This is the accessible text file for GAO report number GAO-02-881 
entitled 'High-Skill Training: Grants from H-1B Visa Fees Meet Specific 
Workforce Needs, but at Varying Skill Levels' which was released on 
October 21, 2002.



This text file was formatted by the U.S. General Accounting Office 

(GAO) to be accessible to users with visual impairments, as part of a 

longer term project to improve GAO products’ accessibility. Every 

attempt has been made to maintain the structural and data integrity of 

the original printed product. Accessibility features, such as text 

descriptions of tables, consecutively numbered footnotes placed at the 

end of the file, and the text of agency comment letters, are provided 

but may not exactly duplicate the presentation or format of the printed 

version. The portable document format (PDF) file is an exact electronic 

replica of the printed version. We welcome your feedback. Please E-mail 

your comments regarding the contents or accessibility features of this 

document to Webmaster@gao.gov.



Report to Congressional Requesters:



United States General Accounting Office:



GAO:



September 2002:



High-Skill Training:



Grants from H-1B Visa Fees Meet Specific Workforce Needs, but at 

Varying Skill Levels:



H-1B Grants:



GAO-02-881:



Contents:



Letter:



Results in Brief:



Background:



Skill Grants Offer Training with Flexible Service Delivery While 

Scholarship Grants Offer Education through Degree Programs:



Skill Grant and Scholarship Grants Designed to Meet Workforce Needs, 

Though the Skill Levels for Which They Train Varies:



National Efforts Not Coordinated to Strategically Address High-Skill 

Needs, but Local Coordination Shows Promise:



Conclusions:



Recommendations for Executive Action:



Agency Comments:



Appendix I: Scope and Methodology:



Appendix II: Survey Sent to Skill Grant Recipients:



Appendix III: Detailed Data on Skill Grant Programs:



Appendix IV: Detailed Data on NSF’s Computer Science,

Engineering, and Mathematics Scholarship Program:



Appendix V: Areas of Training for First 43 Skill Grants:



Appendix VI: Key Federal Programs and Initiatives with a High-Skill 

Component:



Appendix VII: Comments from the Department of Labor:



Appendix VIII: Comments from the National Science Foundation:



Appendix IX: Comments from the Department of Commerce:



Appendix X: GAO Contacts and Staff Acknowledgments:



GAO Contacts:



Staff Acknowledgments:



Tables:



Table 1: Top 10 Occupation Categories for H-1B Visa Petitions Approved 

for Fiscal Year 2001:



Table 2: Skill Grant Recipients Visited:



Table 3: Post-Secondary Educational Institutions Visited:



Table 4: Participants Enrolled in Training:



Table 5: Gender of Participants:



Table 6: Age of Participants:



Table 7: Race/Ethnicity of Participants:



Table 8: Employment Status of Participants at the Time of Enrollment:



Table 9: Education Status of Participants at the Time of Enrollment:



Table 10: Participants Who Attained the Following as a Result of 

Program Participation:



Table 11: Organization Obtained or Tried to Obtain H-1B Visa 

Application Data to Identify Skill Shortages in High-Skill Occupations 

in Local Area:



Table 12: Other Methods Used to Identify Skill Shortages in High-Skill 

Occupations in Local Area:



Table 13: Number of Employers Needing High-Skilled Workers That 

Organization Worked with before and after Receiving the Grant:



Table 14: Role of One-Stop System in the H-1B Skills Training Program:



Table 15: Methods Grantees Plan to Use to Sustain the Skill Grant 

Training:



Table 16: Gender of Participants in IT Training:



Table 17: Race/Ethnicity of Participants in IT training:



Table 18: Characteristics of Computer Science, Engineering, and 

Mathematics Scholarship Recipients as of May 1, 2002:



Table 19: Occupations on Which Grantees from First Three Funding Rounds 

Provided Training:



Figures:



Figure 1: Age of Participants:



Figure 2: Highest Education Level Participants Attained before Training 

Program:



Figure 3: Percentage of Women, African Americans, and Hispanics 

Participating in Skill Grant IT Training as Compared with the U.S. IT 

Workforce:



Figure 4: Status of Participants as of January 31, 2002:



Figure 5: Funding Sources the 43 Grantees Expect to Use to Sustain the 

Skill Grant Training Programs:



Figure 6: Comparison of Demographic Characteristics of Current 

Scholarship Program Students to Students Awarded Related Bachelor’s 

Degrees in the United States in 1999-2000:



Figure 7: Number of Grantees Who Offered Training in Various 

Categories:



Figure 8: Scholarship Program Students’ Majors by Categories:



Abbreviations:



ATELS: Office of Apprenticeship Training, Employer and Labor Services:



ETA: Employment and Training Administration:



EHR: Directorate for Education and Human Resources:



INS: Immigration and Naturalization Service:



IT: information technology:



JTPA: Job Training Partnership Act:



NSF: National Science Foundation:



OVAE: Office of Vocational and Adult Education:



TA: Technology and Administration:



WIA: Workforce Investment Act:



United States General Accounting Office:



Washington, DC 20548:



September 20, 2002:



The Honorable James Barcia

Ranking Minority Member, Subcommittee on

 Environment, Technology, and Standards

Committee on Science

House of Representatives:



The Honorable Lynn Rivers

House of Representatives:



In recent years, U.S. employers have complained of shortages of workers 

with higher-level skills in information technology, the sciences, and 

other fields. To find workers with these skills, employers often turn 

to foreign workers, who enter the United States with H-1B visas to work 

in specialty occupations.[Footnote 1] Despite the recent economic 

downturn, employers report that they continue to need higher-skilled 

workers. Congress passed the Workforce Investment Act (WIA) of 1998 to 

create a system connecting employment, education, and training services 

to better match workers to labor market needs. In 1998, Congress passed 

legislation raising limits on the number of high-skilled workers 

entering the United States and imposing a $500 fee on employers--which 

was later raised to $1,000--for each foreign worker for whom they 

applied. Most of the money collected is to be spent on training that 

improves the skills of U.S. workers. Fifty-five percent of the funds 

are provided to the Department of Labor for technical skill grants to 

increase the supply of skilled workers in occupations identified as 

needing more workers. Labor awards the skill grants to local workforce 

investment boards, created under WIA to establish local workforce 

development policies, thereby linking the skill grant program with the 

workforce system. The boards use the funds to provide training to 

employed and unemployed people. The National Science Foundation (NSF) 

receives 22 percent of the funds to distribute as scholarship grants to 

post-secondary schools that distribute the funds as scholarships for 

low-income students in computer science, engineering, and mathematics 

degree programs.[Footnote 2] As of July 1, 2002, about $197 million has 

been awarded through the skill grant program; as of May 1, 2002, about 

$72 million has been awarded through the scholarship grant program.



Because of your interest in how the United States is meeting the 

employers’ demand for high-skilled workers, you asked about the skill 

grant and scholarship grant programs and how they relate to other high-

skill workforce development practices. Specifically, we address (1) how 

the skill grant and scholarship grant programs are being administered 

to raise the skill level of American workers; (2) whether the skill 

grant and scholarship training is based on workforce needs and specific 

jobs that 

H-1B visa holders fill, particularly in the information technology (IT) 

industry; and (3) to what extent these programs are coordinated with 

other workforce development programs at the local and national level to 

meet high-skill training needs.



In response to your questions, we surveyed the 43 recipients of skill 

grants distributed in 2000; visited 12 of these grantees and 

interviewed the local workforce investment board’s staff, and, at most 

grantees, the training providers, employers, and participants; visited 

6 colleges that received scholarship grants; analyzed data on the 

participants and outcomes for the scholarship grants; and discussed 

these programs and other high-skill training with officials from the 

Departments of Labor and Commerce, NSF, and Immigration and 

Naturalization Service[Footnote 3] (INS), and industry 

representatives. Our work was conducted in accordance with generally 

accepted government auditing standards between October 2001 and July 

2002. See appendix I for a full discussion of our scope and 

methodology.



Results in Brief:



The grantees operating skill grant programs use the flexibility allowed 

by Labor to administer training through a variety of service delivery 

options to individuals whose skills need to be upgraded, whereas NSF’s 

scholarship grant programs provide scholarships to low-income students 

for college degree programs. The skill grant program provides 

flexibility to meet local workforce needs through the selection of the 

partners who implement the program, the length and setting of training, 

and the participants served. Three-fourths of the participants are 

employed workers upgrading their skills, whose employers approved the 

training. Information on participants and training outcomes is limited 

because Labor has not collected consistent data on individual programs. 

Grantees report that of the over 16,000 participants who enrolled in 

training through January 31, 2002, about half have completed training. 

Grantees could provide only limited data on outcomes and the same 

participant could be counted in more than one outcome; however, these 

data provide an indication of how the participants benefited from the 

training. Grantees stated that of the participants they could report 

on, about 1,800 were placed in new or upgraded jobs, 1,600 increased 

their wages or salaries, 2,600 attained skill certifications, and 1,900 

attained industry-recognized skill standards. Grantees who could report 

on their participants’ characteristics indicated that 43 percent are 

female; 20 percent are African American; 7 percent Asian; and 6 percent 

are Hispanic; and half had a 

2-year or higher postsecondary degree. Although grantees have used the 

skill grant program to create innovative programs and build ties with 

new partners, many have not planned for alternative funding beyond the 

program’s two-year limit and may be unable to offer their program in 

the future. In the scholarship grant program, postsecondary schools use 

the funds in a structured academic setting to attract and retain low-

income students in computer science, engineering, and mathematics 

degree programs. Almost 8,000 students have received scholarships as of 

May 1, 2002. Finding students eligible for the scholarship grant 

program has proven to be a challenge, as some schools have struggled to 

fill open slots; however, NSF officials believe that their change to a 

less strict standard for financial eligibility has made it easier to 

recruit students.



The training offered by the skill grant programs is based on local 

workforce needs, although sometimes for lower-skill jobs than those 

filled by H-1B visa holders, and the scholarship program’s training is 

based on national workforce needs and the types of jobs that many H-1B 

visa holders fill. The skill grant training is designed by grantees to 

address skill shortages in the local workforce by providing technical 

skills training for both employed and unemployed workers. Almost all of 

the 43 grantees funded in 2000 provided IT-related training; other 

training provided included health care, telecommunications, 

engineering, and manufacturing. Throughout the process of designing and 

implementing the skill grant training, new partnerships were formed, 

thereby increasing workforce investment boards’ knowledge of local 

workforce needs. In establishing their programs, grantees sought 

information on local employers’ use of H-1B visa workers and on 

workforce shortages as identified in labor market data and through 

discussions with employers. In its solicitations for grant 

applications, Labor has provided guidelines that were confusing as to 

the skill level of training that grantees should provide. INS, in 

characterizing the occupations for which training was provided, 

identified about 40 percent of the occupations as able to qualify for 

an H-1B visa level occupation. The scholarship program, by its nature, 

is preparing students for careers in fields with workforce shortages 

nationally, and is focusing its efforts on attracting and keeping 

students in those fields. In addition, it educates students for the 

high-skill jobs comparable to jobs filled by H-1B visa holders.



While federal initiatives are not coordinated to strategically address 

high-skill needs at a national level, local skill grant programs 

increased coordination, though Labor provided limited assistance to 

enhance these efforts. Several federal agenciesæLabor, NSF, Commerce, 

and othersæhave independent programs to address the need for high-skill 

workers; however, coordination across agencies is limited. While 

Labor’s Employment and Training Administration (ETA) has begun to take 

a more strategic approach to identify skill shortfalls in a few key 

industries--such as health care and IT--efforts to coordinate these 

high-skill initiatives within ETA are also limited. At the same time, 

local workforce program officials said that a major benefit of the 

skill grant program was its contribution to advancing the goals of WIA, 

such as building relationships with more employers and partners. Survey 

respondents reported working with one-third more employers with high-

skill needs since receiving the 

H-1B grants. Despite this progress, local skill grant representatives 

faced challenges in obtaining information on companies needing H-1B 

workers and would have liked assistance in marketing the program to 

those employers. Furthermore, Labor and NSF provided few opportunities 

for grantees to share information and learn from each other.



We include recommendations to the Secretary of Labor and to the 

Director of NSF to improve the H-1B skill grants and scholarship 

programs, respectively. We also recommend that the Secretary of Labor 

proactively develop a more comprehensive approach to address high-skill 

workforce needs across the country. In commenting on a draft of the 

report, Labor and NSF generally agreed with our findings and 

recommendations, although Labor believes its recent new reporting 

requirements will provide the information needed to monitor progress 

and evaluate the program. In its comments, Commerce raised no 

objections to our recommendations but had concerns about our job 

design, suggesting that we should have gathered information on the most 

recent grants awarded in December 2001 and during 2002. However, 

because these grants were so new, information generally was not 

available regarding participant characteristics or program operations.



Background:



In recent years, Congress passed legislation that modified the visa 

program for foreign workers who enter the country with H-1B visas to 

work in specialty occupations. Changes have included expanding the 

limits on the number of workers who may be approved for these visas 

from 65,000 to 195,000, providing Labor with additional enforcement 

authority, and establishing an employer fee to fund training of 

American workers. The American Competitiveness and Workforce 

Improvement Act of 1998 (P.L. 105-277) authorized programs to provide 

technical skills training and scholarships for low-income postsecondary 

students pursuing high technology fields of study. To fund these 

programs, it assessed a $500 fee on employers for each person for whom 

they submitted an application for an H-1B visa.[Footnote 4] In 2000, 

the H-1B visa application fee for employers was raised to $1,000. Also, 

the American Competitiveness in the Twenty-First Century Act (P.L 106-

313) clarified some guidelines for administering the skill grant 

program and included Commerce as a consultant to the skill grant 

distribution process. The fee for employers who apply for H-1B visa 

workers, which funds the skill grants and scholarship grants, expires 

on September 30, 2003. Currently, 55 percent of the fees collected are 

distributed to Labor for skill grants and 22 percent are distributed to 

NSF for scholarship grants. The remaining 23 percent of the funds is to 

be used for other activities.[Footnote 5] The 2003 Labor budget 

proposed redirecting the skill grant funding beginning in fiscal year 

2003 to reducing the backlog of applications submitted on behalf of 

foreign workers for permanent residency.



In 1998, Congress also passed WIA, which replaced the Job Training 

Partnership Act (JTPA) and introduced various reforms to the 

coordination and delivery of federal employment and training services. 

WIA seeks to create a workforce investment system that connects 

employment, education, and training services to better match workers to 

labor market needs. WIA specifies separate funding sources for each of 

the act’s main client groupsæadults, dislocated workers, and youth. The 

American Competitiveness and Workforce Improvement Act of 1998 linked 

the H-1B skill grants to federally funded employment and training 

services administered by Labor by requiring that the grants be awarded 

to private industry councils, workforce investment boards or regional 

consortia of these boards. [Footnote 6]



Labor is responsible for administering and overseeing the H-1B grant 

program on a national level, which includes compiling and collecting 

reports, maintaining an H-1B skill grants website, and providing 

technical assistance. Labor’s regional offices assign one staff person 

to each grantee within the region to serve as the front-line contact 

and monitor of the grantees.[Footnote 7]



Through its Office of Policy and Research, Labor has awarded 43 skill 

grants totaling about $96 million distributed in three separate rounds 

in February 2000, July 2000, and October 2000, and an additional 24 

grants totaling about $67 million were distributed in a rolling award 

process beginning in December 2001. Workforce investment boards or 

regional consortia of these can receive skill grants. For each 

application, a local workforce investment board must indicate that the 

project is consistent with, and will be coordinated with, the region’s 

workforce investment efforts. The 2000 law allotted 25 percent of the 

skill grants to business-related consortia; a first round was awarded 

in May 2002 to 14 grantees, totaling about $34 million. Labor convenes 

panels to review grant applications and recommends grantees for 

selection on the basis of specific criteria, such as target population, 

service delivery, and ability to meet labor market needs.



Grantees have been required to submit a quarterly financial report and 

a quarterly narrative progress report. While Labor did not require a 

standard format for the narrative progress report until the quarter 

ending September 30, 2002, some grantees used a template developed by 

Labor that included numbers for the following: individuals continuing 

to be served from any quarter, individuals served during the quarter, 

individuals served since the beginning of the project, individuals 

newly enrolled, and individuals who exited without completion. Labor 

limited the amount of money grantees’ could spend on administrative 

costs to 10 percent of the funding and set the grant period at up to 2 

years, although some grantees have received 1 year extensions at no 

additional cost. Grantees are required to obtain matching funds from 

other parties; the amount they have been required to obtain ranged from 

25 percent to 50 percent of the grant, depending on the round in which 

they received their grant. Business consortia grantees are required to 

obtain matching funds of 100 percent of the grant they receive.



The 2000 law provided specific guidance about the types of training 

that should be provided under the skill grants, which was absent from 

the 1998 law. It said that the training is not limited to skill levels 

commensurate with a 4-year undergraduate degree, but should include the 

preparation of workers for a broad range of positions along a career 

ladder. It also required that at least 80 percent of the grants be 

awarded to programs and projects that train employed and unemployed 

workers in skills in high technology, information technology, and 

biotechnology. The 1998 law did not elaborate on the nature of the 

training authorized and did not mention any particular occupations.



NSF provides scholarship grants to schools that grant associate, 

baccalaureate, or graduate degrees. The schools are selected by panels 

that review applications from postsecondary schools. Students must be 

majoring in computer science, engineering, or math; must be enrolled in 

classes full-time; must demonstrate financial need; and must 

demonstrate academic potential and ability. Initially, only students 

who were eligible for Pell grants[Footnote 8] could be eligible for 

scholarships, but NSF later relaxed this requirement to include 

students who were eligible for any federal financial aid. Each student 

receives up to $3,125 per year for up to 4 years. As of May 2002, 277 

schools have obtained grants ranging from $24,750 to $760,320 in a 

series of three rounds of grant awards totaling about 

$72 million. Schools may ask for an additional 5 percent of the total 

requested scholarship amount for administrative costs, an increase from 

the original 2 percent for the first set of grants awarded. Schools may 

also ask for an additional 5 percent of the total requested scholarship 

amount for student support services.



Skill Grants Offer Training with Flexible Service Delivery While 

Scholarship Grants Offer Education through Degree Programs:



Skill grantees use the grant program to offer training through a 

variety of service delivery options to people whose skills need to be 

upgraded; scholarship grantees use the scholarship program to offer 

traditional degree programs in mathematics, computer science, and 

engineering to low-income students. While the skill grant program 

requires grantees to create partnerships to implement the program, the 

nature of the partnerships is flexible. The grant training, which can 

be used to prepare workers for a range of occupations, can be offered 

to employed and unemployed individuals in a variety of settings. 

However, in the scholarship grant program, the postsecondary schools 

receiving grants provide scholarships toward undergraduate and graduate 

postsecondary education, with a goal of attracting and retaining low-

income students in computer science, engineering, and mathematics 

degree programs. Some schools are having difficulty finding students 

eligible for the scholarship grant program to fill all available slots. 

NSF officials, however, believe that their change to a less strict 

standard for financial eligibility has made it easier to recruit 

students.



Skill Grantees Form a Variety of Partnerships to Train Employed and 

Unemployed Individuals, but Face Challenges Sustaining the Programs:



In implementing their skill grant programs, grantees form partnerships 

to meet local workforce needs and to train diverse participants. 

However, many grantees have not planned for alternative funding to 

sustain the training program beyond the 2-year time frame allowed for 

the grant. The skill grant program requires grantees to create 

partnerships with local entities to implement the program, yet the 

nature of the partnerships is flexible. Data on participants are 

limited, however, because Labor does not require grantees to collect 

consistent participant and outcome information. Although many grantees 

have used the skill grant program to create innovative programs and 

build ties with new partners, many have not planned for alternative 

funding beyond the end of the grant period and may be unable to offer 

their program in the future.



Variety of Service Delivery Options:



Skill grantees taking advantage of the skill grant program’s 

flexibility, have formed partnerships with local entities, and have 

used a variety of innovative service delivery options. For the first 

three rounds in which skill grants were awarded, workforce investment 

boards or private industry councils were required to submit grant 

proposals to Labor; however various partners initiated or implemented 

the skill grant training program to best meet local workforce needs. 

Other partners may include employers, unions, for-profit and not-for-

profit training institutions, community colleges, public and private 4-

year colleges, and other organizations such as business trade or 

industry associations or community and faith-based organizations. The 

following sites that we visited exemplify the variety of partner 

configurations and service delivery options.



* At several sites in various states, the grantee implemented the skill 

grant using local government, nonprofit or community based 

organizations that were also administering WIA programs. The skill 

grant funds were awarded either to employers to train current workers 

or individuals to upgrade their skill set. For example, one offered 

businesses grants of up to $50,000 to train their employees in 

information technology, electrical engineering, mechanical 

engineering, or precision manufacturing; another offered funds for IT 

training and targeted employed workers as well as dislocated (laid-off) 

workers, low-income people, and high school students. The local boards 

advertised the availability of training through standard advertising 

channels such as flyers, newspapers, and the one-stop centers.[Footnote 

9] The training providers were chosen by the employer or the 

individuals participating in the programs.



* At a site in California, a major health care provider with thousands 

of employees partnered with the local board, the union, and training 

providers to address specific skill shortages within its company. 

Similarly, at a site in Massachusetts, unions at two manufacturing 

plants partnered with the local board, training providers, and the 

employers. For both grants, training was available primarily to company 

employees. In this arrangement, the local workforce boards were not 

heavily involved in the operation of the training program, but did 

connect the grant to the local workforce system. Employers and unions 

implemented the skill grants in the regions covered by the employers 

instead of limiting participation to only workers in the area served by 

the board.



* At a site in D.C., a college initiated and implemented the skill 

grant, while the local board advised the college and established 

networks to other partners. The college sought out employers who wanted 

their underemployed workers to receive IT training. It also marketed 

the training directly to unemployed individuals. All training occurred 

at the college administrating the grant.



* At one site in California, the local board partnered with four 

training providers to offer different IT curriculums to both employed 

individuals and dislocated workers. The training partners and the board 

were responsible for recruiting participants for the program.



The skill grant training programs vary in length and by type of 

provider; different approaches are taken to respond to employers and 

trainees’ needs. Training programs at sites we visited were as short as 

a 1-day course on new software taught through a for-profit training 

provider and as long as a 2-year college curriculum at a technical 

college. A grantee has the flexibility to provide different training at 

different sites. For example, one grantee ran four different IT 

training programs, each with a different time frame: one on weekends 

for 9 months at a community college; one summerlong program on weekdays 

at a community college; one full time for 10 months at a nonprofit 

training provider; and one with various schedules offered through a 

major state university continuing education program.



Depending on the partners and service delivery option for the skill 

grant, the training can take place in a variety of locations, such as 

on-site at a company or at a training facility. At one skill grant 

location, a local community college offered math, electronics, and 

other courses at the workplace after the close of the workday. 

Employees could earn an associate degree in computer and 

telecommunications technology at a convenient location, while upgrading 

their skills for their employer.



The skill grant program’s flexibility allows grantees to adjust the 

content of their training in response to changes in local labor market 

demands or events. The grant administrators at one site providing 

training in both health care and IT increased the number of health care 

training participants and decreased the number of IT training 

participants in response to changing employer demand for workers. 

Similarly, a local board that partnered with two large employers to 

train current workers amended their grant to include training for 

dislocated workers when one employer had a major lay-off. Participants 

who had been laid off could continue in the training program.



Despite the flexibility of the skill grant program, many of the skill 

grantees experienced challenges during the start-up phase of the grant. 

On average, grantees took about 4 months from the time the grants were 

awarded until the programs were operational and began serving 

individuals. For two, forming new partnerships with employers and 

training providers took longer than anticipated. For others, the 

economic downturn that began in 2001 altered their ability to 

participate. For a few grantees, these obstacles delayed their program 

start-up 9 months or longer. As a result, several grantees asked or 

planned to ask for a no-cost extension of up to 1 year beyond the 

original 2-year grant period.



Between December 2001 and July 2002, Labor has awarded an additional 38 

grants, including 14 awards under the 25 percent allotment reserved for 

business or business-related consortia. Based on information in the 

summaries of the funded projects, some of the regional consortia are 

led by large nationwide corporations such as MetLife, Inc., or General 

Motors Corporation, while other programs are led by community colleges, 

or in one case, an organization working to enhance opportunities for 

the Latino population. Many of the projects cover geographic areas 

larger than the areas served through a single local workforce board. 

For example, one project led by a national employer will serve 

participants in five states: Alabama, Indiana, Michigan, New York, and 

Ohio. Other projects will serve participants in a broad area of one 

state or a few selected major metropolitan areas around the country.



Diverse Grant Participants, Though Data Are Limited:



In the first three rounds of skill grant awards, the training programs 

served a range of participants, in part because of the flexibility 

afforded in the skill grant program. The skill grant programs were not 

required to select participants on the basis of eligibility factors 

such as age, income, or employment status of the individuals. However, 

in its solicitations for grant applications, Labor encouraged grant 

applicants to reach out to underrepresented groups, such as minorities, 

women, and individuals with disabilities. Grantees targeted various 

combinations of employed, dislocated, and unemployed individuals, and 

specific populations such as youth, disabled, or public assistance 

recipients. For example, at one site, the grantee targeted two groups: 

individuals who were employed and wanted to upgrade IT skills or gain a 

new skill set and unemployed individuals who were seeking a computer-

related job. At another site, the grantee used the skill grant program 

to train high school students in an IT program at the vocational high 

school and also trained employed, dislocated, and low-income adults 

using other training providers.



Data on participant characteristics are limited because Labor did not 

require standard data on individual participants to be collected and 

reported. Until the quarter from July 1 through September 30, 2002, 

grantees were not required to report on standard data elements. For 

that quarter, Labor will be requiring that grantees submit standard 

information on the status of participants’ training and certain 

outcomes, such as new job placements and the number of wage increases 

individuals received as a result of H-1B training. However, the new 

requirements still do not require specific demographic data on the 

individual participants or information on the specific levels of 

training provided.



Because data collection varies across sites, the responses to our 

survey questions about participant characteristics vary as 

well.[Footnote 10] All grantees provided information on the number of 

training participants in their program, reporting that a total of 

16,590 individuals were enrolled in training between March 1, 2000, and 

January 31, 2002. Grantees from the first three rounds who collected 

participant employment data (39 of the

43 grantees) report that approximately three-fourths of skill grant 

participants are employed workers upgrading their skills. In addition, 

the data from our survey show that the skill grants are reaching a wide 

range of ages, though focusing more heavily on ages 22 to 39, as shown 

in 

figure 1.



Figure 1: Age of Participants:



[See PDF for image]



Note: Based on 6,398 participants, or 39 percent of participants in the 

first three rounds of the skill grant training program.



Source: GAO data from H-1B Skill Grant Survey.



[End of figure]



Because many grantees chose to target employed individuals that want to 

upgrade skills or change careers, the participants often have some 

education beyond high school. Information on the educational background 

of participants in the first three rounds of grants reveals that most 

of the participants have some college education, many with at least a 

bachelor’s degree (see figure 2). In one case, a health care training 

program required that a participant be a registered nurse before 

receiving training as a nurse specialist in the operating room or 

critical care.



Figure 2: Highest Education Level Participants Attained before Training 

Program:



[See PDF for image]



Note: Based on 6,645 participants, or 40 percent of participants in the 

first three rounds of the skill grant training program.



Source: GAO data from H-1B Skill Grant Survey.



[End of figure]



Grantees reported that almost 5,000 participants were members of 

“underrepresented” groups. Underrepresented groups can include women, 

minorities, persons with disabilities, and older workers. Information 

gathered from grantees collecting gender, race, and ethnicity data 

indicates that a greater percentage of women and African Americans are 

training for IT occupations in this program than are working in IT 

occupations nationally. Grantees indicate that 40 percent of the skill 

grant participants in IT training[Footnote 11] were female as compared 

with 27 percent of computer scientists and systems analysts, and 

computer programmers in the U.S. workforce in 2001, according to Bureau 

of Labor Statistics data. Further, a higher portion of African 

Americans and about an equal portion of Hispanics were trained than 

were present in those key IT occupations, as shown in figure 

3.[Footnote 12]



Figure 3: Percentage of Women, African Americans, and Hispanics 

Participating in Skill Grant IT Training as Compared with the U.S. IT 

Workforce:



[See PDF for image]



Note: Includes data on the 19 grantees who provided IT training only.



Source: Bureau of Labor Statistics and GAO data from H-1B Skill Grant 

Survey.



[End of figure]



In addition to participant demographic data, some grantees collected 

outcome data, although these data were limited and had not been 

standardized. In general, such data are not collected until after 

participants have ended their training. As of January 31, 2002, 

grantees reported that 7,646 had completed their entire training 

program. Most of the remaining participants were still in training; the 

rest were either waiting for training to start at the time of our 

survey or had left or dropped out of the program (see figure 4). 

Because grantees did not always collect outcome data, such as 

certifications obtained or wages that increased, the outcome data are 

not complete. The data we collected do not identify whether each 

participant achieved only one or more than one of the outcomes 

reported, thus the outcomes cannot be compared to the number of 

participants who completed their training. While limited, the outcomes 

reported indicate what the training programs achieved. Grantees 

reported that 

1,796 participants were placed in new or upgraded positions;

1,571 participants increased their wages/salaries; 2,582 participants 

attained skill certifications, such as a Microsoft Certified Systems 

Engineer; and 1,870 participants attained industry-recognized skill 

standards. Grantees report a very low number of participants receiving 

a 

2-year or 4-year college degree, which may be due to the 2-year time 

frame of the skill grant program.



Figure 4: Status of Participants as of January 31, 2002:



[See PDF for image]



Note: Information reported on 15,485 of the 16,590 participants, or 93 

percent.



Source: GAO data from H-1B Skill Grant Survey.



[End of figure]



Because the program is flexible, grantees can choose to measure success 

with outcomes relevant to their service delivery option. For example, a 

grantee that is targeting unemployed individuals can measure job 

placements, while a grantee targeting employed individuals can measure 

wage gains or job retention. Outcomes measured included student or 

employer satisfaction, students’ continuation in school, job retention, 

job placements, wage gains, or upgraded positions. Only 1 of the 43 

grantees is planning to measure reduced reliance on H-1B workers as an 

outcome. Employers and employees we interviewed reported that the 

training is valuable because it may contribute to an employee’s loyalty 

to the company or may provide a service within the company that would 

otherwise have been outsourced. For example, at one skill grant 

location, employees of a small nonprofit organization learned how to 

edit and upgrade the company’s website. By gaining the skills through 

existing staff, the company became more competitive and saved money.



Even though grantees were interested in tracking outcomes of 

participants, and had attempted to do so, they encountered a number of 

challenges. Since the programs were largely based on the needs of 

employers, the purpose of the training was often to upgrade a worker’s 

skills, which is not necessarily connected to an easily measured 

outcome. For example, training that helps a registered nurse become an 

operating room specialist or helps an employee at an IT firm upgrade 

his or her skills to keep up with current technology may not be 

accompanied with a wage gain or promotion. A couple of grantees we 

visited said that the training helped employees avoid being laid off 

with the recent dip in the economy. In addition, some skill grantees 

said they had a difficult time collecting data from private industry 

employers who were reluctant to give personal information, such as 

wages, on their employees.



Future Funding for Sustaining Skill Grant Programs Is Uncertain:



Although grantees were required to outline a plan in their applications 

for sustaining their programs beyond the grant period, some skill 

grantees who were in their last year of funding had not identified 

definite future funding sources. During our site visits, grantees said 

that the H-1B grant provided funding to initiate programs. For example, 

one grantee said it gave their program the “shot in the arm” it needed 

to start a new and innovative training program. Some grantees hoped 

that continuing the program would be easier once the program was 

established. In their survey responses, grantees identified a wide 

variety of other funding sources they expected to use to sustain the 

training programs established under the skill grant. The most common 

sources of funds were other federal programs, WIA program funds (adult, 

dislocated workers, or youth program), H-1B employers, and tuition 

assistance/remission (see figure 5).



Figure 5: Funding Sources the 43 Grantees Expect to Use to Sustain the 

Skill Grant Training Programs:



[See PDF for image]



A: States can setaside 15 percent from each of the three WIA funding 

streams (adults, dislocated workers, and youth) to be used for 

statewide activities, including incumbent worker projects and 

authorized youth and adult activities.



Source: GAO data from H-1B Skill Grant Survey.



[End of figure]



However, several grantees we visited did not have definite plans for 

alternative funding beyond the program’s 2-year limit and may be unable 

to offer their program in the future. For example, one program that 

trained in IT areas had planned to seek funding from employers that 

were hiring graduates of the training program, but with the downturn in 

the IT industry, employers were not expected to want to contribute as 

readily. Some grantees were planning to apply for another H-1B skill 

grant to continue their programs, but whether they would be approved, 

was not known.



In the recent grant solicitation, Labor has allowed grantees to reapply 

to continue a program but has required at least some expansion of the 

grantee’s program. Previous skill grant recipients were encouraged to 

apply for another H-1B grant to provide a different approach or scope 

to skills training, including the option to expand the existing 

training program. Labor did award one grantee from the first round of 

awards another H-1B grant in the fourth round to expand its initial IT 

training program. The grant administrator at this site commented that 

continued funding could only improve the training now that the 

infrastructure was in place.



Scholarship Grants Serve Low-income Students in Computer Science, 

Engineering and Mathematics Degrees:



The scholarship grant program emphasizes the importance of attracting 

and retaining low-income students in computer science, engineering, and 

mathematics degree programs, primarily by providing them tuition funds 

and supplemental income to assist with living expenses. As of May 1, 

2002, 7,706 students had received scholarships through the program. 

Scholarship program coordinators at sites we visited noted that 

students who meet the low-income requirement for this program typically 

have to work at least part-time, in addition to attending school. 

According to an NSF official, the scholarships, which are not 

restricted to tuition, can be used for any expenses related to school, 

such as housing, transportation, or childcare. School officials said 

that students could use the time that they would be working at a job to 

focus on schoolwork. One student said that the scholarship is helping 

her to finish the program faster because she is required to be a full-

time student to receive the scholarship. Moreover, two students thought 

that the scholarship attracted them to these fields of study when they 

were debating what major to choose. One student told us that even 

though she excelled in math in high school, she only considered 

becoming a math major after she learned about the scholarship 

opportunity.



On the basis of data collected by NSF on students who receive the 

scholarships, the program is attracting a higher proportion of women 

and minorities than have pursued degrees in computer science, 

engineering, and mathematics as a whole. As shown in figure 6, 

scholarship recipients include a greater portion of women and 

minorities than are included among computer science, engineering, and 

mathematics degree awardees. Approximately 37 percent of the students 

in the scholarship program are women, as compared with 24 percent of 

all students earning computer and information science, engineering and 

engineering related technologies, and mathematics bachelor’s degrees in 

1999-2000, according to Department of Education statistics. Further, 

the percentage of minority students in the program was higher than the 

percentage of minority students earning comparable bachelor’s degrees 

nationally.



Figure 6: Comparison of Demographic Characteristics of Current 

Scholarship Program Students to Students Awarded Related Bachelor’s 

Degrees in the United States in 1999-2000:



[See PDF for image]



Note: Totals do not equal 100 percent due to rounding. Scholarship 

program data exclude 

812 students of the total 7,706 for whom ethnicity was unknown. Data on 

students awarded degrees exclude nonresident aliens.



Source: NSF database on Computer Science, Engineering, and Mathematics 

Scholarship students and Department of Education, Office of Educational 

Statistics.



[End of figure]



During our visits we found that while the scholarship program is 

serving low-income students, some of the schools were having trouble 

filling their scholarship slots. An NSF program official agreed that 

some of the smaller schools were having trouble filling slots, and that 

one complaint heard from school representatives responsible for the 

program was the restrictive requirement that students be eligible for 

Pell grants to receive an award. Effective January 2002, NSF relaxed 

this criteria to require that students are federal financial-aid 

eligible, a less restrictive criteria. The NSF program official 

estimates that while enrollments appear to have increased since the 

criteria was relaxed, the effect of this change will not be known for 

another year; however, he believes the change has made it easier to 

recruit students. Moreover, since the start of the program, some 

schools have begun other initiatives to publicize the program to find 

more students that meet the eligibility requirements, which may help to 

increase the enrollments in the scholarship program.



Skill Grant and Scholarship Grants Designed to Meet Workforce Needs, 

Though the Skill Levels for Which They Train Varies:



The skill grant training is based on local workforce needs and 

addresses occupations both below and at the bachelor’s degree level 

required for 

H-1B visas, whereas the scholarship program’s training is on the basis 

of national workforce needs and the jobs that many H-1B visa holders 

fill. The skill grant training is designed by grantees to address skill 

shortages in the local workforce. However, the programs, as permitted 

by law, do not always prepare participants for the specific kind of 

jobs held by H-1B visa holders. The scholarship program also focuses 

its efforts on attracting and keeping students in specific fields with 

national workforce shortages.



Skill Grant Programs’ Training Based on Local Workforce Needs:



As established by law, the skill grants were intended to provide 

technical skills training, but acceptable areas of training were not 

prescribed. Labor, in its solicitations for grant applications, stated 

that the funds were intended for skill training in high-skill 

occupations that are in demand by U.S. businesses. Its guidance stated 

that the overall goal of H-1B-financed training is to raise the skills 

of American workers so that they can fill high-skill jobs presently 

being filled by temporary H-1B workers. Labor also stated that one key 

indication of the occupations in demand is the number of employer 

applications for H-1B foreign workers, and noted that two industries 

appear to generate the most current H-1B demand--IT and health care. 

The solicitations included an appendix of specific occupations in which 

job openings were certified through these applications; the top two 

occupations by far that were listed were “occupations in systems 

analysis and programming” (an IT occupation) and “therapists” (a health 

care occupation). However, many applications were never filled with a 

foreign worker.[Footnote 13] INS data on the actual workers who 

eventually obtain visas indicate a different mix; the largest category 

is computer-related occupations, while medicine and health occupations 

represent a much smaller portion of the visas approved, as shown in 

table 1.



Table 1: Top 10 Occupation Categories for H-1B Visa Petitions Approved 

for Fiscal Year 2001:



Occupation category: 1. Computer-related; Percent: 58.0.



Occupation category: 2. Architecture, engineering, and surveying; 

Percent: 12.2.



Occupation category: 3. Administrative specializations; Percent: 7.2.



Occupation category: 4. Education; Percent: 5.3.



Occupation category: 5. Managers and officials (not elsewhere 

classified); Percent: 3.8.



Occupation category: 6. Medicine and health; Percent: 3.4.



Occupation category: 7. Life sciences; Percent: 2.0.



Occupation category: 8. Social sciences; Percent: 1.9.



Occupation category: 9. Mathematics and physical sciences; Percent: 

1.7.



Occupation category: 10. Miscellaneous professional, technical, and 

managerial; Percent: 1.7.



Source: U.S. Immigration and Naturalization Service.



[End of table]



Most of the skill grant programs funded with the first three rounds of 

grants distributed in 2000 were providing training for IT occupations. 

Several programs trained in a variety of areas, but of the 43 grantees 

selected in the first three rounds of grants, 35 provided training in 

IT and 19 of these trained exclusively in IT. The number of grantees 

who offered training in specific categories is shown in figure 7.



Figure 7: Number of Grantees Who Offered Training in Various 

Categories:



[See PDF for image]



Note: Grantees often offered training in more than one area.



Source: GAO data from H-1B Skill Grant Survey.



[End of figure]



As applicants for skill grants planned their programs, they used 

information that Labor supplied in the solicitation about occupations 

in demand and supplemented it with additional information about local 

labor market needs. Of the 43 grantees selected in the first three 

rounds, 33 tried to obtain H-1B visa data for their area to help them 

identify shortage areas being filled with foreign workers, but only 23 

were successful. During our site visits, some grantees said they 

followed up with the employers identified as having H-1B visa workers 

and discussed their workforce needs. The surveyed applicants also used 

other approaches to identify local workforce needs:



* 42 reported using state and/or regional labor market information;



* 40 reported using information from employers on hiring demands;



* 19 reported using newspaper want ads; and:



* 27 reported using at least one other approach, including working with 

industry groups, using others’ studies of local skills gaps, analyzing 

postings on Internet job sites, employer focus groups, and national 

studies.



Grantees we visited commented that this process allowed the workforce 

investment boards to better understand industries and employers that 

employ higher skilled workers, with whom they had not previously had 

strong relationships. One grantee official noted that the grant had 

been useful in helping his organization look at broader labor market 

needs and focus on emerging trends, such as an anticipated shortage of 

nurses due to retirements. Another spoke of how this process helped to 

better understand the telecommunications/information technology 

industry. Several grantees noted that this grant gave them the 

opportunity to provide training that helped meet employers’ labor 

needs.



Skill Grant Training in Several Occupational Areas, at a Range of Skill 

Levels:



Although the skill level of H-1B occupations is generally required to 

be at the bachelor’s degree level, the law governing the skill grants 

does not require that the grants, though funded with fees from H-1B 

workers’ employers, train at that same level. The goal of the skill 

grant programs was to provide technical skill training to workers, both 

for those who were employed as well as those who were unemployed. The 

American Competitiveness and Workforce Improvement Act that established 

the program does not refer to any particular occupations and did not 

elaborate on the nature of the training authorized. The American 

Competitiveness in the Twenty-First Century Act of 2000 did provide 

more specific direction, stating that this training is not limited to 

skill levels commensurate with a 4-year undergraduate degree, but 

should include preparing workers for a broad range of positions along a 

career ladder.



Unlike some other fields, occupations in the IT field are difficult to 

classify as to the level of education degree they require. The Bureau 

of Labor Statistics in its Occupational Outlook Handbook has noted that 

some IT workers have a degree in computer science, mathematics, or 

information systems, while others have taken special courses in 

computer programming to supplement their study in other fields, such as 

accounting or other business areas. The National Workforce Center for 

Emerging Technologies has identified IT skill cluster titles and the 

education necessary for the occupations. For several of the 

occupations, workers can prepare academically with a range of training 

types, from a 1-year certificate program to a 4-year degree 

program.[Footnote 14]



Labor, when issuing guidance in its solicitations for grant 

applications for various rounds, provided confusing language when 

describing the level of training that was appropriate. The 

solicitations state that the primary target served should be workers 

who can be trained and placed directly in the high-skill H-1B visa 

occupations. However, the solicitations also sometimes included other 

information that allowed training for lower level positions. For 

example:



* The first round’s solicitation also says grantees should reach out to 

high-and low-skilled workers to train for H-1B occupations related 

career paths. However, some grantees commented that raising a low-

skilled worker to a baccalaureate level in the 2-year grant period 

could be difficult.



* The two most recent solicitations for applications mirror the change 

from the 2000 law. They state that the technical skills training is not 

limited to skill levels commensurate with a 4-year degree and should 

prepare workers for a broad range of positions along a career ladder.



Although Labor’s solicitations were unclear as to the level of training 

that was acceptable, according to Labor officials, they avoided being 

overly prescriptive to allow grantees flexibility and encourage 

innovation. In addition, Labor stated that because this was a new 

program, it was difficult to determine where more clarification was 

needed until grantees began to ask similar questions. Labor did post 

some questions and answers about the H-1B skill grant program from two 

conferences for potential grant applicants on the H-1B Technical Skills 

Training Grant website.[Footnote 15] A Labor official also told us that 

Labor is developing a list of commonly asked grantee questions and 

answers to those questions, which should be posted in the near future.



The 43 grantees from the first three rounds provided training for a 

range of levels of occupations. INS Adjudications Division staff, when 

asked to assess whether these occupations are equivalent to skill 

levels needed for H-1B positions, said that many of them could be 

acceptable H-1B positions, depending on the details of the job 

descriptions.[Footnote 16] The agency found that 25 (38 percent) of the 

66 occupations in which training was provided could qualify for H-1B 

occupations, 30 (45 percent) would generally not qualify, and the 

remaining 11 occupations were too vague to be characterized either way. 

(See app. V for a full list of the occupations in which skill grant 

programs trained and INS’s assessment of how the occupations compared 

with H-1B occupations.) A few employers told us that in some cases the 

specific skills they needed could be obtained from an H-1B worker, or 

could be obtained by training a present employee, who already had some 

knowledge of processes, in specific higher-level skills. For example, a 

small nonprofit organization that had interviewed outside candidates, 

including an H-1B worker, for a networking position decided to use the 

skill grant funds to upgrade an employee’s skill sets instead. 

Similarly, the general manager at a manufacturing plant said that 

electronics technicians who were being upgraded to junior engineers 

would be able to do testing that previously was part of the 

responsibilities of senior engineers, some of whom were H-1B workers.



Scholarship Grant Programs Targeted to Meet National Workforce Needs 

and Train at High-Skill Levels:



Students receiving scholarship grants are enrolled in educational areas 

that prepare students for occupations frequently filled by H-1B visa 

holders, an indicator of national workforce needs. The law establishing 

the program stated that scholarship recipients must use the scholarship 

to enroll or continue enrollment at a school in order to pursue an 

associate, undergraduate, or graduate level degree in computer science, 

engineering, or mathematics. Although the students are pursuing a 

variety of specific course programs, such as automation robotics and 

actuarial science, their areas of study can be classified into broad 

categories as shown in figure 8. INS data on H-1B visa workers indicate 

that these majors would provide suitable training for positions these 

foreign workers often fill. As shown in table 1, the data on H-1B visa 

workers approved to begin work during fiscal year 2001, which reflect 

national workforce needs, indicate that 

58 percent of them were for computer-related occupations.



Figure 8: Scholarship Program Students’ Majors by Categories:



[See PDF for image]



Note: Numbers do not total to 100 percent due to rounding.



Source: NSF database on Computer Science, Engineering, and Mathematics 

Scholarship students.



[End of figure]



Training paid for in part by scholarship grants is for occupations with 

a similar level of complexity to those held by H-1B visa holders, who 

must have bachelor’s degrees or equivalent experience. Some students 

receiving scholarships are attending 2-year schools while others are in 

4-year undergraduate programs or graduate programs. (About a quarter of 

the schools in the program are 2-year schools.) Some of those in 2-year 

programs plan to transfer into 4-year degree programs. For example, one 

program we visited at a 2-year community college was specifically 

preparing students for transfer to a nearby 4-year public university, a 

process that was simplified by the transfer agreements that the program 

advisor had arranged.



National Efforts Not Coordinated to Strategically Address High-Skill 

Needs, but Local Coordination Shows Promise:



While federal programs and initiatives are not coordinated to 

strategically address the national need for high-skill workers, local 

skill grant programs are more coordinated, though Labor has provided 

limited assistance to enhance these local efforts. There are multiple 

federal agencies and offices within agencies involved in efforts to 

address the need for high-skill workers, although coordination is 

limited. At the same time, local workforce officials said that as a 

result of implementing their skill grants they have increased 

coordination with partners and employers. Yet, skill grant 

representatives said they would have liked more assistance from Labor 

in obtaining information on companies needing H-1B workers and 

developing a national strategy to market the program. Labor and NSF 

provided few opportunities for grantees to share information and learn 

from each other.



National Efforts Address High-Skill Needs for Workers, Although 

Coordination is Limited:



Multiple federal agencies and offices within agencies are involved in 

efforts to address shortages of high-skill workers and/or attract more 

students to high technology fields. Yet, these efforts are not focused 

on broadly coordinating across agencies to address national high-skill 

workforce needs in a strategic way. Within Labor, many of these efforts 

are discretionary grant programs operated by ETA through separate 

offices with limited coordination. For example, ETA’s Office of Policy 

and Research oversees the H-1B skill grant program, ETA’s Office of 

Adult Services oversees several discretionary grant programs that 

address employer skill shortages and a grant to the Information 

Technology Association of America to inform IT companies about the 

workforce investment boards’ role in local communities; and ETA’s 

Office of Apprenticeship Training, Employer and Labor Services oversees 

a grant to expand apprenticeship in the IT occupational area. In 

addition to the H-1B scholarship program, the NSF has other programs 

aimed at attracting and retaining students in high-skill degree 

programs. The Department of Commerce’s Office of Technology Policy 

within the Technology Administration, the Department of Education’s 

Office of Vocational and Adult Education, the Department of Health and 

Human Services’ Health Resources and Services Administration, also have 

initiatives and programs to research and/or address areas of high-skill 

needs and shortages. (A list of some key programs and initiatives that 

have a component addressing the need for high-skill workers is shown in 

app. VI.):



The lack of coordination between federal agencies was evidenced within 

the two grant programs funded with H-1B fees. The Labor-administered 

skill grants and NSF-administered scholarship grant programs have had 

little coordination across agencies to address broader needs. According 

to a NSF official, while programs such as the scholarship grants are 

complementary to Labor’s workforce programs, NSF’s primary link to the 

workforce system has been with the Department of Education. At the 

local level, some of the skill grant representatives said they did not 

know about the scholarship grants and some of the colleges with 

scholarship grants did not know about the skill grants. Yet, local 

grant representatives of both programs were interested in learning more 

about each other and it appeared that there were some areas where they 

could have benefited from more coordination. For example, one 

university official overseeing the scholarship program mentioned that 

she would like more information on the skill grants because of the many 

requests about training programs from students who have degrees but 

still need additional training to be more marketable to employers.



Within Labor, ETA oversees the WIA adult, dislocated worker, and youth 

programs and has some other initiatives to address high-skill workforce 

needs in addition to the skill grants; however, these efforts are not 

linked together to build on the lessons being learned. For example, ETA 

assigned regional staff from the Office of Apprenticeship Training, 

Employer and Labor Services (ATELS) to monitor the skill grants. ATELS 

also has a major initiative to develop apprenticeships in new and 

emerging industries such as IT and health care. Yet, according to a 

national ATELS official, a strong partnership between the skill grant 

program and ATELS did not develop, which could have led to building a 

broader infrastructure that connects the skill grants and 

apprenticeship efforts in high technology industries. A Labor official 

from the Division of One-Stop Operations within ETA said that a formal 

mechanism is not currently in place to share information among grant 

programs such as the skill grant program and other ETA grants and 

programs. However, these officials did say that the ETA leadership is 

interested in looking at the role of demonstration grants such as the 

skill grant program and how they fit into ETA’s ongoing employment and 

training programs. An example of this type of coordination was 

demonstrated by Labor’s Boston regional office that convened a series 

of 3 daylong conferences that focused on current worker training for H-

1B grantees and other discretionary grants awarded by Labor. In 

addition, the Assistant Secretary of ETA recently announced the 

establishment of a Business Relations Group that will strive to better 

support business linkages with all components of the workforce system, 

such as apprenticeship programs and Job Corps.



Labor involved Commerce in the skill grant program, as required by the 

American Competitiveness in the Twenty-First Century Act of 2000, but 

these efforts were limited and not part of a more comprehensive 

strategy to address high-skill needs across agencies. Labor consulted 

with Commerce while developing the initial solicitation for grant 

application for the skill grant program. The 2000 act mandated that 

role by requiring that Labor consult with Commerce in awarding the 

grants and requiring Commerce to complete a study of public and private 

sector high-tech workforce training programs. Commerce staff also 

served on some of the skill grant application review panels. Yet, 

Commerce expressed frustration in trying to obtain information from 

Labor on the skill grant program for their report on workforce training 

programs. At the same time, Commerce is leading several major 

initiatives addressing IT employers and employees, which are 

independent of Labor’s workforce programs.



While some federal agencies are taking steps to more broadly address 

high-skill workforce needs and skill shortages, no agency has taken the 

lead in coordinating across education, economic development and 

workforce development programs to strategically focus on high-skill 

needs. The Secretary of Labor established a “21st Century Workforce 

Initiative” that includes the Office of the 21st Century Workforce, 

created by executive order on June 20, 2001, to provide information and 

forums on workforce issues. However, these efforts address the broad 

workforce and are not focused specifically on high-skill needs. The 

Secretaries of Labor and Health and Human Services are also working on 

a Memorandum of Understanding to support joint efforts to address the 

nation’s nursing shortage. Within Labor’s ETA, there are some efforts 

to take a more strategic role in identifying skill shortfalls in a few 

key industries, notably health care and IT. Yet, these efforts tend to 

be limited largely to one agency or targeted to one industry, without 

building on the lessons being learned across programs and initiatives 

addressing high-skill needs.



Skill Grants Helped Local Boards Increase Coordination but Labor 

Provided Limited Assistance to Enhance These Efforts:



Local workforce board representatives and program officials reported 

that the skill grants helped them advance key goals of the WIA 

workforce system, such as coordinating with new partners beyond local 

boundaries, building relationships with more employers, and linking to 

the one-stop system; however, they would have liked more assistance 

from Labor to enhance these local efforts. Survey respondents reported 

working with one-third more employers with high-skill needs since 

receiving the H-1B grants. Some workforce officials said that the skill 

grants enabled them to work with employers that would not have accessed 

the WIA workforce system otherwise. We also spoke with some employers 

who said they had not known of the services available or worked with 

the WIA workforce system before this grant. At the same time, 10 of the 

grantees said they had difficulty obtaining data on H-1B visa 

applications to identify employers who used H-1B workers in their 

areas. A number of grantees contacted Labor, INS, state workforce 

agencies, and even congressional offices to attempt to track down this 

information. While some grantees got information from Labor, others did 

not. Almost a quarter of the grantees said they would like more 

assistance from Labor in obtaining information on companies hiring H-1B 

workers or networking with H-1B employers. A number of grantees 

suggested that it would be beneficial for Labor to develop a national 

strategy to market the H-1B grant program to employers and to 

facilitate discussions with national employers who use H-1B workers. 

One of the national employers who participated in a H-1B skill grant 

program expressed interest in replicating its experiences and sharing 

information on a national level.



Almost all (40) of the grantees reported that the one-stop centers, 

which are the cornerstone of the WIA workforce system, had a role in 

the grant and in some cases, increased visibility as a result of the 

grant. For many of the grantees, the one-stop centers served multiple 

functions with the most common being recruiting/referring participants, 

followed by conducting intake/assessment, identifying job openings for 

participants, and matching participants to job openings/employers. One 

of the grantees that worked with employers to upgrade the skills of 

current workers said that they used the one-stop centers to help 

backfill the lower-level positions vacated by employees who got the H-

1B training and moved into higher-level positions. One employer we 

interviewed, who was not aware of the publicly funded workforce system 

before the H-1B grant, expressed interest in using the screening 

services available through the local one-stop center after learning 

about these services through the grant.



Local workforce officials also mentioned how these training programs 

helped support other efforts under WIA to strengthen the workforce 

system. For example the skill grants helped the workforce investment 

boards think beyond local boundaries to regional and employer 

territories and develop a model for employer-driven training that can 

also be applied to other programs, such as those funded by WIA. A 

number of grantees commented on how the H-1B grant enhanced their 

capacity to work with community colleges and other partners to provide 

innovative, higher-skills training. At the same time, some grantees 

requested more technical assistance from Labor in such areas as 

learning more about national efforts to develop and define career 

ladders. As one grantee noted, information on career ladders is 

available in different areas, but is hard to track down; information 

developed by efforts such as the National Skill Standards 

Board[Footnote 17] could be useful, but this information does not 

always make its way to the local level.



Local Skill Grant and Scholarship Programs Had Limited Opportunities to 

Share Information:



For both the skill grant and scholarship grant programs, grant 

recipients thought they could have benefited from sharing more 

information with one another about lessons learned and promising 

practices. Yet, Labor and NSF provided few opportunities for this type 

of information exchange. Labor has established a website with relevant 

information for the H-1B grants, conducted an early study of the 

program and a second study of exemplary practices of H-1B skill grants, 

and convened two national meetings for H-1B skill participants. 

However, grantees do not have a mechanism for ongoing information 

exchange with each other. In our mail survey and through site visits 

with grantees, 13 of the grantees noted that they would like to have 

more opportunities to network and share information among grantees. 

Some of the local grantees formed informal networks to share 

information and have relied on each other for technical assistance. 

Officials at scholarship programs we visited also said that they would 

like the opportunity to exchange information and promising practices 

with other schools. NSF plans to convene a meeting of the scholarship 

program coordinators from all the colleges awarded NSF scholarship 

grants in the spring of 2003. The schools we visited commended NSF for 

distributing information about the program and responding to questions 

in a timely fashion through e-mail.



Conclusions:



The H-1B skill grant and scholarship grant programs are two key 

programs that train high-skill workers and help address employers’ 

concerns about skill shortages in the United States--particularly in IT 

and health care fields. The skill grant program’s flexibility allows 

training at high-skill levels, often in IT-related occupations, while 

the scholarship program attracts and encourages students to stay in 

degree programs in the computer science, engineering, or mathematics. 

Both programs respond to workforce shortages in either the local or 

national economies.



Both programs have encountered challenges during their early 

implementation. Labor’s confusing guidance on the skill grant program 

has resulted in uncertainty about the type of training that should be 

provided. Further, Labor’s new reporting requirements, with the first 

quarterly report due September 30, 2002, do not require grantees to 

collect data on individual participants or the level of training being 

provided. Without these data, Labor cannot identify whom the program is 

serving or whether the training prepares participants for H-1B level 

jobs or career ladders leading to those jobs. This limits the ability 

of Labor to adequately assess the program’s effectiveness and limits 

the ability of Congress to determine whether the program is 

accomplishing its goals. The local scholarship grant programs struggled 

initially with recruiting enough students to fill all available spaces 

in their programs. However, it appears that this may no longer be a 

problem now that NSF broadened the program’s financial eligibility 

requirements.



Skill and scholarship grantees have had limited opportunities for 

sharing information on best practices or how they overcame challenging 

problems. While Labor recently published a report on exemplary 

practices of H-1B training programs and has convened two national 

meetings of grantees, there is no mechanism for grantees to exchange 

information on lessons learned with each other on an ongoing basis. On 

the basis of our site visits, the scholarship program grantees also 

expressed interest in having the opportunity to share information with 

each other. The skill grant and scholarship programs could also benefit 

from better communication with one another. For example, local one-stop 

systems could have helped colleges with scholarship grants recruit 

potential students for the scholarship program. On the other hand, 

skill grant programs could have benefited by knowing of scholarship 

programs in their community, since they could be another resource for 

participants who had trained through the skill grant program but wanted 

to continue to work toward a college degree in computer science, 

engineering, or mathematics.



While many efforts to train high-skill workers are underway by 

different agencies, these efforts are not coordinated across agencies 

to build on lessons learned and maximize their impact. The progress 

made at the local level by the skill grant program in building 

relationships with employers and identifying skills needed has broader 

implications for enhancing national efforts to meet high-skill needs. 

At the national level, Labor has initiated some promising efforts such 

as analyzing workforce needs in health care and IT, two industries in 

which employers have expressed concerns about labor shortages. In 

addition, the partnership between Labor and Health and Human Services 

to support joint efforts to address the nation’s nursing shortage is a 

positive example of bridging initiatives across agencies. While these 

efforts by Labor and other agencies are moving in the right direction, 

a more broad-based, comprehensive approach would help the United States 

address its high-skill labor needs in a more strategic way.



Recommendations for Executive Action:



To ensure that the skill grant program can assess its effectiveness and 

that information about grantees’ successful approaches are shared 

throughout the program, the Secretary of Labor should:



* implement the new quarterly reporting requirements and expand these 

requirements to also include information on individual participants and 

the level of training that is being provided so they can better measure 

whether the program is achieving its goals and:



* establish ongoing mechanisms to share successful strategies among 

grantees and encourage networking.



To ensure that the scholarship program improves its ability to attract 

and retain students to computer science, engineering, and mathematics 

fields, the Director of NSF should establish mechanisms to share 

successful strategies and encourage networking among the postsecondary 

schools that are grantees.



In addition, in a more overarching effort to be responsive to workforce 

development needs, the Secretary of Labor should be proactive in 

building a comprehensive approach within the Department and across 

federal agencies to address high-skill workforce needs across the 

country.



Agency Comments:



The Department of Labor, the National Science Foundation, and the 

Department of Commerce commented on a draft of this report (see apps. 

VII, VIII, and IX). In general, Labor agreed with our recommendations, 

although Labor believed that their new reporting requirements will be 

sufficient to provide needed information to evaluate the program. NSF 

generally agreed with the report, and provided technical comments. 

While Commerce raised concerns about the design of our study, Commerce 

did not take issue with our recommendations. Commerce was more 

interested in the recent grants awarded than in the implementation of 

the first three rounds of grant awards that was the focus of our study. 

The recent grant awards were so new that information was generally not 

available on participant characteristics or program operations. Because 

Congress asked us to focus our study on how H-1B programs are 

operating, we reviewed programs that were already in place. Overall, 

Commerce’s comments appear consistent with our findings that Labor has 

not collected sufficient data on the program to judge its 

effectiveness.



The Department of Labor supported our recommendation that the Secretary 

of Labor take a proactive approach to addressing high-skill workforce 

needs across the country. Regarding the recommendation about reporting 

requirements, Labor pointed out that ETA has recently developed a 

standard format for the quarterly report. However, we believe that the 

new reporting requirements need to include additional information on 

participants’ demographic characteristics and the level of training to 

ensure that Labor and others can evaluate who is being served and how 

the training relates to occupations that H-1B visa workers fill. Labor 

concurred with our recommendation that the Department establish 

mechanisms for grantees to share successful strategies. In fact, Labor 

noted that ETA has provided grantees with two studies that include 

information about grantees’ best practices and also plans to provide 

additional technical assistance support to the H-1B program that will 

include information sharing.



Commerce, in commenting on the draft, was critical of our decision to 

focus on the skill grants distributed in the first three rounds of 

grant awards and not on the more recent grantee selections. Commerce 

notes that the changes in the law in 2000 governing the skill grants 

and Labor’s program implementation and grantee selection have had an 

impact on the composition of the training offered. We focused our work 

on the first rounds of grants because we wanted to obtain information 

on how grantees were implementing programs. Grantees from the more 

recent awards begun in December 2001 could have provided little, if 

any, information on actual participants and training.



Commerce was also concerned about our presentation of information on 

identifying the occupations for which grantees should be training. 

Commerce states that we drew conclusions by comparing labor condition 

application data and visa petition data from different years. Our 

report, however, does not compare these two sources of information, but 

rather points out that the most recent information available on H-1B 

visa petitions approved provides a different picture of H-1B workers’ 

occupations than was identified through the labor condition application 

data. Further, as we noted in the report, grantees began their analysis 

of workforce needs with data on H-1B occupations from labor condition 

applications, but their decisions about occupations in which to train 

were based on local labor market conditions and employers’ needs. 

Regarding our reporting on educational requirements for H-1B workers in 

IT occupations, Commerce commented that we failed to contrast others’ 

data on the high portion of workers in IT who have a bachelor’s or 

higher degree with the education profile of participants at grantees we 

surveyed. The education data we present on participants reflect their 

education profiles when they entered the programs. Participants may 

achieve degrees as a result of the training. Further, we believe that 

at the time of our survey it was too early to evaluate the number of 

degrees participants attained because many longer programs were not yet 

completed.



We agree with Commerce’s comment that we provide limited information on 

the level of training being provided; however, this information is the 

most extensive data grantees could provide and was not available from 

any other sources prior to our study. Consequently, we have included a 

recommendation to Labor regarding data collection. Commerce also noted 

that individual duties could vary within the same occupational title. 

We recognize in the report that some occupation titles are vague, but 

believe that the INS analysis that we present is helpful to identify 

those occupations that could qualify as H-1B occupations, while 

recognizing that some are too vague to categorize. In addition, 

Commerce said we imply that a specific company’s training of junior 

engineers might reduce this firm’s need for an H-1B worker. This 

example was included to point out only that these workers trained with 

H-1B grants could perform some duties otherwise performed by an H-1B 

worker. Commerce also comments that we should have explored the 

implementation of the career ladder concept with grantees. Our 

discussions of career ladders focused on the level of training provided 

and led to our discussion in the report about grantees’ desire to have 

more assistance in developing and defining career ladders.



Commerce also expressed some concerns regarding our review of the NSF 

scholarship program. However, the additional areas that they believe we 

should have explored, such as whether the scholarships are attracting 

students who would otherwise not have pursued degrees in these 

disciplines, would have required resource-intensive approaches, such as 

surveying schools and scholarship recipients, and were beyond the scope 

of this study. Because much information was available directly from 

NSF’s program database, we chose to rely on this participant data for 

our study.



All three agencies provided technical comments, which we incorporated 

as appropriate.



As arranged with your offices, unless you publicly announce its 

contents earlier, we plan no further distribution of this report until 

30 days from its issue date. At that time, we will send copies of this 

report to the Secretary of Labor, the Director of NSF, the Secretary of 

Commerce, and other interested parties. We will also make copies 

available to others upon request. In addition, this 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 Joan T. Mahagan at (617) 565-7532. 

Other key contributors to this assignment are listed in appendix X.



Sigurd R. Nilsen

Director, Education, Workforce, and

 Income Security Issues:



Signed by Sigurd R. Nilsen



[End of section]



Appendix I: Scope and Methodology:



We took several steps to determine how the skill grant and scholarship 

grant programs are being administered and the areas and skill levels in 

which they train. We judgmentally selected 12 grantees (see table 2) 

from the skill grant program to visit from the first 3 rounds (43 

grants) funded within the skill grant program. Those selected 

represented various geographic locations; rural and urban service 

delivery; participation from all three grant rounds; and a mixture of 

areas of training. For each grant, we met with key individuals, such as 

representatives from the workforce investment boards and for most 

grants, employers, participants, and training providers. We discussed 

their objectives; their decisions on the occupational areas in which to 

train, level of training, and methods of delivering training; their 

outreach to potential training participants and employers; and their 

views on the benefits and challenges of operating these programs.



Table 2: Skill Grant Recipients Visited:



Grantee: Metro North Regional Employment Board; Location: Malden, 

Mass..



Grantee: Regional Employment Board of Hampden County, Inc.; Location: 

Springfield, Mass..



Grantee: New Hampshire Workforce Opportunity Council; Location: 

Concord, N.H..



Grantee: Vermont Human Resources Investment Board; Location: 

Montpelier, Vt..



Grantee: Workforce Investment Council of the District of Columbia; 

Location: Washington, D.C..



Grantee: Alexandria/Arlington Workforce Development Consortium; 

Location: Arlington, Va..



Grantee: Dallas County Local Workforce Development Board; Location: 

Dallas, Tex..



Grantee: North Central Texas Council of Governments; Location: 

Arlington, Tex..



Grantee: City of Chicago; Location: Chicago, Ill..



Grantee: JobWorks, Inc. (Northeastern Indiana WIB); Location: Fort 

Wayne, Ind..



Grantee: Contra Costa County Employment and Human Services Department; 

Location: Concord, Calif..



Grantee: City of Sunnyvale - North Valley Job Training Consortium 

(NOVA) Private Industry Council; Location: Sunnyvale, Calif..



Source: GAO.



[End of table]



We also surveyed all 43 of the round 1, 2, and 3 grantees to obtain 

specific data, such as the kinds of participants they were serving, the 

types of training they offered, and their sources for data on workforce 

needs. While all 43 grantees returned their surveys, as noted in the 

report, some could not provide information to all questions, 

particularly those requesting detailed participant demographics. 

Because this survey was sent to all 43 grant recipients, there is no 

sampling error, but the practical difficulties of administering any 

questionnaire may introduce other types of errors, commonly referred to 

as nonsampling errors. For example, differences in how a particular 

question is interpreted by a survey respondent could introduce unwanted 

variability in the questionnaire’s results. We took steps in developing 

the questionnaire, the data collection, and the data editing and 

analysis to minimize nonsampling errors. (The survey instrument is 

provided in app. II.) We obtained Immigration and Naturalization 

Service (INS) Adjudications Division’s views on how the occupations for 

which the grant programs trained compared with H-1B visa workers’ 

occupations. In addition, we analyzed descriptions of programs funded 

with more recent skill grants.



We also visited six colleges (see table 3) that received scholarship 

grants, selected to give us a mix of publicly funded and privately 

funded schools, 2-year and higher-degree granting schools, and 

geographic representation. We discussed with program officials their 

outreach to students, support services to students, and views on the 

benefits and challenges of the program. To obtain specific information 

on the grantees and students, we analyzed the National Science 

Foundation (NSF) database of participants and schools.



Table 3: Post-Secondary Educational Institutions Visited:



School: Montgomery College; Location: Rockville, Md..



School: Texas Woman’s University; Location: Denton, Tex..



School: University of California (Mathematics, Engineering, Science 

Achievement Program); Location: Oakland, Calif..



School: Oakton Community College; Location: Des Plaines, Ill..



School: Springfield Technical Community College; Location: 

Springfield, Mass..



School: American University; Location: Washington, D.C..



Source: GAO.



[End of table]



To provide views on the overall programs and the extent to which these 

programs are coordinated with other workforce development programs 

designed to meet high-skill training needs, we discussed these programs 

with officials from the Department of Labor, NSF, the Department of 

Commerce, the National Association of Workforce Boards, and groups 

representing industry. We also performed an extensive Internet search 

to identify programs that key agencies are sponsoring to meet high-

skill training needs.



[End of section]



Appendix II: Survey Sent to Skill Grant Recipients:



[See PDF for image]



[End of section]



Appendix III: Detailed Data on Skill Grant Programs:



The survey mailed out to the 43 grantees that received skill grants in 

the first three funding rounds provided much data on those programs. 

The tables below provide data from the surveys beyond the data provided 

in the report.



Table 4: Participants Enrolled in Training:



Responses: Participants who completed training; Number: 7,646; Percent: 

49.



Responses: Participants who left/dropped out of training; Number: 

1,238; Percent: 8.



Responses: Participants who are still in training; Number: 5,691; 

Percent: 37.



Responses: Participants who are waiting for training to start; Number: 

910; Percent: 6.



Responses: Total; Number: 15,485; Percent: 100.



Note: Based on 93 percent of the participants.



Source: GAO data from H-1B Skill Grant Survey.

:



[End of table]



Table 5: Gender of Participants:



Gender: Male; Number: 5,288; Percent: 57.



Gender: Female; Number: 4,066; Percent: 43.



Gender: Total; Number: 9,354; Percent: 100.



Note: Based on 56 percent of the participants.



Source: GAO data from H-1B Skill Survey.



[End of table]



Table 6: Age of Participants:



Age: 21 or under; Number: 401; Percent: 6.



Age: 22 - 39; Number: 3,497; Percent: 55.



Age: 40 - 54; Number: 2,088; Percent: 33.



Age: 55 and over; Number: 412; Percent: 6.



Age: Total; Number: 6,398; Percent: 100.



Note: Based on 39 percent of the participants.



Source: GAO data from H-1B Skill Grant Survey.



[End of table]



Table 7: Race/Ethnicity of Participants:



Race/ethnicity: American Indian/Alaskan Native; Number: 69; Percent: 1.



Race/ethnicity: African-American (non-Hispanic); Number: 1,524; 

Percent: 20.



Race/ethnicity: Asian; Number: 556; Percent: 7.



Race/ethnicity: White (non-Hispanic); Number: 4,841; Percent: 62.



Race/ethnicity: Spanish/Hispanic; Number: 504; Percent: 6.



Race/ethnicity: Other; Number: 312; Percent: 4.



Race/ethnicity: Total; Number: 7,806; Percent: 100.



Note: Based on 47 percent of the participants.



Source: GAO data from H-1B Skill Grant Survey.



[End of table]



Table 8: Employment Status of Participants at the Time of Enrollment:



Employment status: Employed; Number: 10,411; Percent: 73.



Employment status: Unemployed; Number: 3,793; Percent: 27.



Employment status: Total; Number: 14,204; Percent: 100.



Note: Based on 86 percent of the participants.



Source: GAO data from H-1B Skill Grant Survey.



[End of table]



Table 9: Education Status of Participants at the Time of Enrollment:



Education level: No high school diploma/GED[A] or equivalent; Number: 

132; Percent: 2.



Education level: High school diploma/GED or equivalent; Number: 1,937; 

Percent: 29.



Education level: Some college, but no degree; Number: 1,269; Percent: 

19.



Education level: 2-year college degree; Number: 718; Percent: 11.



Education level: 4-year college degree; Number: 2,218; Percent: 33.



Education level: Post-college degree; Number: 371; Percent: 6.



Education level: Total; Number: 6,645; Percent: 100.



[A] General Education Development (high school equivalency test):



Note: Based on 40 percent of the participants.



Source: GAO data from H-1B Skill Grant Survey.



[End of table]



Table 10: Participants Who Attained the Following as a Result of 

Program Participation:



Outcomes: Placed in new or upgraded positions; Number: 1796.



Outcomes: Increased wage/salaries; Number: 1571.



Outcomes: Attained 2-year college degree; Number: 33.



Outcomes: Attained 4-year college degree; Number: 61.



Outcomes: Attained certifications; Number: 2,582.



Outcomes: Attained licenses; Number: 101.



Outcomes: Attained industry recognized skill standards; Number: 1,870.



Note: Because participants may have achieved more than one outcome, we 

cannot tell what percent of the participants these numbers represent.



Source: GAO data from H-1B Skill Grant Survey.



[End of table]



Table 11: Organization Obtained or Tried to Obtain H-1B Visa 

Application Data to Identify Skill Shortages in High-Skill Occupations 

in Local Area:



(Continued From Previous Page)



Response: Obtained H1-B visa application data; Number: 23; Percent: 54.



Response: Tried to obtain H1-B visa application data, but were not 

successful in getting it; Number: 10; Percent: 23.



Response: Did not try to obtain H1-B visa application data; Number: 10; 

Percent: 23.



Response: Total; Number: 43; Percent: 100.



Source: GAO data from H-1B Skill Grant Survey.



[End of table]



Table 12: Other Methods Used to Identify Skill Shortages in High-Skill 

Occupations in Local Area:



Response: State/regional labor market information; Number: 42.



Response: Newspaper want ads; Number: 19.



Response: Expressed employer hiring demands; Number: 40.



Response: Other; Number: 27.



Note: Respondents could check more than one answer.



Source: GAO data from H-1B Skill Grant Survey.



[End of table]



Table 13: Number of Employers Needing High-Skilled Workers That 

Organization Worked with before and after Receiving the Grant:



Response: Number employers needing high-skilled workers that 

organization worked with at the time grant went into effect; Number: 

1,978.



Response: Number employers needing high-skilled workers that 

organization currently working with; Number: 2,648.



Source: GAO data from H-1B Skill Grant Survey.



[End of table]



Table 14: Role of One-Stop System in the H-1B Skills Training Program:



(Continued From Previous Page)



Response: One-stop operator manages the H-1B grant; Number: 15.



Response: One-stop operator serves as fiscal agent of the H-1B grant; 

Number: 15.



Response: Recruit/refer participants through one-stop centers; Number: 

34.



Response: Conduct intake/assessment at one-stop centers; Number: 25.



Response: Identify job openings for participants through one-stop 

centers; Number: 24.



Response: Match participants to job openings/employers through one-stop 

centers; Number: 24.



Response: Other; Number: 7.



Note: Respondents could check more than one answer.



Source: GAO data from H-1B Skill Grant Survey.



[End of table]



Table 15: Methods Grantees Plan to Use to Sustain the Skill Grant 

Training:



Response: WIA[A] program funds; Number: 22.



Response: WIA[A] statewide set-aside funds; Number: 5.



Response: Other federal programs/grants; Number: 23.



Response: State programs; Number: 19.



Response: City programs; Number: 8.



Response: County programs; Number: 8.



Response: Foundations; Number: 13.



Response: H-1B employers; Number: 20.



Response: Tuition assistance/remission; Number: 20.



Response: Other; Number: 11.



[A] Workforce Investment Act.



Note: Respondents could check more than one answer.



Source: GAO data from H-1B Skill Grant Survey.



[End of table]



Table 16: Gender of Participants in IT Training:



Gender: Males; Number: 2,061; Percent: 60.



Gender: Females; Number: 1,370; Percent: 40.



Gender: Total; Number: 3,431; Percent: 100.



Note: On the basis of grantees that provided information technology 

(IT) training only (19 grantees) and reported that they served a total 

of 5,672 participants. This response is based on 60 percent of the 

participants.



Source: GAO data from H-1B Skill Grant Survey.



[End of table]



Table 17: Race/Ethnicity of Participants in IT training:



Race/ethnicity: American Indian/Alaskan Native; Number: 24; Percent: 1.



Race/ethnicity: African American (non-Hispanic); Number: 1,069; 

Percent: 32.



Race/ethnicity: Asian; Number: 314; Percent: 9.



Race/ethnicity: White (non-Hispanic); Number: 1,753; Percent: 52.



Race/ethnicity: Spanish/Hispanic; Number: 186; Percent: 6.



Race/ethnicity: Other; Number: 44; Percent: 1.



Race/ethnicity: Total; Number: 3, 390; Percent: 100.



Note: On the basis of grantees that provided IT training only (19 

grantees) and reported that they served a total of 5,672 participants. 

This response is based on 60 percent of the participants.



Source: GAO data from H-1B Skill Grant Survey.



[End of table]



[End of section]



Appendix IV: Detailed Data on NSF’s Computer Science, Engineering, and 

Mathematics Scholarship Program:



This table provides additional data on the students in the Computer 

Science, Engineering, and Mathematics Scholarship Program.



Table 18: Characteristics of Computer Science, Engineering, and 

Mathematics Scholarship Recipients as of May 1, 2002:



Category: Gender; Characteristic: Male; Number: 4,610; Percent: 60.



Characteristic: Category: Female; Number: Category: 2,859; Percent: 

Category: 37.



Characteristic: CategoryAge[A]: No information; Number: 

CategoryAge[A]: 237; Percent: CategoryAge[A]: 3.



Category: Age[A]; Characteristic: 21 and under; Number: 3,462; Percent: 

45.



Characteristic: Category: 22-30; Number: Category: 3,016; Percent: 

Category: 39.



Characteristic: Category: 31-40; Number: Category: 857; Percent: 

Category: 11.



Characteristic: Category: 41-50; Number: Category: 282; Percent: 

Category: 4.



Characteristic: CategoryRace/ethnicity[B]: 51-72; Number: 

CategoryRace/ethnicity[B]: 88; Percent: CategoryRace/ethnicity[B]: 1.



Category: Race/ethnicity[B]; Characteristic: White; Number: 3,135; 

Percent: 45.



Characteristic: Category: African American; Number: Category: 1,409; 

Percent: Category: 20.



Characteristic: Category: Asian/Pacific Islander; Number: Category: 

961; Percent: Category: 14.



Characteristic: Category: Hispanic; Number: Category: 957; Percent: 

Category: 14.



Characteristic: Category: American Indian; Number: Category: 117; 

Percent: Category: 2.



Characteristic: CategoryMajor: Multiple ethnicity[C]; Number: 

CategoryMajor: 315; Percent: CategoryMajor: 5.



Category: Major; Characteristic: Computer Science; Number: 2,958; 

Percent: 38.



Characteristic: Category: Engineering; Number: Category: 2,844; 

Percent: Category: 37.



Characteristic: Category: Mathematics; Number: Category: 790; Percent: 

Category: 10.



Characteristic: Category: Computer Science and Engineering; Number: 

Category: 75; Percent: Category: 1.



Characteristic: Category: Computer Science and Mathematics; Number: 

Category: 27; Percent: Category: 0.



Characteristic: Category: Mathematics and Engineering; Number: 

Category: 9; Percent: Category: 0.



Characteristic: Category: Other; Number: Category: 44; Percent: 

Category: 1.



Characteristic: CategoryCharacteristic: No information; Number: 

CategoryNumber: 959; Percent: CategoryPercent: 12.



[A] Age when first entered the scholarship program. Information was not 

available on one student.



[B] Race/ethnicity data excludes 812 students for whom ethnicity was 

unknown.



[C] The majority of those with more than one category of ethnicity were 

White/Hispanic (242).



Note: Totals may not add to 100 percent due to rounding. :



Source: NSF Database on Computer Science, Engineering, and Mathematics 

Scholarship students.



[End of table]



[End of section]



Appendix V: Areas of Training for First 43 Skill Grants:



This table presents data on occupations for which the grantees train, 

as provided by the 43 grantees that received skill grants in the first 

three funding rounds.



Table 19: Occupations on Which Grantees from First Three Funding Rounds 

Provided Training:



[See PDF for image]



[End of table]



[End of section]



Appendix VI Key Federal Programs and Initiatives with a High-Skill 

Component:



The following programs and initiatives were identified as having at 

least a component that addresses the need for high-skills in the 

following ways: training; education and scholarships; recruitment to 

high-skill fields; collaborative efforts within/among agencies; and 

resources and information related to high-skill areas. This list is not 

comprehensive, but serves as an illustration of various efforts and 

resources that currently exist.



Agency/office: Department of Labor.



Agency/office: Secretary’s initiatives; Program/initiative: 21st 

Century Workforce Initiative-mission to ensure that all American 

workers have as fulfilling and financially rewarding a career as they 

aspire to have and make sure no worker gets left behind in the 

limitless potential of the dynamic, global economy of this new 

millennium.

Office of the 21st Century Workforce-created by executive order June 

20, 2001, to gather and disseminate information relating to workforce 

issues by conducting summits, conferences, meetings, and other 

appropriate forums. The executive order also established the 

President’s Council on the 21st Century Workforce to provide 

information and advice on issues affecting the 21st century workforce.

A Memorandum of Understanding is under development between the 

Department of Labor and the Department of Health and Human Services to 

address issues such as the nursing shortage..



Agency/office: Employment and Training Administration (ETA)/Office of 

Policy & Research; Program/initiative: H-1B Technical Skill Training 

Grants-provides grants for technical skills training to employed and 

unemployed individuals in occupations that are in employer demand. 

Grants are provided to local workforce investment boards, private 

industry councils or regional consortia, and to partnerships that 

consist of at least two businesses or a business-related nonprofit 

organization..



Agency/office: ETA/Office of Apprenticeship Training, Employer & Labor 

Services; Program/initiative: Information Technology Industry Outreach 

Initiative-Grant awarded to the Computer Technology Industry 

Association in 5/01 and ends in 12/02-to expand apprenticeship in the 

IT occupational area. This includes developing and testing an IT 

apprenticeship model in five pilot sites and creating a structure to 

market and support IT apprenticeships..



Agency/office: ETA/Office of Workforce Security/Division of One-Stop 

Operations; Program/initiative: Serves as the One-Stop office within 

ETA (national and regional offices) for any issues related to WIA and 

provides support to state and local officials as they build One-Stop 

systems. Also fosters partnerships on workforce issues with other 

federal agencies such as the Department of Education, the Department of 

Health and Human Services, and the Department of Housing and Urban 

Development..



Agency/office: ETA/Office of Adult Services; Program/initiative: WIA 

Adult and Dislocated Worker Programs-provide three levels of services 

to adults 18 years and older. These services include: core services 

(job search and placement assistance, etc.); intensive services 

(comprehensive assessments, case management, etc.); and training 

services (occupational skill training, skill upgrading, etc.)..



Agency/office: ETA/Office of Adult Services; Program/initiative: 

Discretionary grants that relate to H-1 B skill grants:; * Information 

Technology Association of America Grant-conduct a series of targeted 

activities to inform IT companies about the role of workforce 

investment boards in local communities.; * Skills Shortages, 

Partnership Training/System Building Demonstration Program-awarded 

grants to 11 states and the District of Columbia to help establish 

regional partnerships to respond to employers’ identified skill 

shortages.; * Minority Colleges and Universities Workforce Partnerships 

and Training Strategies to Address Skill Shortages Demonstration 

Program-awarded grants to 13 minority colleges and universities to 

develop new systems to train workers for high-skill jobs in areas where 

companies are facing labor shortages.; * Incumbent/Dislocated Worker 

Skill Shortage II Demonstration Program-awarded grants to 19 

communities to create projects or industry-led consortia to upgrade 

current workers, design/adapt training curricula in skill shortage 

occupational areas, and recruit/retrain workers in this area..



Agency/office: ETA/Office of Technology and Information Services; 

Program/initiative: Occupational Information Network-database 

accessible from any Web browser that contains comprehensive information 

on job requirements and worker competencies..



Agency/office: National Science Foundation; Program/initiative: 

[Empty].



Agency/office: Directorate for Education and Human Resources (EHR)/ 

Division of Undergraduate Education; Program/initiative: Computer 

Science, Engineering and Mathematics Scholarships-grants to 

postsecondary schools that distribute the funds as scholarships for 

academically talented, low-income students in computer science, 

computer technology, engineering, engineering technology, or 

mathematics.

Program for Gender Equity in Science, Mathematics, Engineering and 

Technology-grants to support research, demonstration, and 

dissemination projects that broaden the participation of girls and 

young women in science, mathematics, engineering, and technology 

education. Addresses middle school, high school, and undergraduate 

education.

Science, Technology, Engineering, and Mathematics Talent Expansion 

Program-planning and pilot grants to academic institutions to increase 

the number of students (U.S. citizens or permanent residents) pursuing 

and receiving associates or baccalaureate degrees in science, 

technology, engineering, and mathematics.

Noyce Scholarship Supplements-institutions of higher education that 

lead or are partnering in other NSF grants can receive supplemental 

funding for scholarships to encourage science, engineering, and 

mathematics majors and professionals to become K-12 mathematics and 

science teachers..



Agency/office: EHR/Divisions of Undergraduate Education and 

Elementary, Secondary & Informational Education; Program/initiative: 

Advanced Technological Education-grants to promote improvement in 

technological education at the undergraduate and secondary school 

levels by supporting curriculum development; preparation and 

professional development of college faculty and secondary school 

teachers; internships and field experiences for faculty, teachers, and 

students, and other activities..



Agency/office: Department of Commerce; Program/initiative: [Empty].



Agency/office: Technology Administration (TA)/Office of Technology 

Policy; Program/initiative: National Medal of Technology-presidential 

award to individuals, teams, or companies for accomplishments in the 

innovation, development, commercialization, and management of 

technology. First awarded in 1985. Review and study of high-tech 

workforce training programs in the United States-authorized by the 

American Competitiveness in the 21st Century Act of 2000.

Work Force Reports-The Digital Work Force: Building Infotech Skills 

at the Speed of Innovation--a report on the demand for highly skilled 

information technology workers and its August 2000 Update, and Digital 

Workforce State Data and Rankings.

Go 4 IT! Web site-maintains this site to provide information on IT 

education, employment, and training programs.

GetTech-partnership developed by the Department of Commerce’s Office 

of Technology Policy and the National Association of Manufacturer’s 

Center for Workforce Success to encourage young people, particularly 

those in middle school, to prepare for careers in mathematics, science, 

and technology..



Agency/office: TA/National Institute of Standards and Technology; 

Program/initiative: Manufacturing Extension Partnership-nationwide 

network of not-for-profit centers in over 400 locations nationwide to 

provide assistance to small and medium-sized manufacturers. If this 

assistance includes obtaining new equipment, these centers may provide 

training on the new equipment..



Agency/office: Economic Development Administration; Program/

initiative: Technology-Led Economic Development-Web site that 

identifies federal, state, and local initiatives related to technology-

led economic development..



Agency/office: Department of Education; Program/initiative: [Empty].



Agency/office: Office of Vocational and Adult Education (OVAE); 

Program/initiative: Preparing America’s Future-initiative that 

provides a framework to connect OVAE’s activities to support education 

reform and prepare the 21st century workforce. This effort organized 

three teams, High School Excellence Team; Community and Technical 

Colleges Team; and Adult Learning Team, to develop a coherent strategy 

for preparing America’s future with implications for policy and 

practice.

Carl D. Perkins Vocational-Technical Education Act Amendments of 

1998-provides federal funding for vocational and technical education 

programs and services to youth and adults. The majority of the funds 

are awarded as grants to state education agencies as State Basic Grants 

and Tech Prep Grants.; ; Career clusters-established 16 broad career 

clusters that consist of entry level through professional-level 

occupations in a broad industry area. Each cluster includes academic 

and technical skills and knowledge needed for further education and 

careers.

IT Career Cluster Initiative-partnership of the Education Development 

Center, Inc., the Information Technology Association of America, and 

the National Alliance of Business to create a national model and career 

cluster curricular framework for IT careers. This initiative is 

sponsored by the Department of Education and National School-to-Work 

Office.

Community Technology Centers program-grants to create or expand 

community technology centers that will provide disadvantaged residents 

of economically distressed urban and rural communities with access to 

information technology and related training..



Agency/office: Department of Health and Human Services; Program/

initiative: [Empty].



Agency/office: Health Resources and Services Administration; Program/

initiative: Grants to address emerging nursing shortage include:; * 

Advanced Education Nursing Traineeship grants.; * Advanced Education 

Nurse Anesthetist Traineeship grants.; * Geriatric Nursing Knowledge 

and Experiences in Long-Term Care Facilities grants.; * Nurse Faculty 

Development in Geriatrics grants.; * ; Cooperative agreements for 

health workforce research--available for state or local governments, 

health professions schools, schools of nursing, academic health 

centers, community-based health facilities, and other appropriate 

public or private nonprofit entities, including faith-based 

organizations to conduct research that will contribute to (1) the 

development of information describing the current status of the health 

professions workforce and (2) analysis of fundamental health workforce 

related issues..



Agency/office: National Skill Standards Board; Program/initiative: 

[Empty].



Program/initiative: Agency/officeProgram/initiative: Information 

Communications Technology Voluntary Partnership-sponsoring research 

for the development of skill standards and the potential alignment of 

industry-based certifications in the Information Technology and 

Telecommunications sector..



Source: Compiled by GAO from various Web sites.



[End of table]



[End of section]



Appendix VII Comments from the Department of Labor:



U.S. Department of Labor

Assistant Secretary for Employment and Training 

Washington, D.C. 20210:



AUG 28 2002:



Mr. Sigurd R. Nilsen:



Director, Education, Workforce, and Income Security Issues:



United States General Accounting Office Washington, DC 20548:



Dear Mr. Nilsen:



Thank you for your letter to Secretary of Labor Elaine L. Chao, 

providing the draft GAO report entitled “High Skill Training: Grants 

from H-1B Visa Fees Meet Specific Workforce Needs, But at Varying Skill 

Levels” (GAO-02-881). We very much appreciate the opportunity to 

comment on the draft report. We also value the professionalism of your 

staff in conducting the H-1B Technical Skills Training Grant 

Demonstration review and the constructive suggestions contained in the 

draft report.



We are pleased that GAO’s review found that the H-1B skills grant 

demonstration has helped improve partnerships among local workforce 

investment boards, businesses, and education and training 

organizations. A major goal of the Department of Labor is to respond 

firmly and clearly to business skill needs. This includes building 

sustained partnerships between the business community and the public 

workforce investment system created under the Workforce Investment Act 

of 1998 (WIA). By doing this, workers will be the ultimate beneficiary 

because they will be receiving more targeted training assistance that 

will lead to better jobs at higher wages.



A key GAO recommendation is that the Secretary of Labor take a 

“proactive approach to addressing high-skill workforce needs across the 

country.” The Department supports this recommendation and continues to 

identify ways that the public workforce system can provide leadership 

and solutions to this critical economic need. As GAO acknowledges, we 

have industry initiatives underway in the areas of information 

technology and health care, and we plan to expand our high growth job 

training partnerships to several other industries. Any components of 

the H1B skills grant demonstration that truly address high-skill 

workforce needs will be incorporated in our efforts.



I also want to take the opportunity to address the other key GAO 

recommendations. First, the draft report notes in several sections that 

participant and outcome data should be standardized and collected so 

that project outcomes can be obtained to determine whether goals and 

objectives have been met. It also notes the absence of a reporting 

system. The Department’s Employment and Training Administration (ETA) 

recently developed a standard format and content for the quarterly 

report required from grantees and briefed all current grantees on the 

new quarterly report format and requirements at the H-1B Grantee 

Conference held July 31 - August 1, 2002. A copy of the report and 

instructions is enclosed. Data elements required are specified, as is 

the content of the narrative section of the quarterly report. The new 

report will be effective for the quarter ending September 30, 2002.



ETA is developing a system to give grantees the option of completing 

their quarterly reports electronically. This gives ETA a more efficient 

way to review grantee information. In addition, ETA has completed an 

automated system to report financial data and has trained grantees on 

its use during the recent H-1B grantee conference; we expect it to be 

online by the end of December 2002. ETA also plans to award a contract 

to evaluate the impact of the H-1B grant program by the end of 

September 2002.



The GAO also recommended that the Department “establish mechanisms to 

share successful strategies among grantees and encourage networking.” 

We agree that this is an important objective. The GAO identified 

several ETA activities that supported this objective. More are planned. 

ETA also commissioned and has provided grantees copies of two process 

studies that contain considerable information about grantees’ best 

practices. We will provide additional technical assistance support for 

the H-1B demonstration project that includes the sharing of information 

and experiences leading to improved program performance.



The GAO raised a significant concern that the H-1B grant program 

guidelines “were confusing as to the skill level of training that 

grantees should provide.” It also notes that the Immigration and 

Naturalization Service (INS), in reviewing the first 43 H-1B grant 

projects, characterized about 40 percent of the occupations for which 

training was being provided as qualifying at the H-1B visa level. As 

GAO notes in its report, the current legislation authorizing the H-1B 

grant program (ACWIA 2000) specifically directs that H-1B skill grants 

be used not only for H-1B visa level training, but also for “the 

preparation of workers for a broad range of positions along a career 

ladder.” While we acknowledge that some training may not fully meet the 

H-1B visa level for baccalaurates or commensurate experience, this 

statutory provision contributes importantly to differences between the 

INS H-1B visa standard and some of the occupation training being 

conducted by H-1B technical skills grantees.



We recognize, as does the GAO report, that the H-1B technical skills 

grants are a demonstration project, and that the level of training 

issue is one of the “lessons learned.” We do believe that a measure of 

the ultimate success of this demonstration effort is whether the 

workers trained can mitigate the need for businesses to import high 

skill workers under the H-1B visa program. Therefore, we are monitoring 

carefully the various grant applications and awards, and whether they 

meet this objective. Future evaluation efforts will also take this 

objective into consideration.



I have enclosed some additional comments about observations in the 

draft report. Again, we appreciate your sharing the draft report with 

us and for the cooperation of the study staff. Please contact Gerri 

Fiala, Administrator, Office of Policy and Research, at 202-693-3665, 

for any clarifications or additional information.



Sincerely,



Emily Stover DeRocco



Signed by Emily Stover DeRocco



Enclosures:



Responses and Comments to GAO H-1B Report:



1. Page 6 GAO comment: “While Labor does not require a standard format 

for the narrative progress report...”:



Response: ETA has developed a standard format and content for the 

required quarterly report. Data elements required are specified, as is 

the content of the narrative section of the quarterly report. Grantees 

were briefed on the new quarterly report format and requirements at the 

grantee conference held July 31 - August 1, 2002. The new report will 

be effective for the quarter ending September 30, 2002.



2. Page 11 GAO comment: “Data on participants is limited because Labor 

did not establish standardized reporting requirements for the grantees. 

Grantees express frustration with the lack of a reporting system, which 

they had been told was in development...”:



Page 15 GAO comment: “In addition to participant demographic data, some 

grantees collect outcome data, although this data is limited and not 

standardized. In general, such data is not collected until after 

participants have ended their training...”:



Response: See response to #1 above. ETA has specified reporting 

requirements for both the quarterly progress report and for the final 

report. The data elements required to be provided by grantees are 

sufficient for progress monitoring and for project evaluation purposes. 

Grantees are required to report quarterly, including outcome data for 

the quarter as well as cumulative outcome data. In addition to 

identifying standardized elements for grantees to submit, ETA has 

sought alternative ways to ease grantees’ submissions of quarterly 

reports. ETA has been working on the development of a system to provide 

grantees the option of completing their quarterly reports 

electronically and sending the reports via email. The system will also 

provide ETA a more efficient way of reviewing quarterly information 

submitted by grantees. An automated system to report grantee financial 

data has been completed and will be online in the near future. Grantees 

were provided training on the automated financial reporting system 

during the recent H-1B grantee conference.



3. Page 34 Recommendations, GAO comment: “The Secretary of labor 

should:



*Identify the standard participant and outcome data that is needed...



*Establish mechanisms to share successful strategies among 

grantees...”:



Response: See responses I and 2 above. With respect to sharing 

strategies, ETA has sponsored two grantee conferences and has plans to 

sponsor additional ones as necessary. ETA is currently in the process 

of procuring additional technical assistance support for the H-1B 

demonstration project, and one of the key priorities is supporting the 

sharing of information and experiences among H-1B technical skills 

grantees. In addition to national conferences, Regional Offices have 

held H-IB grantee conferences to share information among grantees.



4. Page 4 GAO comment “In its solicitations for grant applications, 

Labor has provided guidelines that were confusing as to the skill level 

of training that grantees should provide.”:



Response: The Solicitation published on April 13, 2001, stated (p.4) 

that the ACWIA technical skills training is geared towards employed and 

unemployed workers who can be trained and placed directly in highly 

skilled H-1B occupations. Any possible confusion might be the:



result of the Department attempting to reconcile the statutory 

provision of training for jobs on career ladders with the very clear 

and primary goal of placing American workers in H-lB level jobs. 

Recognition of the legislative language in amended section 414(c)(2) 

should be included in the text of the report to explain any 

administrative “confusion.”:



5. Page 17 GAO comment “Even though grantees were interested in 

tracking outcomes of participants and had attempted to do so, they 

encountered a number of challenges.”:



Response: The paragraph which the above sentence begins recognizes one 

of the problems faced by DOL in administering this grant program - how 

to collect and measure outcomes. For example, some positive results 

(noted by GAO) include participants gaining a skill and thereby not 

being laid off in a reduction which occurred because of a recent dip in 

the economy.



6. Page 1 GAO footnote: ETA suggests the full definition of H-lB level 

skill included so that readers will have the complete definition from 

the beginning of the report.



7. Page 5: GAO may want to note that, in addition to the funds used for 

technical skills grants, under ACWIA a small portion of the funds going 

to Labor from H-1B visa fee applications are used for processing alien 

labor certifications.



8. Page 7: GAO may want to note that the matching fund requirement 

under ACWIA 2002 is a statutory requirement, not a DOL established 

requirement.



9. Page 16 GAO observation on the two-year time frame of grants: ETA is 

aware of the concerns by some grantees and partners that two years may 

not be sufficient time to reach an H-1B skill level. Any future 

solicitations will take this into account, using a three-year time 

frame for grants.



10. Page 17 GAO observation on exemplary practices report: ETA 

sponsored and has distributed two process analysis reports; the 

exemplary practices report was the second. Both reports have been 

distributed to all grantees and both reports are posted on the H-1B 

website.



[End of section]



Appendix VIII: Comments from the National Science Foundation:



NATIONAL SCIENCE FOUNDATION 4201 WILSON BOULEVARD ARLINGTON, VIRGINIA 

22230:



OFFICE OF THE DEPUTY DIRECTOR:



August 26, 2002:



Mr. Sigurd R. Nilsen Director:



Education, Workforce, and Income Security Issues United States General 

Accounting Office Washington, DC 20548:



Dear Mr. Nilsen:



We appreciate the opportunity to comment on the draft report, “High-

Skill Training: Grants from H-1B Visa Fees Meet Specific Workforce 

Needs, But at Varying Skill Levels.” The report is generally accurate 

in its discussion of NSF’s Computer Science, Engineering, and 

Mathematics Scholarship (CSEMS) program and of the modifications NSF 

has made to improve the program since it made its first awards two 

years ago.



To date, NSF has made awards to 277 colleges and”universities; and they 

have awarded scholarships to almost 8000 undergraduate ‘and graduate 

students. As part of the grants, awardee schools have collected 

extensive data about their students, such as major field of study, 

demographics, and progress toward the degree. We are pleased to see 

that these data have been useful in this report, and they are also 

being used as part of a CSEMS program evaluation conducted by an 

external evaluator.



The draft report calls attention to the difficulty some early awardee 

schools had in finding students who met all the eligibility 

requirements. Effective January l, 2002, NSF broadened the requirements 

for all awardees so that students are required to be eligible for need-

based Federal financial aid, rather than the more restrictive Pell 

eligibility. This change has broadened the group of students who are 

eligible while retaining the requirement for financial need that is 

part of the legislation establishing the program. We have received many 

favorable comments ‘about the change. In addition, the report comments 

that project directors want some mechanism to “share best practices 

among themselves. There has been some sharing of information informally 

through NSF staff, and, as noted in the draft report, NSF is already 

planning a project director’s meeting, probably in Washington in the 

spring of 2003. The NSF staff talk with many of the project directors, 

and we try to respond to suggestions for improving the effectiveness of 

the projects, as we have in these two instances.



Some technical comments on the draft are as follows:



*On page 27, the pie chart shows the percentage of majors in the 

scholarship program, and the data are given on page 55. It appears that 

the sectors in the chart for “Computer Science” and “No information” 

have been switched. From the data, computer science should be 38% and 

no information should be 12%.



As noted in several places in the draft, NSF broadened the scholarship 

eligibility requirements for all awardees. That change is noted on page 

3, page 21, and page 33, but not at the end of the first paragraph on 

page 8, each of which points out the difficulty some awardees had in 

recruiting enough students under the previous requirement. We suggest 

that the change be noted on page 8 as well.



On page 7, the draft notes that “Schools may request an additional 5% 

of grant funds [for] administrative costs....” It is a small 

difference, but they may actually request an additional 5% of the total 

requested scholarship amount for administrative costs. For 

completeness, it should be noted that they may in addition request 5% 

of the total requested scholarship amount for student support services, 

and these services are important in helping to retain students and 

encourage achievement among the scholarship recipients.



Sincerely,



Joseph Bordogna, Deputy Director:



Signed by Joseph Bordogna



[End of section]



Appendix IX Comments from the Department of Commerce:



This text file was formatted by the U.S. General Accounting Office 

(GAO) to be accessible to users with visual impairments, as part of a 

longer term project to improve GAO products’ accessibility. Every 

attempt has been made to maintain the structural and data integrity of 

the original printed product. Accessibility features, such as text 

descriptions of tables, consecutively numbered footnotes placed at the 

end of the file, and the text of agency comment letters, are provided 

but may not exactly duplicate the presentation or format of the printed 

version. The portable document format (PDF) file is an exact electronic 

replica of the printed version. We welcome your feedback. Please E-mail 

your comments regarding the contents or accessibility features of this 

document to Webmaster@gao.gov.



UNITED STATES DEPARTMENT OF COMMERCE The Assistant Secretary for 

Technology Policy Washington, D.C. 20230:



SEP 4 2002:



Mr. Sigurd R. Nilsen:



Director, Education, Workforce, and Income Security U.S. General 

Accounting Office:



441 G Street, N.W. Washington, DC 20548:



Dear Mr. Nilsen:



The Department of Commerce appreciates the opportunity to review the 

General Accounting Office draft report, GAO/RCED-02-881, “HIGH SKILL 

TRAINING: Grants from H-1B Visa Fees Meet Specific Workforce Needs, But 

at Varying Skill Levels.”:



The Commerce Department finds serious methodological and analytical 

weaknesses in the GAO review of the high-tech training programs 

supported with funds from the H-1B Petitioner Account.



First, Commerce notes with great concern GAO’s choice to focus almost 

exclusively on the grants made during the first three rounds of the 

Labor Department’s skill grants program. Importantly, the later 

competitions were conducted under legislative changes to the program 

made in 2000 under the American Competitiveness in the Twenty-First 

Century Act (PL 106313). These changes have substantially affected, and 

will continue to affect, the implementation of the grants. In addition, 

the subsequent competitions account for more than half of the funds 

distributed under the program. While we recognize that the grantees 

from the later competitions have yet to produce results to assess in 

terms of program outcomes, we believe that the composition of the 

training to be provided has been impacted substantially by changes in 

the law and in the Labor Department’s program implementation and 

grantee selection.



A review of these later grants, in our view, is necessary for GAO to 

achieve its stated goal of addressing the issue of “whether the skill 

grant and scholarship training is based on workforce needs and specific 

jobs that H-lB visa holders fill.” There have been conflicting signals 

in the course of the development and implementation of the Labor 

Department’s program that have affected the selection of grantees and 

their training objectives. Public statements from executive and 

legislative branch officials during the crafting and passage of the 

American Competitiveness and Workforce Improvement Act of 1998 centered 

on using the funds collected from H-1B visa applications to meet the 

Nation’s future need for high-skill, high-wage workers by preparing 

Americans for jobs currently held by H-1Bs. In the Labor Department’s 

public statements and its Solicitation for Grant Applications (SGAs), 

especially those used in the early rounds, this

connection was clear though the legislation did not speak to this goal. 

In the later competitions, this objective seems to have become less 

clear as a result of legislative changes and the Labor Department’s 

implementation. Whereas H-1 Bs are required to have a four-year degree 

(or equivalent skills and experience) in the field in which they are to 

be employed, Congress broadened the training objectives of the Labor 

training program in 2000 to include “the preparation of workers for a 

broad range of positions along a career ladder.” In addition, Congress 

defined the type of skills training to be provided, specifying “high 

technology, information technology, and biotechnology.” Judging by the 

outcome of the later competitions, these new criteria seem to have 

created ambiguity in the grantee selection process with respect to the 

occupations and skill levels to be trained. A significant amount of 

training is now being provided for skill-levels below that required to 

receive an H-1B visa, in areas for which there is no demonstrated 

“career ladder” to an H-1B occupation, for occupations not classified 

as an H1 B occupation, and in occupations not articulated by the 

legislation.



For example, in the Department’s 2002 grants, more than 30 percent of 

the grants went to training low-level healthcare workers, most on a 

career ladder to Registered Nurse (RN), yet RNs are not admitted to the 

United States on an H-1B visa. This would also seem to be in 

contradiction of another provision of the 2000 law (which GAO does not 

mention in its review) which specifies, “No more than 20 percent of the 

grants shall be available to programs and projects that train employed 

and unemployed workers for skills related to any single specialty 

occupation.” The Bureau of Labor Statistics classifies the educational 

requirement for RNs as an associates degree, though they may also 

qualify for state licensure through a hospital vocational diploma 

program or by earning a bachelor’s of science in nursing (B.S.N.) 

degree. Also, while the review notes that the Immigration and 

Naturalization Service (INS) states that nurses “could be H-1B 

equivalent for supervisory or management level positions,” the grants 

awarded in 2002 do not include supervisory training.



Commerce also notes with concern GAO’s failure to address the 

disconnect between the occupations that grantees selected in the latest 

WIA-focused competitions (under SGA/DFA 01105) are providing training 

for and the occupations of those coming into the United States on H1B 

visas. While fully half of the grantees (12 of 24) selected in these 

competitions indicated training efforts focused on nursing or 

healthcare occupations, only 42 percent (10 of 24) of grantees are 

training for IT occupations.This stands in stark contrast to H-1B visa 

statistics published by the Immigration and Naturalization Service 

(INS) for FY 2001 which show “computer-related occupations” accounting 

for more than 58 percent of H-1B visas, while only 3.9 percent of H-1B 

visas were issued to those in “occupations in medicine and health” (of 

which a substantial share, 44 percent, were issued to “physicians and 

surgeons”). Clearly the training focus of grantees selected in the 2000 

competitions is out of sync with the portfolio of occupations for which 

H-1B visas were issued.



In addition to this disconnect, it is unclear what statutory language 

the Department of Labor is relying on in providing training grants for 

nursing and healthcare occupations given that the 2000 law directs 

funding for “high technology, information technology, and 

biotechnology.”



Second, throughout its review, GAO frequently refers to workforce 

shortages, particularly in information technology (IT), computer 

science, mathematics and engineering. This review by GAO fails to 

provide clear, complete, and compelling evidence for a shortage of 

workers in any of these occupations. The Commerce Department’s 

extensive analysis in this arena shows that while in recent years there 

had been evidence indicating a tight labor market for highly-skilled IT 

workers, there was no way to establish conclusively the existence of an 

overall IT workforce shortage due to limitations of available data. In 

1998, GAO itself endorsed Commerce’s position that current statistics 

frameworks and mechanisms for measuring labor supply do not allow for 

precise identification of IT worker shortages. In addition, the recent 

economic downturn has adversely affected employment growth in IT 

occupations. In 2001, the Department of Labor’s Current Population 

Survey indicated that employment in IT occupations declined by 1.6 

percent, after recording 10.9 percent compounded annual growth from 

1995 to 2000. Given that rapid employment growth is a critical criteria 

for ascertaining a workforce shortage, this would argue strongly 

against a current shortage in IT occupations broadly.



The review also indicates that H-1B visas serve as a measure for 

workforce shortages/national workforce needs and uses terminology 

suggesting that H-1B use is based on a requirement unfilled by the 

domestic workforce, e.g. “companies needing H-1B workers,” yet 

employers are not required to attest that they cannot find an American 

worker for the position when applying for an H-1B visa. Employers seek 

workers under the provisions of H-1B for a variety of reasons including 

securing knowledge and skills to enable their companies to better serve 

overseas markets, to continue relationships established with these 

workers during their courses of study in U.S. universities, and because 

some of these workers are perceived to be superior choices for 

competitive companies. Accordingly, Workforce Investment Boards (WIBs) 

using H-1B visa data should explore their local employers’ underlying 

reasons for use of these workers.



GAO appropriately questions the Department of Labor’s use of the 

occupations indicated in Labor Condition Applications (LCAs) as a guide 

for WIBs in assessing workforce needs. In fact, many positions 

certified through LCAs are never filled by employers. And while 

Commerce is inclined to believe that the portfolio of occupations 

represented in LCAs may not ultimately reflect the portfolio of 

occupations of those granted H-1B visas, it is analytically unsound for 

GAO to reach this conclusion by comparing 1999 LCA data to 2001 H-1B 

visa data. If, in fact, the visa list is more accurate for determining 

current H-1B occupations in demand, then GAO should recommend the 

Department of Labor make this data available to the applicants, the 

panelists reviewing applications, and the Department’s grant officers. 

If the visa data is less current than the LCA data, GAO should 

recommend that INS make its visa data available in a more timely 

fashion to better ensure that the skill training is based on specific 

jobs that H-1B visa holders fill.



Commerce also notes with concern that SGAs issued by the Department of 

Labor on August 1, 2000 and April 13, 2001 include LCA numbers that 

purport to represent different time periods (parts of FY 1999 and FY 

2000, respectively), yet the numbers of LCAs for each occupation are 

identical. Notwithstanding our above mentioned reservations about the 

use of LCAs, given that the Labor Department included LCAs numbers to 

provide guidance to potential applicants and that GAO reports that some 

grantees reported difficulty finding H-1B visa data, Commerce believes 

that this error could have misguided applicants.



Third, GAO is inconsistent in how it reports the educational 

requirements of H-1Bs. According to the law, an H-1B must have “(A) 

theoretical and practical application of a body of highly specialized 

knowledge, and (B) attainment of a bachelor’s or higher degree in the 

specific specialty (or its equivalent) as a minimum for entry into the 

occupation in the United States.” To meet the “equivalent” standard, an 

H-1B must have “(i) experience in the specialty equivalent to the 

completion of such degree, and (ii) recognition of expertise in the 

specialty through progressively responsible positions relating to the 

specialty.”



GAO argues that “Unlike other fields, occupations in the IT field are 

difficult to classify as to the level of education degree they 

require.” In support of this thesis, GAO offers a non-sequitor: that 

the Bureau of Labor Statistics’ (BLS) Occupational Outlook Handbook 

notes that IT workers have degrees from a variety of disciplines. We 

readily acknowledge that IT workers come from a variety of academic 

disciplines, as our 1998 report, The Digital Workforce: Building 

Infotech Skills at the Speed of Innovation, illustrated. However, it 

should be noted that 68.4 percent of the IT workforce in 2001 held a 

bachelor’s or higher-level degree, up from 64.9 percent in 1995. An 

additional 9 percent hold an associate’s degree. In addition, BLS’s 

biennial occupational projections for the 2000 to 2010 period indicate 

that three-quarters of new IT jobs will be in IT occupations that 

generally require a bachelor’s or higher-level degree. The remaining 

onequarter of new IT jobs will be in occupations that generally require 

an associate’s or higher-level degree. GAO fails to contrast this with 

the educational profile of the grantees it generated through its own 

survey that shows only 39 percent with four-year degrees and 11 percent 

with two-year degrees. GAO also fails to contrast this with the outcome 

that only 94 (1.2%) of the grantees’ 7,646 participants earned a two-or 

four-year degree through the program.



The GAO review provides extremely limited information on the level and 

type of training provided by the grantees. While the review suggests 

that nearly all grantees provided IT training, it fails to distinguish 

between training designed to use information technology on the job 

(such as the Microsoft Officer User Specialist (MOUS) certification, 

which provides workers with basic office software skills such as word 

processing, spreadsheets, and presentations) and training to prepare a 

worker to become an IT professional (such as a Certified Network 

Engineer or Microsoft Certified Systems Engineer). Even among those 

receiving training to become an IT professional, there is a vast range 

of knowledge and skills in each of the occupational areas. For example, 

someone trained in HTML programming to maintain an informational 

website versus someone capable of designing and implementing a web-

based e-Commerce enterprise integration solution for a multinational 

corporation, though both of these could be classified in the occupation 

“Web Development/Administrator” provided in Appendix V of the review. 

Nor do the knowledge and skills represented by a Certified Novell 

Engineer certification equate with those gained through completion of a 

four-year computer engineering curriculum, though those holding either 

might be referred to as a “computer engineer.”



In addition, technical skills are only one of several assets employers 

evaluate in selecting candidates for higher-skill IT jobs. In addition, 

employers seek formal education (generally at the bachelor’s level or 

higher), experience (“real world,” paid, hands-on; sometimes in both a 

specific technology and specific industry), soft skills (ability to 

work in a team, problem-solving, oral and written communication), and 

business skills (ability to apply technology to business problems, 

requirements analysis, customer orientation).



The Labor Department’s technical skills training program does not 

address the complete set of knowledge and skills that workers need to 

compete for high-skill IT jobs. The review confuses the ability to 

perform one aspect of a high skill-level job with being prepared for 

that job. For example, the review suggests that through training 

electronics technicians were being upgraded to junior engineers through 

a grantee’s training. These junior engineers would also be capable of 

performing one of the functions (testing) of the senior engineers, some 

of who were H-1Bs. GAO’s review implies that this might reduce this 

employer’s’ need for an H-1 B, but clearly this newly trained junior 

engineer does not have all of the requisite education, skills and 

experience to fill the slot of a senior engineer occupied by an H-1B.



Third, as currently structured, the “career ladder” concept is critical 

to the program’s success in preparing students for H-1B-level jobs. 

Commerce believes that GAO should have explored: how effectively the 

grantees identified effective career ladders in the occupations for 

which they provided training, the skills necessary to put a student on 

a particular rung of the ladder, and whether they had conveyed to the 

student an understanding of the career ladder and its rungs (including 

requisite education, training and experience) to enable the student to 

successfully navigate to an H-1B level position.



Commerce believes that the GAO review should include the following 

recommendations regarding the Labor Department’s skills grant program

greater clarity in the goals of the program,



stronger emphasis on recruiting and providing technical skills training 

to those with twoand four-year degrees in non-technical fields;

stronger emphasis on providing formal education opportunities leading 

to two-and fouryear degrees;



more extensive and rigorous data collection by the grantees and the 

Department of Labor, and more rigorous evaluation of program, including 

grantees’ achievement of 

stated goals and the program’s preparation of workers for high-skill 

jobs currently held by H-1Bs.



Commerce also has several concerns with respect to GAO’s review of the 

National Science Foundation’s Computer Science, Engineering and 

Mathematics Scholarship (CSEMS) program. Commerce believes GAO did not 

address several important issues affecting the success of this program 

in adding to the number of Americans educated in these disciplines. 

Commerce would like to have seen GAO explore 

Whether the scholarships are actually attracting students into the 

CSEMS disciplines who would otherwise not have pursued degrees in these 

disciplines (i.e., those who would have pursued a degree in another 

discipline or those who would not have pursued a degree of any kind).



Whether the number of graduates in these disciplines is increased by 

the scholarships or whether others that might have majored in these 

disciplines were displaced from their seat by a scholarship student in 

an institution with limited space. The large increase in the number of 

students majoring in computer science in the last few years has 

resulted in some institutions reaching full capacity in their computer 

science programs.



The effect of the size of the scholarship (maximum of $3,125 per year 

for up to four years) on the number and quality of the scholarship 

candidates. Given the high cost of tuition, room and board at many 

four-year universities, it seems that the size of the scholarship may 

be inadequate, especially for those attending private four-year 

universities. It would have been useful if GAO had provided the cost of 

tuition, books, fees and estimated living expenses at the six schools 

it visited. Commerce questions whether the scholarships are effective 

at enabling low-income part-time students to become full-time students 

by using these limited funds to cover non-academic expenses such as 

transportation, housing and child care. Also, Commerce’s reading of the 

CSEMS enabling legislation casts doubts on the use of these scholarship 

funds for these nonacademic purposes.



The effect of the size of the scholarships in attracting the interest 

and applications of community colleges and four-year colleges and 

universities.



Minor editorial changes have been provided to the General Accounting 

Office under separate cover. The Department of Commerce hopes that the 

comments in both letters will be helpful in the preparation of the 

final report. If there are any questions regarding this response, 

please contact John Sargent at (202) 482-6185.



Sincerely,



Bruce Mehlman 

Assistant Secretary for Technology Policy:



Signed by Bruce Mehlman



[End of section]



Appendix X: GAO Contacts and Staff Acknowledgments:



GAO Contacts:



Sigurd R. Nilsen, Director (202) 512-7215

Joan T. Mahagan, Assistant Director (617) 565-7532:



Staff Acknowledgments:



In addition to those named above, Laura J. Heald, Carol L. Patey, and 

Tatiana Winger made important contributions to this report. Stuart M. 

Kaufman, Corinna A. Nicolaou, and Beverly Ross also provided key 

technical assistance.



FOOTNOTES



[1] Under the H-1B program, specialty occupations are those requiring 

theoretical and practical application of a body of specialized 

knowledge and the attainment of a bachelor’s or higher degree (or its 

equivalent) in the specific specialty. These can be in a range of 

fields from architecture, engineering, and mathematics to medicine, 

education, theology, and the arts, but the majority of H-1B visa 

petitions approved are for computer-related occupations. H-1B visas may 

also be awarded to fashion models of distinguished merit and ability 

but this report does not focus on them.



[2] The balance of the funds is directed toward nontraining activities.



[3] We consulted INS for their views on how the occupations in which 

skill grants were training compared to H-1B positions.



[4] Assessments were also made for visa extensions and employment 

changes.



[5] Fifteen percent is allotted for a direct or matching grant program 

to support private-public partnerships in education for kindergarten to 

grade 12, 4 percent to decrease processing times for H-1B petitions, 

and 4 percent for labor condition application processing and 

enforcement.



[6] As part of the reforms under WIA, local workforce investment boards 

replaced private industry councils, the local administrative entity 

under JTPA. While private industry councils provided oversight and 

could operate local JTPA programs, workforce investment boards provide 

oversight but are prohibited from directly providing services unless 

they receive a waiver from the governor. Even though WIA passed in 

1998, local areas were not required to establish boards until July 1, 

2000, which means many private industry councils were still in place at 

the time the skill grants were authorized. 



[7] The front-line grant monitor is called a Grant Officer’s Technical 

Representative.



[8] Pell grants are based in part on students’ financial need and their 

cost of attendance. Students eligible for Pell grants must have lower 

incomes than for other types of federal student aid. Pell grants do not 

need to be repaid. Students can receive both Pell grants and these 

scholarships.



[9] WIA establishes one-stop centers as the access point for 

employment-related and training services.



[10] Although we received completed surveys from all 43 grantees in the 

first three rounds of grant awards, information on demographics was 

generally provided for less than half of the total number of training 

participants. Data with low response rates may not be generalizable to 

all skill grant participants.



[11] Based on data on those grantees that train for IT occupations 

only. Data for participants on whom information was known (not only 

those from grantees that train exclusively for IT occupations) indicate 

that 43 percent are female, 20 percent are African Americans, 

7 percent are Asian, and 6 percent are Hispanic.



[12] The Bureau of Labor Statistics data describes workers in these key 

IT-related occupations. However, it does not represent all of the IT-

related occupations and skill sets trained for in the skill grant 

training program.



[13] More applications are certified than visas approved for several 

reasons, such as applications approved for anticipated employment that 

does not transpire. 



[14] See Building a Foundation for Tomorrow: Skill Standards for 

Information Technology, by the Northwest Center for Emerging 

Technologies, now called the National Workforce Center for Emerging 

Technologies. This study was sponsored in part by the National Science 

Foundation.



[15] The site address is http://www.doleta.gov/h-1b/. 



[16] INS noted that many of the occupations they characterized as not 

H-1B equivalent could be found to be H-1B equivalent and vice versa, 

depending on the facts contained in an individual petition. For 

example, many of the “technician” positions frequently require only a 

2-year associate degree in a given field, or a baccalaureate degree in 

an unrelated field and experience. However, an employer could require 

at least a baccalaureate degree in the given field and the actual 

duties could be presented as quite complex. INS added that other 

occupations, such as nurses and radiology technicians, generally are 

not H-1B equivalent; however, they could be H-1B equivalent for 

supervisory or management level positions.



[17] The National Skill Standards Board was created by the National 

Skill Standards Act of 1994 to develop a voluntary national system of 

skill standards, assessment, and certification systems. 



GAO’s Mission:



The General Accounting Office, the investigative arm of Congress, 

exists to support Congress in meeting its constitutional 

responsibilities and to help improve the performance and accountability 

of the federal government for the American people. GAO examines the use 

of public funds; evaluates federal programs and policies; and provides 

analyses, recommendations, and other assistance to help Congress make 

informed oversight, policy, and funding decisions. GAO’s commitment to 

good government is reflected in its core values of accountability, 

integrity, and reliability.



Obtaining Copies of GAO Reports and Testimony:



The fastest and easiest way to obtain copies of GAO documents at no 

cost is through the Internet. GAO’s Web site ( www.gao.gov ) contains 

abstracts and full-text files of current reports and testimony and an 

expanding archive of older products. The Web site features a search 

engine to help you locate documents using key words and phrases. You 

can print these documents in their entirety, including charts and other 

graphics.



Each day, GAO issues a list of newly released reports, testimony, and 

correspondence. GAO posts this list, known as “Today’s Reports,” on its 

Web site daily. The list contains links to the full-text document 

files. To have GAO e-mail this list to you every afternoon, go to 

www.gao.gov and select “Subscribe to daily E-mail alert for newly 

released products” under the GAO Reports heading.



Order by Mail or Phone:



The first copy of each printed report is free. Additional copies are $2 

each. A check or money order should be made out to the Superintendent 

of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 

more copies mailed to a single address are discounted 25 percent. 

Orders should be sent to:



U.S. General Accounting Office



441 G Street NW,



Room LM Washington,



D.C. 20548:



To order by Phone: 	



	Voice: (202) 512-6000:



	TDD: (202) 512-2537:



	Fax: (202) 512-6061:



To Report Fraud, Waste, and Abuse in Federal Programs:



Contact:



Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail: fraudnet@gao.gov



Automated answering system: (800) 424-5454 or (202) 512-7470:



Public Affairs:



Jeff Nelligan, managing director, NelliganJ@gao.gov (202) 512-4800 U.S.



General Accounting Office, 441 G Street NW, Room 7149 Washington, D.C.



20548: