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The OIG conducted an audit to determine whether current policies and practices of the Dislocated Worker (DW) program resulted in the targeted population being served. We found that DW programs were not predominantly serving persons who were victims of plant closings or mass layoffs and 35 percent of program participants were ineligible or documentation was insufficient to establish their eligibility. In addition, we believe that the allocation methodology may not distribute funds where they are most needed.

We recommended that the Assistant Secretary for Employment and Training:

• Ensure adequate guidance is provided to states so that the files of participants who are certified for intensive services under WIA contain adequate information to qualify them as dislocated workers and entitle them to services deemed necessary to return them to the workforce.
  
• Determine if a more equitable method of allocating DW funds can be devised which would result in funds being distributed to areas where the most dislocated workers reside.

While ETA generally agreed with many of our recommendations, they did not agree with our conclusions or much of the data on which they were based. ETA agreed to work with state and local governments to ensure that files adequately document participants' eligibility and also plans to increase DW program technical assistance and monitoring activities. In addition, ETA's response indicated that a review of the DW program's distribution formula may be completed as a part of a mandated review of the Workforce Investment Act's (WIA) allocation formula for the adult program. The response does not indicate a willingness to provide additional guidance on program eligibility. However, ETA indicated that it will increase its efforts to ensure WIA program data are accurate and believes the use of UI wage data will help eliminate some of the errors identified in our review.
(Report No. 04-00-002-03-340; issued June 29, 2000)

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