STAFF REPORT ON THE DEPARTMENT OF WORKFORCE SERVICES

Transcription

1 EXHIBIT D STAFF REPORT ON THE DEPARTMENT OF WORKFORCE SERVICES PREPARED FOR THE GOVERNMENT ACCOUNTABILITY AND EFFICIENCY REVIEW SUBCOMMITTEE OF THE JOINT COMMITTEE ON STATE AGENCIES AND GOVERNMENTAL AFFAIRS March 13, 2006 Prepared By The Research Services Division Bureau of Legislative Research

2 TABLE OF CONTENTS Report Objectives... 1 Disclaimers... 1 Summary of Findings Discussion of Issues Major Services... 8 Key Statistical Indicators... 8 Fiscal Year 2006 Budget Summary... 9 Summary of Applicable Review Criteria Summary of Efficiency Questionnaire Research Schedules: Schedule 1 - State Comparisons of Selected Labor Exchange Outcomes Schedule 2 - State Comparisons of Selected Unemployment Insurance Statistics Schedule 3 - Comparison of Workforce Development Programs and Services (Region IV and Border States) Schedule 4 - Comparison of Workforce Development Staffing Levels (Region IV and Border States) Appendix: Summary of Staff Procedures PAGE

3 STAFF REPORT ON DEPARTMENT OF WORKFORCE SERVICES REPORT OBJECTIVES This report has been prepared by the Research Services Division of the Bureau of Legislative Research to provide limited staff analysis on the applicable review criteria provided by Act 2218 of In particular, the objectives of our review were to: Determine whether agency objectives and services are consistent with authorizing legislation. Assess the utilization and results of agency services based upon statistical information and other available information and compare to selected other states. Determine whether the agency operates in an efficient manner. To identify any considerations relevant to potential consolidation, transfer of programs or possible duplications of services for consideration by the Subcommittee. Identify any significant areas of concern relating to applicable administrative and regulatory review criteria. Assess the impact of the loss of federal funds or federal intervention if the agency was abolished. DISCLAIMERS Our review was not intended to be a performance audit under applicable governmental auditing standards. Additionally, the review was not intended to determine compliance with applicable federal legislation. We have attempted to identify the sources of information presented in the report. Due to limited staff resources and the limited scope of our review, data has not been independently verified. 1

4 SUMMARY OF FINDINGS AUTHORIZATION OF SERVICES Services provided by the Department of Workforce Services (including the Board of Review and the Division of New Hire Registry) appear consistent with authorizing legislation and applicable federal funding sources. UTILIZATION AND RESULTS OF AGENCY SERVICES The agency appears to be meeting objectives for major programs such as Unemployment Insurance, Labor Market Information, and administrative support for Workforce Investment Act services. Significant numbers of job seekers are receiving employment services. However, reported outcomes for the percentages of overall job seekers and veterans finding employment are among the lowest reported in Region IV for the year ending June 30, Unemployment insurance indicators reviewed for the quarter ending September 30, 2005 indicated that Arkansas appeared to be a the mid-range of other states regarding the duration and exhaustion rates of benefits. See comparison to other Region IV and other border states at pages 12-13, Schedules 1 and 2. EFFICIENCY o The report indicates that staffing levels are based upon caseload or federal funding allocations for some of the larger programs of the agency. The number of positions appears reasonable based upon comparisons to other states in Arkansas' region (Region IV) and three additional border states - See Schedule 4, pages o The agency appears to utilize technology effectively, including online and telephone Unemployment Insurance services and the operation of the Arkansas Job Link System to provide a consistent reporting platform for reporting employment services in Arkansas. o The agency report indicates that many field staff are cross-trained to provide both unemployment insurance and employment services. 2

5 POTENTIAL CONSOLIDATION, DUPLICATION OR PROGRAM TRANSFER The following issues are suggested for consideration by the Subcommittee: 1) The relation of the Arkansas (statewide) Workforce Investment Board to the Department of Workforce Services and whether the state's workforce development efforts are best served by having two separate agencies or by consolidating the two agencies. 2) The relation of Dislocated Worker services provided by contract to the Department of Workforce Services. 3) The relation of the Employment and Training component of the Food Stamp Program currently administered by the Division of County Operations of the Arkansas Department of Health and Human Services and whether changes are needed to ACA REGULATORY AND ADMINISTRATIVE REVIEW Regulatory criteria not applicable to this agency. No significant findings related to EEOC, procurement, employee conflict of interest policies and resolution of complaints against the agency. FEDERAL FUNDING Significant loss of federal funds for employment and related support services if the agency were to be abolished. ACTIONS NEEDED: Subcommittee recommendations on the continuation of the Department of Workforce Services (including the Board of Review and Division of New Hire Registry) and any recommendations pertaining to consolidation or transfer of programs or other changes to existing legislation. 3

6 DISCUSSION OF ISSUES ISSUE 1 RELATION OF ARKANSAS (STATEWIDE) WORKFORCE INVESTMENT BOARD AND THE ARKANSAS DEPARTMENT OF WORKFORCE SERVICES The Arkansas Workforce Investment Board as a governing board has responsibilities for the Workforce Investment Act programs carried out through Local Workforce Investment Boards. The Board has a staff of 13 authorized positions and operates as a separate state agency. The amount appropriated for FY06 is $989,847. Matters noted regarding the relationship of the two agencies include the following: o The Department of Workforce Services provides extensive support services as detailed on the following page. These services are valued at $1,558,623 for the year ending June 30, o The two agencies provide services together as partners in various local One-Stop Centers pursuant to a Memorandum of Understanding. o The Workforce Investment Board staff are being located in the newly renovated Capitol Mall space with staff of the Department of Workforce Services. o Federal funding for Workforce Investment Act and labor exchange services (Wagner-Peyser) are provided through the same Federal agency - the Department of Labor - Employment and Training Administration. o Only one other state in Region IV (LOUISIANA) appears to have a separate state agency for staff support. Three states in Region IV appear to have a Workforce Investment Office within the Governor's Office and one state in Region IV has a division with staff support in a separate state agency other than the lead Workforce Development agency. 4

7 WIA Support Provided by the Department of Workforce Services for the Arkansas Workforce Investment Board The Workforce Investment Act sets forth the administrative and oversight requirements that are applicable to programs operated with these federal funds. The Department of Workforce Services (DWS) performs various functions for the Arkansas Workforce Investment Board (AWIB). Annually, DWS provides the AWIB with an estimate of the total costs associated with the provision of these duties. For Program Year 2005, DWS estimated these costs to total $1,558,623. Line Item Total Costs Regular Salaries $1,007,494 Personal Services Matching $326,129 Maintenance & Operations Expense $110,000 Conference Fees & Travel $35,000 Professional Services $30,000 Capital Outlay $0 Data Processing $50,000 Total $1,558, Specific duties that are performed by the various AESD sections and are included in this request are listed below: DWS Section Total Costs WIA Program Duties performed: Identify needs and suggest policies to AWIB Propose changes to AWIS/AJL systems Provide training on AWIS/AJL Conduct federally required customer satisfaction surveys PC Support Duties performed: Provide MIS systems support to Central Office Staff $407, $50, Financial Management $82, Duties performed: Provides monthly, quarterly, and annual WIA financial data to the Department of Labor 5

8 Legal $21, Duties performed: Conducts research and interpret applicable federal and state law Provide technical assistance to AWIB on legal issues EEO $36, Duties performed: Monitors for compliance with the nondiscrimination and equal opportunity provisions of WIA WIA Monitoring $302, Duties performed: Monitor fiscal and procurement activities of AWIB and Local Area recipients/sub-recipients Send preliminary and final fiscal and procurement monitoring reports to Local Areas and AWIB Draft and recommend policy to AWIB Provides technical assistance to Local Areas WIA Finance $244, Duties performed: Make payments on AWIB contracts, upon approval by AWIB Receive and process fund requests by AWIB and Local Areas Provide monthly financial reports to AWIB Provide financial reports to Department of Labor Prepare statistical reports for WIA Title I and Title III Calculate and propose Local Area allocations to AWIB Provides technical assistance to Local Areas Administrative Disbursement $6, Duties performed: Cuts checks out of 15% Funds Communications $7, Duties performed: Media relations, issues public notices and news releases for AWIB Central Office Staff Support $174, Budget $15, Logistics $7, Payroll $3, Personnel $7, Security $14, Non-Personal Services (NPS) $126, Administrative Staff/Technical (AS&T) $126, TOTAL $1,558,

9 ISSUE 2 DISLOCATED WORKER TASK FORCE It was noted that 100% of the effort of 5 employees of the Department of Workforce Education are funded by the Department of Workforce Services as a part of the Dislocated Worker services administered by the Department of Workforce Services. We were informed that the 5 employees of the Department of Workforce Education will be co-located with Department of Workforce Services staff providing Dislocated Worker services in the near future. The Subcommittee may want to hear justification from the Directors of the two Departments for the continuation of a contractual arrangement for 100% of the work effort of the employees providing these services. ISSUE 3 FOOD STAMP EMPLOYMENT AND TRAINING ACA requires the periodic stationing of ESD employees in DHS field offices for services to Food Stamp recipients provided funds are specifically available to ESD for such purposes. The following matters came to our attention: o The Department of Workforce Services indicated that their staff were not generally being stationed in DHS field offices for this purpose, but that both agencies were represented in a number of one-stop centers. o The Division of County Operations (Arkansas DHHS) currently contracts with the Department of Workforce Education to coordinate certain services related to Food Stamp Training and Employment. The contract amount for the current year is approximately $1.1 million. o Food Stamp Employment and Training services are provided by the Workforce Development agency in four states in Region IV (South Dakota, Utah, Wyoming, Texas) and in a border state (Tennessee). The Subcommittee may wish to discuss the programmatic location of Food Stamp Employment and Training Services. Additionally, the Subcommittee may want to consider recommending appropriate changes to the Code Section cited above regarding the stationing of ESD (now Workforce Services) employees in DHS field offices. 7

10 DEPARTMENT OF WORKFORCE SERVICES MAJOR SERVICES o Labor Exchange Program o Veterans Employment Services o Workforce Investment Act Programs (Pass through to Local Workforce Development Boards - DWS has certain responsibilities for compliance monitoring and reporting) o Administration of Unemployment Insurance Program o Administration of Benefit and Training Programs, Work Opportunity Credit Programs o Statistical and Information Programs, including Labor Market Information, Career and Occupation Information, U.S. Department of Labor statistics o Administration of Transitional Employment Assistance Program (as of pursuant to Act 1705 of 2005) and New Hire Registry o Board of Review o New Hire Registry KEY STATISTICAL INDICATORS (YE ) INDICATOR DATA SOURCE Total Registered Job Seekers 161,121 Federal Report Total Receiving Staff Assisted Services 126,572 Federal Report Total Veterans and Eligible persons receiving staff assisted services Average Monthly Number of Unemployment Claims Number Work Opportunity / Welfare-to-Work Tax Credits 14,871 Federal Report 16,350 Agency GEAR report 10,556 Agency GEAR report Board of Review Statistical Indicators for CY04 INDICATOR CY04 DATA SOURCE Total # of Appeal Tribunal decisions issued in UI appeals 2 12,780 Agency GEAR report Number of Appeal Tribunal-UI decisions that reverse DWS Total # of Board of Review decisions issued in UI appeals Number of Board of Review-UI decisions that reverse Appeal Tribunal 3,299 Agency GEAR report 2,415 Agency GEAR report 448 Agency GEAR report 8

11 FY06 BUDGET SUMMARY Positions (authorized) 698* Personnel costs $ 35,610,154 General operating costs 23,088,996 Other operating costs 11,993,472 Unemployment Insurance (Remittances of Taxes Collected and Benefit Payments) 620,000,000 Excess UI Benefits and Expenses 12,048,033 UI Trust Fund Interest 3,000,001 Training Allowances and Payments 15,000,000 Reed Act 77,000,000 Workforce Investment Act (pass-thru) 58,000,000 Community Investment Initiative 2,000,000 New Hire Registry - State 180,927 New Hire Registry - Federal 351,212 Other 877,708 TANF 100,000,000 Total $959, *Estimated Break-out of Positions: Unemployment Insurance 260 Wagner-Peyser Employment Service 91 Workforce Investment Act 23 Other Programs 199 Transitional Employment Assistance 125 TOTAL 698 FUNDING SOURCES General Revenue $ 3,821,577 Federal Revenue 322,403,185 Unemployment Insurance Trust Fund 620,000,000 Special Fund 12,925,741 Other Total $ 959,150,503 9

12 SUMMARY OF APPLICABLE REVIEW CRITERIA REVIEW CRITERIA COMMENTS 1) Agency efficiency See Page 11 and Schedule 4, pages Staff levels appear reasonable compared to other states. Agency appears to use technology effectively. Field staff are cross-trained to provide more than one type of service. 2) Agency objectives, extent to which they have been achieved, any additional functions and related authority. Agency services appear consistent with applicable legislative authorization. Agency appears to be meeting objectives for major programs such as Unemployment Insurance, Labor Market Information, and administrative support for Workforce Investment Act services. Significant numbers of job seekers are receiving employment services. However, reported outcomes for the percentages of overall job seekers and veterans finding employment are among the lowest reported in Region IV for the year ending June 30, Indicators reviewed for UI were in the mid-range of other states reviewed. 3) Assessment of the regulatory function N/A 4) Assessment of need and utilization of agency services Services are vital to the state and are being utilized - See Key Statistical Data, Page 8. 5) Potential duplication and possible See Discussion of Issues on pages 4-7 consolidation 6) Assessment of public benefit versus benefit to entities regulated N/A 7) Effectiveness of dealing with complaints No significant issues noted. 8) Extent of public participation in rulemaking N/A 9) EEOC and historically underutilized No significant issues noted. businesses 10) Whether changes are needed in state statutes See Discussion of Issues on pages ) Employee conflict of interest rules No significant issues noted. 12) Record keeping practices related to public requests for information 13) Effect of federal intervention or loss of federal funds if agency is abolished No significant issues noted. Significant loss of federal funds for employment and related support services if the agency were to be abolished. 10

13 SUMMARY OF EFFICIENCY QUESTIONNAIRE NUMBER OF STAFF IN RELATION TO WORKLOAD RATIO OF ADMINISTRATIVE STAFF TO DIRECT SERVICES REALLOCATION OF RESOURCES OUTSOURCING FIELD STAFF TECHNOLOGY TIMELINESS OF REPORTS MONITORING The number of workforce staff generally appears consistent (and in some cases modest) in comparing staff and workloads in other states in Region 4. See Schedule 4. The agency report indicates that Federal funds for administration of Unemployment Insurance are allocated on the basis of workload. The report submitted by the agency indicates that about 61 persons of 555 FTE are providing general administrative and technical support (approximately 11%). That later percentage is even lower with the addition of approximately 125 positions for TANF services. The report indicates that 46 additional staff are in management positions over individual programs. The agency did not report any significant instances of reallocation of resources. No examples of outsourcing were reported. The report indicates that many field staff are cross-trained to provide both unemployment insurance and employment services. The agency uses a cost allocation system to assign costs to the appropriate program. Technology appears up-to-date including online and telecenter services for Unemployment Insurance claims. The agency uses a system known as Arkansas Job Link System developed by the America's Job Link of Topeka, Kansas to meet data reporting requirements for Labor Exchange and Workforce Investment Act purposes. Subject to Federal program requirements The agency provides a significant portion of compliance monitoring of Local Workforce Investment Boards funded thru the Workforce Investment Act. 11

14 Schedule 1 STATE COMPARISONS OF SELECTED LABOR EXCHANGE OUTCOMES * PY04 (JULY 1, 2004 JUNE 30, 2005) STATE ENTERED EMPLOYMENT RATE (TOTAL JOB SEEKERS) ENTERED EMPLOYMENT RATE (VETERANS) EMPLOYMENT RETENTION RATE (TOTAL JOB SEEKERS) ARKANSAS 54% 47% 72% LOUISIANA 83% 80% 71% NEW MEXICO 52% 53% 76% OKLAHOMA 71% 68% 85% COLORADO 64% 69% 82% MONTANA 74% 67% 85% NORTH DAKOTA 77% 74% 89% SOUTH DAKOTA 73% 69% 70% UTAH 70% 65% 83% WYOMING 63% 61% 80% TEXAS 80% 55% 81% MISSOURI 59% 60% 84% TENNESSEE 72% 72% 83% MISSISSIPPI 51% 44% 64% *Source of Information: U.S. Department of Labor 12

15 Schedule 2 STATE STATE COMPARISONS OF SELECTED UNEMPLOYMENT INSURANCE STATISTICS* INITIAL CLAIMS 2005 THIRD QUARTER AVERAGE DURATION OF BENEFITS (Weeks) 2005 THIRD QUARTER EXHAUSTION RATE 2005 THIRD QUARTER FIRST PAYMENT TIMELINESS INTRASTATE (Year Ending ) ARKANSAS 45, % 92.3% LOUISIANA 176, % 83.9 NEW MEXICO 12, % 83.6 OKLAHOMA 26, % 92.3 COLORADO 29, % 89.3 MONTANA 7, % 95.3 NORTH DAKOTA SOUTH DAKOTA 3, % , % 97.6 UTAH 12, % 98.1 WYOMING 3, % 91.3 TEXAS 210, % 90.9 MISSOURI 86, % 85.9 TENNESSEE 82, % 93.1 MISSISSIPPI 81, % 85.7 *Source of Information: U.S. Department of Labor 13

16 Schedule 3 COMPARISON OF WORKFORCE DEVELOPMENT PROGRAMS SERVICES (REGION IV AND BORDER STATES) STATE AGENCY ARKANSAS Department of Workforce Services LOUISIANA Department of Labor NEW MEXICO Department of Labor OKLAHOMA Oklahoma Employment Security Commission COLORADO Department of Labor and Employment MONTANA Department of Labor and Industry NORTH DAKOTA Job Service North Dakota SOUTH DAKOTA Department of Labor UTAH Department of Workforce Services WYOMING Department of Workforce Services CORE SERVICES* SEPARATE STATE AGENCY FOR WIA OTHER PROGRAMS NOTED YES YES TANF, Administration of Benefits and Training Program, Work Opportunity Credits, Trade Adjustment Assistance YES YES (Note 7) YES NOTE (1) Labor Laws Incumbent Worker Training, Worker Compensation YES NO Incumbent Worker Training, Senior Community Service Employment Program, Welfare-to-Work YES NOTE (2) Labor Laws, Workers Compensation YES NO Labor Laws, Workers Compensation, Apprenticeship and Training YES NOTE (3) Senior Community Service Employment Program YES NO Labor Laws, Workers Compensation, Food Stamp Employment and Training, TANF (work components), Career Leaning Centers, Adult Education, Alternative High Schools YES NO Child Care, Food Stamp Employment and Training YES NO Adult Basic Education, Apprenticeship Utilization, Employment Training for Self-Sufficiency, Food Stamp Employment and Training, Vocational Rehabilitation 14

17 Schedule 3 STATE AGENCY TEXAS Texas Workforce Commission CORE SERVICES* SEPARATE STATE AGENCY FOR WIA OTHER PROGRAMS NOTED YES NOTE (4) Child Care Services for TANF and low income families (administered through Local Workforce Development Boards), Food Stamp Employment and Training, Regulation of Career Schools and Colleges, [TANF Choices-Self-Sufficiency], Labor Laws MISSOURI (Border State Region 5) Department of Economic Development Division of Workforce Development TENNESSEE (Border State Region 3) Department of Labor and Workforce Development MISSISSIPPI (Border State - Region 3 - Department of Employment Security NOTE (5) NOTE (6) Community College New Jobs Training Program, Apprenticeship Information and Referral, Welfare-to-Work YES NO Labor Laws, Workers Compensation, Food Stamp Employment and Training, Senior Community Service Employment Program YES NO Trade Adjustment Assistance *Core Services generally include Workforce Centers, Workforce Investment Act (WIA) programs, Labor Market Information, Unemployment Compensation NOTES: (1) Governor s Office of Workforce Training and Development (Staff of 34) (2) Governor s Office of Workforce Development (Staff of 4) (3) Workforce Development Division within the Department of Commerce includes support for the state s Workforce Development Council (Staff of 5) (4) Texas Workforce Investment Council within the Office of the Governor (5) Unemployment Insurance administered by the Department of Labor and Industrial Relations - Division of Employment Security (6) Missouri Training and Employment Council with a staff of 4 (within the Department of Economic Development) (7) Louisiana Workforce Commission Authorized Positions of 13 - Appropriation of $1.7 million 15

18 Schedule 4 COMPARISON OF WORKFORCE DEVELOPMENT STAFFING LEVELS (REGION IV AND BORDER STATES) STATE TOTAL REGISTERED JOB SEEKERS (PY04) UNEMPLOYMENT INITIAL CLAIMS (3RD QUARTER) STAFFING LEVEL COMMENTS ARKANSAS 161,121 45, (Budgeted for FY06 and including 125 staff for TANF) LOUISIANA 143, , ( FY Authorized - Includes Administration (35), Management and Finance (129), Occupational Information Program (135), Job Training and Placement (446), Incumbent Worker Training (38), Unemployment Benefits Program (238), Worker Protection (20) NEW MEXICO 93,342 12, (FY05 Operating) OKLAHOMA 150,506 26, (FY04 actual - Includes TANF program and administrative support to the state Workforce Investment Board) COLORADO 265,534 29, (FY05 Appropriation for the Division of Employment and Training) 16

19 Schedule 4 STATE TOTAL REGISTERED JOB SEEKERS (PY04) UNEMPLOYMENT INITIAL CLAIMS (3RD QUARTER) STAFFING LEVEL COMMENTS MONTANA 72,145 7, (2004 Base Budget - Workforce Services Division 302 FTE Unemployment Ins. 150 FTE) NORTH DAKOTA 30,897 3, ( budgeted FTE) SOUTH DAKOTA 74,425 3, (192 Field Operations and 93 Unemployment Insurance - FY05 Actual) UTAH 204,392 12, WYOMING 61,046 3, TEXAS 2,676, , (Authorized for YE ) MISSOURI 263,307 86, (483 FTE - Workforce Development Division 2005 and 625 FTE - Division of Employment Security for Unemployment Insurance) TENNESSEE 297,636 82, Full time; 430 Part time MISSISSIPPI 253,673 81, Full-time; 307 Part-time FY04 Actual - Employment Security Division) (FY05 Actual) Source of Information: Review of State Executive Budget Documents and/or information provided by State Budget staff 17

20 APPENDIX SUMMARY OF STAFF PROCEDURES o Determine whether agency objectives and services are consistent with authorizing legislation. o Assess the need and results of agency services based upon statistical information and other available information and compare to selected other states. o Summarize key points and supporting information to support conclusions regarding efficiency and identify areas of significant concerns. o Research the structure and programs of similar agencies in other states in Region IV other border states not in Region IV. o Discuss any areas of potential duplication, overlap, consolidation or program transfer with appropriate agency officials. o Review any audit reports prepared by the Division of Legislative Audit that appear relevant to the review criteria. o Review report conclusions and issues for Subcommittee consideration with agency officials. 18