This is the accessible text file for GAO report number GAO-03-239 
entitled 'Workforce Investment Act: States' Spending Is on Track, but 
Better Guidance Would Improve Financial Reporting' which was released 
on November 22, 2002.



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Report to Congressional Requesters:



United States General Accounting Office:



GAO:



November 2002:



Workforce Investment Act:



States’ Spending Is on Track, but Better Guidance Would Improve 

Financial Reporting:



GAO-03-239:



GAO Highlights:



Highlights of GAO-03-239, a report to Congressional Requesters:



Why GAO Did This Study:



The administration has twice proposed reducing the Workforce Investment 

Act’s  (WIA) budget, citing large amounts of states’ unspent funds 

carried over from the prior year.  However, in light of current 

economic conditions, state and local workforce officials have expressed 

a need for more funds, not less.  GAO was asked to assess whether the 

Department of Labor’s spending information is a true reflection of 

states’ available funds.  GAO examined the spending rate for states, 

what Labor does to determine how states are managing their spending, 

and what factors affect states’ WIA expenditure rates.



What GAO Found:



States are spending their WIA funds much faster than required under the 

law, according to GAO’s analysis of Labor’s data. By the end of program 

year 2001, states had spent virtually all funds allocated in 1999 as 

well as 90 percent of 2000 funds and 56 percent of 2001 funds. By 

contrast, Labor’s estimate suggests a slower pace of spending because 

it is based on all available funds, including those only recently 

distributed.  Even though 44 percent of program year 2001 funds are 

being carried over into program year 2002, many of these funds may have 

already been committed at the point of service delivery. Furthermore, 

because of reporting inconsistencies, Labor’s data do not accurately 

reflect funds that have been obligated—long-term commitments made by 

states and local areas on behalf of WIA customers. For a truer picture 

of available funding, both expenditures and obligations must be 

considered. But, because Labor lacks consistent data on obligations, it 

focuses only on expenditures to gauge budgetary need and overestimates 

funds states have available to spend.



Labor compares state expenditures against its benchmarks to determine 

how states manage their spending, to target guidance and assistance 

efforts, and to formulate next year’s budget request. But Labor does 

not often communicate these benchmarks to states. Despite active 

monitoring and additional guidance, state and local officials remain 

confused by some of Labor’s financial reporting requirements. They seek 

more definitive guidance and the opportunity to share promising 

strategies to help them better manage spending.



Financial reporting delays result from lengthy spending approval and 

contract procurement procedures—lasting as long as 8 months—and 

untimely service provider billing. Also, yearly funding fluctuations 

affect states’ and local areas’ willingness to commit resources in the 

long term and inhibit workforce system planning. Some states and 

localities have implemented strategies to overcome these factors and 

better manage their WIA spending. 



Highlight Figure: Percentage of WIA Funds Expended as of June 30, 2002:



[See PDF for image]



Source: GAO’s analysis of Labor’s financial data files for program 

years 1999, 2000, 2001.



[End of figure]



Contents:



Letter:



Results in Brief:



Background:



States Have Spent Most of Their WIA Funds, Labor’s Estimate Overstates 

Funds Available to Spend:



Labor Monitors Spending, Provides Guidance, but Concerns Remain:



A Variety of Factors Affects States’ WIA Expenditure Rates:



Conclusions:



Recommendations for Executive Action:



Agency Comments and Our Evaluation:



Appendix I: Sample Financial Status Report Form:



Appendix II: State Expenditure Rates, by Year, for Funds 

Allocated in Program Years 2000 and 2001:



Appendix III: Comparison of States’ Expenditure Rates with 

Labor’s Benchmarks and Projections:



Appendix IV: Comments from the Department of Labor:



Appendix V: GAO Contacts and Staff Acknowledgments:



GAO Contacts:



Staff Acknowledgments:



Related GAO Products:



Tables:



Table 1: Funds Appropriated for WIA in Fiscal Years 2000-2003:



Table 2: Allocation of WIA Funds to States and Local Areas:



Table 3: WIA’s Quarterly Financial Reporting Requirements:



Table 4: Elements of Labor’s Definition of Total Federal Obligations:



Figures:



Figure 1: WIA’s Annual Funding Cycle:



Figure 2: WIA Quarterly Financial Reporting Process:



Figure 3: WIA Fund Recapture Process:



Figure 4: Expenditure Rates by Year Spent:



Figure 5: Range of States’ Cumulative Expenditure Rates for First 2 

Years That Program Year 2000 Funds Were Available:



Figure 6: Range of States’ Expenditure Rates for First Year That 

Program Year 2001 Funds Were Available:



Figure 7: Breakout of $5 Billion Available for Program Year 2001:



Figure 8: Percentage of Program Year 2001 Allocation Available for 

Three Selected States:



Figure 9: WIA Expenditure Rates for First Year That Program Year 2001 

Funds Were Available, by Funding Category:



Abbreviations:



JTPA: Job Training Partnership Act:



TANF: Temporary Assistance for Needy Families:



WIA: Workforce Investment Act of 1998:



November 22, 2002:



The Honorable Edward M. Kennedy

Chairman, Committee on Health, Education,

 Labor and Pensions

United States Senate:



The Honorable Howard P. “Buck” McKeon

Chairman, Subcommittee on 21st Century Competitiveness

Committee on Education and the Workforce

House of Representatives:



With the enactment of the Workforce Investment Act (WIA) of 1998, the 

Congress repealed the Job Training Partnership Act (JTPA) and 

overhauled federal employment and training programs. WIA created a more 

comprehensive workforce investment system and streamlined services for 

at least 17 federally funded employment and training programs into a 

single service delivery structure known as the one-stop system. In 

fiscal year 2002, WIA’s three funding streams--adults, dislocated 

workers, and youth--were appropriated about $3.9 billion. In July 2002, 

most states had just completed their second full year of 

implementation. Under WIA, the federal government allocates funds to 

states each year, and states have three years to spend those funds--

that is, funds received in 1999 may be spent through 2001; similarly, 

those received in 2000 may be spent through 2002. Twice, the 

administration has proposed reducing the program’s budget, recommending 

a $359 million reduction for fiscal year 2002 and another $343 million 

in 2003. In both cases, the administration has cited states’ large 

amounts of unexpended funds carried over from the prior year, saying 

that states could readily absorb funding cuts without affecting service 

levels. Labor estimates that nearly 40 percent of states’ WIA funds 

remain available to spend at the end of program year 2001. However, 

state and local workforce officials challenge this position, and in 

light of current economic conditions, have expressed a need for more 

program funding, not less.



To more fully assess whether the Department of Labor’s spending 

information is a true reflection of states’ available funds, you asked 

us to determine: (1) to what extent states are spending their WIA funds 

and whether Labor’s data accurately reflect states’ available funds, 

(2) what Labor does to assess how states are managing their WIA 

spending, and (3) what affects states’ WIA expenditure rates.



To answer these questions, we analyzed the most recent available 

nationwide[Footnote 1] spending data from Labor--as of June 30, 2002--

and compared them with financial reports collected from selected 

states. In analyzing Labor’s reports, we disaggregated data by program 

year and analyzed them with and without unexpended funds carried over 

from prior years. To gain a better understanding of WIA spending 

issues, we met with workforce officials in two states--Colorado and 

Washington--and conducted in-depth structured telephone interviews 

with state officials in 7 others: California, Florida, Illinois, New 

York, Ohio, Texas, and Vermont. We also contacted officials 

representing local areas in 7 of the states. In selecting the states, 

we focused primarily on those with the larger WIA allocations. 

Collectively, the 9 states we selected accounted for about half of the 

total WIA allocation in program years 2000 and 2001. Besides being 

geographically dispersed, the states we selected included those with 

single and multiple local workforce areas and represented a range of 

expenditure rates and experience levels in implementing WIA. In 

selecting local areas, we chose from among the largest ones. We also 

interviewed officials at Labor headquarters and five of its regional 

offices, as well as four national associations. We conducted our work 

from April to October 2002 in accordance with generally accepted 

government auditing standards.



Results in Brief:



States are spending WIA funds much faster than required under the law, 

according to our analysis of Labor’s data. As of June 30, 2002, states 

had spent essentially all of their program year 1999 funds within the 3 

years allowed. In addition, they had spent 90 percent of their program 

year 2000 funds within 2 years and 56 percent of their program year 

2001 funds in 1 year--in fact, 16 states spent 70 percent or more of 

their program year 2001 funds in the first year. By contrast, Labor’s 

estimate of expenditure rates suggests a slower pace for spending 

because the estimate is based on all funds states currently have 

available--from older funds carried in from prior program years to 

those only recently distributed, assessed in the aggregate, not 

year-by-year. Moreover, the newest funds, which states have 2 more 
years 

to spend, comprised two-thirds of all funds states had available for 

program year 2001. Further, even though 44 percent of program year 2001 

funds are being carried over into program year 2002, many of these 
funds 

may already be committed--or obligated. However, states do not have a 

clear, uniform definition of obligations and what they report to Labor 

on obligations differs--some report obligations made only by the state, 

others report those made at the local level. Of the 9 states we 
reviewed, 

all collected information on obligations made at the local level but 
only

4 reported them to Labor. When local obligations are included, the 
amount 

of funds that could be considered available decreases markedly. For 

example, the percentage of California’s program year 2001 funds that 

are available decreased from 40 percent to 7 percent. Without 

consistent information from states on funds that have been committed, 

Labor relies on expenditures and overestimates the funds states have 

available to spend.



Labor collects quarterly financial reports from each state and compares 

state spending against internally established benchmarks to determine 

how states manage their spending. Labor uses the results of the 

comparison to target guidance and technical assistance and to formulate 

the following year’s budget request. For example in program year 2001, 

Labor expected states to spend 69 percent of all their available WIA 

funds. While half the states met or exceeded this expenditure rate, 

Labor’s benchmarks were often not communicated to the states. Despite 

additional financial reporting guidance provided by Labor, some state 

and local officials remained confused by some of Labor’s requirements 

because the guidance and assistance on obligations had not been clear 

and definitive. State and local officials expressed a need for clearer 

guidance and the opportunity to share promising practices for 

effectively managing spending.



Several factors affect states’ WIA expenditure rates. State and local 

officials told us that cumbersome processes to get approval to spend 

funds, lengthy contract procurement procedures, and untimely billing by 

key service providers, especially community colleges, all delayed 

expenditures, sometimes by as much as 3 to 8 months. Also, funds held 

at the state level for statewide and other activities were spent more 

slowly--at less than two-thirds the rate of funds spent by local areas-

-causing overall expenditures to initially appear lower. Annual 

fluctuations in funding levels also affected many states’ and local 

areas’ willingness to commit funds for the long term and inhibited 

their ability to plan comprehensive workforce investment systems. To 

overcome some of these factors, some states and local areas are 

implementing such strategies as frequently monitoring and recapturing 

unspent and uncommitted funds from one local area and redistributing 

them to another, coordinating the procurement process before the 

receipt of funds so that contracts are in place by the time funds 

become available, and requiring expedited billing as part of contract 

specifications.



To improve the accuracy and consistency of financial reporting, we are 

recommending that Labor clarify its guidance on reporting obligations 

to address concerns identified by state and local officials. In 

addition, we are recommending that Labor collect information on funds 

committed at the point of service delivery and include such information 

in determining states’ available funds. We are also recommending that 

Labor share its spending benchmarks with states along with strategies 

for managing spending effectively. In its comments, Labor generally 

agreed with our findings and recommendations related to providing 

clearer definitions, guidance, and technical assistance to states to 

help them manage their WIA spending. However, Labor disagreed with our 

findings and recommendations related to the importance of considering 

obligations in addition to expenditures.



Background:



The Department of Labor required states to implement WIA’s major 

provisions by July 1, 2000, although six states began implementation a 

year earlier in July 1999. The act authorizes three separate funding 

streams for adults, dislocated workers, and youth. WIA’s appropriation 

for fiscal year 2002 was $950 million for adult, $1.1 billion for 

youth, and $1.5 billion for dislocated worker programs, for a total of 

$3.9 billion (see table 1).



Table 1: Funds Appropriated for WIA in Fiscal Years 2000-2003:



Category: Adult; Fiscal year 2000: $950 million; Fiscal year 2001: $950 

million; Fiscal year 2002: $950 million; Fiscal year 2003 (request): 

$900 million.



Category: Youth; Fiscal year 2000: 1.3 billion; Fiscal year 2001: 1.4 

billion; Fiscal year 2002: 1.4 billion; Fiscal year 2003 (request): 1.0 

billion.



Category: Dislocated worker; Fiscal year 2000: 1.6 billion; Fiscal year 

2001: 1.4 billion; Fiscal year 2002: 1.5 billion[A]; Fiscal year 2003 

(request): 1.4 billion.



Category: Total; Fiscal year 2000: $3.9 billion; Fiscal year 2001: $3.8 

billion; Fiscal year 2002: $3.9 billion; Fiscal year 2003 (request): 

$3.3 billion.



[A] This amount includes a rescission of $177.5 million.



Source: GAO’s analysis of agency budget documents.



[End of table]



WIA encourages collaboration and partnerships in making a wide array of 

services universally accessible to these three populations and allows 

states broad discretion in designing their workforce investment 

systems. WIA requires most federally funded employment and training 

services to be delivered through a one-stop system overseen by newly 

created state and local workforce investment boards, although the 

services themselves may be provided by partner agencies and locally 

contracted service providers. In fact, WIA encourages client referrals 

to programs offered by one-stop partners.



WIA’s Funding Cycle Is Complex:



Once Congress appropriates WIA funds, the amount of money that flows to 

states and localities depends on a specific formula that takes into 

account unemployment. Thus, any changes in the annual appropriation or 

elements of the allocation formula will result in year-to-year funding 

fluctuations. Once the Congress appropriates funds for a given fiscal 

year, Labor notifies states of their annual allocation--usually in the 

February to March timeframe. The funds are made available to states and 

localities at three separate times during the year, depending on the 

program (see fig. 1). For youth services, all funds for the year are 

made available on April 1, 

3 months before the beginning of the program year on July 1. This once-

a-year youth allocation is designed to help states and local areas gear 

up for summer youth activities. The adult and dislocated worker funding 

allocations are distributed twice a year from two different years’ 

appropriations--on July 1 (1/4 of the allotment) and on October 1 

(3/4 of the allotment)--with the October allocation funded from a new 

fiscal year’s appropriation. States and localities are required to 

manage their WIA programs, including spending, on a program-year basis, 

regardless of when funds are made available. In addition, WIA allows 

states 3 program years to spend their funds while local areas have 

2 program years.



Figure 1: WIA’s Annual Funding Cycle:



[See PDF for image]



[End of figure]



Once WIA funds are made available, they flow from Labor to states, 

states to local areas, and local areas to service providers. For 

dislocated worker funds, the Secretary of Labor retains 20 percent of 

the funds in a national reserve account to be used for emergency 

grants, demonstrations, and technical assistance and allocates the 

remaining funds to the states according to a specified formula. Once 

states receive their allocation, the governor can reserve up to 25 

percent of dislocated worker funds for rapid response activities 

intended to help workers faced with plant closures and layoffs to 

quickly transition to new employment. In addition to funds set aside 

for rapid response, WIA allows states to set aside up to 15 percent of 

the dislocated worker allotment and permits them to combine the 

dislocated worker set-aside with similar set-asides from their adult 

and youth allotments. States use the set-asides to support a variety of 

statewide activities such as helping establish one-stop centers, 

providing incentive grants to local areas, operating management 

information systems, and disseminating lists of organizations that can 

provide training. After funds are set aside for rapid response and 

statewide activities, the remainder--at least 60 percent for dislocated 

workers and 85 percent for adult and youth--is then allocated to local 

workforce areas, also according to a specified formula. In addition, 

local areas may reserve up to 10 percent from each of the three funding 

streams for local administrative activities (see table 2).



Table 2: Allocation of WIA Funds to States and Local Areas:



Distributed to states: Reserved by governor for rapid response 

activities; Adult: N/A[B]; Youth: N/A[B]; Dislocated worker[A]: 25%.



Distributed to states: Reserved by governor for statewide activities; 

Adult: 15%; Youth: 15%; Dislocated worker[A]: 15%.



Distributed to states: Allocated to local areas[C]; Adult: 85%; Youth: 

85%; Dislocated worker[A]: 60%.



[A] The Secretary of Labor reserves 20 percent of dislocated worker 

funds for national emergency grants, demonstrations, and technical 

assistance before distributing the remaining 80 percent to states for 

their use.



[B] Rapid response funds are not applicable to the adult and youth 

programs.



[C] A maximum of 10 percent of local area funds may be used for local 

administration.



Source: GAO’s analysis of the Workforce Investment Act.



[End of table]



States Report to Labor on Six Funding Categories:



Labor collects quarterly financial status reports from states, 

detailing expenditures separately for the six funding categories under 

WIA--two categories at the state level (governor’s set-aside and rapid 

response) and four at the local level (adult, dislocated worker, youth, 

and local administration). Appendix I depicts a sample form that states 

complete and submit to Labor. Because adult and dislocated worker funds 

for each program year are provided from two separate appropriations, 

Labor requires states to track financial information separately by the 

year in which funds are appropriated. As a result, states submit a 

total of 11 reports each quarter for activities funded by the current 

program year’s allocation, as shown in table 3. In addition, WIA gives 

states 3 years within which to spend their grant; consequently, states 

may be tracking activities that are funded by 3 different program 

years, thus submitting up to 33 reports each quarter (11 reports

 multiplied by the 3 program years in which funds are available).



Table 3: WIA’s Quarterly Financial Reporting Requirements:



Statewide category; Number of reports: [Empty].



Governor’s set-aside (15 percent); Number of reports: 2.



Rapid response; Number of reports: 2.



Local category; Number of reports: [Empty].



Adult; Number of reports: 2.



Dislocated workers; Number of reports: 2.



Youth; Number of reports: 1[A].



Administration (10 percent cap); Number of reports: 2.



Total; Number of reports: 11.



[A] All youth funds are allocated at a single point during the program 

year; therefore, only one report is required to be submitted.



Source: GAO’s analysis of Labor’s Training and Employment Guidance 

Letter 16-99, (Washington, D.C.: 2000).



[End of table]



In completing their financial status reports, states are required to 

follow Labor’s guidance that identifies and defines the data elements 

to be reported. Labor collects “total federal obligations”--which it 

defines as the sum of expenditures, accruals, and unliquidated 

obligations--for determining how much states have already spent and how 

much is still available for spending. Table 4 shows the definitions of 

each of these terms. In addition, WIA regulations require expenditures 

to be reported on an accrual basis. This means states should report all 

cash outlays and all accruals as expenditures on their reports. As of 

July 2002, all states we contacted told us that they were reporting 

expenditures on an accrual basis.



Table 4: Elements of Labor’s Definition of Total Federal Obligations:



Element: Expenditures; Definition: Actual cash disbursements or 

outlays..



Element: Accruals; Definition: Amounts owed for goods and services that 

have been received but for which cash has not yet been disbursed. For 

example, an accrual would occur if a job seeker completed a training 

class, but the training provider had not yet been paid..



Element: Unliquidated obligations[A]; Definition: Obligations 

incurred, but for which an outlay has not yet been recorded; should 

include unliquidated obligations to subgrantees and contractors. This 

amount is different from accruals in that services have not been 

provided and costs have not been incurred. For example, an unliquidated 

obligation would be incurred when the state or local area enters into a 

commitment or contract with a service provider for training, but 

training has not yet been completed or the service provider paid..



[A] Hereafter, we refer to unliquidated obligations as obligations.



Source: Labor’s Training and Employment Guidance Letter 16-99, 

(Washington, D.C.: 2000). Text in italics added by GAO.



[End of table]



Financial reporting begins at the local service provider level and 

progresses through the local, state, and national levels. Figure 2 

shows how WIA financial reports flow from one level to the next and the 

data elements that are reported. After reconciling any discrepancies, 

states aggregate the local reports and are required to submit a 

financial status report to their regional Labor office 45 days after 

the quarter’s end, according to Labor officials. Ten days later, after 

performing edit checks, regional officials told us that they certify 

and forward states’ reports to Labor’s national headquarters. The 

national office then merges information for the six funding categories 

into the three funding streams--adults, dislocated workers, and youth-

-and combines the program and fiscal year data into a single program 

year. Within 5 days of receiving reports from its regional offices, 

Labor is required to present the Congress with a single report 60 days 

after the end of the quarter.



Figure 2: WIA Quarterly Financial Reporting Process:



[See PDF for image]



[End of figure]



WIA Provides for Recapturing Unspent Funds:



Labor uses states’ financial reports to determine whether there are any 

unspent funds that may need to be redistributed among states. Local 

areas have 2 years within which to spend their annual allocations while 

states have 3 program years. Thus, program year 2000 funds must be 

spent by the end of program year 2001 for localities and by the end of 

program year 2002 for states. If funds are not spent, WIA directs both 

states and Labor to recapture and, if appropriate, redistribute unspent 

funds according to specific criteria (see fig. 3). The recapture 

processes are similar at both the state and federal level. States have 

a two-tiered process by which they recapture available funds. First, at 

the end of the initial program year, states may reclaim funding from 

local areas with total obligations less than 80 percent of their annual 

allocation and redistribute these recaptured funds to those local areas 

that have met the criterion for total obligations. Second, at the close 

of local areas’ 2-year grant period, states may recapture any 

unexpended local funds and may reallocate the funds to other local 

areas that have fully expended their allocation or to statewide 

activities, but only in the third year the grant is available.



Like local areas, states are also subject to having their funds 

recaptured. At the federal level, Labor may recapture funds from states 

with total obligations less than 80 percent of their annual allotment 

at the end of the first program year. Labor applies the same recapture 

process to the end of the second program year. At both intervals, Labor 

may redistribute these funds to other states that have met the 

requisite total obligation rate. By the end of the 3-year grant period, 

Labor may recapture any state funds that have not been fully expended. 

Because states’ WIA grants expire after 3 years, funds recaptured by 

Labor at the end of the third year may not be redistributed to other 

states. Rather, Labor must return the funds to the U.S. Treasury.



Figure 3: WIA Fund Recapture Process:



[See PDF fodr image]



[End of figure]



States Have Spent Most of Their WIA Funds, Labor’s Estimate Overstates 

Funds Available to Spend:



Our analysis of Labor’s data shows that states are spending their WIA 

funds within the authorized 3-year timeframe--virtually all funds 

allocated for program year 1999 have been spent within the requisite 3 

years and 90 percent of program year 2000 funds have been spent within 

2 years. In addition, states have spent just over half of their program 

year 2001 allocation within the first year funds were available. By 

contrast, Labor’s estimate of expenditure rates suggests that states 

are not spending their funds as quickly because the estimate is based 

on all funds states currently have available--from older funds carried 

in from prior program years to those only recently distributed. The 

newest funds, which states have 2 more years to spend, comprised 

two-thirds of all funds states had available for program year 2001. 

Moreover, many of the remaining funds carried over may have already 

been obligated. However, states do not use the same definition for 

obligations and what they report to Labor on obligations differs. 

Lacking consistent information on how much states and local areas 

have committed to spend, Labor relies on expenditure data and 

overestimates the funds states have available to spend.



Labor’s Expenditure Data Show That WIA Funds Are Being Spent within 

Authorized Timeframes:



Our analysis of Labor’s expenditure data shows that states are spending 

their WIA funds within the allowed 3-year period. Nationwide, Labor’s 

data show that states expended essentially all of their program year 

1999 funds within the authorized 3-year period that ended with program 

year 2001. In addition, states have expended 90 percent of program year 

2000 funds within the first two years funds were available--55 percent 

in the first year and another 35 percent in the second year. States 

have one more year to spend the remaining 10 percent of their program 

year 2000 funds. In addition, states had expended 56 percent of program 

year 2001 funds, with 2 years still remaining (see fig. 4).



Figure 4: Expenditure Rates by Year Spent:



[See PDF for Image]



[End fo figure]



While nationwide data show that funds are being spent within the 

required time period, state-by-state expenditure rates vary widely. For 

example, Vermont spent 92 percent of its program year 2000 allocation 

in the first year and 8 percent in the next, while Kentucky spent 29 

percent in the first year and 63 percent in the next. When program year 

2000 expenditure rates were combined for the first and second years 

that funds were available, all states had spent over 70 percent. Forty-

four states had spent 90 percent or more of their program year 2000 

funds, with 9 of those 44 states--Delaware, Idaho, Maine, Michigan, 

Montana, North Dakota, Rhode Island, Utah, and Vermont--achieving a 100

-percent expenditure rate. (See fig. 5.):



Figure 5: Range of States’ Cumulative Expenditure Rates for First 2 

Years That Program Year 2000 Funds Were Available:



[See PDF for image]



[End of figure]



Expenditure rates for first year spending of program year 2001 funds 

were similar to those of program year 2000, and state-to-state spending 

rates also varied widely, as shown in figure 6, ranging from 19 percent 

for New Mexico to 92 percent for Vermont. For program year 2001, the 

majority of states spent at least 55 percent of their funds and 16 

states spent at least 70 percent. (See app. II for state-by-state 

expenditure rates listed for program years 2000 and 2001.):



Figure 6: Range of States’ Expenditure Rates for First Year That 

Program Year 2001 Funds Were Available:



[See PDF for image]



[End of figure]



Expenditure rates increased for many states from program year 2000 to 

program year 2001. Thirty-one states spent funds at the same or faster 

pace in program year 2001 than they did during the same period in the 

prior year. However, for 21 states, spending occurred at a slower pace 

in 2001 compared with 2000. Nevertheless, 9 of the 21 states still 

spent at or above the nationwide rate of 56 percent in program year 

2001.



Labor’s Calculation of Expenditure Rates Aggregates Data Over 

3 Years:



In contrast to our expenditure rate estimate, Labor’s estimated 

expenditure rate of 65 percent at the end of program year 2001 

aggregates data over 3 years and considers all funds states have 

available. Labor based its calculation on older unexpended funds 

carried in from prior years as well as the newest funds represented by 

the program year 2001 allocation, even though that allocation made up 

the largest share of all available funds. For example, of the total $5 

billion[Footnote 2] available at the beginning of program year 2001, 

about two-thirds (65 percent) represented the program year 2001 

allocation, and about another one-third represented amounts carried in 

from program years 2000 and 1999 (29 percent and 6 percent, 

respectively) as shown in figure 7. By basing its calculation of an 

expenditure rate--65 percent at the end of program year 2001--on the 

sum of all available funds, Labor did not take into account the 2 

years that remain for states to spend the majority of their funds.



Figure 7: Breakout of $5 Billion Available for Program Year 2001:



[See PDF for image]



[End of figure]



Labor’s Information on States’ WIA Spending Is Not Accurate Due to 

Reporting Inconsistencies:



Differences in how states report expenditures result in data 

inaccuracies and reporting inconsistencies. WIA regulations require 

states to include accruals--or amounts owed for goods and services 

received that have not yet been paid---when reporting expenditures, but 

a few states reported only cash outlays in program year 2001. As a 

result, reported expenditures may have been understated. Some states 

and local areas may still be using a cash-based accounting system, 

usually tied to the state’s or local area’s existing accounting system 

and often used to report expenditures for other programs, such as 

welfare. State and local workforce officials we spoke with in areas 

that are reporting cash outlays told us they are modifying their 

accounting systems and will soon begin reporting accruals. In fact, as 

of program year 2002, all states we spoke with told us they are 

beginning to collect and report expenditures on an accrual basis as 

required under WIA regulations. Excluding accruals may understate 

expenditures primarily in the short term because invoices for goods and 

services received in one month are often converted into cash outlays in 

the next month. However, if this conversion takes a long time to occur 

and if expenditures are uneven from month-to-month and year-to-year, 

the effect of accruals for a year may be longer term and expenditures 

for a given year may be understated. For example, a jobseeker may have 

completed a training class in June of one program year, but the school 

does not submit an invoice to the local area until September of the 

next program year. If the local area captures the cost of training as 

an expenditure only after paying the invoice, it will wait until the 

new program year to report it and will understate its prior program 

year expenditures. Eventually, accruals may catch up with expenditures 

over the life of the grant---2 years for local areas and 3 years for 

states.



In addition to reporting expenditures each quarter, states also report 

obligations--funds committed through contracts for goods and services 

for which a payment has not yet been made. However, not all of the 

9 states we contacted reported obligations in the same way and 

differences in reporting resulted in data inconsistencies. Labor’s 

guidance requires that states report obligations but does not specify 

whether obligations made at the local level--the point at which 

services are delivered--should be included. States interpret Labor’s 

definition of obligations in several ways. Some states we contacted 

include as obligations the amount of the WIA grant they allocate to 

their local areas. By contrast, other states included funds that their 

local areas have committed in contracts for individual training 

accounts, staff salaries, and one-stop operating costs. Officials in 

these states told us they tracked locally committed funds because they 

more accurately reflect total spending activity. Of the 9 states we 

contacted, all collect information on local obligations. However, 4 of 

them report these data to Labor while the other 5 do not. These 

differences result in data that are not comparable across states.



Lacking Consistent Information on Obligations, Labor Overstates 

Available Funds by Considering Only Expenditures:



Labor’s data on obligations do not consistently reflect local 

commitments; therefore, Labor relies on expenditure data to estimate 

available funds. In doing so, Labor overestimates the amount states 

have available to spend. For 3 of the 4 states that report local 

obligations, the amount of funds the state has available is much 

smaller when local obligations are taken into account along with 

expenditures. For example, for New York, available funds are cut almost 

by a third, and in California and Washington, available funds 

essentially disappear---decreasing from 40 percent to 

7 percent, and 33 percent to 2 percent, respectively (see fig. 8). For 

Vermont, the fourth state that collects and reports local obligations, 

obligations and expenditures were very similar, with about 8 percent of 

program year 2001 funds available.



Figure 8: Percentage of Program Year 2001 Allocation Available for 

Three Selected States:



[See PDF for image]



[End of figure]



Labor Monitors Spending, Provides Guidance, but Concerns Remain:



A key role for Labor under WIA is to monitor state spending; it does so 

by comparing the expenditure information it receives from states with 

benchmarks Labor has developed. However, these benchmarks are often not 

communicated to the states. Labor uses the benchmarks to formulate 

budget requests and identify which states need monitoring and 

additional guidance. While Labor has provided additional financial 

reporting guidance and technical assistance, some state officials told 

us that they remain concerned about WIA spending and financial 

reporting and would like further help in developing strategies to 

effectively manage expenditures.



Labor Monitors State’s WIA Spending Using Benchmarks That Are Not 

Always Communicated to States:



Labor has established several national expenditure rates used as 

benchmarks against which to judge each state’s spending rate. In 

program year 2000, for example, Labor set its benchmark at 25 percent 

of states’ allocations during the first half of the year and 50 percent 

of their allocation three-quarters of the way through the year, based 

on its comparison of state expenditure reports. However, Labor’s data 

show that most states--40 in all--did not meet the 50-percent benchmark 

stipulated for March 31, 2001. The remaining 12 states either met or 

exceeded this benchmark. In program year 2001, Labor assumed higher 

expenditures and projected an expenditure rate of 69 percent, which 26 

states met or exceeded. Labor uses its projection to formulate the 

following year’s budget request and bases it on total WIA funds 

available, which include the current year allocation and prior years’ 

unexpended balances carried into the current year. (See app. III for 

states that met, exceeded, or were below benchmarks.):



Labor intended the program year 2000 benchmarks to serve as internal 

guidelines for targeting oversight efforts and has not always 

communicated them to states. Some state officials told us that lacking 

information on benchmarks has created frustration in managing their WIA 

spending because Labor notified these states that they were 

underspending their funds but did not specify the goal they had to 

achieve. Moreover, state and local officials said that it was unclear 

how the benchmarks take into account states’ 3-year and localities’ 2-

year spending windows.



Labor established protocols in April 2001 to address WIA spending 

issues, requiring its appropriate regional offices to contact states 

whose expenditures appeared low. States whose expenditure rates fell 

below program year 2000 benchmarks were subject to immediate regional 

office examination. In addition to reviewing state spending patterns 

and determining the magnitude of underspending, regional offices were 

required to work with state staff to determine specific reasons for 

underspending, help develop corrective action plans, and submit weekly 

and monthly progress reports on implementation status to Labor 

headquarters.



Labor’s regional offices have taken various approaches to monitoring 

states’ WIA spending. As of July 2002, six of seven regional offices 

had sent monitoring letters to 26 states. Three states received letters 

because spending was below the benchmarks,[Footnote 3] and these states 

were required to submit a corrective action plan. The other 23 

states[Footnote 4] received letters as part of ongoing regional 

oversight, regardless of spending level. The seventh region elected to 

hold meetings and used other modes of direct communication with state 

officials instead of sending them formal letters. In addition to 

sending letters, four regions conducted monitoring site visits to 

states with low expenditure rates.



Labor Has Provided Additional Guidance and Assistance, but States 

Remain Confused about How to Report and Manage Spending:



At the national level, Labor has issued guidance[Footnote 5] containing 

financial reporting instructions and definitions as well as a technical 

assistance guide on financial management.[Footnote 6] At the regional 

level, guidance and assistance efforts vary. For example, the Dallas 

Regional Office issued a memorandum suggesting steps states and local 

areas could take to address low enrollment and expenditures. 

Suggestions included modifying policies and procedures to quickly move 

one-stop clients who are on waiting lists to intensive or training 

activities and reporting Individual Training Account expenditures on an 

accrual basis regardless of whether the provider has submitted a bill. 

The New York Regional Office has developed a quarterly WIA expenditure 

tracking system and uses the information to conduct extensive 

briefings, correspondence, and discussions with its states in addition 

to providing guidance and technical assistance through training 

sessions.



Despite Labor’s guidance and assistance efforts, some state and local 

officials cited several concerns about financial reporting. As we 

noted, states are reporting obligations inconsistently because Labor’s 

definition of obligations is ambiguous. A recent report by Labor’s 

Inspector General confirms that the definition is unclear and that 

Labor provided conflicting instructions to Ohio State officials on how 

to report obligations.[Footnote 7] Obligations are especially important 

because WIA requires that recapture decisions be based on amounts 

expended and obligated. According to state and local officials, three 

aspects of Labor’s definition were problematic:



* First, Labor’s definition of obligations does not specify whether 

local obligations to service providers should be included when states 

report to Labor or whether obligation data should simply reflect state 

obligations to local boards. For example, Florida counts as obligations 

any funds it passes through to local areas, whereas Washington includes 

obligations made at the local level.



* Second, even when the issue of reporting local obligations is 

clarified, what constitutes an obligation is open to interpretation. 

Officials at a local area in Ohio, for example, said that some local 

areas report an obligation only when there is a legally binding 

contract while others include amounts that have been reserved in 

anticipation of a contract.



* Third, confusion exists on the timeframe used to define obligations. 

Colorado state officials noted that some local areas report commitments 

as obligations if the funds are committed no more than 3 months into 

the future, others consider obligations only within the current program 

year, while still others count obligations as any future commitments 

regardless of the length of the contract period. Ohio officials 

questioned whether obligations should be recorded for only 1 year given 

that WIA gives local areas 2 years in which to spend their funds. In 

addition, officials in several local areas told us that Individual 

Training Account vouchers,[Footnote 8] posed a particular financial 

reporting challenge. It is unclear what portion of the training voucher 

is to be reported as an obligation given that the vouchers may cover a 

2 to 3 year period.



Several state and local officials also cited the need for more 

information on strategies to better manage WIA spending. They told us 

that they would benefit from sharing these strategies. While they 

acknowledged that Labor had provided financial reporting guidance, they 

desired a mechanism or forum for exchanging ideas, questions, and 

answers on spending issues. Officials at both the state and local level 

expressed a need for greater clarity in the definition of obligations, 

more specific and frequent guidance and technical assistance, and 

systematic sharing of promising practices to effectively manage WIA 

spending. Labor officials acknowledged that states are misinterpreting 

the financial reporting guidance and that the guidance could be further 

clarified.



To ensure uniform reporting procedures, a few states have developed 

their own policy guidance. For example, Colorado recently issued a 

directive on reporting obligations and accrued expenditures.[Footnote 

9] The directive allows the costs of Individual Training Accounts to be 

reported as obligations when an order is placed or a contract is 

awarded for the procurement of goods and services. Furthermore, voucher 

agreements may be obligated up to 

12 months.



A Variety of Factors Affects States’ WIA Expenditure Rates:



State and local officials told us that a variety of factors affects WIA 

expenditure rates. Delays in reporting expenditures result from lengthy 

spending approval processes and cumbersome contract procurement 

procedures as well as from a lack of timely provider billing. In 

addition, fluctuating funding levels affect their willingness to make 

long-term commitments and inhibit their ability to do long-range 

planning. Some states and local officials we spoke with said that they 

use strategies to mitigate these factors and better manage spending.



Lengthy Expenditure Processes Delay Spending:



Officials at some states and localities told us that lengthy processes 

to obtain approval to spend the funds, WIA’s emphasis on contracting 

for services, and lags in service provider billing all contributed to 

delays in spending WIA funds. After the state allocates the WIA grant 

to the local areas, the local areas may go through time-consuming 

internal procedures to obtain approval to spend the funds before they 

can disburse or obligate the money:



* Officials in Cleveland told us that the city council has to approve 

the grant allocation from the state for each funding stream. This 

process includes approval of the grant’s receipt as well as its 

expenditure, taking anywhere from several weeks to 8 months.



* Local area officials in Colorado told us that county commissioners 

have to approve the release of funds from the state to the local area. 

This process takes anywhere from 2 weeks to 3 months, depending on the 

number of counties comprising a local area.



WIA’s emphasis on contracting for services may also delay spending for 

states and localities, especially for those whose procurement process 

is lengthy:



* New York officials told us that contracts must go through a 

competitive bidding process and many layers of review, including the 

state’s department of labor, comptroller, and attorney general, 

resulting in a procurement process lasting an average of 3 months.



* Illinois state officials attributed slow statewide expenditure rates 

to the state’s lengthy procurement process, in which it took 8 months 

to procure a vendor to redesign the state’s case management system.



Performance-based contracts also result in financial reporting delays 

where contractors get paid as they meet agreed-upon performance goals. 

Officials in 4 of the states we contacted told us that they rely on 

these types of contracts in at least some of their local areas. As a 

result, they record expenditures later in the program year than those 

entities that reimburse contractors whenever costs are incurred:



* According to Florida State officials, all contracts are performance 

based, by state law. Contractors are paid at certain intervals during 

the contract period depending on when they have met stipulated outcomes 

such as job retention. However, an outcome such as job retention may 

not be known until as long as 6 months after the contract terminates.



* Suffolk County in New York pays its contractors at intervals. For 

example, 50 percent of the contract is paid when 50 percent of the 

training has been completed.



Some key service providers often bill late, sometimes months after 

providing services. Both state and local officials told us that public 

institutions--particularly community and technical colleges--are 

primary providers of training, often delivering such services through 

Individual Training Accounts. The 4 to 6 month lag in school billing in 

Miami, for example, not only causes delays in reporting expenditures, 

but public schools--not accustomed to billing monthly--may also have 

little financial incentive to expedite billing because they do not rely 

on WIA funds as a major source of their tuition revenue.



Statewide Funds Are Spent at a Slower Rate:



Slower spending of statewide funds compared to local funds also affects 

expenditure rates. Labor’s data for program year 2001 show that states 

are spending their statewide funds at less than two-thirds the rate of 

local funds. For example, the governor’s statewide 15 percent set-aside 

was 37 percent expended compared to 70 percent expended for local adult 

programs (see fig. 9). The difference in expenditure rates is due, in 

part, to WIA’s requirement that some of the statewide funds be used for 

end-of-year incentive grants to local areas for exemplary performance 

on the local performance measures. In addition, Washington, for 

example, uses statewide funds for long-term projects and for activities 

such as program evaluations. Likewise, rapid response funds are held at 

the state level to enable response to mass layoffs or plant closures. 

Florida State officials told us that, by state law, the state board 

must retain 30 percent of its rapid response funds until the latter 

part of the program year.



Figure 9: WIA Expenditure Rates for First Year That Program Year 2001 

Funds Were Available, by Funding Category:



[See PDF for image]



[End of figure]



Although these factors affect when expenditures are incurred and 

reported, other factors may influence states’ decision on whether to 

spend their WIA funds.



Three Factors Affect States’ Overall Level of Spending:



Three key factors affect the extent to which states spend their WIA 

funds. First, fluctuations in funding levels due to funding formulas or 

budget decisions affect states’ and localities’ willingness to make 

long-term commitments and their ability to plan comprehensive workforce 

systems. Second, WIA’s emphasis on referrals to other one-stop 

partners’ programs may result in non-WIA funds being spent first. 

Third, implementation issues, particularly during the early stages of 

the program, may have resulted in lower expenditures while one-stop 

centers were still being established.



Funding Fluctuations:



Year-to-year fluctuations in funding, whether due to the allocation 

formulas or appropriation decisions, make localities reluctant to 

commit funds for long-term training and education, affecting overall 

WIA spending. How much states and localities receive can vary 

dramatically from year to year as a result of WIA’s funding formula 

allocations for the adult, youth, and dislocated worker programs. The 

dislocated worker funding formula, which distributes a third of its 

funds based upon the amount of “excess unemployment” (unemployment 

exceeding 4.5 percent), is especially volatile.[Footnote 10] In 

addition, funds appropriated for WIA programs vary according to annual 

budget decisions. For program year 2001, for example, 

$177.5 million was rescinded from the dislocated worker program. State 

and local area officials told us that they were uncertain whether the 

rescission would be restored and that the uncertainty contributed to 

their sense of funding instability. Local area funding levels can also 

fluctuate when they receive an infusion of unanticipated, unspent 

statewide funds, as was the case in Seattle and Tacoma. Washington’s 

governor held back some rapid response funds in anticipation of 

aluminum plant closings and mass layoffs stemming from the energy 

shortage along the West Coast. However, when plant closings did not 

materialize, the state no longer needed the funds for rapid response 

activities and allocated them to these two cities midway through the 

program year, with the expectation that the funds would be spent by the 

end of the program year.



Year-to-year fluctuations in funding also hinder states’ and 

localities’ ability to plan comprehensive workforce investment systems. 

For example, in New York, funds for dislocated workers decreased by 

about 40 percent from program year 1999 to program year 2000, a 

fluctuation that state officials said would inhibit its local areas 

from committing funds beyond the current program year because future 

funding levels are uncertain. Similarly, state officials in Ohio told 

us that their local areas have adopted a cautious approach to current 

year spending and plan to carry over unspent funds due to funding 

uncertainty.



Referrals to Other Partners:



WIA’s emphasis on referrals to other sources of assistance makes WIA a 

funding source of last resort. As part of the core services under WIA, 

adults and dislocated workers can get help in establishing financial 

aid eligibility for training and education programs that are available 

in the community but are not funded under WIA. In addition, to qualify 

for training services under the adult and dislocated worker programs, 

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

Pell Grants, or must require assistance beyond that provided by other 

grant aid programs. Sometimes, states make it a priority for local 

areas to spend other grant funds. For example, in Ohio, WIA spending 

was delayed because of the large amount of funds to be spent from the 

Temporary Assistance for Needy Families (TANF) grant.[Footnote 11]



Start-up Issues:



Start-up issues may have also affected expenditures in the initial 

stages of WIA’s implementation, especially during program years 1999 

and 2000. Expenditures during this period may have been lower--many 

one-stop centers were not fully up and running while states and 

localities were developing or substantially retooling existing 

employment and training systems. For example, while Texas got a head 

start in establishing one-stops under WIA because it was an early 

implementer, state workforce officials struggled with other issues such 

as implementing individual training accounts and developing data 

collection systems for WIA’s performance measures. In addition, some 

states and local areas initially took a “work-first” approach, 

emphasizing job placement services that were less expensive compared to 

long-term training and education services, especially given the 

positive economic and employment conditions at the time of WIA’s 

enactment. Workforce officials told us that most of these issues have 

been resolved since the transition from JTPA.



Some States and Localities Have Mitigated Factors Affecting Spending 

Rates:



To manage spending more effectively, some states and local areas have 

developed strategies to mitigate factors affecting spending levels or 

delays in reporting expenditures.



* Most states we contacted have a process in place to recapture funds 

from local areas that have not met their target spending rates and 

reallocate them to those areas that have done so, although only a few 

had used it or planned to use it for program year 2000 funds, in part 

because they were transitioning from JTPA. Florida, however, actively 

monitors expenditures and requires its local areas to meet a minimum 25 

percent expenditure rate after 6 months, 50 percent after 12 months, 75 

percent after 18 months, and 100 percent at the end of 24 months when 

local grants expire.



* To address lengthy contracting processes, Chicago coordinates the 

timing of the procurement process with the availability of funds.



* Florida has addressed delayed school billing by mandating expedited 

billing in the contract and Vermont pays tuition expenses at the time 

of participant registration rather than at course completion.



* To facilitate the spending of statewide funds, Texas’ state WIA plan 

identifies statewide initiatives at the beginning of the program year 

so that statewide funds can be allocated more expeditiously.



Conclusions:



In past reports, we have found that states and local areas have stepped 

up to the challenge of fundamentally reconfiguring their workforce 

investment systems to serve the nation’s jobseekers and 

employers.[Footnote 12] Though spending was initially sluggish as state 

and local boards ramped up their workforce systems, the pace of 

spending picked up as the second full year of implementation under WIA 

came to a close. Our analysis of Labor’s data shows that states are 

rapidly spending their funds--in fact, nationwide, states have spent 90 

percent within 2 years, much of it often within the first year the 

funds were available. This pace of spending has occurred even though 

the law allows states 3 years to spend the funds.



But, expenditures by themselves do not provide a complete picture of 

spending activity. Obligations--funds that have been committed on 

behalf of WIA customers--must also be considered to accurately gauge 

how much is truly available for spending. Moreover, the law requires 

Labor to use obligations in its recapture decision. Taken together, 

expenditures and obligations are important tools for effective grant 

management and prudent oversight of the program. Labor has begun taking 

an active role in monitoring program spending. But, state officials 

have told us that it is not enough; they need more clear and consistent 

guidance from Labor on how to manage and report their WIA spending and 

how to collect and report obligations, particularly those commitments 

made at the local level. Failing this, states will continue struggling 

to understand what information is needed, and Labor’s data will 

continue to be incomplete and inaccurate. Perhaps most problematic, 

though, is that, lacking consistent, reliable data on obligations, 

Labor uses only expenditure data to gauge budgetary need. In so doing, 

Labor does not take into account longer-term commitments made to 

customers and service providers and, as a result, overestimates 

available funds. Budget decisions based on underestimated spending 

levels contribute to funding instability in the system and impair the 

ability of state and local officials to plan workforce systems that 

provide the nation’s jobseekers and employers with critically needed 

services.



To build their workforce investment systems, states must carefully plan 

and use their limited resources in a way that best meets the growing 

demand for employment and training services, in the current uncertain 

economic environment. State officials told us that they seek more 

guidance and assistance in managing their WIA funds wisely and some 

states have implemented strategies to do so. But states will not be 

able to effectively manage their spending and sustain service levels 

without knowing what spending goals they must achieve and without a 

forum for sharing promising practices to help them succeed.



Recommendations for Executive Action:



To enhance Labor’s ability to manage its WIA grants and to improve the 

accuracy and consistency of financial reporting, we are making several 

recommendations to Labor.



Through collaboration with states, Labor should clarify the definition 

of unliquidated obligations to:



* include funds committed at the point of service delivery in addition 

to those funds obligated at the state level for statewide WIA 

activities and not funds that states merely allocate to their local 

areas,



* specify what constitutes an obligation to address state and local 

area concerns regarding contracts, and:



* specify the timeframe for recording an obligation particularly when 

it covers time periods that are longer than a program year.



To provide a more complete picture of spending activity and to obtain 

accurate information for its recapture decision, Labor should:



* require states to collect and report information on obligations at 

the point of service delivery and:



* include such obligations in determining states’ available funds.



To help states and local areas manage their spending more judiciously, 

Labor should:



* proactively provide states and local areas with guidance and 

technical assistance focused on reporting financial information,



* communicate spending benchmarks that states should meet, and:



* systematically share promising practices and effective spending 

management strategies.



Agency Comments and Our Evaluation:



We provided a draft of this report to officials at Labor for their 

review and comment. Labor’s comments are in appendix IV. In its 

comments, Labor noted that the report contained a number of findings 

that will be very helpful during WIA’s reauthorization. In general, 

Labor agreed with our findings and recommendations related to providing 

clearer definitions, guidance, and technical assistance to states to 

help them manage their WIA spending. However, Labor disagreed with our 

findings and recommendations related to the importance of considering 

obligations in addition to expenditures as it assesses WIA’s financial 

position.



In response to our finding that states are spending their WIA funds 

faster than the authorized 3-year period, Labor said that states were 

exceeding the law’s minimum spending requirements, but that it must 

look beyond minimum expectations when investing limited resources. We 

agree with this point. In fact we found an expenditure rate of 90 

percent of program year 2000 funds within 2 years, indicating that 

states are going well beyond minimum expectations. Labor also 

acknowledged that its spending estimate included all funds available at 

the start of the program year, without which an analysis of expenditure 

rates would be misleading. We do not contest Labor’s methodology, but 

think it is important to note that most of the funds available to 

states were allocated within the past year, and states have not had 

long to spend the funds. We continue to assert that a better way to 

look at expenditure rates is not in the aggregate, but on a year-by-

year basis.



Regarding our conclusion that Labor’s data do not accurately reflect 

state spending because they exclude obligations, Labor commented that, 

while it collects information on obligations due to statutory 

requirements, obligations are unimportant in formulating the budget 

because they represent future commitments to provide services, not 

actual service delivery. We continue to believe that obligations play a 

significant role in light of WIA’s greater emphasis on contracting for 

services and are recommending that Labor establish a clearer definition 

of obligations that states can follow so that they can report more 

meaningful data to Labor.



While agreeing with our recommendation to clarify its definition of 

obligations, Labor took exception to the recommendation to collect and 

report obligations made at the point of service delivery. Labor was 

concerned that a new reporting requirement would be extremely 

burdensome and costly to implement nationwide, in part because it did 

not believe that service providers always collected this information. 

We believe that assessing both obligations and expenditures is an 

important tool for sound financial management at any level--state, 

local area, or service provider--and a number of states are already 

collecting local obligations. We are pleased to note that Labor said it 

plans to work with states on this recommendation during WIA 

reauthorization.



Labor also concurred with our recommendations to provide additional 

financial reporting guidance and technical assistance as well as to 

share promising practices for effectively managing spending. Labor 

agreed that it would be a priority for the coming year to ensure that 

all states are aware of requirements for the accounting of WIA funds.



Regarding our recommendation that Labor communicate spending benchmarks 

that states should meet, Labor disagreed with our characterization of 

the expenditure rates as benchmarks, saying instead that they were 

projections of spending used to formulate a budget. Labor also 

commented that expenditure rates used to monitor spending were based on 

actual financial reports submitted by states, not on Labor’s 

expectations. Labor has used these expenditure rates as benchmarks to 

identify states that were underspending their WIA funds and to 

prioritize oversight efforts. We agree that using benchmarks to 

prioritize monitoring helps manage limited resources; however, if 

spending targets are established, they should be disclosed.



Finally, Labor was concerned about the unprecedented level of unspent 

balances carried over from prior years, citing these excess funds as 

justification for the dislocated worker rescission and for seeking 

additional budget reductions. While unspent balances under WIA may be 

larger than those experienced under JTPA, it may not be reasonable to 

expect comparable spending levels between the two programs. WIA’s 

requirements represent a significant shift from prior workforce 

programs, including its emphasis on contracting for services, 

streamlining services through one-stop centers, and establishing 

training vouchers on behalf of customers. In addition, we contend that 

these unspent balances may have already been committed and may be 

unavailable for spending. We agree that the nation will face many 

challenges in financing its priorities in the coming years. However, in 

order to make funding choices, decisionmakers will need comprehensive 

information that considers expenditures, obligations, and how long the 

funds have been available for states to spend. We reiterate that 

additional clarification and guidance from Labor as well as effective 

management strategies would help states judiciously manage their WIA 

funds.



We will send copies of this report to the Secretary of Labor, relevant 

congressional committees, other interested parties, and will make 

copies available to others upon request. In addition, the report will 

be available at no charge on the GAO Web site at MACROBUTTON 

HtmlResAnchor http://www.gao.gov. Please contact me at (202) 512-7215 

if you or your staff have any questions about this report. Other major 

contributors to this report are listed in appendix V.



Signed by Sigurd R. Nilsen:



Sigurd R. Nilsen

Director, Education, Workforce,

 and Income Security Issues:



[End of section]



Appendix I: Sample Financial Status Report Form:



[See PDF for image]



Source: Department of Labor.



[End of figure]



[End of section]



Appendix II: State Expenditure Rates, by Year, for Funds Allocated in 

Program Years 2000 and 2001:



State: Nationwide Total; Program year 2000: Allocation: $3,194,853,459; 

Program year 2000: First year expenditures: 55%; Program year 2000: 

Second year expenditures: 35%; Program year 2000: Cumulative 

expenditures: 90%; [Empty]; Program year 2001: Allocation: 

$3,209,860,440; Program year 2001: First year expenditures: 56%.



State: Alabama; Program year 2000: Allocation: $40,004,934; Program 

year 2000: First year expenditures: 65%; Program year 2000: Second year 

expenditures: 31%; Program year 2000: Cumulative expenditures: 96%; 

[Empty]; Program year 2001: Allocation: $50,899,142; Program year 2001: 

First year expenditures: 43%.



State: Alaska; Program year 2000: Allocation: $13,025,382; Program year 

2000: First year expenditures: 50%; Program year 2000: Second year 

expenditures: 40%; Program year 2000: Cumulative expenditures: 89%; 

[Empty]; Program year 2001: Allocation: $18,770,901; Program year 2001: 

First year expenditures: 31%.



State: Arizona; Program year 2000: Allocation: $40,316,492; Program 

year 2000: First year expenditures: 68%; Program year 2000: Second year 

expenditures: 25%; Program year 2000: Cumulative expenditures: 93%; 

[Empty]; Program year 2001: Allocation: $45,780,561; Program year 2001: 

First year expenditures: 63%.



State: Arkansas; Program year 2000: Allocation: $32,873,554; Program 

year 2000: First year expenditures: 42%; Program year 2000: Second year 

expenditures: 45%; Program year 2000: Cumulative expenditures: 87%; 

[Empty]; Program year 2001: Allocation: $26,623,830; Program year 2001: 

First year expenditures: 46%.



State: California; Program year 2000: Allocation: $629,891,146; Program 

year 2000: First year expenditures: 53%; Program year 2000: Second year 

expenditures: 39%; Program year 2000: Cumulative expenditures: 92%; 

[Empty]; Program year 2001: Allocation: $588,310,299; Program year 

2001: First year expenditures: 60%.



State: Colorado; Program year 2000: Allocation: $21,927,432; Program 

year 2000: First year expenditures: 53%; Program year 2000: Second year 

expenditures: 43%; Program year 2000: Cumulative expenditures: 96%; 

[Empty]; Program year 2001: Allocation: $20,505,485; Program year 2001: 

First year expenditures: 50%.



State: Connecticut; Program year 2000: Allocation: $23,667,536; Program 

year 2000: First year expenditures: 68%; Program year 2000: Second year 

expenditures: 29%; Program year 2000: Cumulative expenditures: 97%; 

[Empty]; Program year 2001: Allocation: $23,219,420; Program year 2001: 

First year expenditures: 80%.



State: Delaware; Program year 2000: Allocation: $6,490,578; Program 

year 2000: First year expenditures: 73%; Program year 2000: Second year 

expenditures: 27%; Program year 2000: Cumulative expenditures: 100%; 

[Empty]; Program year 2001: Allocation: $7,914,898; Program year 2001: 

First year expenditures: 76%.



State: District of Columbia; Program year 2000: Allocation: 

$19,115,547; Program year 2000: First year expenditures: 59%; Program 

year 2000: Second year expenditures: 36%; Program year 2000: Cumulative 

expenditures: 95%; [Empty]; Program year 2001: Allocation: $16,441,608; 

Program year 2001: First year expenditures: 62%.



State: Florida; Program year 2000: Allocation: $119,379,909; Program 

year 2000: First year expenditures: 67%; Program year 2000: Second year 

expenditures: 30%; Program year 2000: Cumulative expenditures: 96%; 

[Empty]; Program year 2001: Allocation: $115,400,934; Program year 

2001: First year expenditures: 71%.



State: Georgia; Program year 2000: Allocation: $61,986,095; Program 

year 2000: First year expenditures: 39%; Program year 2000: Second year 

expenditures: 49%; Program year 2000: Cumulative expenditures: 88%; 

[Empty]; Program year 2001: Allocation: $62,065,406; Program year 2001: 

First year expenditures: 35%.



State: Hawaii; Program year 2000: Allocation: $25,017,294; Program year 

2000: First year expenditures: 36%; Program year 2000: Second year 

expenditures: 53%; Program year 2000: Cumulative expenditures: 90%; 

[Empty]; Program year 2001: Allocation: $16,824,216; Program year 2001: 

First year expenditures: 50%.



State: Idaho; Program year 2000: Allocation: $14,001,554; Program year 

2000: First year expenditures: 59%; Program year 2000: Second year 

expenditures: 41%; Program year 2000: Cumulative expenditures: 100%; 

[Empty]; Program year 2001: Allocation: $11,649,917; Program year 2001: 

First year expenditures: 73%.



State: Illinois; Program year 2000: Allocation: $117,156,561; Program 

year 2000: First year expenditures: 73%; Program year 2000: Second year 

expenditures: 21%; Program year 2000: Cumulative expenditures: 94%; 

[Empty]; Program year 2001: Allocation: $133,535,368; Program year 

2001: First year expenditures: 77%.



State: Indiana; Program year 2000: Allocation: $32,074,354; Program 

year 2000: First year expenditures: 72%; Program year 2000: Second year 

expenditures: 22%; Program year 2000: Cumulative expenditures: 94%; 

[Empty]; Program year 2001: Allocation: $34,472,916; Program year 2001: 

First year expenditures: 73%.



State: Iowa; Program year 2000: Allocation: $11,453,324; Program year 

2000: First year expenditures: 53%; Program year 2000: Second year 

expenditures: 42%; Program year 2000: Cumulative expenditures: 94%; 

[Empty]; Program year 2001: Allocation: $12,050,045; Program year 2001: 

First year expenditures: 54%.



State: Kansas; Program year 2000: Allocation: $12,647,819; Program year 

2000: First year expenditures: 53%; Program year 2000: Second year 

expenditures: 45%; Program year 2000: Cumulative expenditures: 98%; 

[Empty]; Program year 2001: Allocation: $14,070,055; Program year 2001: 

First year expenditures: 48%.



State: Kentucky; Program year 2000: Allocation: $42,450,709; Program 

year 2000: First year expenditures: 29%; Program year 2000: Second year 

expenditures: 63%; Program year 2000: Cumulative expenditures: 91%; 

[Empty]; Program year 2001: Allocation: $42,461,995; Program year 2001: 

First year expenditures: 46%.



State: Louisiana; Program year 2000: Allocation: $66,600,837; Program 

year 2000: First year expenditures: 37%; Program year 2000: Second year 

expenditures: 53%; Program year 2000: Cumulative expenditures: 90%; 

[Empty]; Program year 2001: Allocation: $64,237,072; Program year 2001: 

First year expenditures: 38%.



State: Maine; Program year 2000: Allocation: $11,241,748; Program year 

2000: First year expenditures: 76%; Program year 2000: Second year 

expenditures: 24%; Program year 2000: Cumulative expenditures: 100%; 

[Empty]; Program year 2001: Allocation: $10,172,785; Program year 2001: 

First year expenditures: 78%.



State: Maryland; Program year 2000: Allocation: $44,146,044; Program 

year 2000: First year expenditures: 58%; Program year 2000: Second year 

expenditures: 40%; Program year 2000: Cumulative expenditures: 98%; 

[Empty]; Program year 2001: Allocation: $42,362,811; Program year 2001: 

First year expenditures: 56%.



State: Massachusetts; Program year 2000: Allocation: $39,029,852; 

Program year 2000: First year expenditures: 80%; Program year 2000: 

Second year expenditures: 18%; Program year 2000: Cumulative 

expenditures: 99%; [Empty]; Program year 2001: Allocation: $41,910,884; 

Program year 2001: First year expenditures: 77%.



State: Michigan; Program year 2000: Allocation: $78,378,398; Program 

year 2000: First year expenditures: 80%; Program year 2000: Second year 

expenditures: 20%; Program year 2000: Cumulative expenditures: 100%; 

[Empty]; Program year 2001: Allocation: $75,484,574; Program year 2001: 

First year expenditures: 83%.



State: Minnesota; Program year 2000: Allocation: $23,854,258; Program 

year 2000: First year expenditures: 76%; Program year 2000: Second year 

expenditures: 19%; Program year 2000: Cumulative expenditures: 94%; 

[Empty]; Program year 2001: Allocation: $27,896,710; Program year 2001: 

First year expenditures: 86%.



State: Mississippi; Program year 2000: Allocation: $37,295,042; Program 

year 2000: First year expenditures: 41%; Program year 2000: Second year 

expenditures: 52%; Program year 2000: Cumulative expenditures: 92%; 

[Empty]; Program year 2001: Allocation: $61,839,776; Program year 2001: 

First year expenditures: 35%.



State: Missouri; Program year 2000: Allocation: $43,068,225; Program 

year 2000: First year expenditures: 59%; Program year 2000: Second year 

expenditures: 39%; Program year 2000: Cumulative expenditures: 97%; 

[Empty]; Program year 2001: Allocation: $38,428,485; Program year 2001: 

First year expenditures: 70%.



State: Montana; Program year 2000: Allocation: $14,759,397; Program 

year 2000: First year expenditures: 77%; Program year 2000: Second year 

expenditures: 23%; Program year 2000: Cumulative expenditures: 100%; 

[Empty]; Program year 2001: Allocation: $15,106,415; Program year 2001: 

First year expenditures: 76%.



State: Nebraska; Program year 2000: Allocation: $7,214,382; Program 

year 2000: First year expenditures: 45%; Program year 2000: Second year 

expenditures: 45%; Program year 2000: Cumulative expenditures: 90%; 

[Empty]; Program year 2001: Allocation: $8,654,537; Program year 2001: 

First year expenditures: 43%.



State: Nevada; Program year 2000: Allocation: $12,288,634; Program year 

2000: First year expenditures: 60%; Program year 2000: Second year 

expenditures: 36%; Program year 2000: Cumulative expenditures: 96%; 

[Empty]; Program year 2001: Allocation: $13,454,458; Program year 2001: 

First year expenditures: 61%.



State: New Hampshire; Program year 2000: Allocation: $7,073,563; 

Program year 2000: First year expenditures: 69%; Program year 2000: 

Second year expenditures: 20%; Program year 2000: Cumulative 

expenditures: 89%; [Empty]; Program year 2001: Allocation: $7,564,315; 

Program year 2001: First year expenditures: 64%.



State: New Jersey; Program year 2000: Allocation: $77,798,291; Program 

year 2000: First year expenditures: 52%; Program year 2000: Second year 

expenditures: 44%; Program year 2000: Cumulative expenditures: 96%; 

[Empty]; Program year 2001: Allocation: $78,201,993; Program year 2001: 

First year expenditures: 56%.



State: New Mexico; Program year 2000: Allocation: $37,825,812; Program 

year 2000: First year expenditures: 52%; Program year 2000: Second year 

expenditures: 46%; Program year 2000: Cumulative expenditures: 98%; 

[Empty]; Program year 2001: Allocation: $36,512,180; Program year 2001: 

First year expenditures: 19%.



State: New York; Program year 2000: Allocation: $304,953,605; Program 

year 2000: First year expenditures: 42%; Program year 2000: Second year 

expenditures: 37%; Program year 2000: Cumulative expenditures: 79%; 

[Empty]; Program year 2001: Allocation: $256,067,646; Program year 

2001: First year expenditures: 26%.



State: North Carolina; Program year 2000: Allocation: $45,496,846; 

Program year 2000: First year expenditures: 46%; Program year 2000: 

Second year expenditures: 49%; Program year 2000: Cumulative 

expenditures: 95%; [Empty]; Program year 2001: Allocation: $49,711,078; 

Program year 2001: First year expenditures: 52%.



State: North Dakota; Program year 2000: Allocation: $6,248,030; Program 

year 2000: First year expenditures: 71%; Program year 2000: Second year 

expenditures: 29%; Program year 2000: Cumulative expenditures: 100%; 

[Empty]; Program year 2001: Allocation: $6,989,492; Program year 2001: 

First year expenditures: 73%.



State: Ohio; Program year 2000: Allocation: $112,830,662; Program year 

2000: First year expenditures: 36%; Program year 2000: Second year 

expenditures: 52%; Program year 2000: Cumulative expenditures: 88%; 

[Empty]; Program year 2001: Allocation: $127,098,298; Program year 

2001: First year expenditures: 45%.



State: Oklahoma; Program year 2000: Allocation: $28,674,596; Program 

year 2000: First year expenditures: 51%; Program year 2000: Second year 

expenditures: 43%; Program year 2000: Cumulative expenditures: 94%; 

[Empty]; Program year 2001: Allocation: $25,554,550; Program year 2001: 

First year expenditures: 58%.



State: Oregon; Program year 2000: Allocation: $59,267,052; Program year 

2000: First year expenditures: 70%; Program year 2000: Second year 

expenditures: 27%; Program year 2000: Cumulative expenditures: 97%; 

[Empty]; Program year 2001: Allocation: $55,829,680; Program year 2001: 

First year expenditures: 74%.



State: Pennsylvania; Program year 2000: Allocation: $106,721,228; 

Program year 2000: First year expenditures: 54%; Program year 2000: 

Second year expenditures: 38%; Program year 2000: Cumulative 

expenditures: 92%; [Empty]; Program year 2001: Allocation: 

$104,011,102; Program year 2001: First year expenditures: 58%.



State: Puerto Rico; Program year 2000: Allocation: $215,497,257; 

Program year 2000: First year expenditures: 50%; Program year 2000: 

Second year expenditures: 21%; Program year 2000: Cumulative 

expenditures: 71%; [Empty]; Program year 2001: Allocation: 

$261,614,631; Program year 2001: First year expenditures: 53%.



State: Rhode Island; Program year 2000: Allocation: $7,894,331; Program 

year 2000: First year expenditures: 60%; Program year 2000: Second year 

expenditures: 40%; Program year 2000: Cumulative expenditures: 100%; 

[Empty]; Program year 2001: Allocation: $8,552,097; Program year 2001: 

First year expenditures: 58%.



State: South Carolina; Program year 2000: Allocation: $33,482,113; 

Program year 2000: First year expenditures: 41%; Program year 2000: 

Second year expenditures: 48%; Program year 2000: Cumulative 

expenditures: 89%; [Empty]; Program year 2001: Allocation: $38,681,909; 

Program year 2001: First year expenditures: 45%.



State: South Dakota; Program year 2000: Allocation: $6,303,992; Program 

year 2000: First year expenditures: 63%; Program year 2000: Second year 

expenditures: 31%; Program year 2000: Cumulative expenditures: 94%; 

[Empty]; Program year 2001: Allocation: $7,037,319; Program year 2001: 

First year expenditures: 59%.



State: Tennessee; Program year 2000: Allocation: $50,778,981; Program 

year 2000: First year expenditures: 48%; Program year 2000: Second year 

expenditures: 47%; Program year 2000: Cumulative expenditures: 94%; 

[Empty]; Program year 2001: Allocation: $47,600,914; Program year 2001: 

First year expenditures: 49%.



State: Texas; Program year 2000: Allocation: $245,828,151; Program year 

2000: First year expenditures: 64%; Program year 2000: Second year 

expenditures: 27%; Program year 2000: Cumulative expenditures: 90%; 

[Empty]; Program year 2001: Allocation: $246,407,786; Program year 

2001: First year expenditures: 73%.



State: Utah; Program year 2000: Allocation: $10,398,799; Program year 

2000: First year expenditures: 91%; Program year 2000: Second year 

expenditures: 9%; Program year 2000: Cumulative expenditures: 100%; 

[Empty]; Program year 2001: Allocation: $10,171,265; Program year 2001: 

First year expenditures: 58%.



State: Vermont; Program year 2000: Allocation: $6,046,589; Program year 

2000: First year expenditures: 92%; Program year 2000: Second year 

expenditures: 8%; Program year 2000: Cumulative expenditures: 100%; 

[Empty]; Program year 2001: Allocation: $7,021,752; Program year 2001: 

First year expenditures: 92%.



State: Virginia; Program year 2000: Allocation: $38,738,232; Program 

year 2000: First year expenditures: 54%; Program year 2000: Second year 

expenditures: 40%; Program year 2000: Cumulative expenditures: 95%; 

[Empty]; Program year 2001: Allocation: $40,448,149; Program year 2001: 

First year expenditures: 43%.



State: Washington; Program year 2000: Allocation: $70,046,805; Program 

year 2000: First year expenditures: 64%; Program year 2000: Second year 

expenditures: 31%; Program year 2000: Cumulative expenditures: 96%; 

[Empty]; Program year 2001: Allocation: $70,184,034; Program year 2001: 

First year expenditures: 67%.



State: West Virginia; Program year 2000: Allocation: $44,218,809; 

Program year 2000: First year expenditures: 52%; Program year 2000: 

Second year expenditures: 41%; Program year 2000: Cumulative 

expenditures: 93%; [Empty]; Program year 2001: Allocation: $45,451,308; 

Program year 2001: First year expenditures: 35%.



State: Wisconsin; Program year 2000: Allocation: $30,506,817; Program 

year 2000: First year expenditures: 71%; Program year 2000: Second year 

expenditures: 24%; Program year 2000: Cumulative expenditures: 95%; 

[Empty]; Program year 2001: Allocation: $31,253,858; Program year 2001: 

First year expenditures: 66%.



State: Wyoming; Program year 2000: Allocation: $6,747,843; Program year 

2000: First year expenditures: 78%; Program year 2000: Second year 

expenditures: 20%; Program year 2000: Cumulative expenditures: 98%; 

[Empty]; Program year 2001: Allocation: $7,349,581; Program year 2001: 

First year expenditures: 53%.



Note: Cumulative expenditure rates for program year 2000 do not add to 

100 percent due to rounding.



Source: GAO’s analysis of Labor’s financial data files for program 

years 2000 and 2001.



[End of table]



[End of section]



Appendix III: Comparison of States’ Expenditure Rates with Labor’s 

Benchmarks and Projections:



State: Total number of states; Program year 2000 benchmark: 50 percent 

as of March 31, 2001: Met or exceeded: 12; Program year 2000 benchmark: 

50 percent as of March 31, 2001: Below: 40; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: 26; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: 

26.



State: Alabama; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent 

as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: [Empty]; Program year 

2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Alaska; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent 

as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: [Empty]; Program year 

2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Arizona; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent 

as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001 

projection: 69 percent as of June 30, 2002: Below: X.



State: Arkansas; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty]; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: California; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program 

year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Colorado; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty]; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Connecticut; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program 

year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].



State: Delaware; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent 

as of March 31, 2001: Below: [Empty]; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program 

year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].



State: District of Columbia; Program year 2000 benchmark: 50 percent as 

of March 31, 2001: Met or exceeded: X; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: [Empty]; [Empty]; Program year 

2001 projection: 69 percent as of June 30, 2002: Met or exceeded: X; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Florida; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent as of 

March 31, 2001: Below: [Empty]; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001 

projection: 69 percent as of June 30, 2002: Below: [Empty].



State: Georgia; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent 

as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001 

projection: 69 percent as of June 30, 2002: Below: X.



State: Hawaii; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent 

as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: [Empty]; Program year 

2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Idaho; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent 

as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001 

projection: 69 percent as of June 30, 2002: Below: [Empty].



State: Illinois; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program 

year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].



State: Indiana; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent as of 

March 31, 2001: Below: [Empty]; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001 

projection: 69 percent as of June 30, 2002: Below: [Empty].



State: Iowa; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent as of 

March 31, 2001: Below: [Empty]; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: [Empty]; Program year 

2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Kansas; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent 

as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: [Empty]; Program year 

2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Kentucky; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty]; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Louisiana; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty]; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Maine; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent as of 

March 31, 2001: Below: [Empty]; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001 

projection: 69 percent as of June 30, 2002: Below: [Empty].



State: Maryland; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program 

year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].



State: Massachusetts; Program year 2000 benchmark: 50 percent as of 

March 31, 2001: Met or exceeded: X; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: [Empty]; [Empty]; Program year 

2001 projection: 69 percent as of June 30, 2002: Met or exceeded: X; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: 

[Empty].



State: Michigan; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program 

year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].



State: Minnesota; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent 

as of March 31, 2001: Below: [Empty]; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program 

year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].



State: Mississippi; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty]; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Missouri; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program 

year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].



State: Montana; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent as of 

March 31, 2001: Below: [Empty]; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001 

projection: 69 percent as of June 30, 2002: Below: [Empty].



State: Nebraska; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty]; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Nevada; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent 

as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001 

projection: 69 percent as of June 30, 2002: Below: [Empty].



State: New Hampshire; Program year 2000 benchmark: 50 percent as of 

March 31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 

50 percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty]; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: New Jersey; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty]; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: New Mexico; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty]; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: New York; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty]; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: North Carolina; Program year 2000 benchmark: 50 percent as of 

March 31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 

50 percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty]; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: North Dakota; Program year 2000 benchmark: 50 percent as of 

March 31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 

50 percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program 

year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].



State: Ohio; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent 

as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: [Empty]; Program year 

2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Oklahoma; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program 

year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].



State: Oregon; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent 

as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001 

projection: 69 percent as of June 30, 2002: Below: [Empty].



State: Pennsylvania; Program year 2000 benchmark: 50 percent as of 

March 31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 

50 percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program 

year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].



State: Puerto Rico; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty]; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Rhode Island; Program year 2000 benchmark: 50 percent as of 

March 31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 

50 percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program 

year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].



State: South Carolina; Program year 2000 benchmark: 50 percent as of 

March 31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 

50 percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty]; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: South Dakota; Program year 2000 benchmark: 50 percent as of 

March 31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 

50 percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty]; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Tennessee; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty]; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Texas; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 percent 

as of March 31, 2001: Below: X; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001 

projection: 69 percent as of June 30, 2002: Below: [Empty].



State: Utah; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent as of 

March 31, 2001: Below: [Empty]; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: [Empty]; Program year 

2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Vermont; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent as of 

March 31, 2001: Below: [Empty]; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: X; Program year 2001 

projection: 69 percent as of June 30, 2002: Below: [Empty].



State: Virginia; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty]; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Washington; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program 

year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].



State: West Virginia; Program year 2000 benchmark: 50 percent as of 

March 31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 

50 percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: [Empty]; 

Program year 2001 projection: 69 percent as of June 30, 2002: Below: X.



State: Wisconsin; Program year 2000 benchmark: 50 percent as of March 

31, 2001: Met or exceeded: [Empty]; Program year 2000 benchmark: 50 

percent as of March 31, 2001: Below: X; [Empty]; Program year 2001 

projection: 69 percent as of June 30, 2002: Met or exceeded: X; Program 

year 2001 projection: 69 percent as of June 30, 2002: Below: [Empty].



State: Wyoming; Program year 2000 benchmark: 50 percent as of March 31, 

2001: Met or exceeded: X; Program year 2000 benchmark: 50 percent as of 

March 31, 2001: Below: [Empty]; [Empty]; Program year 2001 projection: 

69 percent as of June 30, 2002: Met or exceeded: [Empty]; Program year 

2001 projection: 69 percent as of June 30, 2002: Below: X.



Note: The benchmark for program year 2000 is based on percent of 

allocation spent. The projection for program year 2001 is based on the 

current year allocation and unexpended funds carried in from prior 

years.



Source: GAO’s analysis of Labor’s financial data files for program 

years 2000 and 2001.



[End of table]



[End of section]



Appendix IV: Comments from the Department of Labor:



U.S. Department of Labor:



Assistant Secretary for 

Employment and Training 

Washington, D.C. 20210:



Mr. Sigurd R. Nilsen 

Director

Education, Workforce, and Income Security Issues 

U.S. General Accounting Office

Washington, D.C. 20548:



Dear Mr. Nilsen:



We have reviewed the draft report entitled, “Workforce Investment Act: 

States’ Spending Is on Track, but Better Guidance Would Improve 

Financial Reporting.” A number of findings, including the 

identification of factors that have contributed to low spending rates, 

will be very helpful as we proceed with the reauthorization of the 

Workforce Investment Act. However, we must respectfully disagree with a 

number of conclusions and recommendations presented.



This report summary begins with GAO statements that “(s)tates are 

spending their WIA funds, often faster than the authorized 3-year 

period.” It goes on to indicate that “... Labor’s estimate suggests a 

slower pace of spending because it is based on available funds, 

including those most recently distributed.” The Department cannot 

dispute that states are exceeding the minimum requirements for spending 

contained in the law. However, as responsible public officials, we 

believe that we must look beyond minimum expectations when making 

investment decisions given the many competing priorities our nation 

faces. We also acknowledge that in spending projections and reports on 

spending shared with the Congress and others, funds that were 

appropriated and allocated at the start of the year were included. We 

believe that any analysis that did not include all formula funds 

provided to a state would be misleading and irresponsible.



The report further concludes that our reports do not accurately portray 

spending in Workforce Investment Act (WIA) state programs because they 

only reflect information on program costs and not unliquidated 

obligations at the state and local levels. DOL does collect information 

on obligations because of statutory requirements but, admittedly, this 

is not an important consideration when formulating the Administration’s 

budget. Our focus is on the levels of services to be provided and the 

actual program costs of providing them. We believe costs rather than 

measures of commitments and future spending provide the strengthened 

accountability and performance that is demanded. Unliquidated 

obligations represent legal commitments to spend funds in a specific 

way at some future time. It is a budgetary account that is used to 

control and not measure spending, and is intended to assure that funds 

are available for a subsequent period’s expenditure. For example, funds 

to pay a service provider for services that have not yet been provided 

would be included, whether the service is to be provided immediately 

or in a subsequent year. While of interest, this information rolled up 

on a national basis is of questionable value.



The Department has drafted reporting instructions recommended by the 

GAO and the Inspector General to clarify an easily correctable problem 

relating to reporting of local obligations and plans to send this 

guidance out soon. GAO also suggests that the DOL concerns regarding 

reliability of obligation data can be addressed by new requirements to 

report obligations made at the point of service delivery rather than 

the current reports that require that states report obligations 

reflected in the accounting records at the state or local level. This 

would address shortcomings expressed to GAO reviewers. However, we are 

concerned that such a requirement would be extremely burdensome and 

expensive to implement nationwide. Not-for-profit service providers do 

not routinely collect this information and neither do service providers 

that operate for profit. We will follow the suggestion made by GAO that 

we consult with the states on this recommendation when financial 

reporting requirements are next reconsidered, but we remain skeptical 

that the recommendation is doable. Consultation on revised reporting 

requirements will most likely occur as part of discussions about WIA 

reauthorization. We are reluctant to make interim changes that may be 

major.



DOL concurs with the recommendations to provide guidance and technical 

assistance focused on accounting and reporting requirements and to 

share information on effective practices. To date, our concerns have 

been to identify the causes of low spending and related low service 

levels and to address them. Additionally, GAO noted a number of 

accounting practices relating to the recording of obligations. A number 

of these are not in conformance with Generally Accepted Accounting 

Principles. Ensuring that all states are aware of requirements relating 

to the accounting of WIA funds will be a priority for the coming year.



GAO recommends that DOL communicate spending benchmarks with states. As 

indicated previously, the numbers referenced are national projections 

of spending used to formulate a budget. They were not target spending 

rates and were never intended as benchmarks. The report also identified 

states that received letters or other communications from our Regional 

Offices because of these spending rates. During the fiscal year we did 

identify spending rates below which further inquiry would be required. 

However, these rates were determined after comparing the actual reports 

submitted by all the states. They were not based on some projection or 

expectation. We continue to believe that this is an effective means to 

prioritize oversight needs. As for benchmarks for spending in the 

future, we believe that benchmarks should be included in 

reauthorization through the inclusion of a reallotment based on actual 

spending rather than obligations. The dislocated worker program 

authorized by the Job Training Partnership Act (JTPA) contained such a 

benchmark. We believe the more timely spending under JTPA can be 

attributed, in part, to this requirement. DOL is also reviewing state 

waiver requests from Governors that request authority to move from an 

obligations-based reallotment policy to one based on expenditures. A 

reallotment policy based on spending is necessary to ensure that those 

states and communities that are spending timely are not adversely 

impacted because others are not.



GAO is correct that carrying unspent balances from one year to another 

and obligating funds for training to be provided one or two years out 

are not violations of WIA law. In fact, GAO uses this information to 

conclude that spending is on track and, we presume, should not be a 

concern. DOL has never indicated that the funds would not be spent. 

What we did indicate is that the levels of unspent carryover from one 

year to another are unprecedented and of concern. This same conclusion 

was reached by the Congress which in July 2001 rescinded WIA dislocated 

worker funding because of concerns expressed in the Conference Report 

107-148 “...that there is excess funding available in the program and 

the rescission is necessary to meet other needs in fiscal year 2001.”:



The Administration faced the same question in formulating its 2002 and 

2003 requests and similarly concluded that because of the availability 

of these large balances, reductions in new budget authority could be 

taken without reductions nationwide in the numbers of individuals 

served. This is because of excess unspent funds that could easily 

absorb what is a relatively small one-time reduction.



We welcome further dialogue on these and other issues as we continue 

efforts to reauthorize WIA over the next year.



Sincerely,



Signed by Emily Stover DeRocco:



Emily Stover DeRocco



[End of section]



Appendix V: GAO Contacts and Staff Acknowledgments:



GAO Contacts:



Dianne Blank (202) 512-5654

Meeta Sharma (206) 287-4806:



Staff Acknowledgments:



Kim Reniero, Rebecca Woiwode, Bill Keller, and Elizabeth Kaufman made 

significant contributions to this report. In addition, Jessica Botsford 

and Richard Burkard provided legal support, Patrick DiBattista provided 

writing assistance.



[End of section]



Related GAO Products:



Workforce Investment Act: Interim Report on Status of Spending and 

States’ Available Funds GAO-02-1074. Washington, D.C.: September 5, 

2002.



Workforce Investment Act: States and Localities Increasingly Coordinate 

Services for TANF Clients, but Better Information Needed on Effective 

Approaches GAO-02-696. Washington, D.C.: July 3, 2002.



Workforce Investment Act: Coordination of TANF Services through One-

Stops Has Increased Despite Challenges GAO-02-739T. Washington, D.C.: 

May 16, 2002.



Workforce Investment Act: Youth Provisions Promote New Service 

Strategies, but Additional Guidance Would Enhance Program Development 

GAO-02-413. Washington, D.C.: April 5, 2002.



Workforce Investment Act: Coordination between TANF Programs and One-

Stop Centers Is Increasing, but Challenges Remain GAO-02-500T. 

Washington, D.C.: March 12, 2002.



Workforce Investment Act: Better Guidance and Revised Funding Formula 

Would Enhance Dislocated Worker Program

GAO-02-274.Washington, D.C.: February 11, 2002.



Workforce Investment Act: Improvements Needed in Performance Measures 

to Provide a More Accurate Picture of WIA’s Effectiveness

GAO-02-275. Washington, D.C.: February 1, 2002.



Workforce Investment Act: New Requirements Create Need for More 

Guidance GAO-02-94T. Washington, D.C.: October 4, 2001.



Workforce Investment Act: Better Guidance Needed to Address Concerns 

Over New Requirements GAO-02-72. Washington, D.C.: October 4, 2001.



FOOTNOTES



[1] Our nationwide review focused on the fifty states, District of 

Columbia, and Puerto Rico. Hereafter, we refer to them collectively as 

states. 



[2] This includes a rescission of $177.5 million from the dislocated 

worker program for program year 2001.



[3] New York, Ohio, and Puerto Rico received monitoring letters because 

their program year 2000 expenditure rate was below the 25-percent 

benchmark that states had to meet by December 31, 2000.



[4] Alaska, Arizona, California, Connecticut, Hawaii, Idaho, Illinois, 

Indiana, Iowa, Kansas, Maine, Massachusetts, Michigan, Minnesota, 

Missouri, Nebraska, Nevada, New Hampshire, Oregon, Rhode Island, 

Vermont, Washington, and Wisconsin.



[5] Department of Labor, Training and Employment Guidance Letter 16-99 

(Washington, D.C.: 2000).



[6] Department of Labor, One-Stop Comprehensive Financial Management 

Technical Assistance Guide (Washington, D.C.: 2002.)



[7] Department of Labor, State of Ohio, Evaluation of Grant 

Obligations, Expenditures and Payments, Workforce Investment Act Grants 

and Job Training Partnership Act Transition Funds, Independent 

Accountants’ Report on Applying Agreed-Upon Procedures, Grants and 

Transition Funds Awarded to the State of Ohio, July 1, 2000 Through 

December 31, 2001 (Washington, D.C.: 2002).



[8] Under WIA, Individual Training Accounts are established for 

eligible adults and dislocated workers to finance training services. 

Participants then use these vouchers to purchase training services from 

eligible providers of their choice.



[9] State of Colorado Department of Labor and Employment, Office of 

Employment and Training Programs, Colorado One-Stop System Policy 

Guidance Letter # 02-20-WIA (Denver, Colo.: 2002.)



[10] For more information on the dislocated worker funding formula, see 

our prior report, Workforce Investment Act: Better Guidance and Revised 

Funding Formula Would Enhance Dislocated Worker Program, GAO-02-274 

(Washington, D.C.: Feb. 11, 2002). 



[11] Welfare reform legislation created the TANF block grant in1996, 

providing states with flexibility to focus on helping needy adults with 

children secure and maintain employment. TANF is administered and 

funded at the federal level through the Department of Health and Human 

Services. In prior reports we have said that states have been under 

considerable scrutiny for not spending their TANF funds more quickly. 

For more information, see, for example, U.S. General Accounting Office, 

Welfare Reform: Challenges in Maintaining a Federal-State Fiscal 

Partnership, GAO-01-828 (Washington, D.C.: 

Aug. 10, 2001).



[12] Our prior work on WIA concluded that states had made significant 

progress in developing new processes and designing new workforce 

systems given the scope of WIA’s reforms. See, for example, U.S. 

General Accounting Office, Workforce Investment Act: Youth Provisions 

Promote New Service Strategies, but Additional Guidance Would Enhance 

Program Development, GAO-02-413 (Washington, D.C.: Apr. 5, 2002) and 

Workforce Investment Act: Improvements Needed in Performance Measures 

to Provide a More Accurate Picture of WIA’s Effectiveness, GAO-02-275 

(Washington, D.C.: Feb. 1, 2002).



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