November 15, 2005
The Fiscal Year 2005 Performance and Accountability Report is the fifth
report I have had the pleasure of submitting to the Congress and the American
people on behalf of the hardworking and dedicated employees of the Department
of Labor. This report is one way we can critically assess our progress in order
to set new directions for the future of the programs we implement on behalf of
America's workers. Our four strategic goals A Prepared
Workforce, A Secure Workforce, Quality Workplaces, and
A Competitive Workforce have provided a clear focus for the
program results we have been called upon to deliver to the Nation.
President's Management Agenda We are proud of the
management improvements made in Fiscal Year 2005 under the President's
Management Agenda, which have helped us to support our program activities
in more effective and efficient ways. The Department of Labor has been working
diligently and creatively to meet the President's Management Agenda
commitments in the government-wide initiatives of Strategic Management of
Human Capital, Competitive Sourcing, Improved Financial Performance, Expanded
Electronic Government, and Budget and Performance Integration;
and in the agency-specific areas of Faith-Based and Community Initiatives,
Real Property, and Eliminating Improper Payments. Not only have
our achievements placed us among the best in government the first Agency
to achieve "green" scores in all government-wide initiatives but the
Department has also been awarded the President's Quality Award in both
Strategic Management of Human Capital and Budget and Performance
Integration.
Skills Competency for a Competitive Workforce
Moving Forward in Job Training Programs The best way to
create jobs is to encourage the conditions that foster growth, encourage
innovation, and help workers invest in new job skills. Maintaining our
competitive advantage is achieved by increasing the skill level of America's
workforce. To prepare for a lifetime of successful employment, workers must
have the ability to continually upgrade their skills and access job training
opportunities. The Department is continuing to reform the current job training
system in order to arm workers with relevant skills so they can get good jobs.
The Department is seeking ways to give States and local communities maximum
flexibility while requiring them to set rigorous performance milestones; spend
more of their allocated funds on actual worker training; enhance individual
choice in creating customized training programs; and strengthen the One-Stop
Career Center System.
Strategies for Workforce Protections Over the past
few years, the Department has more effectively targeted our enforcement
resources. One of the keys to strengthening worker protection is compliance
assistance so that workers and employers understand their rights and
responsibilities. In the safety and health area, our partnerships and alliances
with industry, trade associations, unions, and educational institutions are
growing and getting stronger.
Last year, when the new Overtime Security Rules went into effect, the
Department launched the FairPay Web site (http://www.dol.gov/fairpay). The site provides
comprehensive information, including on-line training seminars so that all
interested parties can understand the new rules.
The Department is also strengthening the protections afforded to members
of labor organizations, empowering union members through greater financial
transparency and accountability.
Retirement Security Meeting the
Challenge A key priority of the Department is the security of
workers' pensions. The promises that companies have made to their workers and
retirees must be kept, and tackling the problem of under-funded pension plans
is critical. Working with Congress, the Department is pursuing legislation to
ensure the financial health of the single-employer, defined benefit plan
system. The Department will continue to provide a wide range of educational and
outreach activities to plan sponsors, participants and beneficiaries to help
them understand their legal obligations and rights, identify and correct
problems early on, and redress inadvertent and intentional violations.
Supporting Our Military Service Members Is More Important Than
Ever The importance of the Department's role in helping veterans
and returning service members secure post-service employment opportunities
cannot be overstated. The Department of Labor is committed to protecting the
employment rights of returning service members, and will assist veterans,
reservists, and transitioning service members in finding the jobs or job
training opportunities that tap their unique skills and potential.
Hurricane Response and Recovery The Department,
along with many other Federal agencies, is playing a key role in cleanup and
recovery efforts in the wake of Hurricanes Katrina and Rita. Even prior
to the hurricanes making landfall, the Department was assessing response
options and pre-positioning key personnel and resources for the disaster. The
Department continues to work with state and local governments, faith-based and
community organizations, relief agencies, and directly with impacted
individuals to provide emergency jobs, income support, short-term skills
development and other vital economic aid to rejuvenate the hurricane-impacted
regions and their populations. In addition, the Department is continuing to
ensure proper compliance with all applicable wage laws in the contracted
cleanup and recovery work, and has funded health and safety training programs
as well as providing on-the-ground health and safety compliance
professionals to minimize injuries and fatalities attributable to this
potentially hazardous work.
Program Data and Financial Performance DOL managers
routinely use the performance and financial data summarized in this report to
improve the quality and cost effectiveness of services to the public. Given its
importance for purposes of accountability, it is crucial to have confidence in
the validity of this information. Several procedures are used routinely to
verify data quality; findings for the current fiscal year are described
below.
Performance information presented in this report is complete and
reliable as defined by the Office of Management and Budget (OMB) in Circular
A-11. The Federal Financial Management Improvement Act of 1996 (FFMIA) requires
agencies to implement and maintain financial management systems that are in
substantial compliance with OMB Circular A-127, Joint Financial Management
Improvement Program (JFMIP) requirements, Federal accounting standards, and the
United States Government Standard General Ledger (SGL) at the transaction
level. All Department of Labor financial management systems substantially
comply with FFMIA.
The Federal Managers' Financial Integrity Act of 1982 (FMFIA) requires
the Secretary to report to the President and the Congress on the adequacy of
management controls in safeguarding resources. Based on the unqualified
opinion, audit results and quarterly and year-end assurances given by the
agency officials and other pertinent information, the Department of Labor's
accounting systems and internal controls comply with the provisions of the
FMFIA.
Conclusion This Performance and Accountability
Report will provide a useful overview of this Department's core missions and a
clear assessment of our program and financial results. The employees of the
Department are dedicated to keeping the American workforce strong and
competitive. We will continue to provide programs and services that keep
America's workers safe and healthy on the job, protect workers' retirement
security, ensure fair compensation, and maintain the competitiveness of our
Nation's workforce in the 21st century.
Elaine L. Chao Secretary of Labor
Mission The Department of Labor promotes the
welfare of the job seekers, wage earners, and retirees of the United States by
improving their working conditions, advancing their opportunities for
profitable employment, protecting their retirement and health care benefits,
helping employers find workers, strengthening free collective bargaining, and
tracking changes in employment, prices, and other national economic
measurements.
Vision We will promote the economic well-being of
workers and their families; help them share in the American dream through
rising wages, pensions, health benefits and expanded economic opportunities;
and foster safe and healthful workplaces that are free from discrimination.
Organization The Department of Labor is organized
into component agencies and offices that administer the various statutes and
programs for which the Department is responsible. These programs are carried
out through a network of regional offices and smaller field, district, and area
offices, as well as through grantees and contractors. The largest program
agencies, each headed by an Assistant Secretary or Commissioner, are the
Employment and Training Administration (ETA), Employee Benefits Security
Administration (EBSA), Pension Benefit Guaranty Corporation (PBGC), Employment
Standards Administration (ESA), Occupational Safety and Health Administration
(OSHA), Mine Safety and Health Administration (MSHA), and Bureau of Labor
Statistics (BLS). An organization chart and agency mission statements appear on
the following pages.
DOL Organization Chart
Agency Missions
Bureau of Labor Statistics (BLS) To produce, analyze, and
disseminate essential and accurate statistical data in the field of labor
economics to the American public, the U.S. Congress, other Federal agencies,
State and local governments, business, and labor.
Employee Benefits Security Administration (EBSA) To protect
the retirement, health, and other benefits of over 150 million participants and
beneficiaries in private sector employee benefit plans.
Employment Standards Administration (ESA) To protect the
welfare and rights of, and generate equal employment opportunity for, American
workers by promoting compliance with the various laws that it administers; and
to provide the best possible program for income replacement, medical treatment,
and rehabilitation for injured Federal workers, longshore workers, and miners.
Employment and Training Administration (ETA) To contribute
to the more efficient functioning of the U.S. labor market by providing high
quality job training, employment, labor market information, and income
maintenance services primarily through State and local workforce development
systems.
Bureau of International Labor Affairs (ILAB) To carry out
the Secretary's international responsibilities, develop Departmental policy and
programs relating to international labor activities, and coordinate
Departmental international activities involving other U.S. Government agencies,
intergovernmental organizations, and non-governmental organizations.
Mine Safety and Health Administration (MSHA) To protect the
safety and health of the Nation's miners by assuring compliance with Federal
safety and health standards through inspections and investigations and working
cooperatively with the mining industry, labor, and the States to improve
training programs aimed at preventing accidents and occupationally-caused
diseases.
Office of the Assistant Secretary for Administration and Management
(OASAM) To develop and promulgate policies, standards, procedures,
systems, and materials related to the resource and administrative management of
the Department and ensure execution of such policies and directives. OASAM
provides leadership and policy guidance in support of the President's
Management Agenda, including the Department's efforts to achieve "green" scores
on the Executive Branch Management Scorecard. In addition, OASAM produces the
Department's Strategic Plan and Annual Performance and Accountability Report.
Office of the Assistant Secretary for Policy (OASP) To
provide advice and assistance to the Secretary and Deputy Secretary in a number
of areas, including policy development, regulations, program implementation,
compliance assistance strategies, program evaluations, research, budget and
performance analysis, and legislation.
Office of the Chief Financial Officer (OCFO) To shape a
fiduciary environment where decision makers readily have and actively use high
quality financial and performance information to make and implement effective
policy, management, stewardship, and program decisions.
Office of Congressional and Intergovernmental Affairs
(OCIA) To provide direction and coordination for congressional and
intergovernmental liaison and outreach activities for the Department of Labor.
OCIA assists the Secretary, Deputy Secretary, agency heads, and Departmental
staff to develop effective programs and strategies to promote the Department's
goals and objectives on Capitol Hill as well as among State and local
officials.
Office of Disability Employment Policy (ODEP) To provide
leadership to increase employment opportunities for adults and youth with
disabilities on both the supply and demand sides of the labor market, by
expanding access to training, education, employment supports, assistive
technology, integrated employment, entrepreneurial development, and
small-business opportunities; and by building partnerships with employers and
State and local agencies to increase awareness of the benefits of hiring people
with disabilities, and to facilitate the use of effective strategies related to
employment of people with disabilities.
Office of Inspector General (OIG) To serve the American
worker and taxpayer by conducting audits, investigations, and evaluations that
result in improvements in the effectiveness, efficiency, and economy of
Departmental programs and operations; prevent fraud and abuse in DOL programs
and labor racketeering in the American workplace; and provide advice to the
Secretary and the Congress on how to attain the highest possible program
performance.
Office of Public Affairs (OPA) To develop and implement
policies and standards governing information and public affairs activities
carried out by the Department, including planning and management of
comprehensive national and regional public affairs programs and activities in
support of the Secretary's goals and Departmental programs and activities. OPA
also manages DOL's Internet and Intranet web sites to ensure that content and
services are accurate, timely, regularly updated and aligned with the
Department's mission and Secretarial goals.
Occupational Safety and Health Administration (OSHA) To
assure so far as possible for every working man and woman in the Nation safe
and healthful working conditions. This includes such strategies as rulemaking,
enforcement, compliance assistance, outreach, and partnerships to enable
employers to maintain safe and healthful workplaces.
Pension Benefit Guaranty Corporation (PBGC) To protect
retirement-plan participants' pension benefits and support a healthy retirement
plan system by encouraging the continuation and maintenance of private pension
plans; protecting pension benefits in ongoing plans; providing timely payments
of benefits in the case of terminated pension plans; and making the maximum use
of resources and maintaining premiums and operating costs at the lowest levels
consistent with statutory responsibilities.
Office of the Solicitor (SOL) To ensure that the Nation's
labor laws are forcefully and fairly applied in implementing the priority
enforcement initiatives of and defending the actions taken by the Department;
and to advise agency officials on legal matters, including the development of
regulations, standards, and legislation.
Veterans' Employment and Training Service (VETS) To provide
veterans and transitioning service members with the resources and services to
succeed in the 21st century workforce by maximizing their employment
opportunities, protecting their employment rights, and meeting labor market
demands with qualified veterans.
Women's Bureau (WB) To improve the status of wage-earning
women, improve their working conditions, increase their efficiency, and advance
their opportunities for profitable employment.
Introduction
This report, prepared in accordance with the Reports Consolidation Act
of 2000, presents the results of the Department of Labor's (DOL) program and
financial performance for FY 2005. It is divided into four sections:
- The Secretary's Message is a letter from the chief
executive that identifies the Department's "bottom line" at the mission level.
It includes highlights of achievements for the year and communicates direction
and priorities.
- Management's Discussion and Analysis (MD&A) introduces
the Department's mission, vision and organization, summarizes program and
financial performance, and addresses major management challenges. The MD&A
also reports on DOL's progress in implementing the President's Management
Agenda.
- The Performance Section narratives and graphic presentations
of program results assess progress in achieving the Department's goals as
presented in the Strategic Plan and Performance Budget
- The Financial Section demonstrates our commitment to
effective stewardship over the funds DOL receives to carry out the mission of
the Department, including compliance with relevant financial management
legislation. It includes the Independent Auditor's Report an
independent opinion on the Financial Statements provided by the Department's
Office of Inspector General (OIG); Management and Performance Challenges
a report on the top management issues identified by the
OIG and the Department's progress in resolving them; and the Annual
Financial Statements.
In addition, five Appendices supplement the performance and
financial sections by providing detailed performance information, summaries of
significant audits and evaluations, additional information on improper payments
reduction, a list of acronyms and a list of Web sites featuring labor programs
and issues.
FY 2005 marks the seventh year that the Department of Labor has reported
program results under the Government Performance and Results Act (GPRA).
Program goals that are key to the accomplishment of Departmental strategic and
outcome goals as presented in the FY 2003-2008 Strategic Plan1 were selected for inclusion in the Department's FY 2006
Performance Budget Overview2. These performance
goals and their indicators provide the basis for assessments of the
Department's effectiveness in this section.
This report includes performance goals from two different reporting
periods in that Workforce Investment Act (WIA) programs are "forward-funded,"
meaning that their spending and performance goals are tracked on a cycle that
lags the Federal Fiscal Year (FY) by nine months. This period is referred to as
a Program Year (PY); such goals being reported on in this document cover July
1, 2004 to June 30, 2005 (PY 2004). PY 2005 goals will appear in the FY 2006
report.
The Department's goal structure has three levels. Strategic goals
describe general aims that emerge from the Department's mission. Each of these
goals in turn has several outcome goals that define general results DOL
agencies can influence. These are long term objectives that in most cases
involve more than one DOL agency. Finally, performance goals that support each
outcome goal provide program-level clarity of purpose. Each performance goal
has associated indicators and targets to measure our impact on a continuous
basis.
Program Performance Overview DOL's four strategic
goals A Prepared Workforce, A Secure Workforce, Quality Workplaces
and A Competitive Workforce express outcomes associated
with our mission, vision and theme, and serve to focus Departmental efforts on
the links between activities and their higher purpose. The table below
indicates FY 2005 program performance goal achievement by strategic goal.
Of the 25 performance goals on which DOL is reporting in FY 2005, the
Department achieved nine, substantially achieved3
six and did not achieve ten. The percentage achieved or substantially achieved
totals 60 percent comparable to the FY 2004 average of 63 percent (19 of
the 30 performance goals supporting DOL strategic goals).
DOL Strategic Goal |
Achieved |
Substantially Achieved
|
Not Achieved
|
Total |
Goal 1 A Prepared Workforce Enhance Opportunities
for America's Workforce |
4 |
1 |
4 |
9 |
Goal 2 A Secure Workforce Promote the Economic
Security of Workers and Families |
2 |
3 |
1 |
6 |
Goal 3 Quality Workplaces Foster Quality
Workplaces that are Safe, Healthy and Fair |
2 |
1 |
3 |
6 |
Goal 4 A Competitive Workforce Maintain
Competitiveness in the 21st Century Economy |
1 |
1 |
2 |
4 |
Total |
9 |
6 |
10 |
25 |
Below is a breakdown, by strategic goal, of FY 2005 achievements and
significant developments. A tally of goals achieved, while providing an
indication of whether DOL is on schedule with its plan, does not convey any
actual performance information. To understand what was achieved in terms of
benefits to the public, it is necessary to look not just at whether targets
were reached but also at whether observed results indicate positive program
impacts. The following summaries focus on significant trends and their
implications. Tables present the goal number, responsible agency, goal
statement, and result for each performance goal being reported on in this
document. The first two digits of each goal number indicate the funding year.
In this report, all "04" goals are reporting on the Program Year period defined
above.
1http://www.dol.gov/_sec/stratplan/main.htm
2http://www.dol.gov/_sec/Budget2006/overview-pb.htm#app1
3The assessment category of substantially achieved recognizes
results that were very close, which is defined as 80 percent of targeted
year-on-year improvement.
Strategic Goal 1 A Prepared Workforce
As
indicated in the Program Performance Goal Achievement table above, DOL had nine
performance goals under this strategic goal in FY 2005, of which five were
achieved or substantially achieved (56 percent) slightly below the
Department wide average. However, the percentage of goals achieved understates
progress, since at the indicator level, 34 of 41 targets were reached (83
percent). Entered employment, retention, education and earnings change, job
training common measures tracked in most of the programs supporting this goal,
improved over prior year results in every case. Although improving economic
conditions helped, DOL had a significant role in facilitating more integrated
employment and training service delivery by State Workforce Agency partners and
encouraging them to focus on high growth occupations and industries in
placement and training services. In addition, Office of Disability Employment
Policy pilot programs exceeded expectations for identifying effective
practices, and the Bureau of Labor Statistics improved its accuracy over FY
2004 results.
Budget structures for Workforce Investment Act employment and training
programs continue to inhibit program performance by duplicating services and
necessitating excessive expenditure on administration. DOL has proposed
legislation to consolidate several funding streams. Another noteworthy
challenge is the Job Corps program's review of asset management practices for
its residential training centers, which the Office of Inspector General has
suggested could be a source of improved efficiency.
Goal # Agency
|
Performance Goal |
Result |
04-1.1A ETA |
Increase the employment, retention, and earnings of individuals
registered under the Workforce Investment Act adult program. |
Achieved |
04-1.1B ETA |
Improve the outcomes for job seekers and employers who receive
One-Stop employment and workforce information services. |
Not Achieved |
04-1.1C ETA |
Increase the employment, retention, and earnings replacement of
individuals registered under the Workforce Investment Act Dislocated Worker
Program. |
Not Achieved |
04-1.1D VETS |
Improve employment outcomes for veterans who receive One-Stop and
homeless veterans' services. |
Achieved |
05-1.1A ETA |
Strengthen the registered apprenticeship system to meet the
training needs of business and workers in the 21st Century. |
Achieved |
05-1.1B ODEP |
Provide national leadership to increase access and employment
opportunities for youth and adults with disabilities receiving employment,
training, and employment support services by developing testing, and
disseminating effective practices. |
Achieved |
04-1.2A ETA |
Increase placements and educational attainments of youth served
through the WIA youth program. |
Not Achieved |
04-1.2B ETA |
Improve educational achievements of Job Corps students, and
increase participation of Job Corps graduates in employment and education.
|
Not Achieved |
05-1.3A BLS |
Improve information available to decision-makers on labor market
conditions, and price and productivity changes. |
Substantially Achieved |
Strategic Goal 2 A Secure Workforce Of six
performance goals, DOL achieved or substantially achieved five (83 percent)
well above the Departmental average of 60 percent. Worker protection
targets for processing timeliness, compliance with wage and hour regulations
and union report transparency were all reached or substantially reached. In the
worker benefits outcome goal, results were better than they appear.
Unemployment Insurance (UI) system performance was very good, thanks in part to
improving economic conditions. The Federal workers' compensation program
results for return to work, reducing program expenses and customer service met
expectations, overall. DOL's Employee Benefit Security Administration's (EBSA)
enforcement efforts were successful by all measures. The Pension Benefit
Guaranty Corporation (PBGC), while improving satisfaction of plan participants,
slipped a bit in the judgment of its practitioner (employer) customers.
The most significant concerns in this area are focused on solvency of
the large trust funds for unemployment and pension benefits and integrity of
payments to millions of beneficiaries annually by the UI system. To improve UI
financial integrity, DOL is establishing processes for improving education of
beneficiaries and assessments of their needs for reemployment services and
continued eligibility. To improve defined benefit plan security, DOL included
in the President's FY 2006 Budget to Congress a proposal to strengthen plan
funding rules, improve transparency, and reform the premium structure for
insurance provided by PBGC.
Goal # Agency
|
Performance Goal |
Result |
05-2.1A ESA |
American workplaces legally employ and compensate workers.
|
Achieved |
05-2.1B ESA |
Ensure union financial integrity, democracy and transparency.
|
Substantially Achieved |
05-2.2A ETA |
Make timely and accurate benefit payments to unemployed workers,
facilitate the reemployment of Unemployment Insurance (UI) claimants, and set
up unemployment tax accounts promptly for new employers. |
Substantially Achieved |
05-2.2B ESA |
Minimize the impact of work-related injuries. |
Substantially Achieved |
05-2.2C EBSA |
Secure pension, health and welfare benefits. |
Achieved |
05-2.2D PBGC |
Improve service to pension plan customers. |
Not Achieved |
Strategic Goal 3 Quality Workplaces DOL
achieved or substantially achieved three of six performance goals (50 percent),
which is below the Departmental average of 60 percent. Progress was made in
workplace safety and health; fatalities were slightly more frequent but overall
injury and illness incidence rates continued to fall, in part due to
partnerships with employers and employees and better enforcement targeting.
Dramatic, and in some cases record lows, in mine industry injury and fatality
rates can be attributed in part to DOL strategies addressing the human factors
that impact safety and health decisions of mine operators and miners. Illegal
discrimination by contractors remained very rare, and veterans' cases were
resolved timely despite increased volume and complexity of complaints due to
reserve mobilizations connected with the war in Iraq. Finally, DOL-funded
international labor programs continued to demonstrate success by, for example,
removing thousands of children from exploitive work and improving work
conditions for the vast majority of those targeted for assistance.
A current DOL occupational safety and health challenge is obtaining
timely outcome data. The latest available data on non-mining occupational
injuries and illnesses are two years old. Mine safety challenges include
developing strategies to reduce risks associated with the influx of
inexperienced workers that accompanies growth in coal production. Reemployment
issues for armed service members continue to emerge with continuation of the
war in Iraq. Beginning in FY 2006, the Veterans' Employment and Training
Service will monitor Guard and Reserve mobilization and demobilization figures
to anticipate needs.
Goal # Agency
|
Performance Goal |
Result |
05-3.1A OSHA MSHA |
OSHA: Reduce work-related fatalities. Target not reached.
MSHA: Reduce work-related fatalities. Target reached. |
Not Achieved |
05-3.1B OSHA MSHA |
OSHA: Reduce work-related injuries and illnesses. Target reached.
MSHA: Reduce work-related injuries and illnesses. Targets not
reached. |
Not Achieved |
05-3.2A ESA |
Federal contractors achieve equal opportunity workplaces.
|
Achieved |
05-3.2B VETS |
Reduce employer-employee employment issues originating from
service members' military obligations conflicting with their civilian
employment. |
Not Achieved |
05-3.3A ILAB |
Contribute to the elimination of the worst forms of child labor
internationally. |
Substantially Achieved |
05-3.3B ILAB |
Improve living standards and conditions of work internationally.
|
Achieved |
Strategic Goal 4 A Competitive Workforce Of
four performance goals, DOL achieved one and substantially achieved one (50
percent) below the Departmental average of 60 percent. Nevertheless,
more indicator targets were reached than not reached (14 vs. 4), and
significant progress was made in making America's workforce more competitive by
a number of measures. Workforce Information job listings, resume searches and
Occupational Information Network resource quality and traffic all posted
impressive increases. Foreign Labor Certification (FLC) processing improved
over FY 2004 and Trade Adjustment Assistance (TAA) continued to improve
participants' employment, retention and earnings. Child labor regulations were
updated to eliminate confusion, and DOL proposed a rule to allow financial
institutions to distribute the assets of abandoned individual pension plans to
participants and beneficiaries. Significant improvement efforts under way
include Workforce Information integration of services in programs funded by the
Workforce Investment Act and the Wagner-Peyser/VETS-funded employment services;
FLC fraud detection/prevention and backlog elimination; and TAA data quality
initiatives.
Goal # Agency
|
Performance Goal |
Result |
04-4.1A ETA |
Build a demand-driven workforce system by increasing accessibility
to workforce information. |
Substantially Achieved |
04-4.1B ETA |
Assist employers in meeting their workforce needs by providing
them with expeditious determinations on their applications to hire foreign
workers. |
Not Achieved |
05-4.1B ETA |
Increase the employment, retention, and earnings replacement of
workers dislocated in important part because of trade and who receive trade
adjustment assistance benefits. |
Not Achieved |
05-4.2A OASP |
Maximize regulatory flexibility and benefits and promote flexible
workplace programs. |
Achieved |
The next table lists Program Year 2005 goals (July 1, 2005-June 30,
2006) for which results will be reported in the FY 2006 Performance and
Accountability Report.
Goal# Agency
|
Performance Goal |
05-1.1A ETA |
Increase the employment, retention, and earnings of individuals
registered under the Workforce Investment Act adult program. |
05-1.1B ETA |
Improve the outcomes for job seekers and employers who receive
public labor exchange services. |
05-1.1C ETA |
Increase the employment, retention, and earnings replacement of
individuals registered under the Workforce Investment Act dislocated worker
program. |
05-1.1D VETS |
Increase the employment outcomes for veterans who receive One Stop
Career Center services and veterans' program services. |
05-1.2A ETA |
Increase placements and educational attainments of youth served
through the WIA youth program. |
05-1.2B ETA |
Improve educational achievements of Job Corps students, and
increase participation of Job Corps graduates in employment and education.
|
05-4.1A ETA |
Build a demand driven workforce. |
05-4.1B ETA |
Increase accessibility to workforce information. |
Costs4 devoted toward achieving the
Department's strategic goals (see table below) are dominated by the second
goal, A Secure Workforce, for which net costs in FY 2005 amounted to
$40.811 billion 82 percent of the total, $49.912 billion. Ninety-two
percent ($37.7 billion) of net costs associated with Strategic Goal 2 were for
benefit payments to unemployed workers or workers disabled as a result of
work-related injuries or illnesses. The first goal, A Prepared
Workforce, required $6.865 billion (14 percent), mostly grants to States
and other organizations for job training and a host of employment-related
services. Approximately $1.062 billion (2 percent) went toward the third goal,
Quality Workplaces, to fund direct services (such as salaries of
Federal employees) aimed at improving safety and health in the workplace. The
fourth goal, A Competitive Workforce, accounted for $1.163 billion,
two percent of the total, which went toward programs aimed at building a
demand-driven workforce system.
DOL Program Net Costs (Millions of Dollars)
|
Goal |
FY 2003 |
FY 2004 |
FY 2005 |
Strategic Goal 1: A Prepared Workforce |
$6923 |
$8654 |
$6865 |
Outcome Goal 1.1 Increase Employment, Earnings, and
Assistance |
$3433 |
$5412 |
$3874 |
- Performance Goal 04-1.1A (WIA adult)
|
|
|
922 |
- Performance Goal 04-1.1B (One-Stop employment services)
|
|
|
725 |
- Performance Goal 04-1.1C (WIA dislocated worker)
|
|
|
1455 |
- Performance Goal 04-1.1D (VETS employment services)
|
|
|
196 |
- Performance Goal 05-1.1A (Apprenticeship)
|
|
|
23 |
- Performance Goal 05-1.1B (ODEP)
|
|
|
52 |
- Other (Senior Community Service Employment Program, Indian and
Native American Adult Programs, National Farmworker Jobs Program, Work
Incentive Grants, etc.)
|
|
|
503 |
Outcome Goal 1.2 Increase the Number of Youth Making A
Successful Transition to Work |
$2957 |
$2703 |
$2455 |
- Performance Goal 04-1.2A (WIA youth)
|
|
|
987 |
- Performance Goal 04-1.2B (Job Corps)
|
|
|
1313 |
- Other (Youth Offender Reintegration, Indian and Native American
Youth Programs, etc.)
|
|
|
155 |
Outcome Goal 1.3 Improve the Effectiveness of Information
and Analysis On The U.S. Economy |
$533 |
$539 |
$536 |
- Performance Goal 05-1.3A (BLS)
|
|
|
536 |
Strategic Goal 2: A Secure Workforce |
$59,969 |
$46,957 |
$40,811 |
Outcome Goal 2.1 Increase Compliance With Worker Protection
Laws |
$273 |
$296 |
$277 |
- Performance Goal 05-2.1A (Wage and Hour)
|
|
|
214 |
- Performance Goal 05-2.1B (Labor-Management Standards)
|
|
|
63 |
Outcome Goal 2.2 Protect Worker Benefits5 |
$57,718 |
$46,661 |
$40,534 |
- Performance Goal 05-2.2A (Unemployment Insurance)
|
|
|
34,243 |
- Performance Goal 05-2.2B (Workers' compensation)
|
|
|
6131 |
- Performance Goal 05-2.2C (EBSA)
|
|
|
160 |
Outcome Goal 2.3 Increase Employment and Earnings for
Retrained Workers |
$1978 |
|
|
Strategic Goal 3: Quality Workplaces |
$991 |
$1021 |
$1062 |
Outcome Goal 3.1 Reduce Workplace Injuries, Illnesses, and
Fatalities |
$815 |
$812 |
$823 |
Outcome Goal 3.2 Foster Equal Opportunity Workplaces
|
$118 |
$112 |
$115 |
- Performance Goal 05-3.2A (Federal Contractor Compliance)
|
|
|
99 |
- Performance Goal 05-3.2B (USERRA)
|
|
|
16 |
Outcome Goal 3.3 Reduce Exploitation of Child Labor,
Protect the Basic Rights of Workers, and Strengthen Labor Markets |
$58 |
$97 |
$124 |
- Performance Goal 05-3.3A (Child Labor)
|
|
|
74 |
- Performance Goal 05-3.3B (International Labor Standards)
|
|
|
43 |
- Other (Other ILAB programs)
|
|
|
7 |
Strategic Goal 4: A Competitive Workforce
|
|
$6 |
$1163 |
Outcome Goal 4.1 Build a Demand-Driven Workforce System to
Address Worker Shortages and Equip Workers to Adapt to the Competitive
Challenges of the 21st Century |
|
|
$1163 |
- Performance Goal 04-4.1A (Workforce Information)
|
|
|
106 |
- Performance Goal 05-4.1A (Foreign Labor Certification)
|
|
|
60 |
- Performance Goal 05-4.1B (Trade Adjustment Assistance)
|
|
|
846 |
- Other (Transition Assistance Program, Pilots, Demonstrations,
Research & Evaluations, and H-1B Technical Skills Training)
|
|
|
151 |
Outcome Goal 4.2 Promote Workplace Flexibility and Minimize
Regulatory Burden6 |
|
$6 |
|
Costs Not Assigned to Goals |
$44 |
$38 |
$11 |
Total7 (may not be equal to sum of
individual goal totals due to rounding) |
$67,927 |
$56,676 |
$49,912 |
Charts that display net costs from FY 1999-FY 2005 to illustrate trends
are provided in each outcome goal summary; brief explanations of significant
changes since FY 2004 are provided, as well. This is the first year for which
DOL has had the capability of reporting costs at the performance goal level
thanks to more sophisticated cost models in our managerial cost
accounting system, Cost Analysis Manager (CAM), that describe relationships
between resources, activities, outputs and performance goals.
4Net cost data are
presented. Net Cost reflects the full cost of each program as
assigned by DOL entities to the Department's outcome goals less any
exchange revenue earned. Full cost consists of (a) both direct and
indirect costs, and (b) the costs of identifiable supporting services provided
by other segments within the reporting entity and by other reporting entities.
5Costs for Performance Goal 05-2.2D (PBGC) are not included
because the corporation's financial statements are separate from those of the
Department and are not included in this document. 6 Costs
associated with this goal in FY 2004 were allocated to program performance
goals in FY 2005. See the explanation in the Outcome Goal 4.2 narrative under
Net Cost of Programs. 7The total net costs for FY 2005 included
in this table are $452 million less than the total net costs included in the
Consolidated Statements of Net Cost as certain costs in this table are
presented on a program year basis vs. a fiscal year basis in the Consolidated
Statements of Net Cost.
Reporting Performance Results The Performance
Section presents, by strategic goal, summaries of performance at each level.
Each strategic goal section is introduced by an overview of the goal, its
component outcome goals, results for FY 2005 and near term plans for
improvement. Each outcome goal section similarly begins with a summary of
results, adds net cost information and highlights and concludes with a brief
discussion of future plans. Finally, within each outcome goal section are
individual performance goal narratives that present results, describe the
program and its operating environment, analyze performance and disclose
management issues such as data quality and studies of program
cost-effectiveness. Appendix 1 contains performance goal histories and Appendix
2 summarizes significant audits and evaluations of DOL programs completed
during FY 2005 that have implications for performance goals.
Performance measurement is inherently difficult, especially for a large,
diverse organization like DOL that works to accomplish its mission indirectly
in partnership and by assisting others. The Department seeks continuous
improvement in its selection of indicators and in policies and procedures for
collecting and reporting program performance data so that managers and other
decision makers can rely on them. However, each program must consider the costs
and benefits of gathering and managing such information. Changes take time to
implement and reporting requirements can impose considerable burdens on staff,
partners, beneficiaries and regulated entities. Timeliness is another important
consideration in utility of performance data; most programs use real-time,
monthly and quarterly reporting systems and estimate/reconcile annual totals or
averages.
New indicators often lack data needed to establish targets. For such
indicators, the first year's target may be to establish a baseline, and thus
the Department gives the program a positive rating for gathering the data as
planned and establishing targets for the subsequent year.
The Office of Inspector General assesses the internal controls of DOL
agencies systems used to validate, verify and record data submitted by
field staff and partners (e.g., grantees). These systems are identified as Data
Sources in Appendix 1 at the bottom of each performance goal history. Material
inadequacies, if any, are disclosed in this report in the Secretary's Message.
Lack of findings does not imply that data are factual; we can only infer that
current practices and data are acceptable given available knowledge and
resources. In other words, unless noted otherwise, performance data in this
report should be considered sufficiently accurate and timely.
Financial Performance Report
At the end of FY 2004, the Department received green on the President's
Management Agenda (PMA) scorecard for financial management. Since then, the
Office of the Chief Financial Officer (OCFO) under the direction of the
Secretary has devoted significant resources to secure its achievement of
excellence in financial management in the Federal Government. Successes include
updating the Department's Cost Accounting Manager (CAM) models for all
participating agencies, providing accurate and timely financial statements on a
quarterly basis, migrating the Department's payroll function to the National
Finance Center, and beginning the implementation of a new core financial
management system. While working on these key initiatives, the OCFO anticipated
the new requirements related to internal controls by preparing and submitting
an implementation plan to the Office of Management and Budget (OMB). As in
previous years, the Department's financial systems remained in substantial
compliance with the Federal Financial Management Improvement Act of 1996
(FFMIA), ensuring that the systems support full disclosure of the costs of the
Department's programs and activities. In addition, the Department continued to
comply with the Federal Managers' Financial Integrity Act (FMFIA), a sign that
the Department's accounting systems and internal controls were sufficient to
safeguard its resources. Further, no material weaknesses were found in the
audit of the Department's financial statements for the fiscal year ended 2005.
Financial Management Scorecard (as of 9/30/05)
Current Status
|
- Received ninth consecutive unqualified and timely audit opinion
on annual financial statements; no material auditor-reported internal control
weaknesses.
- Produced accurate and timely financial information that is used
by management to drive results in key areas of operations.
- Integrated financial and performance management systems to
support day-to-day operations.
- Met FFMIA requirements.
|
Continued Progress
|
To Implement a New Core Financial Management Information
System:
- Select Center of Excellence
To Integrate Financial Data into Management:
- Complete design of working capital fund model.
- Continue efforts to automate non-financial data.
- Revise CAM models to support Budget and Performance Integration
(BPI) efforts.
To Implement OMB A-123 revisions
- Assess, test, and report on the adequacy of the Department's
internal controls.
|
For the ninth consecutive year, the Department received an unqualified
opinion on its consolidated financial statements. During FY 2005, the OCFO
provided timely quarterly audited financial statements to OMB, 21 days after
the end of each quarter.
The Department successfully implemented CAM, its managerial cost
accounting system. CAM supports decision-making by providing program managers
with cost of outputs and activities to better understand the cost of programs
from an operational perspective. CAM information will be used to support
Departmental initiatives related to Budget and Performance Integration and OMB
PART efficiency measures.
The Department continues to work on the implementation of a new core
financial management information system that will provide readily available,
transparent data to managers and decision-makers for use on a day-to-day basis.
This JFMIP-compliant COTS package will make available timely, accurate, and
reliable financial information, and will provide the tools to conduct
sophisticated financial analyses to better manage program resources. This will
result in an increased use of integrated financial and performance information
that will empower superior decision making through better business
intelligence. When fully implemented, the new system will be a strategic asset
for the Department allowing managers to create customized reports online at
their desktops to meet their management needs in real time. The Department's
new core financial management system will be hosted by a Center of Excellence
(CoE). The CoE is scheduled to be selected in FY 2006.
The Department is committed to implementing the requirements outlined in
the revised OMB's Circular A-123, Management's Responsibility for Internal
Control over Financial Reporting. Strong internal controls already exist in the
Department as evidenced by numerous clean audit opinions and no material
weaknesses. OCFO continues to administer a Quarterly Financial Management
Certification program, which requires managers at all levels to attest to the
adequacy of program controls. OCFO will continue to work with program agencies
to ensure effective management controls over program resources, financial
systems and reporting. The Department has developed an implementation plan to
establish an oversight committee consisting of representatives from the
financial, administrative and information systems communities. OCFO will build
upon existing processes to meet the requirements of A-123. The result of these
efforts will support the Secretary's annual FMFIA certification in the
Performance and Accountability Report. Internal controls improve transparency
to the public ensuring that resources are being wisely used to bring results
that support the Department's strategic goals A Prepared Workforce,
A Secure Workforce, Quality Workplaces, and A Competitive Workforce.
Financial Statement Presentation
We are proud to
report our ninth consecutive unqualified audit opinion issued by the
Department's Office of Inspector General (OIG). Annually, we are challenged
with improving and maintaining financial management practices and policies.
This independent assessment provides assurance that the money entrusted to the
Department's stewardship is accounted for properly.
The principal financial statements summarize the Department's financial
position, net cost of operations and changes in net position, provide
information on budgetary resources and financing, and present the sources and
disposition of custodial revenues for FY 2005 and FY 2004. Highlights of the
financial information presented in the principal financial statements are shown
below:
Financial Position
The Department's Balance Sheet
presents its financial position through the identification of agency assets,
liabilities and net position. Total assets increased from $62.4 billion at the
end of FY 2004 to $71.5 billion in FY 2005 primarily due to the increase in
unemployment taxes. Seventy seven percent of assets are invested in U.S.
Government securities, compared to 73 percent in FY 2004.
Liabilities totaled $ 20 billion and $ 15 billion at the end of FY 2005 and FY
2004 respectively, leaving a difference, or net position, of $ 51.4 billion and
$ 47.4 billion at the end of each year. DOL's Balance Sheet presents its
financial position through the identification of agency assets, liabilities and
net position. Over 99 percent of DOL's investments are Unemployment Trust Fund
investments. DOL total assets decreased from $64.8 billion at the end of FY
2003 to $62.4 billion in FY 2005. Seventy three percent of DOL assets are
invested in U.S. Government securities, compared to 75 percent in FY 2003.
Liabilities totaled $15.0 billion and $13.9 billion at the end of FY 2005 and
FY 2003 respectively, leaving a difference, or net position, of $47.4 billion
and $50.8 billion at the end of each year.
Balance Sheet (in thousands) |
Fund Balance with Treasury |
|
Investments |
|
Accounts Receivable |
|
Net Cost of Operations
The total net cost of
operations in FY 2005 was $50.4 billion, an 11 percent decrease from the prior
year. This decrease in program costs is mainly attributable to a decrease in
unemployment claims during the fiscal year.
Income Maintenance programs continue to comprise the major portion of
costs. These programs include costs such as unemployment benefits paid to
individuals who are laid off or out of work and seeking employment as well as
payments to individuals who qualify for disability benefits due to injury or
illness suffered on the job.
Employment and training programs comprise the second largest cost. These
programs are designed to help individuals deal with the loss of a job, research
new opportunities, find training to acquire different skills, start a new job,
or make long-term career plans.
Crosscutting Programs (in thousands) |
Income Maintenance |
$42,236,284 |
Employment and Training |
$6,009,384 |
Labor, Employment and Pension Standards |
$714,351 |
Worker safety and health |
$794,420 |
Statistics |
$525,011 |
Financing The Statement of Financing
reconciles the net cost of operations with the obligation of budgetary
resources. The Department's operations are funded primarily by Unemployment
Insurance (UI) program employer taxes, appropriations received, and investment
interest earned from various trust funds.
Statement of Budgetary Resources
This statement
reports the amount of resources received to effectively carry out the
activities of the Department as well as the status of these resources at the
end of the fiscal year. The Department had direct obligations of $ 51.3 billion
in FY 2005, a decrease of $ 10.3 billion from FY 2004.
Limitations on the Principal Financial Statements
As required by the Government Management Reform Act of 1994 (31 U.S.C.
3515 (b)), the principal financial statements report the Department's financial
position and results of operations. While the statements have been prepared
from the Department's books and records, in accordance with formats prescribed
by OMB, the statements differ from the financial reports used to monitor and
control budgetary resources, which are prepared from the same books and
records. The statements should be read with the realization that they are a
component of the U.S. Government, a sovereign entity, and that liabilities
reported in the financial statements cannot be liquidated without legislation
providing resources to do so.
Improper Payments Information Act Compliance
Eliminating Improper Payments (as of 9/30/05)
Current Status
|
- Corrective action plan in place with OMB approved targets
- Evidence that improper payment reduction targets are being
met.
- Recovery targets in place and evidence that targets are being
met.
|
Continued Progress
|
- Work with OMB on WIA and FECA measurement and reporting
requirements based on FY 2005 results.
- Continue to roll-out the National Database for New Hires
cross-match across multiple States for the Unemployment Insurance program.
|
Over the past several years, identifying and reducing improper payments
has been a major financial management focus of the Federal Government. A PMA
key component is to improve agency financial performance through reductions in
improper payments. OMB originally provided Section 57 of Circular A-11 as
guidance for Federal agencies to identify and reduce improper payments for
selected programs.8 The Improper Payments
Information Act of 2002 (IPIA) broadened the original erroneous payment
reporting requirements to programs and activities beyond those originally
listed in Circular A-11.
IPIA defines improper payments as those payments made to the wrong
recipient, in the wrong amount, or used in an improper manner by the recipient.
IPIA requires a Federal agency to identify all of its programs that are risk
susceptible to improper payments. It also requires the agency to implement a
corrective action plan that includes improper payment reduction and recovery
targets. The act also requires the agency to report annually on the extent of
its improper payments and the actions taken to increase the accuracy of
payments.
To coordinate and facilitate the Department's efforts under IPIA, the
Chief Financial Officer (CFO) is the Erroneous Payment Reduction Coordinator
for the Department. OCFO worked with program offices to develop a coordinated
strategy to perform annual reviews for all programs and activities susceptible
to improper payments. This cooperative effort included developing actions to
reduce improper payments, identifying and conducting ongoing monitoring
techniques, and establishing appropriate corrective action initiatives.
Methodology Due to the inherent
differences in managing and accounting for funds in a benefit versus a grant
program, the Department conducted its FY 2005 risk assessment using different
methodologies to assess their improper payment risk. Per OMB guidance, all
Section 57 programs are deemed to be high risk irrespective of the determined
improper payment error rate. The Department has two Section 57 benefit
programs, Unemployment Insurance (UI) and Federal Employees' Compensation Act
(FECA). It also has one Section 57 grant program, Workforce Investment Act
(WIA).
FY 2005 benefit programs with FY 2004 outlays totaling less than $200
million were deemed to be low risk, unless a known weakness existed in the
program management based on reports issued by oversight agencies such as the
Department's Inspector General (IG) and/or the U.S. Government Accountability
Office (GAO). Hence, these benefit programs were not statistically sampled. For
benefit programs with outlays greater than $200 million, the Department
conducted sampling to determine their improper payment rates. This sampling
included FECA, UI, Black Lung Disability Trust Fund, and Energy Employees
Occupational Illness Compensation Fund. UI was the only program determined to
be susceptible to risk9 as a result
of this approach. However, the Department is also reporting on FECA's improper
payment rate since it is a Section 57 designated program.
As mentioned earlier, the Department used a separate methodology to
assess the risk of improper payments in grant programs except for Job Corps
which was sampled. The Department analyzed all FY 2003 Single Audit
Reports10 to identify questioned costs,
which were used as a proxy for improper payments, and to estimate an
approximate risk for each of the Department's grant programs. The improper
payment rate was determined by calculating the projected questioned costs and
dividing this total projection by the corresponding outlays.11 All error rates were determined to be well
below the 2.5 percent threshold; therefore, no grant programs were determined
to be susceptible to risk as a result of this approach. However, like FECA, the
Department is reporting on WIA's improper payment rate since it is a Section 57
designated program, even though its improper payment rate is well below the 2.5
percent threshold.
Challenges for IPIA Compliance Like many
other Federal agencies, the Department faces challenges in meeting its improper
payment reduction and recovery targets, particularly with programs that are
sensitive to the U.S. economy fluctuations, such as the UI program.
Furthermore, meeting improper payment reduction and recovery targets of
programs, such as UI and WIA, are contingent upon the cooperation and support
of State agencies and other outside stakeholders who are intricately involved
in the day-to-day management of these programs' activities.
Accomplishments and Plans for the Future
In FY 2005, the Department conducted the required risk assessment. It
also established reduction and recovery targets and developed corrective action
plans for those programs for which it is required to report. Furthermore, the
Department met its reduction and recovery improper payment targets set in FY
2004.
In addition to implementing its corrective action plans, the Department
also conducted pilot programs within the UI and WIA programs in an effort to
identify new ways to detect and reduce these programs' improper payments.
During FY 2005, OCFO and the Employment and Training Administration (ETA)
initiated the UI National Directory of New Hires (NDNH) pilot across three
states to determine how a cross-match between NDNH12 and State UI claimant data would help identify
and reduce improper payments. The result of this pilot clearly indicated that a
substantial amount of additional overpayments could be detected using NDNH. As
a result of these positive experiences and the overall success of the pilot,
many states have expressed interest in implementing the NDNH cross-match. ETA
is already moving ahead with the implementation of the NDNH cross-match with
five states (Utah, Virginia, Texas, Connecticut, and Washington). An additional
24 states have expressed interest in the use of NDNH by the end of FY 2006. The
ultimate goal is for all states to use NDNH to detect and reduce the occurrence
of Benefit Year Ending (BYE)13
overpayments. The WIA pilot entailed gathering and analyzing data using the
Department's single audits for FY 2002 and FY 2003 that identified WIA grant
funds. The results indicate that questioned costs identified in the audits are
less than one percent of WIA expenditures. The analysis also confirmed that the
most efficient means to gather data regarding Federal grant programs is to use
the existing infrastructure provided by the Single Audit Act. The Department
used the single audits for the first time to estimate error rates for all grant
programs except for Job Corps.
Other Significant Information
Audit Follow up The Inspector General Act
Amendments of 1988 require Federal agencies to provide the status of their
audit resolutions for all audit reports with recommendations open for more than
one year. The Department's management and auditors agree that some of Labor's
corrective action plans will take several years to complete. As of September
30, 2005, 183 audit reports have been open for over one year. The total
monetary value of open audit findings is $65.2 million, which covers 936
separate recommendations.
Departmental agencies and the OIG jointly manage and update the audit
tracking system where the current status of each open audit finding is
maintained. Final closure of the audit finding is determined solely by the
reviewing OIG officials. Due to the complexity of implementing some of the
audit resolutions, many of these decisions take years before being rendered and
the audit finding is closed.
The most significant of the non-monetary open audit findings are
discussed in this report. A listing of all open audits is available upon
request from the Department's OCFO.
FY 2005 OIG Audit Recommendations Greater
than One Year (amounts in thousands)
|
Affected accounts in 183 audit findings with 936 recommendations
|
$65,236 |
- 42 open recommendations under administrative law or Federal
appeal
|
$3,302 |
|
$5,669 |
- Referred/in the process of being referred to Department of the
Treasury
|
$2,726 |
Balance of open audit findings |
$53,539 |
Debt Management The Debt Collection
Improvement Act of 1996 (DCIA) designated the Department of the Treasury as the
central agency for collection of Federal debts over 180 days delinquent. The
Department cross services all delinquent debts in accordance with this statute.
Debt management accounts for a relatively small part of our financial
management activity. The majority of debts managed by the Department relate to
the assessment of fines and penalties in our enforcement programs. During FY
2005, the Department referred $67.7 million, which represents 70 percent of all
eligible delinquent debt, to Treasury for collection. The Department continues
to monitor and aggressively pursue its debt greater than 180 days old.
User Charges Policy Review In
accordance with the Chief Financial Officers Act of 1990 (CFO Act) and OMB
Circular A-25, department-wide guidance has been developed to establish
policies, procedures, and responsibility for implementing and managing user
charges within the Department. The guidance includes the biennial review
requirements of the CFO Act.
Prompt Payment Act The Department works
effortlessly to meet guidance and regulations outline in the Prompt Payment
Act. The Prompt Payment Act requires Executive agencies to pay commercial
obligations within discreet time periods and to pay interest penalties when
those time constraints are not met.
In FY 2005, of approximately $1.9 billion in gross payments, $481,430
was paid in interest fees and penalties. Additionally, during FY 2005, there
were over 69,000 payments made to vendors and travelers. Of this amount, 2,773
invoices were paid late, resulting in only 4% of the total payments incurring
interest penalties.
Electronic Fund Transfer (EFT) The
Department has worked aggressively with its agencies during this fiscal year to
increase the number of vendors receiving payments electronically. As the chart
below displays, this cooperative effort resulted in improved results across the
board. The low rates for ESA programs are due to the low EFT participation and
the heavy volume within its medical and benefits programs.
DOL EFT Payments |
|
FY00 |
FY01 |
FY02 |
FY03 |
FY04 |
FY05 |
Administrative Vendors |
|
|
|
|
|
|
Travel & Miscellaneous |
|
|
|
|
|
|
Salary & Awards |
|
|
|
|
|
|
ESA Programs |
|
|
|
|
|
|
Total |
|
|
|
|
|
|
Source: DOL DOLAR$ and Payroll System EFT reports.
|
8Section 57 identified
Unemployment Insurance (UI), Federal Employees Compensation Act (FECA)
and Workforce Investment Act (WIA) as programs required to report annual
erroneous payments. 9OMB Implementation Guidance, M-03-13
defines programs to be susceptible to risk if the improper payment rate exceeds
2.5 percent and the amount of overpayment exceeds $10 million.
10The Single Audit Act of 1996 provides for consolidated financial
and single audits of State, local, non-profit entities, and Indian tribes
administering programs with Federal funds. The most recent year available for
Single Audit Reports is 2003. 11In the case of the WIA program,
the projection was based on the WIA-specific questioned costs. For the non-WIA
grant programs, the projection was made for all programs as an aggregate. The
improper payment rate was determined by dividing this aggregate projection of
questioned costs by the total outlays for all non-WIA grant programs.
12NDNH is a nationally consolidated database that contains employment and
UI information on the nation's workforce and is maintained by the Department of
Health and Human Services (HHS). 13BYE violations are defined as
individuals who return to work and continue to claim and receive UI benefits.
The table below lists management challenges the Department considers
most important in terms of their impact on the accomplishment of goals in this
report and their impact on the American workplace and taxpayers, overall.
Management challenges for Goal 1, A Prepared Workforce, pertain
to managing employment and training programs, foreign labor certification, and
safeguarding real property. The GAO identified the management of
employment and training programs as one of the three major challenges remaining
for the Department in 2005. The Department's OIG identified the foreign
labor certification and the management of real property challenges for this
goal.
Management challenges for Goal 2, A Secure Workforce, include
reducing overpayments (improper payments) of unemployment insurance and
safeguarding funds for Employee Benefit Plan Assets and unemployment insurance
and real property. These challenges are well documented and were
identified by the OIG, the GAO, and the Department.
For Goal 3, Quality Workplaces, the GAO identified a challenge
to fostering safe workplaces that the Department recognizes as important.
The achievement of all the Department's goals is influenced by the
successful management of its procurement operations, its information technology
capabilities, and its data quality. These challenges have been identified
by the Department's OIG and are included in the table, as well.
This year's list includes ten items, each of which has been identified
as a concern by DOL's Office of Inspector General (OIG), the U.S. Government
Accountability Office (GAO), DOL's Office of the Chief Financial Officer
(OCFO), or some combination thereof:
- Reducing Improper Payments
- Foreign Labor Certification
- Security of Employee Benefit Plan Assets
- Manage Employment and Training Programs to meet the Demands for the
Workforce of the 21st Century
- Procurement System Concerns
- Foster Safe Workplaces
- Real Property
- Information Technology Systems
- Data Quality
- Safeguarding Unemployment Insurance
Summaries of the issue, actions taken and those remaining are presented
for each item. More information on many of them may be found elsewhere in this
report in discussions of program performance or in the Financial Section. The
Department aggressively pursues corrective action for all significant
challenges, whether identified by the OIG, the GAO, OCFO or other sources
within the Department.
Management Challenge/
Significant Issue |
Actions Taken in FY 2005 |
Actions Remaining and Expected Completion
Date |
Reducing Improper Payments |
Improper payments are payments made to the wrong recipient, in the
wrong amount, or used in an improper manner by the recipient. |
Reducing improper payments is a Departmental initiative under the
President's Management Agenda. |
|
Unemployment Insurance (UI) made up most of
DOL's $ 3.9 billion in improper payments in FY 2004. Reducing UI improper
payments impacts Goal 05-2.2A, Make timely and accurate benefit payments to
unemployed workers. |
DOL proposed legislative changes to prevent and recover
overpayments of Unemployment Insurance benefits, saving an estimated $4.7
billion over 10 years
Formed partnerships with States, other Federal agencies and the
OCFO to prevent UI fraud and abuse
Facilitated and funded State access to the National Directory of
New Hires to identify individuals claiming benefits after returning to work
(the number one cause of UI overpayments).
Awarded grants to 21 States to conduct in-person claimant
interviews in One-Stop Career Centers to assess beneficiaries' need for
reemployment services and their continued eligibility
Issued a State-level Detection of Over-Payments Core Measure in
States' performance budget plans, giving States an additional incentive to
prevent and detect UI overpayments |
Focus Departmental efforts to detect, prevent, and recover
improper payments so that taxpayers can be assured that their dollars are spent
as intended: FY 2006
Facilitate States' use of the National Directory of New Hires and
issue report on use of the directory: ongoing
Collect information on results of grants to conduct in-person
claimant interviews: May 2006
Implement beneficiary eligibility reviews in One-Stop Career
Centers that are projected to save up to $225 million annually
|
The Federal Employees' Compensation Act provides
income replacement and medical cost protection to covered Federal civilian and
Postal Service employees injured on the job, and to employees with work-related
diseases (and their beneficiaries). Cases were found without current
medical information on file, resulting in payments to
claimants who were no longer disabled. Without adequate controls over the
processing of medical bill payments, amounts paid are not always calculated in
accordance with fee schedules. Impacts Goal 05-2.2C, Minimize the impact
of work-related injuries. |
Rolled-out a new case management and benefit payment system
(Integrated Federal Employee Compensation System) that automatically tracks the
due dates of medical evaluations |
Full functionality of Integrated Federal Employee Compensation
System: March 31, 2006 |
Foreign Labor Certification |
Labor's OIG investigations revealed that corrupt employers, labor
brokers, and lawyers file fraudulent applications. Problems with integrity of
the labor certification process and fraud may result in economic hardship for
American workers, the abuse of foreign workers, and may have national security
implications when applications are not adequately screened before being
certified. This management challenge impacts Outcome Goal 1.1, Increase
Employment, Retention and Earnings.
|
Amended regulations governing the filing and processing of labor
certification applications for the permanent employment of aliens to implement
a new system for filing and processing such applications. The system allows for
electronic filing of some applications and requires employers to conduct
recruitment before filing their applications. The rule applies to labor
certification applications for the permanent employment of aliens filed on or
after that date.
Developed a module for the permanent application processing system
that validates applicant information and highlights signs of risk or fraud.
|
Change the current regulation to: 1) eliminate the current
practice of allowing the substitution of alien beneficiaries on applications
and approved labor certifications; 2) implement a 45-day deadline to file
approved permanent labor certifications in support of a petition with Homeland
Security; 3) prohibit the sale, barter, or purchase of permanent labor
certifications or applications, as well as related payments; and 4) provide
enforcement mechanisms to protect program integrity, including debarment with
appeal rights: FY 2006
|
Security of Employee Benefit Plan Assets
|
The Pension Benefit Guaranty Corporation (PBGC) encourages
continuation and maintenance of voluntary private defined benefit pension
plans, provides timely and uninterrupted payment of benefits and is
self-financing. PBCG experienced a substantially increased workload in FY 2005.
|
- PBGC implemented performance plans, performance-based and fixed
price contracts; sought to use technology to improve customer service and
leverage resources; implemented a new investment policy and strong internal
controls environment; and improved risk management.
|
Work with DOL/EBSA and IRS to implement electronic processing of
information about private pension plans: FY 2006
|
DOL safeguards approximately 730,000 private pension plans and 6
million health and welfare plans by ensuring that annual audits of large
employee benefit plans meet requirements. These pension plans hold over $4.5
trillion in assets and cover more than 150 million American workers. Areas of
concern include ensuring security of employee benefit plan assets, pension plan
fraud, cash balance plans, and corrupt multiple employer welfare arrangements.
|
The Administration proposed pension reform to streamline, simplify
and strengthen regulations.
Security of Employee Benefit Plan Assets
- Inspected operations of CPAs performing significant numbers of
plan audits and, with the American Institute of Certified Public Accountants
(AICPA), created the Employee Benefit Plan Audit Quality Center
- Referred deficient audit work to State boards of accountancy or
the AICPA's Professional Ethics Division
|
Implement CPA firm inspection program, augment reporting
compliance cases with audit work paper reviews, refer deficient audit work for
disciplinary action, and, with professional organizations, develop accounting
and auditing guidance: FY 2006 |
Pension Plan Fraud
- 69 indictments were returned as a result of criminal
investigations (as of the third quarter of FY 2005)
- DOL entered convictions or pleas in 43 cases and recovered over
$2.5 million.
|
Make criminal enforcement a top priority: FY 2006 |
Cash Balance Plans
- Confer with the IRS concerning guidance on calculations for
benefits from cash balance pension plans.
|
Continue to confer with the IRS concerning guidance on
calculations for benefits from cash balance pension plans: FY 2006 |
Corrupt Multiple Employer Welfare Arrangements
- From 1995 to Q3 FY 2005, initiated 670 civil and 134 criminal
investigations
- Obtained monetary results of over $162 million
- Filed 75 civil complaints
- Indicted 112 individuals with 76 convictions resulting in
prison terms
|
Place a top priority on stopping abusive practices: FY 2006
Work closely with Department of Justice to prosecute these complex
financial, white-collar crimes and include these as an emerging area of health
care fraud: FY 2006 |
Manage Employment and Training Programs to meet
the Demands for the Workforce of the 21st Century |
The goal of the Workforce Investment Act of 1998 (WIA) is to
increase employment, retention, and earnings of participants and thus improve
the quality of the workforce to sustain economic growth, enhance productivity
and competitiveness, and reduce welfare dependency. Authorization for WIA ended
in 2003. Reauthorization is pending before Congress. WIA is significant both in
terms of its impact on the Nation's workers and the extent of funding.
The program is large and complex and impacts Goals 04-1.1A,
04-1.1B, 04-1.1C and 04-4.1A. WIA could be improved through changes to increase
training provider participation, improve dislocated worker program services and
outcomes, and better document youth program outcomes and assess State WIA
funding availability.
The Work force Investment Act (WIA) Youth program authorizes
services to low-income youth (ages 14-21) with barriers to employment. The
program serves in-and out-of-school youth, including those with disabilities
and those requiring assistance to complete an educational program or to secure
and hold employment
DOL is challenged to connect dropouts to WIA youth programs. This
challenge pertains to Goal 04-1.2A, Increase placements and educational
attainments of youth served through the WIA youth program. A recent GAO
study found that despite DOL's guidance, local areas faced challenges in
identifying and retaining out-of-school youth, providing youth with mentoring
and follow-up services, and using interim measures for ongoing program
assessment. |
Implemented requirements for WIA Standardized Record Data to
facilitate reporting across DOL employment and training programs
Provided States with software, handbooks, training and assistance
to validate annual reports and a sampling mechanism to select files from each
program for manual review
Held forums of education agencies, workforce development, juvenile
justice and child welfare agencies from 45 States to identify opportunities to
align services and create strategies for improvement
Created Federal/State support teams to provide guidance and
assistance
Funded demonstration grants to:
- assist youth transitioning out of foster care in accessing
employment and training opportunities; and
- prepare youth offenders to enter high growth and high demand
industries
Provided assistance to help States meet performance goals through
the Performance Enhancement Project
Emphasized accountability, particularly by implementing Federal
Job Training Program Common Measures
Conducted on-site assessments to determine the effectiveness of
youth programs and help regional offices improve outcomes |
President's FY 2006 Budget includes proposal for reforming job
training programs and consolidating the WIA Adult, Dislocated Worker, and Youth
funding streams and the Employment Service proposal allow governors to
restructure for results, achieve administrative savings, and increase the
number of workers receiving training: FY 2006
Feasibility study on final reporting design: FY 2007
Work with States to develop a more complete reporting system that
will provide greater comparability and clarity of performance data: FY 2006
Require States to validate annual reports and perform annual data
element validation to improve quality of data in performance reports: FY 2006
Work with States to identify best practices and technology
solutions to collect and report customer information: FY 2006
Invest in innovative solutions to address challenges in high
growth industries and efforts to improve the skills and expertise of youth
service providers: FY 2006
Collaborate with Education and the other Federal partner agencies
through the Federal/State support teams: FY 2006 |
Procurement System Concerns |
The Chief Acquisition Officer (CAO) oversees DOL's procurement
functions. DOL's ability to effectively execute and manage its procurements
affects the attainment of all goals. Recently, the DOL OIG noted a reportable
condition and identified weaknesses in file documentation and organization, and
compliance with Federal Acquisition Regulations regarding contract
competition.
There are several appropriated funds procurement activities under
the CAO; the Office of Procurement Services (full delegation); BLS (limited
delegation); MSHA (full delegation); ETA (full delegation); regional offices
(limited delegation). DOL's OIG has independent procurement authority.
The OIG found deficiencies in two other procurement audits
one of a major DOL contract and the other of an agency with full procurement
delegation and recommended that DOL put effective controls in place and
separate procurement and programmatic responsibilities. |
Improved internal policy and procedures and controls
Set a goal to provide effective contract and procurement policy
support and compliance to be accomplished by audits, performance metrics, use
of the E-procurement system, managerial oversight, and timely issuance of
procurement guidance
CAO and Procurement Executive disseminated policy information
Provided extensive written guidance to customers and staff and
others in procurement functions to increase standardization and knowledge
Replaced and/or supplemented management and contracting officers
with staff having more current acquisition training
Added Federal and contract staff to attain staffing levels in
order to process actions in accordance with regulations and sound business
judgment and to undertake corrective actions
Trained incumbent procurement staff
The agency where deficiencies were found made changes, including
review by the DOL solicitor of certain contracts, hiring a Certified
Professional Contract Manager and contracting professionals, and training
senior executives, managers, and acquisition staff.
The CAO considered the delegations of the various procurement
offices to determine if acquisition staffing levels and DOL-wide training
initiatives were still appropriate. |
Pursue excellence by enhancing the training, professionalism and
commitment of the staff: FY 2006
Meet for FY 2006 targets for:
- percent audits with major findings
- percent satisfactory procurement management reviews met
- percent contracts awarded in compliance with customers'
requests/requirements
- percent agencies compliant with DOL procurement policy
Acquisition staff complete core courses and 40 hours per year
training: September 30, 2006 |
Foster Safe Workplaces |
DOL's occupational safety and health agencies OSHA and MSHA
face challenges in establishing performance measurement systems that
accurately assess success in fostering safe and healthful workplaces. The GAO
identified this as one of the three major management challenges at DOL. GAO has
stated that "MSHA is not effectively monitoring the timeliness of certain
aspects of mine plans nor always ensuring that hazards found during inspections
are corrected promptly
. In addition, while OSHA's voluntary compliance
programs appear to have yielded many positive outcomes, much of the agency's
data are insufficient for evaluation. Finally, OSHA's oversight of its regional
and area office activities has limitations." This challenge affects Outcome
Goal 3.1 Reduce Workplace Fatalities, Injuries, and Illnesses.
|
MSHA headquarters monitored reports from the Mine Plan Approval
database to ensure that mine plans were approved by MSHA and entered in timely
fashion into their database. MSHA's supervisors used a tracking system to
monitor hazard abatement
Collected information on OSHA Voluntary Protection Program (VPP)
site injury and illness data and the costs and benefits of participating in
VPP
Developed a new Field Audit Program that provides for tracking and
review of OSHA and Regional Area Office adherence to established policies and
procedures |
Implement OSHA's Management Accountability Program, a new field
audit system: FY 2006 |
Real Property |
Executive Order 13327 addresses the Federal Asset Management
initiative of the President's Management Agenda. The lack of
reliable and useful property data impacts the Department's ability to use funds
most efficiently and therefore attain its goals. A financial audit conducted in
FY 2004 revealed that Job Corps was not adequately accounting for real
property, and that DOL's property reporting and tracking system did not
establish sufficient controls to ensure that real property was safeguarded and
accurately reported in tracking and general ledger systems. Later in 2004, an
OIG audit of management controls over Federal equity in State Workforce Agency
real property found that DOL had not established adequate management controls
over accounting for DOL's equity interest. This challenge affects Goal 05-1.2B
Improve educational achievements of Job Corps students and increase
participation of Job Corps graduates in employment and education and Goal
05-2.2 A Make timely and accurate benefit payments to unemployed
workers, facilitate the reemployment of Unemployment Insurance claimants, and
set up Unemployment tax accounts promptly for new employers. |
Established a Departmental real property workgroup lead by DOL's
Senior Real Property Officer
Job Corps Revised entries in the Capitalized Asset
Tracking And Reporting System
Strengthened control systems to ensure that data remain accurate
and current.
Completed corrective action plan with two OIG recommendations
closed and the remaining items resolved with closure pending
State Workforce Agencies Issued instructions requiring
States to report changes and/or updates to their real property data and
re-emphasizing the requirement that they remit proceeds from property sales to
DOL
Issued instructions requiring regional offices to ensure that
States promptly update property inventory records and provide these for
inclusion in the national property inventory |
Job Corps Centers complete online training to ensure proper
preparation of the ETA-2110: December 31, 2005
Complete State Workforce Agency property inventory: December 31,
2007 |
Information Technology Systems |
DOL relies heavily on Information Technology. Developing efficient
and effective systems to perform daily activities remains a significant
challenge. OIG audits found that IT system development life-cycle activities
need strengthening in the areas of planning, project management, and decision
making. OIG audit identified weaknesses in OSHA's $12.6 million IT project to
redesign its integrated management information system and a DOL procurement of
software to store use of electronic signatures securely to enable use of IT to
transact business with the public. In addition, DOL is likely to experience
security threats associated with wireless technology and needs to plan to
protect its informational assets and confidential and sensitive information.
This challenge affects all outcome goals. |
Implemented IT Governance Structure
Defined outcomes desired:
- Value for dollars expended and staff time invested
- Expert guidance and assistance for agencies on resource
management issues
Assessed IT initiatives via an established Control Review Process
and bi-annual assessments of compliance with Enterprise Architecture, Capital
Planning and Investment Control, and Security through an internal eGov
scorecard
Provided IT Project Management training
Emphasized the importance of Systems Development Lifecycle
Methodology for IT projects (documentation from concept to design, pilot, and
production) so acquisition of unacceptable software should not occur
Issued a standard for implementing wireless technologies via the
DOL's Technical Security Standards Manual |
Improve the IT governance process and procedures: FY 2006
Conduct quarterly reviews, Internal eGov reviews, and Federal
Information Security Management Act (FSMA) reviews, Enterprise Vulnerability
Management System (EVMS) reports, etc: FY 2006
Maintain over 90 percent of major IT investments within 10 percent
of cost, schedule, performance and compliance with target Enterprise
Architecture: FY 2006
Identify a shared service provider to enable DOL to accept and
protect electronic signatures: FY 2006
100 percent of DOL major information systems operating securely:
FY 2006 |
Data Quality |
DOL strives to have the most timely financial data possible, a
well functioning managerial cost accounting system that matches cost
information with program outcomes, quality performance data, and useful
information from single audits. Much of DOL's program results data required are
generated by States and other sources below the Federal level. OIG audit work
has disclosed high error rates in grantee-reported performance data. DOL relies
on audits conducted under the Single Audit Act to provide oversight of more
than 90 percent of its expenditures. DOL's OIG expressed concern about the
adequacy of information from these audits, which are conducted by public
accountants or State auditors and procured with DOL grant funds. This challenge
affects all goals. |
Further implemented the Department wide managerial cost accounting
system, Cost Analysis Manager (CAM). Developed cost models for most major DOL
agencies and continued to improve capabilities for integrating cost and
performance information.
Developed a data validation program to improve the reliability of
program data.
OIG quality control reviews since 2002 have revealed serious
deficiencies in single audits, including inadequate sampling, which would make
the audits unreliable. |
Expand and refine agency cost models and reporting capabilities,
map CAM outputs to agency performance goals, and provide cost information for
selected efficiency measures using CAM: FY 2006
OIG audit of ETA's data validation system: FY 2006
Receive and respond to recommendations from the report on the
National Single Audit Sampling Project which is designed to determine the
quality of Single Audits by providing a statistically reliable estimate of the
extent that Single Audits conform to applicable requirements and standards: FY
2006 |
Safeguarding Unemployment Insurance
|
The Department faces challenges in safeguarding the funds in the
Unemployment Trust Fund (UTF). Over-charging for Unemployment Trust Fund
administration by the Internal Revenue Service (IRS) poses a major challenge
for the Department. In addition, investigations found increasingly complex,
costly and pervasive UI fraud schemes involving identify theft and organized
crime resulting in program losses in the millions of dollars. Safeguarding UI
funds impacts Goal 05-2.2A, Make timely and accurate benefit payments to
unemployed workers, facilitate the reemployment of Unemployment Insurance
claimants, and set up Unemployment tax accounts promptly for new employers.
|
DOL requested that the Treasury Inspector General for Tax
Administration audit the new methodology's adequacy for charging UTF
administrative expenses.
|
Treasury Inspector General for Tax Administration Audit of IRS
methodology for charging the Unemployment Trust Fund for administrative
expenses: FY 2006
Contingent upon the appropriation of funds and the passage of the
Integrity Act included in the DOL FY 2006 budget request, DOL will prevent and
detect fraudulent unemployment benefit claims using stolen personal information
otherwise known as identity theft that would result in annual
trust fund savings of as much as $105 million. |
On June 30, 2005, The US Department of Labor became the first Executive
Branch department or agency to achieve a green status for all five
government-wide President's Management Agenda (PMA) initiatives. This
achievement is not an end in itself it represents an ongoing commitment
to good management to bring quality services to the American people. Commenting
on this accomplishment, Secretary Elaine L. Chao said, "This is a tremendous
achievement by DOL employees who are committed to excellence on behalf of
American workers and taxpayers."
President George W. Bush's Management Agenda, announced in 2001, is a
strategy for improving the management and performance of the Federal
government. The objective is a Federal government that is:
- Citizen-centered, not bureaucracy-centered;
- Results-oriented, not output-oriented; and
- Market-based, actively promoting rather than stifling innovation
through competition.
Together, initiatives created to achieve these goals are referred to as
the President's Management Agenda (PMA). The five government wide initiatives
are: Strategic Management of Human Capital, Competitive Sourcing, Improved
Financial Performance, Expanding Electronic Government, and Budget and
Performance Integration.
The Office of Management and Budget (OMB) regularly assesses all Federal
agencies' implementation of the PMA, issuing a quarterly Executive Branch
Management Scorecard rating of green, yellow or red for both status and
progress on each initiative. The breakdown by initiative, comparing last year's
ratings with those for FY 2005, is indicated in the table below. Under the
OMB-led Proud to Be campaign, DOL set ambitious goals, demonstrated
measurable progress and ultimately achieved green status scores in all five
government-wide initiatives. The Department is now rated highest of all Cabinet
agencies in overall implementation of the PMA. Highlights of achievements
associated with each initiative follow the table. The Department uses a similar
scorecard on a semi-annual basis to measure individual agency progress on the
PMA.
Department of Labor's PMA Scorecard Status
|
Executive Branch Management
Scorecard |
|
|
Human Capital |
Green |
Green |
Competitive Sourcing |
Yellow |
Green |
Financial Performance |
Green |
Green |
E-Government |
Green |
Green |
Budget & Performance Integration |
Green |
Green |
Strategic Management of Human Capital The Human
Capital initiative requires Federal agencies and departments to develop and use
a comprehensive human capital plan, with the aim of significantly reducing
mission-critical skill gaps.
The PMA has provided the impetus for DOL to overhaul the Department's
entire performance management system in order to hold managers and employees
accountable for achieving results. Previous to Secretary Chao's leadership,
DOL's performance management system operated 16 different employee rating
cycles and used ten different rating systems. The Department has developed a
streamlined rating system for all 17,000 DOL employees. More importantly, the
performance management system reinforces the connection between resources,
performance against the Department's strategic goals, and individuals' ties to
both. We are pleased to say that 100 percent of mission-critical occupations at
the Department are linked to DOL's strategic goals.
The Department also created performance plans for DOL managers and
members of the Senior Executive Service (SES) the cadre of top civil
servant executives in the Federal government to better link agency
mission, goals, and outcomes. Each SES performance plan now includes four core
management skills or competencies such as leadership, human resource
management, and coalition building as well as four measurable results
linked to organizational or Departmental goals.
Critical to DOL's success in implementing the PMA was having a roadmap
of what we wanted to accomplish. Our roadmap is the Department's Human Capital
Strategic Plan, published in 2003. The Department's Human Capital Strategic
Plan tracks key activities and metrics to measure results. The Department's
success in this area is bolstered by the Department's status as a President's
Quality Award winner in 2004 for its Strategic Management of Human Capital
efforts and by the International Personnel Management Association's Leading
Edge Award received in 2003.
Competitive Sourcing Competitive Sourcing is DOL's
most recent PMA initiative to achieve green status. Competitive Sourcing allows
the government to take advantage of market-based competition while
simultaneously allowing the existing Federal employees to compete for the work.
Competitive sourcing requires Federal employees to compete against private
sector bidders for work that is deemed "commercial activity." These skills and
competencies, which are not mission-critical, can be performed more effectively
and efficiently when subject to the competition of the marketplace.
In the past two years, DOL announced and carried out eight competitions
for IT services, invoice payments, administrative services, printing and
reprographics, reports disclosure, conference center, statistical systems, and
finance and accounting. Seven of these competitions were won by the in-house
workforce and one was decided in favor of an outside contractor, with savings
and/or cost avoidance achieved by each of these competitions. The combined
projected savings/cost-avoidance for the eight competitions completed to date
is over $12,000,000. DOL has an ambitious plan to compete designated commercial
functions by the end of FY 2007. In FY 2005, DOL completed eight competitions,
involving 125 FTE and announced 4 streamlined competitions and 1 standard
competition involving approximately 187 FTE. These latter competitions are
currently in-progress.
Improved Financial Performance The availability of
timely, accurate, and useful financial information is essential to any
well-managed, effective organization. The Improved Financial Performance
initiative requires Federal agencies to receive clean audit opinions on their
annual financial statements, meet accelerated financial reporting deadlines,
implement managerial cost accounting practices, improve internal controls, and
have financial management systems that are compliant with Federal laws and
regulations.
The Department continues to expand the use of integrated financial and
performance information in the planning, budgeting, and decision-making
activities throughout its agencies. It also remains focused on improving
accountability and transparency for how well tax dollars are spent.
In FY 2005, DOL received its ninth clean audit opinion on our
consolidated financial statements, fifth consecutive CEAR award, and has
consistently met the accelerated OMB financial reporting deadlines. To ensure
that the Department's financial operations comply with all Federal financial
management laws, regulations, and standards and to quickly identify and address
potential financial management problems, Agency Heads attest on a quarterly
basis to the adequacy of internal controls in their agencies.
Expanding Electronic Government (E-government) The
Expanding Electronic Government (E-government) initiative requires Federal
agencies and departments develop secure Information Technology (IT) systems and
strictly adhere to IT project cost, schedule, and performance projections.
E-government is really about becoming a better steward of Federal IT investment
dollars. Government IT projects suffer from the same problems as private sector
IT projects, namely, scope creep, slipping schedules and cost overruns. The
only way to prevent this is to develop solid plans and to stick with the plans.
To ensure that major IT investments adhere to cost, schedule, and performance
measures, DOL has adopted an Earned Value Management System (EVMS) Policy and
targeted several major IT projects to rollout the new methodology. The success
of our new EVM policy is exemplified by having 96 percent of our IT projects
within 10 percent of cost, schedule, and performance in FY 2005. In FY 2002,
only 70 percent of DOL's IT projects were within 10 percent of cost, schedule,
and performance.
Two examples of DOL's use of E-government to provide citizens better
service are GovBenefits.gov and the Safety and Health Information Management
System (SHIMS). Before 2002, government benefits eligibility information was
spread across 31 million Web sites. DOL established and is managing
GovBenefits.gov, a web portal that organizes 500 Federal and State benefit
programs, where citizens can get personalized benefit information within three
easy steps. GovBenefits.gov offers diverse and extensive benefit program
information for veterans, seniors, people with disabilities, disaster victims,
job seekers and others. In April 2005, DOL launched GovLoans.gov en
Español, which offers Spanish-speaking communities greater access to
available Federal and State loan program information.
DOL developed SHIMS a Web-based workers compensation and safety
filing system to enable DOL workers and managers to submit Federal
workers' compensation claims electronically. Since its deployment in 2001, DOL
has developed hosting capabilities providing the potential for reporting
work-related injuries and illnesses and filing of compensations claims
throughout the Federal workforce. The Transportation Security Administration
currently uses SHIMS and the Department of Education and the Federal Air
Marshal Service will use the electronic system in the near future.
Budget and Performance Integration The Budget and
Performance Integration initiative requires agencies and departments use
performance goals and results as an integral element in program operations and
budget formulation. This initiative allows decision-makers within the
Administration, DOL, and Capitol Hill to make connections between budget
dollars and what programs produce. At a more fundamental level, it allows
executives within programs to manage toward program performance and make
resource decisions accordingly.
In June 2004, DOL was the first of only two Federal agencies to achieve
a green status score in budget and performance integration. DOL had to
demonstrate improvement in both performance and efficiency; operate by
strategic plans containing a limited number of outcome-oriented goals and
measures; appraise employee performance and provide consequences tied to
individual's contribution toward performance of agency mission, goals, and
results; and demonstrate the full cost of achieving performance goals.
Agency Specific PMA Initiatives In addition, DOL is
responsible for three of the PMA components found in selected departments:
Eliminating Improper Payments, Faith-Based and Community Initiative, and
Federal Real Property Asset Management. DOL's status for all three of
these initiatives is yellow. DOL's progress in implementing these initiatives,
however, is green.
Eliminating Improper Payments The Improper Payment
Information Act of 2002 defines improper payments as those payments made to the
wrong recipient, in the wrong amount, or used in an improper manner by the
recipient. The Eliminating Improper Payments initiative requires a Federal
agency to identify all of its programs that are risk susceptible to improper
payments. It also requires the agency to implement a corrective action plan
that includes improper payment reduction and recovery targets.
The Department has successfully met all the reporting requirements of
the Improper Payment Information Act. It has developed and implemented
corrective action plans that have reduced the amount of its erroneous payments
within the FECA and UI programs.
Faith-Based and Community Initiative The
Faith-Based and Community Initiative strengthens and expands the role of
faith-based and community organizations in addressing the nation's social
problems. The Department's Center for Faith-Based and Community Initiatives
seeks to empower faith-based and community organizations (FBCOs) as these
organizations help neighbors enter, succeed and thrive in the workforce. DOL
targets those organizations that are trusted institutions providing valuable
services but that may not be partnering with government programs. To accomplish
this mission, DOL works to remove administrative and regulatory barriers and
develop innovative programs to foster partnerships between DOL-funded programs
and FBCOs. The Department is working with workforce investment boards
nationwide to increase partnerships with faith-based and community
organizations that help transition hard-to-serve individuals into
employment.
DOL extends its outreach to FBCOs well beyond the confines of direct
grant programs. Forty-eight intermediaries have worked with over 300 grassroots
organizations since 2001 through DOL's coordination and funding support. By
linking the administrative and reporting expertise of intermediary
organizations to the human and program resources of small FBCOs, we are
providing workforce development and other essential human services to
populations not previously reached by DOL programs.
Federal Real Property Asset Management The Federal
Real Property Asset Management Initiative promotes the efficient and economical
use of America's real property assets and assures management accountability for
implementing Federal real property management reforms. In June 2005 in
keeping with the purposes of the real property initiative DOL Deputy
Secretary Steven Law established a Departmental workgroup consisting of senior
executives throughout the Department to implement this key President's
Management Agenda initiative. In addition, the Inspector General's "Top
Management Challenges" addressed in this report also highlights the need to
improve management of real property assets. Even in this early phase of
implementing this real property initiative, DOL is quickly making progress. For
example, the Job Corps program is implementing new data validation procedures
and is continuing to look closely at whether its physical assets (its
residential centers) are being utilized as efficiently as possible.
President Bush has stated that "Government likes to begin things
to declare grand new programs and causes. But good beginnings are not the
measure of success. What matters in the end is completion. Performance.
Results. Not just making promises, but making good on promises." At DOL, we are
not just making promises; we're making good on promises.
The Program Assessment Rating Tool (PART) was developed to assess and
improve program performance so that the Federal government can achieve better
results. A PART review helps identify a program's strengths and weaknesses to
inform funding and management decisions aimed at making the program more
effective. Through a PART assessment, Federal programs are rated in terms of
their purpose and design, strategic and performance planning, management, and
results and accountability. Based on a PART score and the quality its
performance measures and performance data, each program receives one of five
PART Ratings: Effective, Moderately Effective, Adequate, Ineffective, and
Results Not Demonstrated. To date, 21 DOL programs have been assessed through
the PART. Of DOL's 21 assessed programs: one is rated Effective, seven are
rated Moderately Effective, eight are rated Adequate, four are rated
Ineffective, and one is rated Results Not Demonstrated.
Specifically related to performance and accountability, the rating of
Results Not Demonstrated is an assessment that a program's performance goals
are not sufficiently outcome (results) oriented and/or the program does not
have adequate data to demonstrate its performance results to decision makers
and the public. In FY 2006, DOL will publish the scores and ratings for seven
additional programs in the President's FY 2007 Budget and will complete all
remaining PART assessments, totaling 39 over a five-year period.
In addition to a score and a rating, PART assessments are useful because
they include specific recommendations intended to improve accountability and
performance. PART recommendations DOL has recently implemented include: develop
efficiency measures, baselines and targets for all programs assessed through
the PART; reporting against a uniform set of measures (Federal job training
program common measures) for Workforce Investment Act (WIA) programs; establish
ambitious performance targets for the majority of programs; and use PART
results to justify proposed program terminations and cuts.
DOL PART SCORES AND RATINGS
|
Program |
2004 Score |
2004 Rating |
2005 Score |
2005 Rating |
2006 Score |
2006 Rating |
Bureau of Labor Statistics |
79 |
Moderately Effective |
88 |
Effective |
- |
- |
Dislocated Workers |
36 |
Results Not Demonstrated |
50 |
Adequate |
- |
- |
Employee Benefits Security Administration |
57 |
Results Not Demonstrated |
58 |
Results Not Demonstrated |
71 |
Moderately Effective |
Federal Employees Compensation Act |
75 |
Moderately Effective |
- |
- |
- |
- |
Office of Federal Contract Compliance Programs
|
43 |
Results Not Demonstrated |
43 |
Results Not Demonstrated |
65 |
Adequate |
Occupational Safety and Health Admin |
62 |
Adequate |
- |
- |
- |
- |
Community Service for Older Americans |
26 |
Results Not Demonstrated |
27 |
Ineffective |
- |
- |
Trade Adjustment Assistance |
53 |
Results Not Demonstrated |
45 |
Ineffective |
- |
- |
Youth Activities |
31 |
Results Not Demonstrated |
45 |
Ineffective |
- |
- |
Black Lung Benefits Program |
|
|
71 |
Moderately Effective |
|
|
Davis-Bacon Wage Determination |
|
|
29 |
Results Not Demonstrated |
|
|
Migrant and Seasonal Farm Workers |
|
|
38 |
Ineffective |
|
|
Mine Safety and Health Administration |
|
|
55 |
Adequate |
|
|
Unemployment Insurance Administrative Grants
|
|
|
74 |
Moderately Effective |
|
|
Employment Service |
|
|
|
|
56 |
Adequate |
H-1B Labor Conditions Applications |
|
|
|
|
78 |
Moderately Effective |
Int'l Child Labor/Off. of Foreign Relations
|
|
|
|
|
51 |
Adequate |
Job Corps |
|
|
|
|
70 |
Moderately Effective |
Native American (WIA) |
|
|
|
|
51 |
Adequate |
Pension Benefit Guarantee Corporation |
|
|
|
|
79 |
Moderately Effective |
Permanent Labor Certification |
|
|
|
|
64 |
Adequate |
|
|
|
|