Identifies the strategies used by 28 Local Workforce Investment Boards to manage cuts in funding to Workforce Investment Act (WIA) Adult and Dislocated Worker programs during sequestration and a government shutdown in program years 2011 to 2013.

This brief reports how 28 Local Workforce Investment Boards (LWIBs) “randomly selected to participate in the WIA Adult and Dislocated Worker Programs Gold Standard Evaluation adapted to the uncertain funding environment of the past few years. It first discusses the recent trends and fluctuations in the funding of the WIA Adult and Dislocated Worker programs. It then describes LWIBs’ strategies to manage their program funding and the changes they made to services. Data for this brief were collected during two rounds of visits to the Local Workforce Investment Areas (local areas) conducted in 2012 and 2013 and telephone interviews with local area staff conducted in early 2014” (p.2).

“The period from Program Year (PY) 2011 (which runs from July 1, 2011, to June 30, 2012) to PY 2013 brought increasing funding challenges to local area administrators of the WIA Adult and Dislocated Worker programs. Combined federal funding for the WIA Adult and Dislocated Worker programs declined from PY 2011 to PY 2013, more so for the Dislocated Worker program (10 percent) than for the Adult program (5 percent). Funding for the Adult program would have remained flat over the period if sequestration cuts had not occurred in PY 2013.

Even without changes in the federal allocation, an LWIB’s share of…funding might vary from year to year. States allocate…funds to the local areas based on formulas that depend on the local labor market and other factors…Local areas were insulated to some degree from large funding fluctuations for the Adult program, but not the Dislocated Worker program, by a hold harmless clause. This clause stipulated that an LWIB receive an allotment for its Adult program that is at least 90 percent of its average allocation percentage for the preceding two years” (p.2).

“This issue brief is one in a series of briefs that presents findings from the WIA Adult and Dislocated Worker Programs Gold Standard Evaluation, which is being conducted for the U.S. Department of Labor…, Employment and Training Administration….The study examines the implementation, effectiveness, and benefits and costs of the Adult and Dislocated Worker programs using an experimental design” (p.7).

(Abstractor: Author and Website Staff)

Full publication title: Managing Funding Challenges in the Workforce Investment Act Adult and Dislocated Worker Programs: Mitigating Strategies and Effects on Services

Major Findings & Recommendations

“Although PY 2013 was challenging for many LWIBs to navigate because of funding cuts from sequestration and funding delays due to the government shutdown, the 28 study LWIBs reported experiencing different challenges. Staff from 18 of the 28 study LWIBs reported that their local areas received less funding than anticipated in PY 2013….The remaining 10 study LWIBs did not experience funding cuts due to sequestration because of local economic conditions that affected within-state WIA distribution formulas….Similarly, state processes and timing for distributing funds to the LWIBs varied. Staff from only 11 of the 28 LWIBs reported that their primary allocations…were delayed due to the government shutdown. Staff from 9 LWIBs reported that their funding was affected by both sequestration and the government shutdown, and staff from 8 LWIBs reported that they were affected by neither” (p.2). “Staff at study LWIBs reported using four main strategies to weather funding fluctuations while minimizing the effect on service provision. Although LWIBs reported using these strategies before 2013, LWIB staff described a heavier reliance on them in the face of the increased cuts and uncertainty that sequestration and the government shutdown brought in fall 2013” (p.4). LWIB staff reported that they would: 1.“Carry-over funds from one year to the next” (p.4). 2.“Transfer funds between the Adult and Dislocated Worker programs” (p.4). 3.“Diversify funding for American Job Center operations” (p.4). 4.“Reduce Administrative costs” (p.5). “[S]taff from 23 of the 28 LWIBs reported that they made some changes in service provision to address funding concerns in the period from PY 2011 to PY 2013. Fourteen of these LWIBs cut their WIA-funded staff as a result of funding concerns” (p.5). Related changes to WIA services included: •“Reduced access to AJC services” (p.5). •“Reduced access to training and supportive services” (p.6). •“Reduced staff-assisted services” (p.6). •“Reduced other services” (p.6). Finally, the brief suggests that by 2017, the Workforce Innovation and Opportunity Act (WIOA) could “restore funding for the Title I programs to the levels of 2010.… [However,] LWIBs are likely to continue to use the available funding management strategies [under WIOA] to help meet their customers’ demand for services” (p.6). (Abstractor: Author and Website Staff)