The study described in this report was conducted to explore the problems with, and possible alternatives to, the current Title IIA and IIB allocation formula required by the Job Training Partnership Act (JTPA). The study included a literature and legislation review; interviews with practitioners, public interest groups, and Congressional staff to identify concerns; and empirical analyses using a variety of secondary data sources to assess the scope and dimension of problems identified with the allocation formula. This report is organized in six chapters. The first chapter provides background information on the allocation formula and the methodology of the study. Chapter 2 reviews the JTPA Title IIA and IIB allocation formula. Included in this chapter is a description of exactly how the formula works as well as a summary of major problems and concerns that have arisen since they were implemented in 1983. Chapter 3 assesses the distributional equity of the current formula. Particular attention is devoted to the geographic distribution of target populations underlying the formula factors and the extent to which they overlap. Chapter 4 addresses the issue of funding stability. Focusing primarily on the service delivery area level, it explores funding changes over the years. Chapter 5 addresses the adequacy of data and data sources that support the current allocation formula. The final chapter of the report assesses a number of alternatives to the current allocation formula. Based on the research presented in the previous chapters, it reviews a number of options that can more effectively promote distributional equity, data accuracy, and increased funding stability. Appendixes present references, detailed data tables, and a brief review of the use of allocation formulas in recent employment and training legislation. (KC)