ENCLOSURE 3 15 September 1971 D. BRIEF DESCRIPTIONS OF MANPOWER PROGRAMS NOTE: Synoptic descriptions are provided in this Enclosure 3 for those manpower programs which provide training, work experience and other kinds of direct support to the unemployed and/or underemployed. 1. JOB OPPORTUNITIES IN THE BUSINESS SECTOR (JOBS) 1. Program: JOB OPPORTUNITIES IN THE BUSINESS SECTOR (JOBS) 2. Authorizing Legislation: MDTA 3. Administering Agency: Department of Labor 4. Description: JOBS seeks to stimulate the private sector into hiring, training and retraining disadvantaged, unemployed persons and to upgrade the skills of those already employed. Positions are provided through the efforts of the National Alliance for Businessmen (NAB) with the Federal Government compensating employers for extra costs involved in hiring and training the disadvantaged. COMPTROLLER GENERAL'S EVALUATION OF RESULTS AND ADMINISTRATION OF THE JOB Department of Labor B-163922 DIGEST WHY THE REVIEW WAS MADE The Senate Committee on Labor and Public Welfare has urged the General Accounting Office (GAO) to provide the Congress with broad, independent appraisals of the management of Federal manpower programs by executive agencies. One of the principal manpower programs is the Job Opportunities in the Business Sector (JOBS) program. It is designed to assist disadvantaged persons achieve selfsufficiency through employment in private enterprise. The program consists of a contract component under which about 25 percent of the persons were reported as hired and a noncontract or voluntary component under which about 75 percent of the persons were reported as hired. The Department of Labor, in cooperation with the National Alliance of Businessmen, started the JOBS program in January 1968. Through June 30, 1970, the Department had programmed $499.1 million for the program. Initially 50 cities were designated for participation in the JOBS program. GAO selected five metropolitan areas on the basis of the desirability of including a large city--Detroit, Michigan--where the program is quite extensive and other cities--San Francisco and Oakland, California; Portland, Oregon; and Seattle, Washington--where the programs are more limited. GAO also considered the results of various other evaluations of JOBS. FINDINGS AND CONCLUSIONS Overall conclusions JOBS, a new and somewhat experimental program, has been effective in focusing the attention of businessmen on the employment problems of disadvantaged persons and in eliciting broad responses and commitments by many private employers to hire, train, and retain the disadvantaged. The Department of Labor and the National Alliance of Businessmen, however, have not compiled accurate data on the results achieved, and their reports on accomplishments generally are overstated. The most significant problems with the JOBS program concern (1) the need for more accurate and meaningful data on program operations, (2) questions relating to how the program was conceived and designed, and (3) improvements needed in the operation and administration of the program. Data on program operations Reporting by the Department of Labor and the National Alliance of Businessmen on the total number of jobs pledged by business, trainees hired, trainees terminated, Tear Sheet 69-110 O - 71 - 7 trainees on board, and the trainee retention rate was based substantially on data that, for the most part, had not been verified and, in some cases, was based on inaccurate or misleading data. (See p. 13.) A revised and improved management information system was put into use in February 1970. (See p. 20.) Basis on which the JOBS program was conceived and designed As presently conceived, the JOBS program provides for helping the disadvantaged to obtain meaningful employment creditably well during periods of high or rising employment levels but not during periods of high or increasing unemployment. This program was begun during a period of high employment. It now appears that adequate consideration may not have been given to what would happen during periods of declining labor demand. (See p. 23.) The JOBS program is not a job-creation program; ordinarily it does not increase the number of existing job openings. Therefore, during periods of declining or relatively stable labor demand, for an employer to participate in the program he would have to give preference to disadvantaged persons over persons he would have hired normally in filling job openings. When this happens, the program appears to simply shift the burden of unemployment from disadvantaged persons to others. (See p. 24.) The people whom the JOBS program was designed to assist are too broad a segment of the population and include many who have no clear and legitimate need for assistance under this type of program. Many persons enrolled under present eligibility criteria appeared to require placement assistance only, not costly on-the-job training and the support services that are also integral parts of this program. (See p. 26.) Operation of the JOBS program Contracting for on-the-job training on a fixed-unit-price basis generally is not appropriate. Many contracts provided for excessive payments to contractors for onthe-job training. This was due primarily to the fundamental difficulty of negotiating fixed-unit-price contracts at a time when neither the amount of training required nor the costs of providing the training were known. (See p. 31.) The number of job pledges by some prospective employers were unrealistically high and not always consistent with their ability, or intention, to provide the jobs. As a result, information on JOBS program activities available to the Congress did not provide a realistic picture of industry participation. (See p. 41.) A significant number of the jobs provided by contractors paid low wages and appeared to afford little or no opportunity for advancement. Often these were jobs traditionally filled with unskilled or low-skilled persons. In these cases, it appeared to GAO that very little was being accomplished under the JOBS program for the funds expended. This same condition existed, but to a lesser degree, under the noncontract component of the program. This condition appeared to have been caused, in substantial part, by the lack of appropriate departmental guidelines defining the elements of meaningful employment for use by JOBS program administrators. (New guidelines, which provide a system for rating jobs pledged under the contract component, were promulgated after the completion of GAO's fieldwork) (See p. 47.) Substantial improvements are needed in the procedures and practices for ascertaining and documenting the eligibility of persons for enrollment in the JOBS program. GAO's tests of eligibility of trainees reported as "hires" in the JOBS program showed that a substantial number of the trainees either did not meet the eligibility criteria established by the Department or could not be identified readily as having met the criteria, because pertinent information either had not been obtained from them or had not been reported to the National Alliance of Businessmen. (See p. 51.) Enrollees in the Concentrated Employment Program were not always given first priority in filling openings in the JOBS program, contrary to provisions of the Department's policy statements. (See p. 58.) For 17 of the 31 contracts reviewed, the contractors were providing substantially fewer services than were required by the contracts. In all cases, however, the contractors were receiving payment as if the services were being provided. (See p. 63.) Overpayments totaling about $24,000 and underpayments totaling $240 were noted on 16 of 29 contracts reviewed. For the most part, the erroneous payments appeared to be due to misunderstandings of the billing procedures by contractors. (See p. 71.) The Department's failure to scrutinize contractor performance has perpetuated many of the problems identified. (See p. 73.) RECOMMENDATIONS OR SUGGESTIONS The JOBS program management information system The Department should examine periodically the information system for the JOBS program to ensure that --the system provides all the data necessary for program management and evaluation, --statistical reports on operations of the program are qualified appropriately to de- The design of the JOBS program The Department should direct the JOBS program more specifically to --helping the disadvantaged obtain employment in those segments of the economy --redefining the parameters of the disadvantaged segment of the population and applying resources to those persons who are not job-ready and who require costly on-the-job training and supportive services (see p. 27), and Tear Sheet --providing job counselors and placement officials with detailed instructions for screening prospective enrollees and requiring, in the case of each applicant, written justification concerning how the program is to fulfill an applicant's specific needs (see p. 27). |