Mr. FARNUM. It is not a unilateral decision by the research specialist or panel? Dr. ALLER. They simply make a recommendation. They spell out the reasons for the recommendation. If we find those persuasive, then we would accept the recommendation. On the other hand, we are perfectly free to go in another direction. I might say 90 percent of the time we would follow their recommendations. They are soundly arrived at usually. APPLICATION OF SYSTEMS ANALYSIS TO OPERATION OF THE DEPARTMENT Mr. FARNUM. On the next page under "Technological change" you have a question which gives me cause to ask a question as it concerns internal operation of the Department. There is no question there is much research goes on as a result of technological change in terms of the effects it has on new methods, systems, procedures, controls, paperwork. I would like to have somebody tell me if all of this information that you are collecting is being used in the Department to more efficiently operate the Department in terms of methods and system and the flow of paper. Mr. RUTTENBERG. I would like to suggest that you include in your response, Dr. Aller, what we have done in the correctional institution area, which I think is the thrust of your example. Dr. ALLER. The thrust of your question is on technological changes as it relates to the internal operation of a Government agency. Mr. FARNUM. An administrative agency. Dr. ALLER. This goes to the use of computers, the whole automatic data processing. Mr. FARNUM. And systems analysis. I Dr. ALLER. Systems analysis operations, research, and so on. think it would be fair to say on that we rely on experts in these areas who come in, or on our own staff, to find these new concepts and automatic data processing possibilities. So that we are not simply attempting, in a small research arm focusing on technological change, to also be expert in the application of the new technology to the administrative operations of the agency, For that we rely on experts. As regards the systems analysis aspect of it, we have been engaged in some conversations with some specialist firms in this area regarding the possibility of their taking a contract with us and attempting to look at aspects of our operation and make recommendations for improvement in our operation. In particular, we are currently exploring such proposal as it relates to the experimental demonstration project area. This is only in the early discussion stage, as far as that goes, but we are not Mr. FARNUM. You haven't really gotten into the systems analysis then? Mr. ALLER. No. Mr. FARNUM. There is a difference between systems analysis and the utilization of ADP. There is much difference. Mr. ALLER. Yes. Mr. FARNUM. But they go together, as you well know. If you don't have a good, efficient system, you are not going to get good, efficient. operation out of data processing equipment because you are going to be programing inefficiency into it, and as a net result you are not going to get what you want. You say you are only taking a look at it now. Mr. ALLER. As far as using systems analysis for one aspect of our operation. I think it would be appropriate to indicate that the Employment Service is working in this area because they have been exploring the utilization of these techniques far longer as it relates to their operation. PAPER FLOW STUDY Mr. FARNUM. What about a simple study of the paper flow of the administrative operation? Is any of this going on at all? Mr. RUTTENBERG. On this question; yes, sir. We have a joint committee between ourselves and the Department of HEW specifically on the way paper flows in development, processing, and approval of specific MDTA projects, and we call it a subcommittee on paperwork. We are really concerned tremendously with reducing the amount of paperwork which contractors or State agencies have to engage in preparing in order to get a project approved, and sometimes there are forms and contracts. For example, in an OJT contract, the size of the contract is quite large and it is sometimes unnecessary, and we are trying to get at the problem of how we can reduce the amount of paper which has to flow in order to get approval of the project and still be assured that we have covered ourselves in terms of the efficient use of the money. Mr. FARNUM. I am sure this would be widely acclaimed by people that you do business with. What about right in your own office? Are you doing it there, too? Mr. ALLER. I have had a committee of staff people working since October on our contracting and approval process which relates to research contracts and experimental projects. That report has been completed. There are some 15 or 20 recommendations that have been made, all of which have been accepted by my Office, by the Solicitor's Office, and by the Financial and Management people. We are, as of yesterday, beginning the process of implementing it, and we have discovered some significant ways in which we can reduce the amount of paper, reduce the amount of timelag between various steps of the operation, and reduce the amount of clerical and related labor that is involved in getting a contract to the funding stage. Mr. FARNUM. That is all. Mr. FLOOD. Mr. Shriver. COST PER TRAINEE Mr. SHRIVER. In your statement on the last page, page 4, you mentioned the average expense per trainee in 1966 was $1,324 and per trainee in 1967 will be $1,388. How do those figures compare with prior years? Mr. RUTTENBERG. This is the overall figure now, including the combination for institutional and OJT. The actual figure for fiscal year 1965 was $1,345. Mr. SHRIVER. Could you put the figures in the record for the various programs? Mr. RUTTENBERG. Yes. (The information follows:) 1 Excludes 10 percent State matching required for vocational education costs. Including State funds, the overall estimated average training cost is $1,435; the estimated average institutional cost is $1,851, and the estimated average on-the-job-training cost is $1,019. Mr. RUTTENBERG. What I would like to add is that the fiscal 1967 figure of $1,388 does not include what will become necessary in fiscal 1967 in terms of 10 percent State matching. The 10 percent State matching will apply to the training costs in vocational projects, and that figure will be $47, as now estimated. So that the cost per trainee in fiscal 1967 is $1,388 plus $47, but the $47 being the equivalent of 10 percent State matching on vocational training. Mr. SHRIVER. There is a 10-percent matching in a portion of the training program? Mr. RUTTENBERG. Beginning in fiscal 1967. Mr. SHRIVER. And that has not been heretofore true? Mr. RUTTENBERG. No. It has been 100 percent Federal financing up through fiscal 1966. Mr. SHRIVER. Would you put the figures in, then? Mr. RUTTENBERG. We will put it in the record. OUTREACH PROGRAM Mr. SHRIVER. On that same page, where you referred to the requirement of more intensive outreach and employment security services, specifically how do you plan to reach these people? Mr. RUTTENBERG. I think, Mr. Congressman-Mr. Goodwin might want to augment what I am going to say on this-the Youth Opportunity Centers, which are, as you know, part of the employment security system, part of the Employment Service, is funded under the grants budget, and has for the past year and a half been engaged in doing just this for youth. People are stationed in the Employment Service in the Youth Opportunity Service, who go out into the various parts of the community, knock on doors, knock on doors of clubs or various halls, go even to the extent of finding street-corner gangs of kids that are together, and actually trying to work with these kids and deal with them and stimulate and motivate them to bring them into the Youth Opportunity Center so that they could be then moved into a particular training course where intensive counseling could be conducted for the individual throughout his training to make sure that he would not be a dropout. That is what we are now doing in the Employment Service for youth. This money we talked about, the $15.9 million for fiscal 1967, would be to do these same things for other than youths, for the adults, for the long-term unemployed, for the older worker, for the individual discharged for technological reasons who sort of shrugged his shoulders and gave up hope of any chance to do anything, to go out and find these people and involve these individuals in the program in the way we have been working with the youths. Mr. MICHEL. Will the gentleman yield? TEN PERCENT MATCHING BY STATES Mr. MICHEL. We might back up, really, to the previous question and supplement it a bit. Is there any indication that any of the States will be lagging in coming up with this 10-percent program? Will the program in any given State suffer because it won't be 100 percent Federal money! Mr. RUTTENBERG. As you know, Congressman Michel, we also, in the Department of Labor administer under delegated responsibility from the Office of Economic Opportunity the Neighborhood Youth Corps program, and in the Economic Opportunity Act there is the 10-percent matching in cash or kind. And, to the best of my knowledge, the Neighborhood Youth Corps program has not run into any problems in any State up to now in terms of making funds available. Mr. FLOOD. Will you supply for the record what you mean by "kind?" Mr. RUTTENBERG. Yes. Mr. FLOOD. What do you mean by "kind?" Mr. RUTTENBERG. Cash or kind. For example, if the building, the facility is providing for the training course, that is the equivalent of rent, and that would be in kind rather than cash. Mr. FLOOD. I know. I wanted the record to show what the word means. Mr. DENTON. Do you do that here? Mr. RUTTENBERG. We are not required to do it up to the end of 1966. Beginning in fiscal 1967, Congressman Denton, we would. It is a requirement of law. Mr. DENTON. You mean like light, facilities, heat, or something like that? Mr. RUTTENBERG. Yes. EMPLOYMENT SERVICE OUTREACH PROGRAM Mr. SHRIVER. Many communities don't have the poverty program. How would you reach the people that need training in such communities, the same kind of people? Mr. RUTTENBERG. As you know, there are over 2,000 local offices in the Employment Service throughout the United States. It will be the function of these local employment services in local areas to engage in outreach and finding activities. In the very rural communities there is a very excellent program in the Employment Service of mobile teams that move into local communities. There is a rural program of bringing these activities in to the rural community. This would be expanded under this proposal to find these kinds of individuals to bring them into training programs, and in smaller communities, with the authority that exists under the law, for individual referral on the person rather than having to set up a course. If we can't get enough people to make the course profitable, we can, under the law, take an individual from a small community, where there are not enough to set up a full course, and refer him individually, and even pay his transportation costs and even subsistence if it requires his leaving the community to go to another area to be trained. That authority we have under the act and do use. TRAINING OF PRISON INMATES Mr. SHRIVER. In the justifications on page 2, when you are talking of the groups upon whom you are going to place special emphasis, you mentioned prison inmates. Mr. RUTTENBERG. Yes. Mr. SHRIVER. Heretofore, I take it, there has been no training program other than what the State might have or the Federal Government itself. Mr. RUTTENBERG. For prison inmates? Mr. SHRIVER. Yes. We have had three Mr. RUTTENBERG. This is an interesting area. experimental programs to work with prison inmates, youths who are about to be released, either to be paroled or to be discharged. We work jointly with HEW in the location of people at Lorton Institute out here in Virginia, which is a District of Columbia correctional institution. We had a program at Rikers Island, N.Y., and another program at Draper Institute, Alabama. The results of these programs have been so encouraging to us that, as a matter of fact, yesterday and today I think there is a conference here. Mr. ALLER. It was postponed because of the snow until February 17. Mr. RUTTENBERG. There was to have been a conference 2 days this week of individuals from correctional institutions to explore further how we might extend the success we have had in the Lorton and Rikers projects to this type of individual who is really disadvantaged in the sense if he comes out with a record, what is he going to do? Mr. SHRIVER. This is a tremendous program, I would think. Mr. MICHEL. The emphasis, though, is on those who are to be soon released, not lifetermers? Mr. RUTTENBERG. Yes. Mr. MATTHEWS. It might be well, also, in relation to the gentleman's question earlier, to show that the project at Elmore. One of its features is the development of specialized materials which take into account the language handicaps and the cultural handicaps of these people, and those materials will be disseminated to all the States planning similar programs. Mr. RUTTENBERG. I cannot help, for Mr. Flood's benefit, to add a comment, if I might, sir. It is this kind of research and experimental work with individuals in correctional institutions that the money suggested in the research area, planning, research and evaluation, will be used and have been used. So that it is working in developing and trying to find techniques of helping these kinds of people that we have used the research and experimental for and will in the future. APPORTIONMENTS TO STATES Mr. SHRIVER. I am not sure I understand the chart on page 19. Funds obligated for a State, and the last column is the apportionment obligated. Let's pick out Kansas: $3,796,000 for 1966, and up to now specifically obligated $1,712,000, with 45 percent now obligated. Would you explain that? Mr. RUTTENBERG. What this means is there have been so far this fiscal year through the end of December 31, 1965, 35 projects approved in the State of Kansas, for 813 trainees, at a cost of $1.7 million, and that represents a commitment of the moneys available to Kansas, which is $3.8 million, or 45 percent. In other words, 45 percent of the |