| STATEMENT OF
RONALD W. DRACH before the SUBCOMMITTEE ON OVERSIGHT AND INVESTIGATIONS COMMITTEE ON VETERANS AFFAIRS U.S. HOUSE OF REPRESENTATIVES July 29, 1999 Mr. Chairman and members of the Subcommittee: It is an honor and pleasure to be invited before you today to discuss the Department of Labor’s (DOL) Veterans Employment and Training Service’s (VETS) response to the report of the Commission on Servicemembers and Veterans Transition Assistance (Commission). By way of background, I was one of twelve Commissioners appointed by Congress to review and report on the adequacy and efficiency of current veterans benefits and programs as they affect today’s separating servicemembers. The Commission established three "Panels" and I was asked to chair the Panel on Employment and Servicemembers Transition Services. Additionally, I retired from the Disabled American Veterans (DAV) in June, 1998 following almost twenty-eight years of service. The last twenty-three years with the DAV, I was their National Employment Director involved in all aspects of veterans’ employment and training issues. I have reviewed the Department of Labor’s response to the Commission’s report and offer the following comments. In Secretary Herman’s transmittal letter she indicates the Commission "...failed to take into account recent improvements in program performance, ignored the impact of new legislation such as the Workforce Investment Act, and based many of its conclusions on old data". The Commission based its recommendations on information and data provided by the Department of Labor. The Assistant Secretary for Veterans Employment and Training was an ex-officio member and had every opportunity to bring to our attention that we weren’t using current information and data. We had to base our findings on what they gave us. As for the "impact of ... the Workforce Investment Act" -- the impact has yet to be learned as the legislation is currently in its early implementation stages. One of DOL/VETS’ biggest concerns appears in their EXECUTIVE SUMMARY and deals with the Commission’s recommendation on changing the categories of veterans to receive "priority of service". The Commission recommends that "priority of service" be limited to disabled veterans, veterans with barriers to employment, and recently separated veterans (within four years following discharge). The Commission had considerable discussion on this issue. We concluded the current system is unable to provide priority to all veterans and often those most in need don’t get served at all. The "creaming affect" kicks in and all too often those who really don’t need help or need a minimum of assistance get help at the expense of those most in need. DOL/VETS cites that 48.1% of all unemployed veterans are aged 45-64. Since the Commission did not attempt to define "barriers to employment" DOL/VETS would retain that authority to develop such a definition unless Congress would legislate such a definition. If DOL/VETS has this major concern for this group of deserving veterans, the question must be asked what is being done to work with these individuals now? DOL is opposed to transferring VETS to the Department of Veterans Affairs. I should point out that the Commission stopped short of such a recommendation and this issue created quite a lengthy discussion. I discuss this in greater detail later in this testimony. VETS has not always enjoyed high visibility or respect within DOL. They certainly enjoy a new found respect and status in the current administration -- a respect they did not have in prior administrations dating back at least to 1973. There is no guarantee this respect will continue in future administrations. There is nothing that VETS currently does in DOL that they couldn’t do in the Department of Veterans Affairs. The role of VETS is not one of service delivery as DOL would have you believe. The Commission’s recommendation regarding VETS would not create a separate, duplicate system to serve veterans as alleged by DOL because VETS is not a delivery system. DOL also alleges that such a "separate, duplicate" system would "...endanger their [veterans] well-earned right to priority of service in the Wagner-Peyser funded employment service". WHY???? DOL/VETS states "Employers have told the Department of Labor that they want to deal with one employment entity". How did employers convey this message -- through focus groups, a survey, interviews with employers or what mechanism? The Commission did a survey of employers. One of the questions asked was, "If you wanted to hire a veteran, do you know who to contact"? Of the employers who responded 57% did not know who to contact. When asked, "Who would you contact"?, only 25% of thje employers who "knew who to contact" would contact job service offices, while 49% said they would contact the VA. On page 4 of the EXECUTIVE SUMMARY DOL/VETS states "...VETS is working with leading companies and unions to help veterans use the skills they acquired in the military to move quickly into career building jobs in growth industries like information technology (IT) and telecommunications. Companies like Cisco, Microsoft, Lucent Technologies, U.S. West, Pacific Bell and PowerComm, and unions like the Communications Workers of America [CWA] and the International Brotherhood of Electrical Workers are coming to VETS seeking assistance in filling their employment needs". (VETS has been so pleased with the work of the CWA that they were honored with the Sonny Montgomery Award at last year’s Salute to America’s Veterans). As of January 1999, 201 separating servicemembers were referred to jobs through the CWA project but it is not reported how many were placed into career employment. VETS is to be applauded for their ability to include such prestigious companies. However, their statement begs the question -- how many veterans have been placed in these companies and not just referred and how many disabled veterans through vocational rehabilitation have been placed by these companies? Overall, DOL/VETS’ response raises more questions as to its own performance as it defends against the recommendations of the Commission. On page 5, DOL/VETS cautions that if Congress removes VETS from DOL and turns the DVOP/LVER system into a separate, private system run by 53 different organizations it will have dire consequences. Remember again that VETS does not deliver services, it matters little where it is housed. The DVOP/LVER system is already run by 53 different organizations. In a competitive system as the Commission recommends, the states will be able to compete. They may not win the competition based on past performance, but they can compete. Also on page 5 the DOL/VETS states that certain labor-exchange related services include "...vocational guidance, job counseling, job seeking skills, and intensive services generally using a case manager approach..." This statement leads one to infer these services are available on request. This subcommittee should ask DOL/VETS to provide data on how many veterans by category received each of these services. Current law states and DOL/VETS admits "Implicit throughout Chapter 41 of Title 38 is the requirement that SESAs provide the maximum opportunity for jobs and job training to the job-seeking veterans in their respective States". Yet the DOL/VETS performance standards say that a State only have to provide services to veterans at a rate higher than non veterans. Therefore, if a State places 12% of its non veterans in jobs, it need only place 12.1% veterans in jobs to meet the compliance indicators for that category. Not very stringent standards and certainly falls short of the Congressional intent of "maximum". The Commission offered the following comment "The Commission is outraged by the fact that, according to DOL’s 1997 Annual Report, nine states meet DOL performance standards while placing fewer than 10 per cent of veteran registrants". The DOL/VETS disputes data reported by the Commission as being misleading. If, in fact the data are misleading then the Commission was misled by the data provided by DOL/VETS. At no time did the Assistant Secretary, an ex officio member of the Commission offer to provide us clarifying data that were not misleading. Additionally, DOL/VETS’ exception to their own data begs for a new system of data collection that all users can understand and leaves no room for interpretation. Further evidence of data defense by DOL/VETS is contained on page 8 of their response. The section dealing with federal contractor job listing for Program Year 1997 reveals that federal contractors reported hiring 123,876 targeted veterans. The local employment offices referred 121,949 targeted veterans to these federal contractor but only 18,901 of these referred veterans were hired by these contractors. This means that only 15% of the referred veterans obtained jobs with federal contractors. Why were so few hired? DOL/VETS’ explanation is "It appears that due to timing and interstate problems in hiring verification, many of those veterans referred were hired by Federal contractors but not reported by the SESA reporting system" (emphasis mine). Perhaps another explanation is that federal contractors don’t use the employment service very much. DOL/VETS opposes the idea of providing a competitive process for funding either the Commission recommended positions of Veterans Case Manager (VCM) and Veterans Employment Facilitator (VEF) or DVOP/LVER. They say competing the process "raises a host of equity issues". Equity issues already exist. First, states are going to be funded regardless of their performance. Second, some states charge as much as 26% of their grant to administrative overhead and other states are much lower. That should be an "equity issue" of paramount concern to DOL/VETS. They also express concern that "...private vendors who would have profit motives to work primarily with the more employable veterans, potentially ignoring the hardest to serve clients that need more intensive services". That problem currently exits in many states and DOL as much as admits it when they mention on page 12 that they want to provide financial incentives by "...establishing an incentive fund...to be used to reward exceptional local offices, managers and DVOPs/LVERs and poorly performing states that make dramatic improvements" (emphasis mine). This potential problem among private vendors can be avoided by "weighting" placements and other services provided to those most in need. DOL/VETS agrees that the performance measures need updating. They state "Nothing in the statute precludes VETS from establishing new prototype outcome and process measures for DVOP and LVER. Therefore, we believe that the Commission’s recommendation for legislation is unnecessary." When can we expect DOL/VETS to develop such outcome and process measures? I would like to commend VETS on the development of their web page on the Internet. I have reviewed it and found it to be very informative. What is VETS doing to assure that job seeking veterans know about the web site? VETS is also to be commended for its progress on electronic employment assistance. The question still must be asked, however, how does VETS get the web site information to the veteran. I am also concerned that many DVOPs/LVERs do not have dedicated computer support and some have no access to the Internet. All the electronic assistance is no good unless it reaches the intended audience -- job seeking veterans. DOL/VETS’ response indicates that "...Federal contractor jobs currently are flagged for initial exclusive viewing by DVOPs and LVERs". How many DVOPs/LVERs have access to these jobs? In responding to the Commission’s recommendations on the Job Training Partnership Act (JTPA), DOL/VETS states the Commission "misinterpreted" the data. Again, this was data provided by them, and as an ex officio member, the Assistant Secretary had every opportunity to correct any of our "misinterpretations". Every one of our documents was prepared in draft format, circulated among all the Commissioners and ex officio members for comment (some of these drafts even reached the hands of VETS field staff) and yet VETS never offered insight into our "misinterpretations" until they responded to Congress. During my 23 years as National Employment Director for the Disabled American Veterans (DAV) I monitored data for federal contractors. The federal contractor affirmative action program was never effective and never enforced. The contractors are required to file annual reports (VETS-100) on their accomplishments. While the reports may not have required all the necessary data for assessing contractor’s compliance, they do contain sufficient data to track employer and industry trends. To my knowledge the VETS-100 report was never used to trigger a compliance review of a federal contractor’s compliance. DOL/VETS reports that for Program Year (PY) 1997 "local employment offices reported that 51, 895 veterans were placed [by federal contractors]. Of this number, 16,259 were Vietnam era and 2,642 were special disabled veterans". This means that of all veterans placed only a little more than one-third were veterans targeted for affirmative action. (see my earlier comments on this subject on page 3). DOL/VETS reports to Congress that "10,930 Federal contractors did not file the required VETS-100 report", and that information was passed on to the DOL’s Office of Federal Contractor Compliance. By not filing this report, these contractors have violated federal law. What has been done to enforce this law? DOL/VETS opposes the Commission’s recommendation to amend the current affirmative action requirements to delete Vietnam veterans, change special disabled veteran to disabled veteran, and add recently separated veterans. They do not provide any rationale for their opposition to changing special disabled to all disabled. Congress should ask them why they oppose that. I believe Congress should also ask for clarification of their position on recently separated veterans to avoid any "misinterpretations" by Congress or the readers of their response to the Commission’s report. Specifically, DOL states "...amending section 4212 of Title 38 to extend coverage to ‘recently separated veterans’ would assist these transitioning service personnel into the civilian workforce" (emphasis mine). They go on to say "...it is unclear what is meant by ‘recently separated veterans’" (emphasis mine). Why then would they support the change if they don’t know what they’re supporting. Additionally, for as long as I can remember "recently separated veterans" means someone who was discharged or released from military service within the last four years. On page 35 of DOL/VETS’ response they state "It appears that the Commission has concluded that an entire agency (VETS) ... should be moved ... because it believes that the one program jointly served by VETS and VA, ... is unsuccessful". Perhaps DOL/VETS has "misinterpreted" the Commission’s recommendation. We did not recommend that VETS be immediately transferred. The Commission’s recommendations start on page 85 of the Commission’s report. The reason for suggesting that VETS maybe should be transferred at a later date is found in the "Analysis" section on page 84 of the Commission’s report -- "The Commission is especially concerned with the low percentage of vocational rehabilitation program participants being placed in suitable employment and the low percentage of veterans registering for jobs at state employment service offices who are placed through the assistance of DOL-funded employment specialists. The Commission also has serious concerns about the effectiveness and efficiency of program administration and oversight at DOL/VETS. DOL/VETS’ leadership, however, says that improvements will occur and has prepared a Strategic Plan for Fiscal Year 1997-2002. The Commission has reservations about whether DOL/VETS, through its plan, will be able to effect significant changes in the employment services it administers and oversees. The plan does not address the precipitous drop in state-grant program performance from PY 1996 to 1997". Further, if this transfer were to take place, the Commission envisions a new system of employment and vocational rehabilitation consolidating existing programs and responsibilities into one program under the jurisdiction of the Undersecretary for Benefits. Thank you again for allowing me to participate in these hearings today. That concludes my statement and I would be happy to answer any questions. |