comes questionable. As you will hear from Karl Grossenbacher, the county's service levels, while out of balance, indicate a commitment to serve all segments of the eligible population.

In an ideal world, the eight service delivery areas would agree to coordinate their service delivery in such a way that every eligible person within the county would have an equal chance at service from one or another of the programs. If the county took on the responsibility for providing job traning service to the public assistance recipient population of all SDAS, the other seven would reciprocate by providing a proportionate amount of services to county residents eligible for job training who are not on welfare roles. We understand that the county intends to work out agreements along these lines with other SDAS.

If we were able to implement a "Labor Market” plan which assigned each SDA a role comensurate with its specific population plus a responsibility to interact with the county in a proportional manner reflecting the SDA's population of public assistance recipients, the combination of the eight plans might reflect a balanced level of service to all segments of the population although an individual SDA's statistics might be skewed from the norms.

While we believe that the Governor has considerable authority to adjust for State needs and conditions, we feel that the provisions in the JTPA that mandate service levels for youth, for school dropouts and for AFDC recipients, prevent the inter-SDA coordination in the degree I have suggested.

We are slightly more than 3 months into the implementation of the Job Training Partnership Act in California. At our conference in January, attended by more than 600 persons from all walks of the JTPA life; PIC chairs and members, local elected officials, educators, SDA administrators, labor and community organization representatives, and others, there was a spirit of enthusiasm, a definite attitude of "we can do it if you'll keep the bureaucracy off our back.”

As chairman of the California Council, I will say to you that California, including Los Angeles County, can make the JTPA work better than you hoped. Just give us the chance.

STATEMENT OF BARBARA PEARSON, MEMBER OF CALIFORNIA STATE JOB TRAINING COORDINATING COUNCIL

MS. PEARSON. Thank you, Congressman.

Like Ted, I've submitted a written statement, but, in view of what we have heard today, I think a lot of it would be redundant. I am a member of the State job training coordinating council. I was one of those who had to be approved by the Senate Rules Committee. I think the public members had to be, so some of us had to be approved. I have a letter from Mr. Roberti-

Mr. DYMALLY. And they didn't reject you?

MS. PEARSON. No. They let me in, Merv. [Laughter.]

I'd like to touch on something which isn't on the agenda but which the Congressman alluded to earlier. CETA could have worked. From personal experience I know the legislation was good. It was all in place. I think in certain areas of the country it was abused by service providers and by people at the local level.

As Gus mentioned, I'm at the University of Southern California. I'm their affirmative action officer. Back in the beginning of CETA, I was asked by the State and then by the city if we couldn't bring these programs into USC as a way to bring people from the community into a private institution. In the last 10 years we've placed over 1,200 people, and not just in entry-level jobs. Some of them are quite highly placed now. So I know these programs can work. We didn't have our first council meeting until the middle of May because the implementing legislation had not been approved. We had our first meeting in the middle of May and the chairman, Mr. Bruinsma, in order to expedite our workload, appointed subcommittees for each region of the State. I was on the one in charge of re

viewing southern California. In fact, we met right across the hall and I attended every meeting.

Our first meetings were hearings on the composition of SDA's and many of these had not been the prime sponsors under CETA. So it was an interesting experiment.

After the SDA's were approved, we had to approve the PIC composition. October kept galloping toward us. We were meeting several times a month and weekly in our case, and some of the hearings were open. Finally, we had to approve the submissions from the SDA's for the 9-month plan. In some cases we found deficiencies, not just in the county of Los Angeles. That was the one we were most concerned about. But we felt that, in order to have the startup by October 1, it was incumbent upon us to recommend to the council approval with certain specified deficiencies that had to be eliminated from various plans, and that's what we did.

My spot on the council is to represent vocational education and services to youth, so I found I had a readymade large constituency out there who kept me informed about things from their viewpoint. This is one reason I've been so concerned about Los Angeles County, because, as we have heard today, they recognize they have problems. The service providers have had problems, but every effort humanly possible is being made to correct these problems.

I think that we should be given a chance to make this program work. We're only about 5 months into the program. The 2-year planning cycle is coming up. I know that it's high on the Governor's agenda to make this program a success, and those of us who are on the council, as well as our staff, are really dedicated to training people and getting them jobs. With your support and help, I think we can make it work.

Thank you.

Mr. HAWKINS. Thank you.

Mr. Bruinsma, who is the next speaker?

Mr. BRUINSMA. Mr. Grossenbacher, sir.

If you will excuse me, sir, I'm going to have to leave.

Mr. HAWKINS. You may leave.

Mr. BRUINSMA. But I have a good representative here.

Mr. HAWKINS. We appreciate your statement. Your testimony will be entered in the record at this point. We congratulate you on making a great effort to make this program work.

Mr. BRUINSMA. Well, thank you. I think your inquiry this morning, as I've heard it, is helpful, but I also think we're on the same track and I think we're going to show that California is going to have a great plan.

Thank you.

Mr. HAWKINS. Well, the three of us are from California, so we'll be back.

Mr. Grossenbacher.

[Prepared statement of Barbara Pearson follows:]

PREPARED STATEMENT of Barbara Pearson, Member of California STATE JOB

TRAINING COORDINATING COUNCIL

Chairman Hawkins, members of the subcommittee, good morning. My name is Barbara Pearson, and I served on the subcommittee of the State Job Training Coordinating Council which reviewed plans submitted by SDA's in Southern California

for the first nine months of implementation of the Job Training Partnership Act in California.

Because of a delay in required State legislation, the Council did not have its first meeting until the middle of May 1983. This meant a very tight schedule for the Council in order to approve recommendations for submission to the Governor concerning SDA designation, PIC membership, and nine-month plans in time for the JTPA startup of October 1, 1983.

Responsibility for making first stage recommendations to the full Council was divided between five subcommittees. Public meetings were held on each component of JTPA. Because the position I fill on the Council is designated to represent Vocational Education and Services to Youth, I began receiving communications from service providers complaining about the Los Angeles County Plan even before the Subcommittee meeting to review the proposed plan. The primary focus of the complaints was the decision to serve only General Relief recipients and the elimination of services to youth aged 16 and 17.

At the Subcommittee meeting, it became evident that a number of the plans being submitted had deficiences. In the interest of time, under pressure to get the recommendations for approval to the full Council and then the Governor in time for the October 1 startup date, these plans were given conditional approval subject to modification.

The County of Los Angeles presented a plan which had serious deficiencies. The most glaring problem with this plan was the declared intention of serving only General Relief clients. Upon direct questioning by members of the subcommittee, the County representatives affirmed their intention not to serve AFDC recipients, clients of the Department of Rehabilitation, and other eligible persons unless they were also GR recipients.

The members of the subcommittee unanimously rejected this type of planning and declared that the LA County plan would not be recommended for funding unless changes were made to comply with the intent of Congress as expressed in federal law.

There were other deficiences than the requirement concerning clients to be served. These included the lack of an agreement between the PIC and local elected officials, participant levels, plus lack of a process for selecting service providers. In addition, the subcommittee felt that the proposed 22 percent placement rate was too low when all eligible client groups were identified. Subsequently, the County deleted the reference to serving only GR recipients, by implication indicating that the plan would respond to the requirements of the law. Other conditions were met, including an adjustment in the placement rate to 36 percent. Inasmuch as the Secretary of Labor had not yet established placement standards for the 9-month period, the subcommittee had no guidelines on what placement could be mandated.

After the changes were made, the Council recommended that the Governor approve the County plan. This was done.

When complaints from service providers continued, the matter was brought to the attention of the State Council. Mr. Ted Bruinsma, chairman, ordered EDD to conduct an immediate investigation. The investigation, conducted under the guidance of Mr. Karl Grossenbacher, who will address you shortly, indicated that the LA County plan was legal under JTPA legislation and implementing regulations.

The State of California has 50 SDA's, many of them new consortiums with no prior experience as CETA prime sponsors. We are less than half way through the initial 9-month period of JTPA. Problems are still being ironed out as the transition from CETA evolves. Preliminary reports indicate that the problems are being monitored and technical assistance given where needed. Staff and the volunteer Council members are spending untold hours working to make JTPA successful. The Governor has stated that job-training has the highest priority on his agenda.

On January 31, 1984, the Secretary of Labor issued new standards for evaluating JTPA. These will provide additional guidance to the Council as the 2-year plans are submitted.

JTPA appears to be a very carefully thought-out vehicle to provide federal funding for the training of eligible participants. Real jobs as opposed to make-work will lead to long-term satisfaction for participants plus a decrease in welfare expenditures. The cooperation between business and local government promises to provide the partnership envisioned by Congress that will benefit the entire country.

All of us who are involved hope to be able to convincingly demonstrate the success of the partnership before the conclusion of the next funding cycle.

STATEMENT OF KARL GROSSENBACHER, CHIEF, JOB TRAINING PARTNERSHIP ACT OFFICE, EMPLOYMENT DEVELOPMENT DEPARTMENT, STATE OF CALIFORNIA

Mr. GROSSENBACHER. Thank you.

Mr. HAWKINS. May I personally say that we enjoyed the cooperation and support that you gave to this group a few weeks ago in Sacramento and also the help that you have given to the staff over a long period of time.

Mr. GROSSENBACHER. Thank you.

I have provided a prepared statement to the staff and I would like to present it to the committee because I think it does provide some information different from what you have heard so far.

I am Karl Grossenbacher, chief of the Job Training Partnership Act office in the employment development department which, as Mr. Bruinsma indicated, has been designated by the Governor as the administrative agency for JTPA at the State level.

I've been asked here today to provide testimony with respect to the procedures used by the State to assure compliance with the act and to address the findings of the director with regard to a complaint filed by the Western Center on Law and Poverty about the Los Angeles County service delivery area plan.

I'd like to emphasize that the Job Training Partnership Act has been operating for only 4 months and that the program in California does appear to be off to a good start.

The data available indicates that it is operating effectively, even though in some areas we do have the kinds of startup problems that one would expect in a program of this magnitude in a State as large and diverse as California with, as was mentioned, 50 service delivery areas.

JTPA represents a change in focus for employment and training programs funded by the Federal Government in that it is clearly tied to performance standards. When we're dealing with adults, those performance standards all relate back to one key factor and that is the number and percentage who enter employment.

To specifically address the areas that have been requested by the committee, the system established in California to assure compliance with the act has six major components. First, the review of job training plans by the employment development department staff and by the State job training coordinating council, with final approval of those plans by the Government; a fiscal management system, a management information system, a field liaison unit that monitors service delivery area program administration, an audit system to insure that funds are appropriately expended, and then the director's independent investigation under State law.

The purpose of the fiscal management system is to insure adherence to generally accepted accounting procedures, including cash management requirements on the part of service delivery areas.

A key goal of that system in this transition year is to insure that the Department of Labor's very stringent standards relative to cash on hand are adhered to.

The management information system collects and collates data on participants and program management, and it is submitted by service delivery areas to the State.

During this current transition year, most of the SDA's in California report quarterly, using hard copy. As we move into the first 2 full program years, we will have an automated system that will allow us at the State level to monitor their programs more closely and to provide greater detailed information to oversight bodies such as this one.

The field liaison staff is a very important point of reference for us. It provides our face-to-face contact with service delivery areas. It provides us with an opportunity to look at their programs directly in a hands-on way. We currently have 10 staff members engaged in that activity in California. They visit each service delivery area on a quarterly basis, using a very comprehensive and detailed monitoring guide that we have developed that we will provide to the committee staff.

The audit system that we are currently developing is basically composed of two components, the preawards surveys that were conducted of all service delivery areas to insure that they have adequate systems, and then the followup fiscal compliance audit which will be conducted at least every 2 years as required by the act. We are working in the Job Training Partnership office closely with the State council to develop our audit program and plan, and parenthetically we have the assistance of an audit advisory committee composed of representatives from audit firms, local service delivery areas, and other groups in the development of our audit system, so we feel that it will be a good system.

The State implementing legislation that has already been referred to earlier this morning, the Family Economic Security Act, provides a mechanism by which the director of EDD can conduct an investigation whenever there is a complaint that a service delivery area plan or program operation is contrary to the law. Under that authority, he must make a finding within 60 days of receiving the complaint.

Looking for a moment at the overall program, in the first 3 months of operation, that is through December 30, the 50 California service delivery areas enrolled 18,574 participants. That is 25 percent of the total planned participants for the full year. Now that's 25 percent of the participants in 33 percent of the time, but, if you take into account that we're in an implementation phase, I think that it illustrates that the service delivery areas are doing an outstanding job of getting their programs online.

What is even more satisfying from my perspective is that 4,414 individuals have completed programs or have been terminated. Of those, 70 percent or 3,123 have entered employment. So I think that our service delivery area administrators and private industry councils, which are responsible for the implementation of programs, can take pride in what they are doing out there on a statewide basis.

The complaint filed by the Western Center on Law and Poverty was reviewed by the director under the authority granted to him by the Family Economic Security Act. He conducted an investigation, as was required by the act, and looked primarily at two issues that were raised by the complaint.