lllllulllNlllllllllll lllllllllllllll~llllll LM08932-i Dear Dr, Fdeber: The General Accounting Office has made a survey of two Department of Labor 6DOL) contracts awarded to the Chicago Urban League (CULj for the purpose of promoting on-the-job (OJT) training in the Chicago area under the Manpower Development an’d Training Act of 1962, as amended. our survl2~’ was directed primari3.y to CUL*s contract performance during the period f;oa~ St!]:JtCIEibCY: 15, 1968, t0 May 31, 1969, but also included some review of Ci’L’s O.I’T contract operations prior to this period. Our survey was made pura:~nL to authority contained in the Budget and Accounting Act, I.921 (31 U,S.C..531 and the Awounting and A*uditin g Act of 1950 (31 U.S.C. t57)2ubd to speciiic n.uthority contained in the contracts. CUL has received two contracts from DCL, the first dating back to \:I L117L? I 30 3 1965” The first contract called for CUL to subcontract with local I~U1’1i nc s s and industry for the training of a minimum of 300 unempLoycd or u~lcl.~~rc~;cipl~ycd persons in entry-level, skill improvement or ski 1.1 convers icjn t\.rp~ ~~~~sitions during the period from June 30, 196.5, through July 31, l%ij,, i'lnt.:: cmri l.ract amlount was $237 1 324, Six modifications were ma.de to the ci):i-' I, ~~'i'b:::.l.bilich cxtcnded the contrt;ct pcl"e'iod tci Sept,ember 15 1 I.967 1 and inc~-~2~cd 1 ili: number of trainee positions to 525 with no increase in the contract cl IIUJLLZ? 1: 0 ?“hc saxmd contract called for CUL to subcontract for the training 05 ?iiQ unc~n~ployed and underemployed persons ) primarily-in entry-level positions, ,il ;R ~0~1 01 $421,712 during the period September 15, L967, to Sei2tember iii, i. 9 ;I s m i2dclitional funds of $84,O(sO from the Office of Economic Op?ortuniiy x:::I*c Ixovidccl for administration in connection with a separate CUL agree-5 SST IIK~R-~~..with The Woodlawn Organization, This agreement was incorporated in?o ill K? hasi c nor, contra,ct and allocated 500 of the 900 QJT positions for -Lra;w~~ iii:,: 01 yr~uths from the target area of The Woodlawn Organization. The Zili.nois L-li.,at:c: ~hploymcnt Service (ISES) was responsible under this contract for -I 8ccr~if)rin& the eligibility of persons participating in the OJ’T program, 2- ):* :’ * -3- As a result of our survey we questioned payments totaling about $2,000 which were made to subcontractors for (1) periods when trainees were not on the job, (2) training which was apparently not received by the trainees, and (3) trainees who were apparently never employed by the subcontractors to whom reimbursements were made. An additional $5,800 was paid to subcon- tractors for training certain persons under The Woodlawn Organization agre’ement who were not connected with that organization. These payments were made in contravention of DOL requirements placed on The Woodlawn Organization subcontract. We found also that, although CUL's first contract had terminated on September 15, 1967, an unexpended balance of about $1,300 had been retained by CUL as of July 17 1 1969. We noted that prior to awarding subcontracts for QJT, CUL did not ascertain either the number of employees normally trained by the subcon- tractors or the subcontractors f precontract level of expenditures for I: raining 0 We believe that there is a need to establish the level of the subcontractors I prior efforts P to help avoid the payment of training expend- itures that subcontractors should bear under the maintenance-of-effort requirements of their contracts s We believe that a number of the weaknesses which we found in CUL op’erations in Chicago, as discussed above, could have been identified and corrected earlier if more effective monitoring had been performed by DOL. Our survey show’ed that the Regional Manpower Administration OJT staff ~dcvoted most of its time to administrative matters and that up until the initiation of our review only one monitoring visit had been made of the OJT cnntrci.ct s with GUL, Monitoring responsibilities, as ‘defined by DOL, generally involve site inspections and reviews of reports submitted by the contractors. The objec- Live of such monitoring, it is stated, is to ensure compliance with the 1053: cc~~tra.ct provisions and with the Departmenrs Ds instructions) procedures) and poIic:icG, and to recommend program and administrative improvements where neeeseary oa Tn June and July 1969, we discussed our findings with officials of GUL, “ihe ISES, and the Regional Manpower Administrator, Regional Manpower Administration officials agreed with most of our findings andoutlined certain corrective actions planned. The DOL Regional Manpower Administrator and OJT staff stated that the CUL-OJT program had been d’ecreasing in effectiveness and attributed this decrease, in part, to the nBon41JT activities ‘carried out by the CUL project staff 0 C[K, proje’ct officia.1.s advised us that 1 in their opinion, the contract, c*s ~~,odFEiecl on June 11, 1969, p#ermitted the enrollment of non-Woodlawn 10l”p2niza.t ion youth * They also advised us that eligibility certification was the responsibility of the employment service and they did not qwstion its ~clcterminat ions I TSES officials informed us that they determined eligibility ,, ,, ,,, ,,,,,,, ,e ,,,,, 0 ,; % “‘I on the basis of criteria established by various DOL manpower directives and gave no consideration to any special terms that might be included in an OJT contract. We believe it is incumbent on CUL, as program manager, to monitor efforts of the employment service and perform in-house evaluations for the purpose of ensuring the enrollment of eligible individuals, Regional Manpower Administration officials informed us that they would discuss the need for adherence to eligibility criteria with CUL o.Efiscials. Me wer’e advised by the CUL projecr director that the necessary covnseling was provided, but he agreed, as did DOL officials, that more definitive guidelines and specific responsibjlities should bme established. Ynle discussed the limited monitoring coverage of CUL operations with Regional Planpower Administration offi’cials who agreed that the monitoring provided was inadequate. The officials informed us, however, that ix)L had only two OJT field representatives to monitor over 200 OJT contracts in the State of Illinaiis and expressed the belief that they could not be expected to provide inmadepth monitoring with such a workload. On the basis of the foregoing, we believe that the Department should r~~c~xa.m:inc its present contractual arrangements with CUL and determine r~.r:~c:~her iliiprovements in CUL’s performance can be effected to bring results up CQ a level. that would sufficiently -satisfy program objectives at a r.I’E‘I:sc)l:n~1,e,l.e cost. I, WC recommend that the Department of Labor take appropriate steps to ak~J)rise CUL of its contractual. obligation to (1) devote staff tine exclu- sivr~1.y to the furtherance of the OJT program where such time is charged to cwntract costs, 121 m&e appropriate eligibility determinations on OYT ~!r~relbces and document such determinations, (3) provide adequate counseling LO t:nroli.lees 1 (4) give appropriate consideration to potential subcontractors’ existing level. of training effort before entering into OJT agreemects, and I.51 rcv~.ew the questionable paym’ents described above and effect appropriate rrccoveri~cs of overpayments made to subcontractors, We presented the details <:IE o :i. 1. E in d in gs concerning the questionable payments to both CUL z.nd the Ro;;ioila.l Nanpower Administration OJT staff during our survey, Also, we l.C’Cibl~lm~nd that the Department of Labor improve its monitoring of CLJL-QJT activities to ensure early identification and correction of weaknesses found in CiJi 1s operations d We would appreciate being advised of your views on the matters presented ii\ Lhis ‘Letter as we1.I as any action taken or contemplated as a result of o!dr ii’ecomtilenclat~cDns * Me wish to acknowledge the cooperation given to our representativses crli1,3:i ;rag t 17i S SulY.rey 1D ,, ,, * ,1,,,,,,I ,,, ,, II ,I ,,,, ,,,,I, Copies of this latter are being sent today to the Secretary of Labor, the Assistant Secretary of Labor for Administration, and to the Administrator of the Manpower Administration. ‘L . Sincerely yours, Henry Eschwege Associate Director The Honorable Arnold 2%. Weber Assistant Secretary for Manpower Deparitment of Labor
Survey of the Cooperative Area Manpower Planning System
Published by the Government Accountability Office on 1971-05-28.
Below is a raw (and likely hideous) rendition of the original report. (PDF)