The U.S. Department of Labor (USDOL), Office of Inspector General, conducted an audit of the Metro North Regional Employment Board's (REB) H-1B technical skills training grant for the interim period November 15, 2000 through December 31, 2001. The overall audit objective was to evaluate if the REB was meeting the intent of the H-1B Technical Skills Training Program and the requirements of its grant. The subobjectives were to determine if:

• The project had been implemented as stated in the grant.

• Program outcomes were measured, achieved, and reported.

• Reported costs were reasonable, allocable, and allowable in accordance with applicable Federal regulations, and Office of Management and Budget (OMB) Circulars A-122, Cost Principles for Non-Profit Organizations and A-21, Cost Principles for Educational Institutions.

The H-1B Technical Skills Training Program was designed to help U.S. workers acquire the technical skills for occupations that are in demand and being filled by foreign workers holding H-1B visas. USDOL awarded the REB $2,372,522, for the period November 15, 2000 through November 14, 2002, to train semi-skilled incumbent workers of Lucent Technologies and AMETEK Aerospace to meet corporate needs for at least 430 skilled electrical/electronic technicians, testers and engineers.

AUDIT RESULTS

As of December 31, 2001, the REB had implemented a training project that served the target population. Additionally, the REB reported outlays in accordance with applicable Federal regulations and cost principles.

However, the project was adversely affected when Lucent, the predominant corporate partner, decided to outsource its work to contractors and lay off Lucent workers in June 2001. In response, the grant was modified in November 2001, and the REB refocused the project to include laid off Lucent employees and provide more-transferable credentials. Nevertheless, the REB needs to make additional changes to fully meet outcome goals and ensure sustainability.

Outcome Goals

• There were no wage gains and promotions because Lucent had eliminated the career level jobs. Also, AMETEK participants had not progressed far enough in the training program to achieve wage gains and promotions.

• While the REB was meeting enrollment goals, the project was not meeting goals for completion and credential attainment. Lucent layoffs were responsible for 53 percent of the participants dropping out (172 of 324) of the certificate training before completion and for 57 percent of training completers (80 of 141) not taking the exam to attain the Lucent tester certificate. Because AMETEK's training was delayed, no participants had completed the certificate training or enrolled in the associate degree training.

• To address the affects of Lucent's downsizing, the grant modification expanded the target group of incumbent workers to include recently laid off workers. However, the grant modification did not similarly modify outcome goals to more relevant outcomes, such as placements, replacement wages and job retention.

Sustainability

• The grant relied on corporate resources to ensure training continued after the grant ended. Project sustainability became doubtful when Lucent, the predominate corporate partner, laid off most of the Merrimack Valley work force and eliminated Electrical/Electronic Engineering Occupations (E3O) career ladder jobs.

REB'S RESPONSE TO DRAFT REPORT

In response to our draft report, the Executive Director of the REB stated that REB officials were in substantial agreement with our findings. The Executive Director also noted the difficult and unforeseen circumstances of plant layoffs and the eventual plant closing and stated that she believes the project continues to meet both the obligations and the intent of its grant.

Excerpts of REB's response to the draft report have been incorporated into appropriate sections of the report. The response is included in its entirety as an Appendix.

RECOMMENDATIONS

We recommend the Assistant Secretary for Employment and Training ensures that the REB addresses issues regarding project sustainability, and develops appropriate outcome measures to fully evaluate the changed program.

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