The latest flare-up occurred regarding the agency’s process of distributing about $900 million in training grants for fiscal years 2001-07.

A Government Accountability Office report released Wednesday, May 7, shows that the awards did not include performance goals and other assessment criteria. In addition, $263.8 million in grants targeted toward high-growth industries did not go through a competitive bidding process.

Jennifer Coxe, deputy assistant secretary of public affairs at the Labor Department, maintained that the grants followed federal procurement rules and are crucial in helping workers upgrade their skills for the changing economy. 

“We stand by these investments and their results as a sound use of taxpayer dollars,” she said.

But a training advocate said the GAO has added to the perception that the Bush administration is undermining the state and local boards established by the Workforce Investment Act.

“This GAO report confirms what Congress already believes—that there hasn’t been appropriate oversight and accountability in how these grants have been administered,” said Rachel Gragg, director of federal policy for the Workforce Alliance in Washington. “These grants are circumventing the current workforce development system.”

Democrats on Capitol Hill echoed that point and criticized President Bush for seeking to reduce training funds at a time when workers are being laid off and need to retool their careers.

“Under this administration, the Labor Department’s ability to … support a prepared and competitive workforce has declined significantly,” said Sen. Tom Harkin, D-Iowa and chairman of the Senate Appropriations subcommittee with jurisdiction over the agency, in prepared testimony at a hearing Wednesday, May 7.  

He cited a proposed 16 percent, or $474 million, cut in training grants to argue that the area is not a Bush administration priority.

Labor Secretary Elaine Chao responded at the hearing Wednesday that the current workforce system is riddled with wasteful duplication and bureaucratic inefficiencies. She said that states didn’t spend about $900 million in workforce monies in the last fiscal year.

Harkin dismissed that calculation, especially in light of a $250 million rescission in WIA funding that the administration advocated and Congress approved last year. It’s causing states to deplete their workforce budgets.

“The data we have doesn’t show there’s all that leftover money,” Harkin said.

The Bush administration asserts that it can do more with less by consolidating WIA funding, currently spread over four programs, into individual “career advancement accounts” that provide $6,000 over two years for education and training. Congress has rejected the idea for several years.

Too many people lack “the training they need, and that’s a tragedy,” Chao said.

And workers in the system can be misguided. “We’re training people for jobs that don’t exist,” she said.

But Harkin doesn’t accept the notion that the answer is to reduce funding.

“As we move forward through this budget process, I will fight for the investments that keep our workers’ skills sharp,” he said.

—Mark Schoeff Jr.