Operation of the JOBS program

The Department should

--contract for on-the-job training and supportive services on (1) a costreimbursable basis when services to be provided cannot be specifically defined and when sufficient experience is not available to enable a realistic estimate of the costs of providing the services and (2) a fixed-unit-price basis when the services can be adequately defined and a realistic estimate can be made of the costs (see p. 38);

--require contractors, under cost-reimbursable contracts, to adequately document training and supportive services provided and costs incurred (see p. 39);

--review contractors' costs and performances to ensure that the Government is paying only for services provided (see p. 39);

--watch closely the implementation of its guidelines for evaluating prospective contractors' present and planned capacity to perform in accordance with their job pledges (see p. 46);

--adopt guidelines for rating jobs, offered by noncontract employers, similar to those adopted for contract employers (see p. 50);

--develop more exacting procedures for screening prospective trainees, including substantiation of their statements as to their family incomes (see p. 56);

--take the necessary steps in collaboration with the National Alliance of Businessmen (1) to ensure that trainees hired by noncontract employers are comparable to trainees hired by contract employers and (2) to explore the feasibility of having the Alliance request noncontract employers to hire JOBS trainees only through the Concentrated Employment Program, the Work Incentive Program, and the local Employment Service offices (see p. 56);

--ensure that employers give the Concentrated Employment Program and the Work Incentive Program the highest priority in filling training openings and instruct the Concentrated Employment Program and the Employment Service to refrain from certifying persons selected in advance by the contractors, or subcontractors, unless there is adequate justification for so doing (see p. 61);

--emphasize to its contract negotiators the need for (1) adherence to prescribed guidelines in negotiating contracts for trainee supportive services, taking into consideration the contractors' capabilities to provide the services, (2) specificity concerning the nature of the services to be provided, and (3) documentation of the services actually provided and the costs incurred (see p. 69);

--review contractors' activities to ensure that payments are made only for supportive services provided and to recover payments that have been claimed improperly (see p. 69); and

--revise its billing instructions to show contractors how monthly invoices should be prepared and how the amounts should be calculated (see p. 72).

Lastly, the Department should monitor effectively contractors' compliances with contract requirements. (See p. 76.)

The total funds programmed, obligated, and expended for the JOBS program through June 30, 1970, were as follows:

Budget estimates submitted to the Congress by OEO and the Department of Labor in support of requests for fiscal year 1970 funds for the JOBS program totaled $420 million. After various reductions by the Congress and administrative adjustments by the Office of Management and Budget, the Department of Labor and OEO appropriations totaling $280 million were made available for fiscal year 1970.

In April 1970 the Department of Labor transferred $105 million to other manpower programs and activities. This transfer left a total of $175 million available for the JOBS program.

As of June 30, 1970, Department records showed that $168.9 million, or about 97 percent of the available funds for fiscal year 1970, had been obligated. This amount represented about 40 percent of the program funds originally requested. Of the amounts obligated, only $21.7 million had been expended at the end of the year.

The reprogramming of fiscal year 1970 funds from the JOBS program was attributable primarily to the shrinkage in the demand for labor which resulted in the award of fewer contracts to private employers for the training and employment of persons. The shrinkage in demand for labor resulted also in the expenditure in fiscal year 1970 of only $21.7 million, or about 12.8 percent of the funds obligated in that year, because some contract employers (1) were hiring at a rate lower than proposed and (2) were experiencing a high rate of trainee turnover and were unable to recruit persons to keep trainee positions filled throughout the training period.

2. JOBS OPTIONAL PROGRAMS

Program: JOBS Optional Program and the National On-The-Job Training Contracts. (JOBS/National Contracts)

Authorizing Legislation: MDTA

Administering Agency: Department of Labor

4. Description:

The JOBS Optional Program, supplemented by national on-the-job training contracts between the Department of Labor and national unions and trade associations, provides skill-training and supportive services for both disadvantaged and non-disadvantaged persons. The program has entry-level and upgrading components and is operated entirely by the States through State on-the-job training agencies designated by the Governors. On-the-Job training services consists of agreements with State apprenticeships agencies to monitor on-the-job training projects and other program support.

8

We presented our preliminary review findings and observations in testimony before the Select Subcommittee on Labor of the House Committee on Education and Labor on May 1, 1970, and the Subcommittee on Employment, Manpower, and Poverty of the Senate Committee on Labor and Public Welfare on May 5 and 6, 1970. This report is basically an amplification of that testi

mony.

LEGISLATIVE AUTHORITY AND FUNDING

OF THE JOBS PROGRAM

The basic concepts of the JOBS program are authorized under both the Economic Opportunity Act of 1964, as amended (42 U.S.C. 2740), and the Manpower Development and Training Act of 1962, as amended (42 U.S.C. 2571).

The Economic Opportunity Act authorizes the Office of Economic Opportunity (OEO) to provide financial assistance in urban and rural areas for comprehensive work and training programs, including programs to provide incentives to private employers, other than nonprofit organizations, to train or employ unemployed or low-income persons. The act authorizes also (1) reimbursements to employers for unusual training costs for a limited period when an employee might not be fully productive, (2) payments for on-the-job counseling and other supportive services, and (3) payments to permit employers either to provide employees with transportation to and from work or to reimburse the employees for such transportation. OEO has delegated its authority with regard to the JOBS program to the Department of Labor.

The Manpower Development and Training Act directs the Secretary of Labor to provide occupational training for those unemployed or underemployed persons who cannot otherwise be expected to secure appropriate full-time employment.

In carrying out the purposes of this act, the Secretary is responsible for determining the skill requirements of the economy; developing policies for the adequate occupational development and maximum utilization of the skills of the Nation's workers; promoting and encouraging the development of broad and diversified training programs, including on-the-job training, designed to qualify for employment the many persons who cannot reasonably be expected to secure full-time employment without such training; and equipping the Nation's workers with the new and improved skills that are or will be required.