Recommendations of the Texas Comptroller

Improve the

Texas Workforce System

Summary

Texas’ workforce development system is designed to serve all Texas workers and job-seekers as well as more than 431,000 employers. The fragmented nature of the state’s education and workforce development programs, however, has made it difficult to establish an accountability system to help policymakers determine which programs are effective. To ensure that Texas’ workforce development system efficiently serves both workers and employers, the Legislature should create standards for judging its workforce programs, as well as an effective follow-up system.

Background

The Texas workforce system is a complex network of public programs affecting employment, education, human services, and economic development. The 1993 Legislature created “one-stop” career centers designed to offer an array of workforce services, and the state now has a network of 128 of these centers.[1] These centers have helped Texas integrate its workforce programs while ensuring that they comply with the requirements of the federal Workforce Investment Act (WIA) of 1998.

Despite this achievement, however, Texas’ system needs greater coordination among the seven state agencies that provide most of the state’s workforce services (Exhibit 1). In addition, workforce-related programs at three additional agencies—the Texas Department of Criminal Justice (TDCJ), the Texas Youth Commission (TYC), and the Texas Department of Mental Health and Mental Retardation (MHMR)—would benefit from improved coordination.

A key ingredient to successfully coordinating workforce programs is a sophisticated accountability system that gathers data on the participants it serves and analyzes the data to help determine the programs most likely to work.[2] An efficient system also includes performance measures, follows up on program participants, and contains feedback mechanisms so local businesses, students, and job seekers can evaluate the usefulness and success of the workforce services they receive. Finally, a productive system distributes information tailored to stakeholders’ needs. The Internet has become particularly useful in this area, because it provides menu-based selections so customers can choose the information they need. Furthermore, information on Internet-based systems can be updated regularly and easily.[3]

Exhibit 1

Texas Workforce Agencies and their Programs

Sources: Texas Council on Workforce and Economic Competitiveness and the Governor’s office.

Texas Council on Workforce and Economic Competitiveness

The Texas Council on Workforce and Economic Competitiveness (TCWEC), created in 1993, is responsible for evaluating the state’s entire workforce development system. TCWEC plans, adopts, and administers core performance measures for Texas’ workforce programs.[4] State law requires TCWEC to submit to the governor a single strategic plan for workforce development in Texas, including goals, objectives, and performance measures for all workforce programs. Only those state agencies represented on the council (including TWC, TDED, DHS, TEA, and THECB), however, are required to report specific workforce program results to TCWEC.[5]

TCWEC’s responsibility for evaluating the entire workforce development system is complicated by the fact that different agencies and programs use performance measures with different definitions. For example, the Texas Workforce Commission (TWC) alone has to report on 101 separate measures to the Legislative Budget Board (LBB) as part of Texas’ performance-based budgeting and accountability system.

A large portion of TWC’s funding comes through the federal Workforce Investment Act, so the measures and extensive reporting requirements mandated by the law have been used as the framework for TWC’s entire accountability system. Since this is not the case for other workforce development agencies, their measures are often defined differently and are sometimes based on the funding requirements at the state or federal level.[6] This difference leads to confusion and makes it difficult for TCWEC to draw accurate comparisons in its report to the governor.

To improve its accountability, TCWEC developed a common set of performance measures for the state’s workforce development system in 1995. These measures were recently updated through a collaborative process with the five agencies represented on TCWEC, as well as the Texas Rehabilitation Commission and the Texas Commission for the Blind and Visually Impaired. The updated measures, approved by the governor in February 2000, are defined in general terms in Exhibit 2.

Exhibit 2

System Performance Measures

Texas Council on Workforce and Economic Competitiveness

Sources: Texas Council on Workforce and Economic Competitiveness and the Governor’s office.

Although TCWEC has established general definitions for these measures, as reflected in Exhibit 2, these measures are not yet defined fully enough to allow partner agencies to track their programs’ and participants’ performance. Once TCWEC establishes common definitions for the system measures, they can be tracked using data provided by partner agencies, using existing definitions where possible.[7]

Follow-up

Follow-up helps agencies comply with federal and state reporting requirements for mandated measures, while also providing data for the continuous cycle of planning and evaluation necessary to improve services.[8] In Texas, systematic follow-up for most workforce programs is provided by the automated student and adult learner follow-up system developed and operated by the Texas State Occupational Information Coordinating Committee (SOICC).[9] With the 1995 passage of HB 1863, SOICC became a program administered by TWC as a department within the Administrative Services Division.[10] In an October 2000 reorganization, SOICC became Career Development Resources (CDR) within TWC’s newly created Workforce Information Analysis and Reporting Division.[11]

State law requires TCWEC to establish and maintain an automated follow-up and evaluation system derived from appropriate available information, including unemployment insurance wage records maintained by TWC and student follow-up information available through THECB. The system must be used to assist the council, local workforce development boards, institution boards, THECB, TEA, and other agencies evaluate the success and effectiveness of workforce development in this state.[12]

TCWEC has neither the resources nor the staff expertise to deliver on its mandate for establishing an automated follow-up system. TCWEC cannot report on all the performance data elements approved by the governor, nor will it be able to cover the cost of delivering the data to decision makers, service providers, or prospective customers.

TCWEC’s $1.1 million budget for fiscal 2001 is provided through the governor’s office and three of the council agencies. The governor’s office contributes approximately $198,000; TWC contributes about $729,000; DHS contributes about $74,000; and TEA, $65,000. Council agencies provide money and staff support to TCWEC through Memoranda of Agreement (MOUs) with the governor’s office.[13] Although state law requires all council agencies to provide funds “in proportion to the agency’s financial participation in the workforce development system,” neither the THECB nor TDED contribute any support to TCWEC.[14]

TCWEC depends on CDR to provide follow-up services through its automated student and adult learner follow-up system. CDR spends about $400,000 of its $2.2 million budget to provide approximately 2 million follow-up records for 15 workforce programs. Follow-up services are funded through individual contracts and MOUs between CDR and several of the education or workforce agencies.

The follow-up system has been funded piecemeal over the years, using funds from the federal Carl Perkins grant, the Department of Labor One Stop grant, and other miscellaneous sources. Of the 21 CDR staff, five are dedicated to the automated follow-up system. Longitudinal studies are included for some customer agencies and not for others.[15]

CDR estimates that $600,000 would be needed each year to operate and maintain the comprehensive Texas automated follow-up system required by state and federal law. That amount is approximately $200,000 more than what is now available through MOU agreements. These funds would cover programs listed in Exhibit 3 that are not now included. It also would provide improvements to current services, such as technical assistance in managing information systems.[16]

Exhibit 3

Workforce Development System Follow-Up Activity

Texas Workforce Commission – Career Development Resources

Sources: Texas Workforce Commission – Career Development Resources.

Although funding for automated follow-up has met with some success, a stable funding source would be more appropriate. In Florida, the Legislature established a centralized data management system to evaluate programs, rank them, and even modify state funding levels based on performance. State funds are provided for the interagency data collection system, measurement, and program evaluation efforts.[17]

Because of ad hoc funding, a permanent, neutral data collection infrastructure is not possible, and meeting TCWEC’s mandate cannot be ensured. And CDR can provide no assurances that it will have the financial ability to gather essential data from one year to the next, including maintaining critical staff expertise and production capacity.[18] If proportional funds are provided by the ten agencies with direct workforce programs, the funds could be ensured year to year.[19]

Recommendations

1. The Texas Council on Workforce and Economic Competitiveness (TCWEC) and the Governor’s office should require all five council agencies to fund council activities proportionately as required by existing state law.

State law already requires all five council agencies to fund council activities proportionally. However, in fiscal 2001, only three council agencies are providing funding: the Texas Workforce Commission (TWC), the Texas Department of Human Services (DHS), and the Texas Education Agency (TEA). Beginning in fiscal 2002, the Texas Higher Education Coordinating Board (THECB) and the Texas Department of Economic Development should begin contributing. TCWEC’s total funding should be sufficient to meet all federal and state mandates, but in no case should council agency support be less than the fiscal 2001 level of $868,000.

1. State law should be amended to require all agencies with workforce programs to report on system performance measures established by TCWEC.

TCWEC is establishing system performance measures to meet its legislative mandate to report on the workforce development system’s performance each year. However, only the five council agencies are required to participate in the development of the measures. All ten agencies with workforce programs should participate, including the five council agencies plus the Texas Rehabilitation Commission, the Texas Commission for the Blind and Visually Impaired, the Texas Department of Criminal Justice, the Texas Youth Commission, and the Texas Department of Mental Health and Mental Retardation. The Legislative Budget Board should provide technical support to ensure that the final measures and reporting criteria are consistent with the state’s budget and accounting system.

By involving all workforce agencies in the development, definition, and implementation of system performance measures, the final product can reflect the key factors for success among all programs. And it will help ensure the final measures are practical because all agencies will be required to report on them at least annually. However, should these agencies fail to reach consensus by September 1, 2002, TCWEC should be authorized to establish the measures and the reporting criteria in consultation with the Legislative Budget Board.

1. State law should be amended to require all agencies with workforce programs to fund the state’s automated follow-up system proportionately.

The Legislature should revise state law to fund the state’s automated follow-up system for all workforce programs through TCWEC and not through year to year contracts between Career Development Resources at TWC (CDR) and individual agencies. Funding should be proportionally provided by all ten agencies with direct workforce programs through the same MOU process as basic funding for TCWEC.

TCWEC should contract with CDR to conduct follow-up for all workforce programs. The level of funding should not be less than the current level of $400,000 per year. However, to meet all state and federal mandates, it may be necessary for TCWEC to increase the amount of follow-up support, and it should be authorized to do so through federal and state funds designated to ensure accountability.

All workforce program follow-up should be conducted in a consistent format that is easy to understand and use for cross-program analysis. As a neutral, third-party entity, CDR should prepare reports that are objective and that provide consistent definitions to avoid confusion in reporting. CDR also should inform their partner agencies about:

• The availability and gaps in the core performance data within the partner agencies’ information management systems,

• Any disparities in the way partner agencies gather and code comparable data elements, along with technical expertise to correct them, and

• Historic performance of programs to help policymakers establish fair and meaningful performance standards across related programs.[20]

1. To improve annual strategic planning, TCWEC should work with TWC to develop its online performance reporting system for the state’s workforce development system.

TWC already pays for online performance reporting on its own Internet operations, although the specific level of funding required cannot be determined.[21] TWC should, with CDR support, ensure that TCWEC outcomes reported to the governor and Legislature each year are made available on the Internet to all interested parties. TCWEC, although mandated to report annually on system measures, has no funding to develop and distribute performance information online.

By leveraging federal funds to include TCWEC reporting, information on local workforce board operations will be supplemented with data on the overall workforce development system. This change will improve planning and evaluation support to local programs, while providing information to state and local planners, legislators, citizens, and job seekers. TWC will be able to ensure that legislators, local boards, training providers, and workforce system participants will get broader information than just those programs managed by TWC.

Fiscal Impact

None of the specific recommendations will result in increased costs. Proportional funding for TCWEC by council agencies is already a legislative mandate. Total council support for TCWEC should be no less in fiscal 2002 than the fiscal 2001 level of $868,000. However, should state or federal mandates increase, TCWEC support should increase accordingly, using existing federal or state dollars already tagged for accountability within the council agencies.

Development of system performance measures is part of TCWEC’s existing mandate and can be accomplished with existing resources. Workforce agency participation in the process also can be accomplished with existing resources.

CDR now spends approximately $400,000 for the automated follow-up function through contracts and MOUs with partner agencies. If the follow-up requirements in state and federal law for the ten agencies with direct workforce programs cannot be met with this level of funding, then the support should be increased using the agencies’ federal or state dollars designated for this purpose.

TWC already plans to make online performance information available. Federal funds already designated for this purpose should be used to present both TWC-specific information as well as workforce development system information to interested parties online.

[1] Texas Workforce Commission, Texas Workforce Commission Strategic Plan 2001-2005 (Austin, Texas, June 1, 2000), p. 40.

[2] Center for the Study of Human Resources, Evaluation Action Plan for the Texas Workforce Development System, by Christopher T. King and Robert E. McPherson (Austin, Texas, February 1997), p. 3.

[3] John J. Heldrich Center for Workforce Development, Edward J. Bloustein School of Planning & Public Policy, Rutgers University, Toward a Performance Management and Vendor Evaluation System Under the Workforce Investment Act (New Brunswick, New Jersey, January 19, 1999), p. 6.

[4] Texas S.B. 642, 73^rd Leg., Reg. Sess. (1993); Texas Council on Workforce and Economic Competitiveness, Texas Workforce Development Strategic Plan FY 2000—FY 2004 (Austin, Texas, November 1999), p. 10; and Texas Governor’s Office, “Texas Council on Workforce and Economic Competitiveness” (http://www.governor.state.tx.us/TCWEC/index.html). (Internet document.)

[5] V.T.C.A., Government Code §2308.104(a-c).

[6] Interview with Joe Adams, director of Planning, Texas Workforce Commission, Austin, Texas, February 4, 2000.

[7] Texas Council on Workforce and Economic Competitiveness, Texas Workforce Development Strategic Plan FY 2000—FY 2004, pp. 8-9.

[8] US Department of Labor Employment and Training Administration, A Field Guide to Automated Follow-Up, by Marc Anderberg and Jay J. Pfeiffer, July 1998, p. 1 (http://www.soicc.state.tx.us/followup/fug/ch1.htm). (Internet document.)

[9] Telephone interview with Rich Froeschle, director of Career Development Resources, Texas Workforce Commission, Austin, Texas, August 2, 2000.

[10] Texas State Occupational Information Coordinating Committee, “Texas SOICC: Function and Mission Statement” (http://www.soicc.state.tx.us/mission.htm). (Internet document.)

[11] Telephone interview with Rich Froeschle, director of Career Development Resources, Texas Workforce Commission, Austin, Texas, December 4, 2000.

[12] V.T.C.A., Government Code §2308.151.

[13] Telephone interview with Cheryl Halliburton, Governor’s office, Texas Council on Workforce and Economic Competitiveness, August 7, 2000.

[14] V.T.C.A., Government Code §2308.065(b).

[15] Telephone interview with Rich Froeschle, director of Career Development Resources, Texas Workforce Commission, Austin, Texas, August 2, 2000.

[16] Texas Workforce Commission, Legislative Appropriations Overview (Austin, Texas, August 2000), p. 1.

[17] Telephone Interview with Jay J. Pfeiffer, director of Florida Education and Training Placement Information Program, Division of Administration, Florida Department of Education, Tallahassee, Florida, November 18, 1999.

[18] Texas Workforce Commission, Legislative Appropriations Overview, p. 1.

[19] Interview with Cheryl Halliburton, Governor’s office, Texas Council on Workforce and Economic Competitiveness, June 9, 2000.

[20] Texas State Occupational Information Coordinating Committee, Texas Follow-Up System: Automated Student and Adult Learner Follow-Up System Final Report for 1999 (Austin, Texas, June 2000), p. 7.

[21] Interview with Joe Adams, director of Planning, Texas Workforce Commission, February 2, 2000.

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