Input:
	Background

		The Workforce Innovation and Opportunity Act (WIOA)

WIOA was designed, in part, to deliver a broad array of integrated  services to customers of the public workforce system, including  individuals seeking jobs and skills training, and employers seeking skilled  workers. WIOA authorizes six core programs, including youth formula  grants, with four programs administered by DOL and two by Education,  as described in table 1. Program participants, including youth, may co- enroll in multiple WIOA core programs, such as the adult education or  vocational rehabilitation programs, if they meet eligibility requirements for  each. The core programs are generally required to report on common  performance indicators, such as how many workers entered and retained  employment, their median wages, whether they attained credentials, and  their measurable skill gains. The law also includes new requirements for  state workforce development plans to unify workforce strategies across  the six core programs.
Most provisions of WIOA became effective on July 1, 2015, superseding  the Workforce Investment Act (WIA) of 1998. The Departments of Labor  and Education issued the final regulations in August 2016, just after the  close of the first full WIOA program year. Figure 1 shows the timing of key  actions in implementing WIOA and timeframes governing state and local  spending of initial youth grants. As illustrated, compliance is determined  over the period for which funds are available, rather than on a program  year basis. States have 3 years after the start of the program year to  expend each program year’s youth funds, and local areas have 2 years.
WIOA also emphasized improving opportunities for populations with  significant barriers to employment, including out-of-school youth. We  have previously reported that disconnected youth (those neither in school  nor employed) may experience challenges successfully transitioning to  adulthood. Disconnected youth are more likely than in-school youth to  have characteristics and/or circumstances that can pose obstacles to  employment, such as a lack of stable housing or transportation, parenting  responsibilities, disabilities, limited basic skills, criminal convictions, or  lack of adult support. In addition, WIOA emphasizes work experiences for  youth—both in- and out-of-school youth—including paid and unpaid work,  pre-apprenticeships, and internships.
To ensure states and local areas emphasized services to out-of-school  youth and youth work experiences, WIOA introduced new expenditure  requirements for each. WIOA also changed the age range of eligible  youth (see table 2). However, DOL has broad authority to issue waivers  to individual states or local areas, exempting them from meeting certain  requirements, including those relating to expenditures.
In addition to the new spending requirements and eligible age range,  WIOA changed the services local areas are required to make available to  youth, as appropriate. Specifically, 2 of WIA’s 10 program services were  combined, and 5 new services were added, bringing the total to 14 (see  table 3). In general, WIOA’s youth program elements support career  readiness as a youth transitions from basic educational attainment to  occupational skills training and work opportunities, then to post-secondary  education or unsubsidized employment.
Since 2011, total youth formula grants to states—under WIA and then  WIOA—have fluctuated but declined overall, with $700,044,855 being  allotted to the 50 states and the District of Columbia for all WIOA youth  activities in PY2017 (see fig. 2). Under WIOA Title I, DOL administers  youth grants to states based on a formula reflecting the distribution of  unemployment and economically disadvantaged youth. In general,  states allocate funds to local areas based on a similar formula. In  addition to changes in federal grant funding, fluctuations in unemployment  and estimates of disadvantaged youth affect annual state and local  grants.
Governors establish state Workforce Development Boards that help guide  implementation of WIOA by developing state plans, crafting statewide  WIOA policies, and assisting local boards in the planning and delivery of  WIOA services, among other duties. The state Boards must include a  majority share of leaders in the state business community as well as  representation from the state legislative and executive leadership, and  labor organizations, and may include community-based organizations and  service providers. Local Workforce Development Boards operate under  state Boards and perform several roles, including developing local WIOA  plans, contracting with service providers, providing oversight of youth  activities, and selecting American Job Center operators.
As was the case with WIA, WIOA provides significant flexibility to states  and local areas to design and operate their WIOA programs to best suit  local needs. For example, some local Workforce Development Boards  provide direct services to youth while others contract with one or more  organizations to provide the WIOA youth program services. In addition,  services can be provided to youth at the workforce area’s American Job  Center, a separate youth center, service providers’ offices, other locations  in the community, or a combination of these sites. Local service providers  work with each youth participant to develop an individual service strategy,  which is a combination of services connected to a career pathways plan  and tailored to the youth’s needs. Local workforce areas generally must  make available all 14 program services, though youth are not required to  participate in all services.

	States and Local Workforce Areas Report Progress in Meeting Spending Requirements

		Most States Appear on Track to Meet Targets for Spending on Out-of- School Youth

Complete data on the spending of youth grants allocated to states for the  first 2 program years of WIOA (PY2015 and PY2016) were unavailable  during our review, but available data states reported to DOL showed a  growing number of states were on target to expend at least 75 percent of  their youth formula grant on out-of-school youth (see fig. 3). Nationally, as  of September 30, 2017, states reported spending over 99 percent of their  WIOA youth grant program funds allotted in PY2015, and 36 states had  spent 75 percent or more of their expended funds on out-of-school youth (with an additional 13 states having spent between 70 and 75 percent).  Twenty-nine states reported having spent all of their PY2015 funds, and  of these states, 21 had spent 75 percent or more on out-of-school youth.  The remaining 8 fell short of the level generally required by statute.  However, for PY2015 specifically, DOL officials told us that the agency  used its transition authority to modify the requirement. For that program  year, DOL allowed states that could not meet the 75 percent requirement  to spend a minimum of 50 percent of funds on out-of-school youth (rather  than 75 percent) if they spent at least 10 percentage points more on  these youth than in the previous program year. Applying this standard to  DOL data on state spending, all but two states were on track to meet the  modified requirement for PY2015 funds.
Available DOL data also suggest most states are making progress in  meeting the out-of-school youth spending requirement for their PY2016  youth funds. The rate at which states are spending their PY2016 funds  varies, but as of September 30, 2017, states had collectively spent  approximately 77 percent of their allotments. As of that date, 48 states  had spent 75 percent or more of their expended funds on out-of-school  youth. Only 4 states reported they had spent all of their PY2016 funds,  and of those 4, all had spent more than 75 percent on out-of-school  youth. States that have not yet spent all of their youth funds nor met the  requirement to spend 75 percent of their PY2015 or PY2016 funds on  out-of-school youth may still do so by the end of the 3-year period, ending  June 30, 2018 for PY2015 funds, and June 30, 2019 for PY2016 funds.  Conversely, states that are currently at or above the 75 percent level, with  substantial funds left to spend, may fall below that level by the end of the  3-year spending period.
Past federal emphasis on serving out-of-school youth, and many states’  experience in doing so, may partially account for states’ progress in  meeting WIOA’s higher spending targets for this population. As far back  as 2002, DOL guidance had emphasized serving out-of-school youth.  Even before WIOA went into effect, many states were exceeding the  existing WIA requirement to spend 30 percent of their WIA youth grant  funds on out-of-school youth, with nationwide levels exceeding 50 percent  since 2012 (see fig. 4). State workforce board officials in the three states  we visited reported that they did not need to make significant changes to  their youth programs to meet the new spending requirement. For  example, in Texas, officials told us that the state had anticipated the  increased focus on out-of-school youth for a number of years. In  response, in the years before WIOA, it began steering more of its WIA  youth grant funds toward serving out-of-school youth. According to this  state official, in PY2006, Texas increased the percentage of youth grant  funds that local areas must spend on out-of-school youth from 30 (the  requirement under WIA) to 45 percent, and raised the requirement again  in PY2007 to 65 percent.

		Local Areas Reported Being on Track to Meet WIOA Spending Requirements

Similar to states, most local workforce areas we surveyed reported that  they were on track to meet the requirement that they spend 75 percent of  their WIOA youth grant funds on out-of-school youth. They also reported  they were making progress on the requirement that they spend 20  percent of their funds providing work experience to all youth served by  WIOA (in- and out-of-school).
With respect to the out-of-school youth spending requirement,  approximately 76 percent of survey respondents reported spending at or  above the required level, and 3 percent reported spending below it.  The majority of local workforce areas reported that meeting the spending  requirement on out-of-school youth was not challenging or only slightly  challenging. Likewise, staff in several local workforce development  areas we visited told us that meeting the out-of-school youth spending  requirement was not a significant challenge. An estimated 15 percent of  those surveyed reported that meeting the spending target for out-of- school youth in PY2016 was very or extremely challenging.
A majority of local workforce areas we surveyed also reported they were  on track to meet the requirement to spend 20 percent of local WIOA youth  grant funds on work experiences for both in- and out-of-school youth.  While work experience was a youth program element under WIA,  spending a specific percentage of WIOA funds on the service is a new  requirement and applies only to local areas and not to states. Based on  our survey, we estimate that approximately two-thirds of local workforce  areas reported spending 20 percent or more of their PY2016 youth funds  on work experiences (see fig. 5), but around 11 percent reported  spending less.
In general, many local workforce areas reported that it was not  challenging or only slightly challenging to meet WIOA’s spending  requirements for serving out-of-school youth and the provision of work  experiences. However, an estimated 15 percent reported that meeting the  out-of-school youth requirement was very or extremely challenging, and  around 21 percent reported the same about the work experience  requirement (see fig. 6).
Under WIOA, states are responsible for monitoring local areas’ progress  in meeting youth spending requirements. DOL officials we interviewed  told us that states collect local area expenditure data, but those data are  not transmitted to DOL except in the aggregate. The three states we  visited confirmed that they collect local expenditure data from local areas  using their own individual state reporting systems and then aggregate  those data at the state level.
DOL takes steps to determine whether states are carrying out their  monitoring responsibilities, including conducting on-site visits to state  offices. However, DOL officials said regional offices do not have the  capacity to conduct on-site monitoring in each state every year. To make  up for this, they conduct risk-based monitoring based on quarterly desk  reviews that can alert them to expenditure issues at the state level.  According to the officials, DOL regional offices typically conduct on-site  monitoring of approximately one-third of their states each year. The  officials said that during on-site monitoring, regional office staff may elect  to review a sample of local area expenditures and the monitoring  activities the state has taken to ensure local targets are being met.
Also, to supplement their monitoring activities, DOL officials said they rely  on regional offices’ ongoing interactions with states to stay abreast of state and local experiences and challenges. They said staff from regional  offices maintain a dialogue with state officials, including periodic  conference calls. As part of this communication, they said states might  inform DOL regional officials about certain local areas experiencing  challenges. DOL officials also said they hear from some local area staff  directly during national conferences.
As of February 2018, DOL’s monitoring had thus far focused on assisting  states in overcoming challenges with WIOA requirements through  technical assistance and guidance, according to DOL officials. At that  time, the officials told us that the agency was moving to more formal  compliance monitoring and would be beginning to address state-level  non-compliance. DOL officials also told us that the agency has developed  a core monitoring guide supplement for the WIOA Youth program and  plans to publish the guide by December 2018. The tool will be used by  DOL officials in their monitoring of states, but will also be shared with  state officials to, among other things, help them organize their state-level  monitoring of localities.

	Local Areas Reported Using a Combination of Strategies to Address the Out-of- School Youth Spending Requirement and Related Challenges

		Local Workforce Areas Restricted Enrollment of In-School Youth to Help Meet the Spending Requirement for Out-of- School Youth

While most local areas reported that their efforts to meet the out-of-school  youth spending requirement involved serving greater numbers of that  population, they also reported the need to accommodate that increase by  significantly reducing or eliminating services provided to in-school- youth. In addition to the estimated 71 percent of local areas reporting  that the number of out-of-school youth receiving services had increased  since the enactment of WIOA, an estimated 80 percent reported that the  number of in-school youth receiving services had decreased. An  estimated 51 percent said they had reduced outreach and services to in- school youth to a great or very great extent, with another 22 percent  saying they had moderately reduced outreach or services to these youth.  Notably, an estimated 35 percent of local areas reported that they had  stopped enrolling in-school youth in their WIOA youth program entirely.
Available DOL WIOA program participant data reflects this shift, as the  number of in-school youth served since PY2014—the program year prior  to when WIOA went into effect—through PY2016 has dropped from just  over 97,700 to around 38,900, or approximately 60 percent (see fig. 7).  During the same period, the levels of out-of-school youth served rose  from nearly 97,200 to around 108,800, or approximately 12 percent.  DOL officials and some local workforce area staff reported that it is  generally more expensive to serve out-of-school youth, in part because  they often require more services than other youth. Although DOL does  not have current data on cost per participant, DOL’s Employment and  Training Administration’s fiscal year 2017 Congressional Budget  Justification notes that WIA data indicate that out-of-school youth may  cost approximately $1,000 more per youth served than in-school youth.
Survey respondents most frequently reported that the reduction in  services to in-school youth was the most adverse consequence they  observed as a result of the new WIOA youth requirements. Similarly,  WIOA practitioners we interviewed during our local area site visits  expressed concerns about reducing services for in-school youth. Several  told us that local in-school youth were no longer receiving the level of  services they might need and that the shift might lead to more youth  becoming disconnected from school and employment. Staff in one of  the more rural workforce areas we visited noted that there are often  insufficient services available to replace these lost WIOA services.  Without a presence in the schools, staff in one workforce area told us  they were concerned that they were not reaching youth at the right time  and that more youth might become disconnected as a result. Some  survey respondents made similar points, reporting that youth are more  likely to become disconnected without WIOA services available in  schools. In addition, workforce development board staff in one local area  we visited told us that the WIOA definition of out-of-school youth has  limited their ability to provide services to youth who need them if they  have enrolled in community college but are not yet attending classes.
DOL has provided technical assistance identifying other federal programs  available for assistance to in-school youth, but we did not determine the  extent to which these resources were being used in the local areas we  visited. One major urban area we visited had managed the program’s  transition toward serving a larger proportion of out-of-school youth  through a city-wide committee established by the mayor. According to  workforce development board staff, this committee works with the  workforce development board and other community partners (e.g., civic,  business, and philanthropic groups) and has helped develop an  overarching strategy to assist youth that did not exist prior to WIOA.

		To Address Challenges, Local Workforce Areas Have Increased Recruiting Efforts, Strengthened Partnerships, and Expanded Services

As local areas have worked to meet the new out-of-school youth  spending requirement, they report applying other strategies to address  certain challenges associated with serving that population in greater  numbers. While many local areas reported that one of the main benefits  of WIOA was its focus on hard-to-serve youth and those in greatest need  of services, survey respondents and local workforce area staff and  service providers reported that it has forced them to make some  adjustments in how they administer their local youth programs,  particularly in their approach to recruitment, local partnerships, and  service offerings.
Challenges Associated with WIOA’s Shift toward Out-of-School  Youth  In response to our survey, local area staff cited a number of specific  challenges related to recruiting, retaining, and serving out-of-school youth  under WIOA (see fig. 8).
Transportation: A lack of transportation can prevent youth from getting  to and from WIOA-funded educational programs, service providers,  training, and work, and it was among the most significant barrier to  employment cited by survey respondents. An estimated 71 percent of  local workforce areas reported that transportation barriers were  moderately or very difficult, and an additional 18 percent said they were  somewhat difficult. Local service providers also told us that the lack of  transportation could be particularly acute in rural areas without public  transportation, such as bus systems.
Locating and Recruiting: Finding out-of-school youth to enroll in WIOA- funded services was a significant challenge cited by local workforce  areas, with an estimated 59 percent reporting that locating out-of-school  youth was moderately or very difficult and another 21 percent reporting  that it was somewhat difficult. Some local workforce area staff and service  providers told us that many out-of-school youth move frequently, making  it difficult to find and track them. In some locations, workforce area staff or  service providers reported that youth typically do not “walk-in” to  American Job Centers seeking services or congregate in the same places  as in-school youth. Staff in one rural area told us that service providers  had to recruit constantly. But even in urban areas, locating and recruiting  out-of-school youth can be difficult. In fact, service providers in one urban  workforce development area we visited told us that recruiting out-of- school youth is by far their greatest challenge. “Life barriers crop up once engaged and can  take the young adults off course. The system  must be flexible to allow these young adults  time to leave and come back multiple times.”
Retaining and Serving: Convincing out-of-school youth to stay in a  WIOA program is also challenging for workforce development areas and  service providers. In our survey, retaining youth was cited as moderately  or very difficult by an estimated 54 percent of workforce development  areas, with another 31 percent reporting it was somewhat difficult. Some  survey respondents and workforce development area staff and service  providers cited current low unemployment rates, which make it easier for  youth to find jobs without completing WIOA work experiences or services,  and frequent moves by out-of-school youth, sometimes far from work or  training locations, as reasons retaining these youth can be difficult. “Many of the out-of-school youth have  significant barriers that they have faced their  entire life. We have to address a series of  barriers with the individual before we can  even begin to think about career, training,  education, or work experience.”
Addressing Personal Barriers: Addressing the personal barriers often  faced by out-of-school youth was also a key challenge cited by local  workforce areas. According to an estimated 44 percent of local workforce  areas, addressing obstacles faced by this population such as  homelessness or having a criminal history is moderately or very difficult,  with another 30 percent reporting that it is somewhat difficult. Multiple  survey respondents noted that because of their multiple barriers, out-of- school youth require more frequent contact and intensive case  management services. During our interviews in local workforce areas,  staff and service providers told us that out-of-school youth tend to face  more of these types of obstacles than in-school youth. They told us these  youth may have disabilities, such as diagnosed or undiagnosed mental  health needs. In addition, they may have children and lack childcare, be  involved in the child welfare or juvenile justice system, or experience  homelessness. Out-of-school youth also often lack basic academic or job  readiness (“soft”) skills, and sometimes are not proficient in English or  face other barriers to employment. Some survey respondents also noted  that the needs of older out-of-school youth are often different from those  of younger youth. For example, they may have multiple children or  housing needs and thus require more supportive services.
Strategies Local Areas Have Applied to Address Challenges  To mitigate challenges in shifting spending to out-of-school youth, local  workforce area staff and service providers said that they have increased  their recruiting efforts, developed new partnerships, strengthened existing  partnerships, and in some cases, expanded services.
Increased Recruitment Efforts to Locate Out-of-School Youth: An  estimated 51 percent of local workforce areas said they are spending a  larger percentage of their WIOA youth grant funds on recruiting compared  to what they spent under WIA. According to our survey, the top  approaches workforce development areas use to recruit out-of-school  youth involve seeking referrals from community-based organizations,  family and friends, and other agencies. They also include recruiting in  person and in places throughout the community where out-of-school  youth tend to congregate. Advertising WIOA youth programs using fliers  and social media were also cited as being used to a great or very great  extent by about 50 percent of local workforce areas (see fig. 9).
In addition to survey respondents, those we spoke to in the local  workforce development areas we visited described how they have  increased their recruitment efforts of out-of-school youth since the  enactment of WIOA. For example, one local workforce development  board used its funds to hire an additional staff person to assist a service  provider with its recruitment efforts. Service provider staff from across the  local areas we visited said they spend time out in the community where  out-of-school youth congregate much more now than under WIA when  they served more in-school youth who were easier to find. They told us  they recruit at malls, barbershops, and other places where out-of-school  youth are likely to gather. One service provider told us they have regular  hours at a popular major-chain coffee shop where they meet with youth  and complete enrollment paperwork rather than relying on youth coming  to an American Job Center or the service provider’s office.
According to our survey, an estimated 70 percent of local workforce areas  receive referrals from parents, siblings, friends, and other community  members to a great or very great extent. These word-of-mouth and peer- to-peer recruiting strategies were also frequently cited as being very  successful by local workforce area staff and service providers we  interviewed. For example, staff in one local workforce area told us that  one of their most successful recruitment efforts has been using or  employing youth who had experienced success in the program to help  enroll others in the local community who could benefit from WIOA  services. They reported these youth recruiters knew where to find out-of- school youth in need of services and can more easily establish  relationships with these youth, both in person and via social media. Other  approaches used by the local areas we visited included seeking referrals  from other community-based organizations and agencies, placing  information fliers in high school graduation packets, attending job fairs  and other community events, using social media or radio ads, going door- to-door in public housing, using mobile recruiting units, and placing fliers  for WIOA services in grocery bags or attaching them to water bills.
Strengthened Partnerships: Local workforce areas report strengthening  partnerships with other WIOA programs and organizations to enroll and  serve out-of-school youth. Approximately 60 percent of local workforce  areas reported developing new partnerships or strengthening  relationships with other WIOA core programs. Specifically, approximately  two-thirds reported that they are co-enrolling WIOA youth with other  WIOA core programs. Similarly, local workforce areas reported  developing new partnerships or strengthening relationships with state and  local government agencies, as well as community-based organizations.  For example, some local workforce development area staff and local  service providers we interviewed told us they had strengthened  relationships with child welfare, juvenile justice, vocational rehabilitation,  community colleges, and adult education programs.
Some service providers focus on delivering services to a specific  population of youth, such as youth involved in the foster care or justice  system. For example, staff at one local workforce board told us that one  of its local service providers ran a program in a juvenile justice facility to  provide services to incarcerated youth. Some local workforce areas also  reported co-enrolling youth in non-WIOA programs such as Temporary  Assistance for Needy Families (TANF). In addition, an estimated 80  percent of local workforce areas reported that they had created new  partnerships or strengthened relationships with employers. Other ways  that local workforce areas reported strengthening partnerships included  strengthening coordination across youth serving programs by improving  communication (an estimated 78 percent), co-locating programs (47  percent), and integrating information technology systems (21 percent).  Several survey respondents said that new or strengthened partnerships  were one of the primary benefits of the WIOA program and that referrals  from these partners are an important way to recruit out-of-school youth for  the WIOA youth program.
Expanding or Intensifying Services: To encourage enrollment or retain  and serve of out-of-school youth, local workforce areas reported that they  had expanded the variety or intensity of the youth services they provide.  For example, workforce areas reported that they had expanded  occupational training (59 percent), adult education (55 percent), and the  development of career pathways (63 percent). In addition, approximately  46 percent of local workforce areas reported they had expanded their  supportive services and approximately one-third of workforce areas  reported that they spent a higher percent of their youth grant funds on  supportive services than they did under WIA. For example, local  workforce area staff or service providers we interviewed in three local  areas (in two different states) told us that they had used WIOA funds to  pay for the care of children of enrolled youth. Staff at another local  workforce development area we visited reported intensified focus on staff  training in trauma-informed care and emphasized the need to assume  trauma among program participants. One WIOA service provider we  interviewed explained that keeping more transient out-of-school youth  motivated and enrolled required more intensive services and more  interaction with staff until they learn to become more self-sufficient. She  also emphasized that linking occupational training to an employer is vital  for success with out of school youth.
Reducing Transportation Barriers: In addition to these overall  strategies, some local workforce area staff and service providers we  spoke to told us they had taken steps to address transportation obstacles,  which were widely cited as especially challenging. For example, local  workforce staff in one local area we visited reported supplying bus passes to help youth participants get to their work experience jobs or training in  areas where bus systems existed. One service provider staff member in a  more rural area told us his organization used two vans to transport youth  and another told us that his organization had provided bicycles to out-of- school youth. In one location we visited, a community college that  partners with the WIOA program provides shuttle bus services between  its various campuses and has expanded this service to include  transportation to various partners, to and from job sites, and to and from  credentialing exams. The representative from this community college told  us that this approach is working well but needs to be further expanded. A  service provider in another local area we visited told us they have  developed some portable training modules that can travel across the local  area, alleviating some of the transportation issues out-of-school youth  face. These modules help train students in more remote areas in fields  such as heating, ventilation, and air conditioning (HVAC), electrical work,  and plumbing.
To help states and local areas implement their WIOA programs and  overcome challenges, DOL has developed and provided a significant  amount of guidance and technical assistance in the form of Training and  Employment Guidance Letters, webinars, conferences, and online  resources; all of which state and local officials generally reported as being  helpful. Officials in the three states we visited stated that DOL’s  guidance and technical assistance had been helpful and that DOL’s  Employment and Training Administration regional offices had been  responsive to their needs. While local workforce development board staff  we interviewed in several local areas told us that they relied primarily on  guidance from their state, they also reported using DOL guidance and  technical assistance and agreed that it was generally helpful. About half  of local workforce area survey respondents reported that DOL guidance  and technical assistance are either extremely or very helpful. When  asked what topics or issues related to WIOA youth needed additional or  clearer guidance, 54 out of 106 (approximately 51 percent) survey  respondents did not provide any examples. Of those that did respond, the  most commonly cited areas for additional guidance included performance  measures and work experiences. However, these topic areas were only  mentioned by 14 and 9 of the survey respondents, respectively.

	Local Areas Used Various Strategies to Meet the New WIOA Work Experience Requirement, Yet Many Reported Challenges

		Local Areas Expanded Work Experience Opportunities for Youth and Frequently Paid for Youth Salaries in Order to Meet the New Work Experience Requirement

Many local workforce areas we surveyed have increased their emphasis  on work experiences for youth under WIOA, with paid employment being  the most common type of opportunity provided to participants. While work  experience was a youth program element under WIA, since the  enactment of WIOA, an estimated 82 percent of local workforce areas  reported they had expanded work experience opportunities, and 59  percent of local workforce areas reported they provided work experiences  to a greater percentage of youth participants than in the years prior to  WIOA. Year-round paid employment and summer paid employment were  the most common work experience opportunities that local workforce  areas reported providing to a great or very great extent (an estimated 69  percent and 42 percent, respectively). In contrast, pre-apprenticeship, on- the-job training, job shadowing, and internship opportunities were less  commonly provided (see fig. 10).
WIOA youth participated in several types of work experiences with  employers in numerous occupational fields, local workforce areas  reported, though some were more common than others. Since the  enactment of WIOA, an estimated 80 percent of local areas developed  new or strengthened existing partnerships with employers. Through  partnerships with employers youth participated in work experiences in a  wide range of fields, the most common being jobs involving retail,  customer service, and hospitality. Healthcare and medical-related jobs  were also common, as were jobs in manufacturing. These occupations  were also associated with the three most common career pathway plans  developed for participants, according to the local workforce areas we  surveyed. Several local staff members and survey respondents said they  try to align youth work experiences with the youth’s interests and career  pathway plan. However, many survey respondents noted that finding a  good match can be difficult.
Several workforce development board staff members and service  providers across the three states we visited told us they had a positive  opinion of work experiences and thought they were beneficial for youth.  They praised work experiences for reasons like helping youth learn  valuable soft skills, helping them realize the value of work, and improving  employment outcomes. An American Job Center staff member in one  local area we visited told us how important work experiences were for  letting youth explore their interests and “try out” a new field before  investing program funds in a related training program, only for the youth  to decide later they did not like that field. Staff at two other centers  described similar instances where participants placed in teaching,  medical, and veterinarian positions reconsidered their decisions after the  work experience exposed them to some of less appealing aspects of the  occupations.
Payment of participants’ salary is the dominant strategy local workforce  areas said they are using to meet the new WIOA work experience  spending requirement. Specifically, based on our survey an estimated 81  percent of local areas reported that to a great or very great extent they  relied on paying a youth participant’s salary to meet the requirement (see  fig. 11).
Our survey also indicates that when local areas paid a participant’s work  experience salary, 88 percent often or very often paid the entire salary  with youth program funds, far outpacing other payment structures (see  fig. 12). Although there is no limit on the length of the paid employment  experience, DOL officials told us the typical length is around 6 to 8 weeks.  In one local area, service provider staff told us that paying a youth’s entire  salary encourages businesses to take a chance on a youth when they  otherwise might not. DOL officials also told us that out-of-school youth, in  particular, are a harder population to serve and many employers are not  willing to take a risk in hiring them without the full salary paid through  WIOA. However, based on our survey, an estimated 42 percent of local  areas have at least sometimes arranged an agreement that part of a  participant’s salary be paid by the employer.

		Local Areas Have Taken Steps to Address a Variety of Challenges That Inhibit Their Ability to Provide Work Experiences to Youth

WIOA requires local areas spend at least 20 percent of local youth funds  on work experience for in-school and out-of-school youth. Most local  workforce areas we surveyed reported meeting that requirement, with  an estimated 42 percent reporting it was slightly or not at all challenging  to meet it in PY2016. However, another 34 percent found it moderately  challenging, and 21 percent reported that it was very or extremely  challenging. As shown in figure 13, local areas reported experiencing a  variety of challenges as they attempted to meet the new spending  requirement.
Participant Challenges: The fact that youth participants may be less  prepared for employment than older participants posed a challenge for  workforce area staff as they worked to address WIOA’s new emphasis on  youth work experiences. Overall, we estimate that 38 percent of local  areas found it moderately or very difficult to meet the spending  requirement because youth were not ready for a work experience. An  estimated 31 percent of local workforce areas reported it was moderately  or very difficult to meet the new requirement as a result of youth not  completing their work experiences because they failed to live up to  employer expectations. Several local WIOA program staff members told  us that youth often have no prior work experience, can lack the soft skills  needed for work, and may face other barriers to employment that can  complicate success in a work experience. Some local staff we interviewed  noted that many youth require substantial preparation before, and support  during, a work experience in order to succeed. Perhaps as a  consequence, about half (48 percent) of local workforce areas provided  job readiness training to youth to a great or very great extent in order to  prepare them for work experiences. In addition, some local service  providers we met with told us they provided orientations to employers in  order to manage expectations and prepare them to employ WIOA youth.
Further, local service provider staff members told us they lend ongoing  support to both youth participants and employers throughout the work  experience period. This included check-ins at employment sites,  mediating employee/employer conflicts, and addressing employer  concerns about a youth’s performance to ensure youth meet employers’  expectations.
Employer Reluctance: Employers are crucial to a local workforce area’s  ability to provide work experiences to youth, yet many local areas have  struggled to develop effective employer relationships that foster such  opportunities. Notably, identifying employer partners does not appear to  be the primary challenge, as an estimated 55 percent of local workforce  areas reported little or no difficulty doing so. Yet, the existence of  employers may not readily yield work experiences, as approximately 35  percent of local areas reported it was moderately or very difficult to align  youth interests with available work experiences. Nearly the same  proportion reported similar difficulty generating work experience  opportunities because employers may perceive that providing those  experiences would come with additional burdens. For example, service  provider staff in two local areas told us some employers expressed  concern about whether they would be responsible for workers’  compensation should a youth be injured. Staff in other areas told us that  large companies in particular worry about potential administrative  burdens, such as getting approval from corporate headquarters for a  WIOA-sponsored work experience, or incorporating a participating youth  into their payroll system.
Some of the additional administrative burden perceived by employers  may be associated with their general concern about the job-readiness of  youth enrolled in WIOA programs. Around 31 percent of local areas  reported it was moderately or very difficult to meet the work experience  spending requirement because employers were reluctant to work with  WIOA youth participants. One local employer we interviewed said out-of- school youth, in particular, may require additional help with  communication, professional presentation, punctuality, and interpersonal  skills, which can require additional personal attention. Many local service  provider staff and survey respondents described the numerous barriers to  employment often faced by out-of-school youth. One service provider  said, as a result of these barriers, employers may be less receptive to  provide work experiences for them. A survey respondent voiced a similar  concern, saying employers may think youth with significant barriers are  “too difficult to manage and/or retain in employment.”
In light of employers’ possible reluctance to provide work experiences for  youth, our survey shows many local workforce areas focused more  resources toward developing employer partnerships. Specifically, we  estimate that 51 percent of local areas reported that they increased their  spending on business/employer relations under WIOA. Service providers  in two local areas we visited, as well as many survey respondents,  reported they had hired new staff, or were utilizing existing staff, to  coordinate with employers. In one local area, workforce board staff told us  that even with an established community presence and decades of  experience, they still had to convince potential employer partners that  their youth program staff would do everything in their ability to make work  experiences easier for the employer.
Other Challenges: Youth interest in work experiences may also vary  according to current life circumstances, especially the need for immediate  income. About a quarter (23 percent) of local areas reported youths’ lack  of interest in obtaining WIOA-funded work experiences made meeting the  spending requirement moderately or very difficult. As one survey  respondent reported, “Many youth in this program simply want and need  a job.” This sentiment was echoed by service providers in all three states  we visited, who said the need for income can inhibit youths’ interest in a  temporary work experience opportunity.
Also, during our interviews with local area service providers we were told  that challenges associated with the WIOA work experience component  may be more acute in rural areas. As with other WIOA components,  such as education and training, the availability of transportation can  determine whether a youth can participate in WIOA-funded work  experiences. For example, service providers we interviewed in Texas  stressed how a lack of transportation, especially in rural areas where  employers may be more distant from a youth’s home, can prevent youth  from getting to and from a work site. In addition, a lack of employers in  rural areas can hinder the creation of work experience opportunities. One  service provider we interviewed said that some rural towns in his local  area “have little more than a gas station and a school,” and the lack of  local employers significantly limits work experience opportunities for  youth. In such cases, arranging an opportunity in an alternate location  would also likely require that the youth have a means of transportation to  travel to the job site.

	Agency Comments

This report does not include any recommendations. We provided a draft  of this report to the Secretaries of Labor and Education for review and  comment. Both agencies provided technical comments which we  incorporated as appropriate.
As agreed with your office, unless you publicly announce the contents of  this report earlier, we plan no further distribution until 30 days from the  report date. At that time, we will send copies to the appropriate  congressional committees, the Secretaries of Labor and Education, and  other interested parties. In addition, the report will be available at no  charge on the GAO Web site at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-7215 or gurkinc@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix II.

Appendix I: Objectives, Scope, and Methodology

This report examines the implementation of the Workforce Innovation and  Opportunity Act (WIOA) youth program in states and local workforce  areas with respect to the new requirements that 75 percent of youth funds  be expended on out-of-school youth and 20 percent of youth funds be  expended on work experiences. In particular, this report examines: (1)  what is known about states’ and local areas’ progress in meeting the  WIOA spending requirements for serving out-of-school youth and  providing youth with work experiences; (2) how local areas are  addressing WIOA’s emphasis on serving out-of-school youth, and any  challenges they have encountered; and (3) how local areas are  addressing WIOA’s emphasis on youth work experiences and any  challenges they have encountered.
To answer all of our research objectives we reviewed relevant federal  laws, regulations, and guidance. We also employed other methods to  answer our audit objectives, as described below.

	Analysis of DOL Data and Documents

To address our first objective, we analyzed Department of Labor (DOL)  state-level WIOA youth program expenditure data from program year  (PY) 2015 and PY2016, the most recent data available, for the 50 states  and the District of Columbia. We also analyzed WIA state level  expenditure data from PY2012 through PY2014. These data include the  funds allotted to each state, minus the governors’ reserve for statewide  activities, which can be up to 15 percent of the total allotment. In addition,  the data include funds spent by the states on out-of-school youth, and for  PY2015 and PY2016, funds spent on work experiences. To determine  whether states appeared to be on track to meet WIOA spending  requirements, we considered the percentage of their overall funds they  had spent, as well as the percentage of their expended funds that were  spent on out-of-school youth and work experiences. Our analysis should  not be used to make conclusions about legal compliance with WIOA  requirements. To assess the reliability of these data, we interviewed DOL  officials with knowledge of the data and reviewed written responses from  the agency officials to data reliability questions. We also reviewed other  documentation related to the data. We found these data to be reliable for  the purposes of addressing our research objective. We also reviewed  DOL guidance and technical assistance materials to identify the  measures the agency is taking to help states and local areas meet  program requirements and deliver WIOA services to youth. To gather  information about the extent to which local areas are making progress in  meeting WIOA spending requirements, we collected data through our  nationally representative survey, described below.

	Interviews with DOL Headquarters and Regional Office Staff

In addition, to address this research objective, we conducted semi- structured interviews with DOL headquarters and regional office officials  to gain information on DOL’s role in the implementation and  administration of the WIOA youth program, the steps the agency is taking  to monitor states’ and local areas’ progress in meeting program  requirements, and to assess the availability and reliability of program and  expenditure data. We spoke to three of the Employment and Training  Administration’s six regional offices, selected for their timely availability  and to account for a large portion of state and territorial oversight. Among  them, these regional offices were responsible for overseeing 24 states  and 3 territories. Our review of DOL’s monitoring of state oversight was  limited to aspects necessary to describe DOL’s general review structure  and collection of information, if any, on local spending; we did not  comprehensively assess DOL’s monitoring efforts.

	Survey of Local Workforce Development Areas

To address each of our research objectives, we conducted a nationally  representative web-based survey of local workforce development areas  (local workforce areas) in the 50 states and the District of Columbia. We  surveyed workforce development areas because they are responsible for  overseeing local youth workforce investment activities. Our survey results  can be generalized to the entire population of workforce development  areas. Specifically, we took a stratified random sample of workforce  development areas (130 out of a universe of 543) to create estimates  about the population of all workforce development areas. To ensure that  our survey included workforce development areas located in major  population areas, in Strata 1 we included the 23 local areas serving the  20 largest metropolitan areas in the United States with a workforce  development board within the city, as identified by U.S. Census Bureau  data. In addition, we included all 11 states in which there is only a single  workforce development board that oversees WIOA activities for the entire  state. There were 33 total workforce development areas in this strata.  Strata 2 included 97 other randomly selected workforce development  areas across the country. Each workforce development area was  weighted in the analysis so our survey would be representative of the  entire universe of workforce development areas.
We conducted the survey from November 15, 2017 through January 31,  2018. We emailed our survey to the executive director of each workforce  development area and asked questions about changes the area has  made in response to the enactment of WIOA, challenges the workforce  area has faced in meeting WIOA requirements related to serving out-of- school youth, and the adequacy of federal guidance and technical  assistance, among other topics. The survey contained a mix of closed- ended and open-ended items. The survey’s weighted response rate was  82.3 percent (81.5 percent unweighted), with 106 of 130 workforce areas  surveyed responding. A small number of items had higher non-response  rates; we note this in the text when the rate of non-response is material.  All closed-ended questions were weighted; however, open-ended  questions were analyzed without weighting. Open-ended items generally  received fewer responses than closed-ended questions.
Because we followed a probability procedure based on random  selections, our sample is only one of a large number of samples that we  might have drawn. Since each sample could have provided different  estimates, we express our confidence in the precision of our particular  sample’s results as a 95 percent confidence interval (e.g., plus or minus  10 percentage points). This is the interval that would contain the actual  population value for 95 percent of the samples we could have drawn. As  a result, we are 95 percent confident that each of the confidence intervals  in this report will include the true values in the study population. All  percentage estimates in this report have a margin of error of plus or  minus 10 percentage points or fewer, unless otherwise noted.

	State Interviews and Local Site Visits

To collect more detailed information about WIOA implementation at the  state and local levels than our survey allowed, we conducted semi- structured interviews of state and local officials, as well as WIOA service  providers, and partners, in three states. For our state-level interviews we  selected three states primarily based on two criteria:  1) Proportions of disconnected youth at or above the median for  all states.  2) WIOA state youth grant allotment for PY2016 at or above the  median for all states.
Sixteen states met both criteria. From those 16 states, we selected 3 that  ensured diversity across DOL Employment and Training Administration  regions and provided a mix of states with large percentages of  disconnected youth and large state allotments. Based on this process we  selected Arizona, Michigan, and Texas. In aggregate, these 3 states  received approximately 12 percent of total PY2016 WIOA Youth funds.
In each of the three states we selected, we visited three separate local  workforce development areas, for a total of nine local areas. For our local  workforce development area site selection we considered a number of  factors, including disconnected youth rate data, input from state officials,  and logistical feasibility. We also selected workforce development areas  that would provide a mix of urban and rural areas. Specifically, we  analyzed data on the percentage of disconnected youth at the county or  metro area level and selected local areas with relatively high percentages  of disconnect youth. To ensure that we selected workforce areas that  would provide both urban and rural perspectives, we relied on county  classifications by the U.S. Census Bureau. As we narrowed the list of site visit candidates, we reviewed the local area strategic plans published  on the state workforce board’s website to gain additional insight into  youth-specific programs in these areas. We also considered state  officials’ input regarding workforce development areas in their states.  Lastly, in making our final selections, we considered the logistical  feasibility of traveling between local areas.
We held interviews with state workforce officials in these states by phone  and then conducted site visits to the three selected workforce  development areas in each of the three selected states. In the each local  area we visited, we interviewed local workforce development board staff,  including, for example, executive directors, youth program supervisors,  workforce youth specialists, community and business liaisons or business  service managers, and others. Members of the workforce development  board, in addition to board staff, participated in some of these interviews.  In addition, in these local areas we interviewed staff from American Job  Centers (one-stops), contracted youth service providers, and WIOA youth  partner organizations, such as community colleges and other educational  services providers, Job Corps, vocational rehabilitation agencies, and the  Temporary Assistance for Needy Families (TANF) program. In one of the  three states we visited, we also spoke with a small number of employers  in each local area that had provided work experiences or hired youth  through the WIOA program. These interviews were designed to obtain  information on a variety of topics related to our research objectives, such  as: how local workforce practitioners were serving out-of-school youth  through the WIOA program;  changes made as a result of the transition from WIA to WIOA;  recruitment and service delivery strategies focused on out-of-school  youth;  challenges related to implementing WIOA and meeting new WIOA  spending requirements; and  federal guidance and technical assistance.
We conducted this performance audit from December 2016 to June 2018  in accordance with generally accepted government auditing standards.  Those standards require that we plan and perform the audit to obtain  sufficient, appropriate evidence to provide a reasonable basis for our  findings and conclusions based on our audit objectives. We believe that  the evidence obtained provides a reasonable basis for our findings and  conclusions based on our audit objectives.

Appendix II: GAO Contact and Staff Acknowledgments

	GAO Contact

	Staff Acknowledgments

In addition to the contact named above, Cindy Brown Barnes (Director),  Betty Ward Zukerman (Assistant Director), David Perkins (Analyst-in- Charge), David Barish, and Kelly Turner made significant contributions to  this report. In addition, key support was provided by James Ashley,  Susan Baker, James Bennett, Stephen Betsock, Holly Dye, David  Forgosh, Laura Hoffrey, Benjamin Sinoff, Almeta Spencer, and Walter  Vance.

Related GAO Products

Workforce Innovation and Opportunity Act: Federal Agencies’  Collaboration Generally Reflected Leading Practices, but Could Be  Enhanced. GAO-18-171. Washington, D.C.: February 8, 2018.
Workforce Innovation and Opportunity Act: Selected States’ Planning  Approaches for Serving Job Seekers and Employers. GAO-17-31.  Washington, D.C.: November 15, 2016.
Workforce Innovation and Opportunity Act: Information on Planned  Changes to State Performance Reporting and Related Challenges,  GAO-16-287. Washington, D.C.: March 7, 2016).
Workforce Innovation and Opportunity Act: Performance Reporting and  Related Challenges. GAO-15-764R. Washington, D.C.: September 23,  2015.
Transportation-Disadvantaged Populations: Federal Coordination Efforts  Could Be Further Strengthened. GAO-12-647. Washington, D.C.: June  20, 2012.
Disconnected Youth: Federal Actions Could Address Some of the  Challenges Faced by Local Programs That Reconnect Youth to  Education and Employment. GAO-08-313. Washington, D.C.: February,  28, 2008.

Output:
Why GAO Did This Study

Approximately 4.6 million youth ages 16 to 24 were neither in school nor employed in 2016. WIOA, enacted in July 2014, provides, in part, grants to states and local areas to assist youth—particularly out-of-school youth—in accessing employment, education, and training services. It also emphasizes the provision of work experiences to in- and out-of-school youth.
GAO was asked to review how states and local areas are using WIOA grants to serve youth. This report examines (1) what is known about states' and local areas' progress in meeting WIOA spending requirements for serving out-of-school youth and for providing youth with work experiences; (2) how local areas are addressing WIOA's emphasis on serving out-of-school youth and any challenges, and (3) how local areas are addressing WIOA's emphasis on youth work experiences and any challenges. GAO reviewed relevant federal laws, regulations, and guidance; interviewed DOL officials; analyzed DOL state level WIOA youth program expenditure data from program years 2015 and 2016, the most recent data available; surveyed a nationally representative sample of local workforce development areas; and visited nine local workforce development areas in three states selected for their relatively large WIOA Youth funding allotments and relatively high rates of out-of-school youth.
GAO is not making recommendations in this report. DOL and the Department of Education provided technical comments on a draft of this report, which were incorporated as appropriate.

What GAO Found

Most states reported they were on target to meet the Workforce Innovation and Opportunity Act's (WIOA) requirement to spend 75 percent of their Program Year 2015 and 2016 youth grant funding to serve out-of-school youth, according to Department of Labor (DOL) data. Because deadlines had not arrived for the spending of state youth grant allotments for these program years, compliance could not be determined. Similarly, most local areas reported they were on track to meet the out-of-school youth spending requirement, as well as the requirement that 20 percent of local youth grant funds be spent on providing work experiences to youth. Through GAO's survey, many local areas reported it was not challenging or only slightly challenging to meet the spending requirements, but some reported experiencing greater challenges (see figure). Under WIOA, DOL does not collect local expenditure information, but states must monitor local areas' compliance while DOL monitors state oversight. DOL has taken some steps to determine whether states are carrying out their monitoring responsibilities, including limited on-site monitoring and ongoing dialogue with states. According to DOL officials, the agency's monitoring of the new requirements has thus far focused on providing technical assistance and guidance, but they reported plans for more formal compliance monitoring.
Note: All percentage estimates in this figure have a margin of error of plus or minus 10 percentage points or fewer. Percentages do not add to 100 due to rounding and because a small number of survey respondents answered “don't know” or did not respond.
Local areas reported in GAO's survey that they used a combination of strategies to meet the WIOA spending requirement for serving out-of-school youth and to address other related challenges. For example, many local areas reported suspending enrollment of in-school-youth to help meet the requirement to spend 75 percent of youth grant funds on out-of-school youth. In addition, local areas reported having taken steps to address challenges locating, retaining, and serving out-of-school youth in their WIOA-funded programs, including increasing their recruiting efforts and strengthening partnerships with other WIOA programs, state and local government agencies, and community-based organizations.
To meet WIOA's 20 percent spending requirement for work experiences, local areas reported expanding work experience opportunities for youth, most commonly with temporary paid employment. An estimated 81 percent of local areas reported they paid youth participants' salaries, with most paying the entire salary. Many local areas also reported challenges, including youths' lack of job-readiness and employers' reluctance to hire WIOA participants. To address these challenges, local areas reported providing job-readiness training for youth and strengthening partnerships with employers.