A study assessed the formulas used to distribute funds to the states under the Workforce Investment Act (WIA) 1998. It identified mismatches that might exist between the formulas and WIA's program goals and populations served and identified where the formulas are most vulnerable to wide fluctuations in funding levels from year to year. Issues associated with the current formulas were found in three areas. The first issue was that some of the factors used in the formulas to allocate funds were clearly not aligned with the programs' modified target populations. The second issue was that there are time lags between when the data are collected and when the allocations are available to states, so the allocations may not reflect current labor market conditions. The third issue was excessive volatility in funding for the Dislocated Worker Program unrelated to fluctuations in the target populations. (The five-page report is accompanied by these extensive appendixes: WIA allocation formulas; current Federal job training allocation formulas; program year 2002 youth and adult allocations; and state dislocated worker allocations, PY 1997-PY 2002.) (YLB)