guidance and perhaps even a sample plan to facilitate the development of unified plans. We expect to issue this guidance before the end of the calendar year.

     The development of unified plans poses particular challenges, especially since the unique planning requirements of each affected statute must be met in addition to carrying out the coordinated planning. We are encouraging States to utilize the unified State planning process, and we will use our experience to determine whether any legislative changes should be recommended.

Performance Accountability

     The WIA calls for a comprehensive accountability system to assess the effectiveness of State and local areas in providing employment and training services. The Act requires:

  •      A focus on results defined by core indicators of performance;

  •      Measures of customer satisfaction with programs and services;

  •      A strong emphasis on continuous improvement;

  •      Annual performance levels developed as a result of negotiations among Federal, State and local partners;

  •      Incentive awards and financial sanctions based on State performance; and

  •      Reporting and dissemination of performance results.

     The Department is approaching the development of this new performance accountability system on two tracks. First, we are developing definitions of the core measures of performance and plan to issue temporary reporting instructions for those States who are implementing WIA in Program Year (PY) 1999. Second, we are working with States and local governments to develop definitions and reporting requirements for use in PY 2000 and beyond. Part of this process will include using the lessons learned from the early implementing States and working with the Department of Education and other Federal agencies to develop common definitions for performance measures across programs. In general, the Department is considering PY 1999 to be a transition year. As a result, we may make substantial changes prior to PY 2000. Therefore, early implementing States will have the opportunity to renegotiate levels of performance before the second year of their approved plan.

     The Department has published, in the Federal Register, a series of consultation papers in order to obtain public comments on various aspects of the performance accountability system. The papers have focused on: (1) the definition of the core measures; (2) the negotiation of levels of performance; and (3) the implementation of the incentive and sanction systems. Three more papers are scheduled to be published within the next two weeks, focusing on: (1) customer satisfaction; (2) continuous improvement; and (3) additional reporting items.

Youth Opportunity Area Grants

     Secretary Herman has placed a special emphasis on America's youth, particularly those who are out-of-school. As the nation enters the 21st century, almost 15 million young people between the ages of 16 and 24 are not enrolled in school. About 90 percent of these youth don't have a college degree, and in our country's largest urban school districts, less than 50 percent of each year's entering 9th grade class graduates four years later. Despite the strong economy, a majority of out-of-school youth in high poverty areas do not have a job. On June 2, 1999, President Clinton and Secretary Herman announced a grant competition to select new sites for the Department's Youth Opportunity Grant initiative, a quarter-billion dollar investment authorized as part of the WIA that is the foundation of the Secretary's focus on these youth.

     The grants will support projects that will substantially increase the employment rate of youth living in selected high-poverty neighborhoods. The grants will emphasize placing youth in private-sector jobs, and include complementary efforts to keep youth in school, increase their enrollment in college, and provide work experience in community-service projects.

     This competition will award grants of up to $12 million to each new recipient. The grant announcement was published in the Federal Register on June 2, 1999, and the competition closes on September 30, 1999. In order to assist potential Youth Opportunity Grant applicants in developing quality grant proposals, the Department hosted a series of five Technical Assistance Conferences. These one-day sessions, held in five cities across the country (Chicago, Denver, Los Angeles, Atlanta, and the District of Columbia), provided information that clearly explained the Youth Opportunity Grant application process and requirements, including the purpose of the grants and the grant review process.

Technical Assistance

     In order to meet the requirements of section 170 of WIA, which requires the Secretary to provide technical assistance, training, staff development and related activities, the Department has been working with representatives of States and local communities to jointly develop and implement a Technical Assistance and Training initiative. This initiative will be designed to:

  •      Assess the workforce system's technical assistance and training needs on an ongoing basis;

  •      Create an electronic library of training and resource materials that are directly available to the user;

  •      Continuously build staff capacity at the Federal, State and local levels; and

  •      Establish a mechanism and process to coordinate the ongoing development and delivery of technical assistance and training resources.

     We will be meeting with representatives of the intergovernmental organizations on July 23rd to discuss our proposed strategy as well as their specific technical assistance roles under the Act.

     As part of this strategy, and in addition to the previously mentioned consultation efforts, we are in the midst of several projects designed to provide technical assistance to States and localities as they begin implementing WIA. For example, a "readiness checklist" has been distributed to States and local agencies to assist them in planning for implementation. In addition, a meeting of the early implementing States is going to be held in Washington, DC on July 12 and 13, 1999. Another key conference, at which WIA implementation will be a major focus, is JETT*CON -- the Joint Employment and Training Technology Conference -- which will be held in Washington beginning July 14, 1999. I invite all of the members of the Subcommittee to attend this innovative conference as my guests so you can see, first hand, how emerging technologies can enhance the development of the new workforce investment system.

A Common Identity

     Customer awareness of the workforce investment system, rather than of individual programs, must be established in order for WIA to be a success. In order to promote this customer awareness, the Department has developed a plan to educate employers, the general public and the workforce investment delivery system through a well-defined public information strategy. The focus of this strategy will be to reinforce that WIA is the framework for improving the quality of all distinct components of the system, such as the dislocated workers and welfare-to-work programs. This customer focus will be achieved by delivering information, expertise and resources that have real value, including:

  •      Aggressively promoting ideas that work;

  •      Constantly providing services of value to our customers;

  •      Promoting the successful outcomes of our customers; and

  •      Advocating excellence in employment and training.

     The cornerstone of this plan is the development of a "brand" -- America's Jobs Network -- for the workforce investment system, which will be attached to all Federally funded activities nationwide. Components of this branding effort will include the establishment of a toll-free number through which all individuals will be able to access information relating to services available through the workforce investment system, as well as newsletters, videos and seminars. The Department will offer branded publication templates for State and local use and will pursue logo and tagline placement on all WIA-funded locations and materials. This process will allow States and localities to develop their own customized identity while maintaining connection and identification with America's Jobs Network.


     Today I would like to mention four key issues we have encountered as part of the implementation process.

1. How do we ensure reform?

     A critical challenge we, as one of the Federal partners, face in the implementation of WIA is promoting reform in an effort to ensure that WIA does not end up simply being JTPA with a new name. The emphasis on State and local flexibility amplifies this challenge. In this new environment, the Department is utilizing a variety of approaches, such as policy guidance, technical assistance including the use of our interactive website, and training, to encourage reform.

     For example, the Department of Labor believes that State Workforce Investment Boards must reflect the membership, and include active participation, of all the entities provided in the statute to ensure the successful implementation of the reforms embodied in the WIA. However, States are authorized to maintain, or grandfather, their existing boards under certain conditions. In an effort to stress the importance of new boards, the Secretary sent a letter to every Governor encouraging them to identify and establish their State Workforce Investment Boards as early as possible, and stating that the Department is committed to providing assistance to States throughout the process. In addition, the Department often calls upon business and labor groups to stress the importance of various reform principles through their membership channels.

2. How do we ensure maximum participation?

     WIA provides us with a framework for reform, but realization of its full potential requires cooperation at the Federal, State and local levels to initiate and sustain the momentum for change. The Department has been engaged in several efforts designed to increase participation at the Federal level.

     The central effort at the Federal level is increasing the participation of other Federal programs in the workforce investment system. Conversations have been taking place with staff from numerous Federal agencies, including the Departments of Education, Health and Human Services, Transportation, Agriculture, and Housing and Urban Development, as well as the Social Security Administration. To underscore the Administration's commitment to interagency coordination, the President has tasked the National Economic Council with convening a series of Deputy Secretary-level meetings to discuss WIA implementation issues which impact all of these various agencies. In general, the meetings are addressing three key issues: (1) unified planning; (2) performance accountability; and (3) participation in the One-Stop delivery system. In addition to these Deputy Secretary-level meetings, a number of staff level workgroups have been established to deal with the specifics of these key issues.

     In another effort to enhance interagency cooperation and effective innovative implementation of WIA, Gene Sperling, Director of the National Economic Council, sent a letter, dated May 31, 1999, to a wide variety of stakeholder organizations, asking them to identify non-legislative barriers to integrated service delivery, circumstances that restrict or prohibit collaboration, or Federal requirements that represent impediments to One-Stop delivery. The organizations have been asked to send their comments to the National Economic Council, which will then host a meeting of the groups to discuss possible solutions for overcoming the barriers identified and to outline next steps.

3. Size of State and Local Boards.

     One of the key issues of concern to State and local communities is the size of State and Local Boards. The Department has heard many concerns that statutory membership requirements relating to the Boards will lead to large, unwieldy, and unmanageable boards. This is especially an issue for Local Boards, due to the requirement that all One-Stop partners must be represented on the board. This requirement, in addition to the requirement for having a business majority, may result in very large boards in many areas. While the Department understands the importance of broad representation on the boards, we are concerned that the large size of the new boards will result in many States and Local areas choosing to grandfather their existing boards, which runs counter to WIA reform principles.

     While the Department was unable to fully resolve this issue in the regulations due to statutory constraints, we did not add any additional requirements regarding the number of members required. In the preamble to the Interim Final Regulations we stated that problems associated with large board size can be addressed in a number of ways, such as through the use of committees. In addition, we will be providing technical assistance on creative approaches State and Local Boards may wish to consider in addressing this issue.

4. Lack of Hold-Harmless Provision.

     Another issue that States and local areas are most concerned about is the lack of a local hold-harmless provision in the first two years a State implements WIA. JTPA contains a hold-harmless provision that ensures that, in a given fiscal year, no service delivery area will be allocated less than 90 percent of its allocation percentage for the preceding fiscal year. The purpose of this provision is to ensure that local areas do not experience dramatic shifts in funding. The Senate bill (S. 1186) as passed, contained a hold-harmless provision similar to the one contained in JTPA. The House bill (H.R. 1385) did not contain any hold-harmless provision for local areas.

     During the House/Senate Conference, the Senate provision was altered so that the hold-harmless would not take effect until the third fiscal year a State is operating under WIA. We understand this change was made because the existence of a hold-harmless in the first two years of WIA could deter the establishment of new local areas. While the lack of hold-harmless would, in theory, distribute funds to areas in greatest need, we are aware that many local areas may experience a dramatic reduction in funding that may result in reduced services and the need to lay off staff.

     We have received many requests to impose a hold-harmless provision through the regulatory process. However, the only way to address this problem would be through an amendment to WIA. Until a legislative resolution of this issue is possible, the Department, under the Secretary's transition authority, is allowing Governors in early implementing States to utilize the JTPA hold-harmless provision in PY 99. This policy decision was addressed in the preamble to the Interim Final Regulations.


     The next twelve months will be a crucial period for the implementation of WIA. Over the next year we will be working with other Federal agencies to address any obstacles to effective implementation and seamless service that exist at the Federal level. In addition, we will be working with the early implementing States to ensure they have the information and support they need to successfully implement their new workforce investment systems. At the same time, we will be working closely with the remaining States to provide them with the assistance they need to develop their comprehensive State Plans. We will be using the lessons learned from all of these States in determining how best to modify our regulations and guidance documents prior to issuing final documents later this year. In general, we expect that the regulations, the State Planning Guidance, and the Performance Accountability specifications will all change based on public comment and the experience of the early implementing States.

     We look forward to working with the members of this Subcommittee and your counterparts in the House as we continue our implementation efforts. I believe that we have established an open and effective working relationship with your staff which has served us well in our efforts to date. Please feel free to call on us whenever issues arise or you need additional clarification on any aspect of our process.

     Mr. Chairman, this concludes my prepared testimony. My colleagues and I will be happy to respond to any questions you and other members of the Subcommittee may have.