ance standards were implemented in JTPA, with a focus on employment and outcomes, employment rates and wage levels rose in the program and continued to increase every year thereafter. At the same time, average costs per participant in the program decreased significantly. By 1986, it became evident that these performance standards were a powerful motivator in gaining systemwide acceptance of the policy goals of increased placements in unsubsidized jobs and reductions in program costs.

The second lesson we have drawn is that performance standards should clearly and fully reflect the goals. Oftentimes, because they are proxies, it is tempting to take what we can measure, which may not be suitable proxies for the goals of the legislation or the program. The initial program performance standards in JTPA were relatively simple measures of immediate employment, wages and unit costs, and they were established to meet the statutory objectives of increasing the economic self-sufficiency.

As the program priorities over time shifted to address more the hard-to-serve population and their education and skill needs, it became necessary to revise the measures to support these new program objectives.

Experience has shown us that the performance standards and incentives that promote immediate job placements do not necessarily result in the long-term labor market success that we are ultimately after.

Further, we learned that in the way we were measuring costs on a unit cost basis, it had the unintended result of discouraging the longer-term and more comprehensive services to those most at risk of failure in the job market. With the elimination of cost measures and the introduction of post-program measures, looking beyond the programs to 13 weeks after people leave the program, the Department now is seeing more improvement in a more intensive investment in education and training. The average length of participation in the program for adults has gone from 17 weeks to 22 weeks, and the average length for youth in the program has gone from 18 weeks to 26 weeks.

We are continually revising and refining this system. The Department is currently looking at the use of unemployment insurance wage records to improve further the quality of our post-program performance measures by using these data to track people beyond their participation in the program.

The third lesson I would suggest is that performance management incentives to achieve results. Tying performance management and standards to financial incentives is a powerful motivator. We tie our resources to performance through incentive grants, which provide additional resources at the margin to local programs that exceed their performance standards.

The use of the incentive funds allows for the basic resource needs of a given area to be met through the initial allocation, and then good performers are rewarded with bonuses.

JTPA also provides for sanctions for service delivery areas that fail to meet performance standards.

The fourth lesson is to keep it simple. There are many levels of JTPA administration responsibility within our program. We have

private sector and local governments participating, and it is very important that everybody have a clear understanding of what the goals and objectives are and what the principal measures of success are. Therefore it is critical that at all these levels, we be clear on these objectives, narrowly focusing performance measures on the key goals at all levels.

Within JTPA, we have focused our measures on a core of 6 performance outcomes. These include post-program employment and earnings experience of adults and adults who are on welfare, and the attainment of employment and academic or skill competencies among youth.

In order to make reasonable judgments about a program's performance, to get at the question that was referred to earlier about causality, the Department has devised an approach which helps to adjust the performance expectations so as not to penalize local areas that operate under difficult conditions or enroll harder-toserve populations. Thus, we do not hold Bismark, North Dakota or Newark, New Jersey to the same performance standards if in this case areas out of management control-for example, conditions of the economy-affect performance in the program.

A fifth lesson would be that performance standards are part of a systemwide management system, and they ought to be incorporated into the agency's overall management information system to ensure that there is routine reporting of accomplishment of results. As we were developing the Job Training 2000 Act, the subgroup identified several issues, looking at other programs, that seemed to be important in improving the accountability across Federallyfunded human resource programs.

The first is really a restatement that the human resource development program share a common mission, and that is to improve individual self-sufficiency, such as, typically, the employment, earnings and academic credentials of individuals and reducing welfare dependency. Yet we found in reviewing 39 programs that there is a considerable ambiguity in how each program measures this goal attainment.

Improving accountability across the Federal programs will remain problematic until various program goals and objectives are more clearly articulated and more simply and consistently measured.

Next, I'd say that in approximately two-thirds of the 39 human resources programs that we examined, the private sector has a critical role as a service provider, yet only in our program does the private sector have a direct role in program management, and we have used these Private Industry Council business men and women, as well as other community leaders, to influence day-to-day decisionmaking, to use performance-based contracts to build in these quantifiable performance goals into the contracts for service deliverers.

But we need to make sure in dealing with Government programs that pure market-based approaches have to be adapted to human resource programs, to ensure that enrollment policies and service strategies are not compromised in the question for performance re

This leads me to the last point that we have come to in our review of other programs as well as our own, and that is that performance standards are important in trying to focus us on outcomes, and that is useful, but it is important and it does matter how you get there, and it will not substitute for also looking at methods and procedures in the administration and delivery of programs.

For example, on programs that are not entitlements, like our job training program, where there is considerable discretion in the number of people that can be served and who is served, it is important to balance and ensure not only that the outcomes are successful, but that we also meet our objectives of promoting access and equity of services in addition to meeting the program's performance expectations.

Lastly, I referred at the beginning to the Job Training 2000 Act which has recently been submitted, and there are a couple of elements of that act that I think would advance the interests of this Committee.

The act proposes that at the Federal level, a Federal Vocational Training Council of Federal agency heads be established, and that this council give guidance on the implementation of various programs and to establish consistent policies and practices. As part of this, the council would be empowered to waive laws and regulations for vocational training programs for 3 years to promote the use of common performance standards amongst all the Federal vocational training programs. Legislation would require the Secretary of Labor, in consultation with this Federal council, to prescribe performance standards relating to what are established in the act as skill centers, a common point of intake or access to all Federal training programs.

These standards would include placement, retention and earnings in unsubsidized employment; placement in appropriate vocational training programs, and completion of training or educational objectives.

We would also make provision in this act for Governors to use JTPA as well as other funds to provide incentive grants to these skill centers, those that exceed performance standards.

Finally, the Job Training 2000 Act would establish a certification system for Federal vocational training programs that is based on performance standards. In order to be eligible to receive Federal funds, a vocational training program offered by any institution or service provider would have to be certified as meeting performance standards established by the Secretary of Education in consultation with the proposed Federal council. These standards would address such items as the reasonableness of the program's training costs, the rate of licensure of graduates, the rates of placement, and the retention in employment and earnings.

Mr. Chairman, we believe these features of the proposed act would complement the work of this Committee, and help us strengthen performance and accountability in vocational training. Thank you very much.

Senator ROTH. Thank you, gentlemen, for your helpful testimony. Mr. Uhalde, the Job Training Partnership Act is a highly decen

thorities considerable discretion and flexibility in their activities, and in return, they are held accountable for results. It is my understanding that it even allows States to provide financial rewards to local programs with superior performance. Is that correct?

Mr. UHALDE. That's correct, Senator Roth. Approximately 6 percent of the funds that go to the States are held in an incentive pool that States can provide to local jurisdictions for exceeding perform

ance.

Senator ROTH. This is a rather rare Federal bird, isn't it?

Mr. UHALDE. Yes, sir.

Senator ROTH. Do you think that other Federal intergovernmental assistance programs should be more performance-based in their approach?

Mr. UHALDE. We think that clearly, by the Job Training 2000 Act, that at least in our arena, which is vocational training, that it makes a lot of sense. We have 10 years of experience in trying to measure success, if you will, so we think at least in this arena it should be expanded.

Senator ROTH. You gentlemen heard the concern expressed that, particularly with the rapid turnover at the political level, this program may not be as successful as some of us would hope it might be. Would you agree or disagree that a consistent set of performance goals is important, perhaps more important then?

Dr. McGinnis, would you care to comment?

Dr. MCGINNIS. The Public Health Service, as you know, is an agency that consists in turn of eight agencies-the National Institutes of Health; the Centers for Disease Control; the Alcohol, Drug Abuse, and Mental Health Administration; the Food and Drug Administration; the Health Resources and Services Administration; the Indian Health Service, the Agency for Health Care Policy and Research, and the Agency for Toxic Substances and Disease Registry. Most of the senior people within those agencies are civil servants. The heads of the agencies themselves are often appointees, sometimes appointees from within the civil service or the Commissioned Corps of the Public Health Service. I think the notion of sustained leadership is one of the most important elements of the success of this kind of an effort, leadership from the top.

There are two ways you can look at it, though. You can look at it as a program in which if you take as a given the fact that there are going to be changes in leadership with some frequency, it is therefore all the more important to have generally agreed upon goals around which to rally, and which to use with your State and local and private counterparts. Or alternatively, you can say that with each change in leadership, the goals and objectives will in turn change.

Senator ROTH. Mr. Morris, would you care to comment?

Mr. MORRIS. Well, the Department of the Treasury sounds very similar to the conditions just described. We have a mixture of both career and political bureau heads. I myself am a career person appointed by the Secretary as commissioner of our bureau, but there are also political appointee and confirmed commissioners.

I guess the Department of the Treasury's mission is rather stable. There is not so much political about collecting taxes and

ance standards don't change from administration to administration very much, or from appointee to appointee. So from where I sit, I guess I don't see that as a particular problem whether there is turnover or not. It doesn't change the direction of the program. Senator ROTH. Mr. Uhalde?

Mr. UHALDE. Senator Roth, I am in an agency of approximately 1,800 people. There are two political appointees the Assistant Secretary and a deputy. I am a career civil servant and report to the political appointee. We have been rather unique in that our Assistant Secretary has been in the position for 4 years. Nonetheless, with more frequent turnover, I think it just makes it more important to have clear measures of your goals and objectives for the programs, not only for the turnover, but if you have an extensive delivery system as we have, that everybody up and down the line knows what the targets are and everybody is shooting for it, and they can stay on target regardless of who is in position.

Senator ROTH. Dr. McGinnis, you mentioned in your statement that having numerical targets can help recruit participants; that if outside groups are involved in setting the goals, they become committed to helping achieve the goals. Could you elaborate on that? Dr. MCGINNIS. Yes. Especially when dealing with public health change, it is quite clear that the major actors are not Federal actors. We are looked to for leadership and for program stimulus, but the major activity really goes on at the level of each individual and becomes a little more remote with each level that one removes oneself from the individual.

So it is important that we enlist the participation of people from throughout the Nation. We had a 3-year process with regional hearings and national meetings and so forth to enlist as wide a spectrum of individuals as we could with some public health expertise in the process of actually setting goals and objectives. When we completed the initial round of work, we then in turn published in the Federal Register and sent the draft out to some 13,000 groups and individuals for review and comment, revised it based on those comments, and issued it as a national and not a Federal document. I think in my testimony I gave special emphasis to the fact that this is a national strategy, not a set of Federal requirements, and that's an important element of the philosophy.

Senator ROTH. As I listened to your testimony, you mentioned that you internally held hearings roughly every 2 weeks; is that right?

Dr. MCGINNIS. Yes. We have 22 priority areas in the three general categories of lifestyle or health promotion, health protection or environmental programs, and preventive services. There are 22 priority areas in there. Every 2 weeks or thereabouts, we have a hearing which is presided over by the head of the Public Health Service, Jim Mason, around one or another of those priority areas, in which the lead agency comes in with colleagues from the other agencies, as well as colleagues from the States and the private sector. All together there are probably 30 to 40 people in the room, and everyone is welcome to participate. We in effect use that opportunity to hold our lead agencies accountable for the progress that is being made, and it gives the States and local representative