oversight

Review of Selected Aspects of a Training and Technical Assistance Contract With Frontiers Unlimited, Inc., Atlanta, Georgia

Published by the Government Accountability Office on 1971-07-12.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

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    LM090549
                                    COMPTROLLER          GENERAL         OF      THE       UNITED        ?STATE%
                                                       WASHINGTON.        D.C.         20548




        B-130515




        Dear    Mr.,    Thompson:

                 This    is our report         on our         review     of selected    aspects       of the       Office
        of   Economic       Opportunity         (OEO)        training     and technical       assistance           con-          j ?\ .;
    !
    ;-, tract    with   Frontiers       Unlimited,           Inc.,    of Atlanta,    Georgia.                         1,’   .:
I
              As indicated    in the report,                   Frontiers  has not submitted     its final
       report   to OEO.    OEO, however,                     has agreed   to furnish   us with a copy of
       the report   when it is submitted,                     and we will forward    it to you.

                 Frontiers,     OEO,    and other    parties   mentioned     in this report    have
       not been given       an opportunity      to formally     examine    and comment      on its
       contents.        As agreed    with your office,       we are sending     a copy of this
       report      to the Director,      OEO, for his information        and use*

              We plan to make    no further     distribution       of this report    unless
       copies   are specifically  requested,     and then we shall         make   distribu-
       tion only after your agreement        has been obtained          or public  announce-
       ment   has been made by you concerning              the contents    of the report.

                                                             Sincerely             yours,




                                                             Comptroller                       General
                                                             of the United                     States

       The Honorable     Fletcher                 Thompson
       House  of Representatives




                          .-r
                                      -- SOTI-!      ANNIVERSARY                   1921-1971
        COMJ?i"ROLLER
                    GENERAL'S REPORTTO                            REVIEW OF SELECTED ASPECTS OF A
        THE HONORABLEFLETCHERTHOMPSON                             TRAINING AND TECHNICAL ASSISTANCE
        HOUSEOF REPRESENTATIVES                                   CONTRACT WITH FRONTIERS UNLIMITED,
                                                                   INC., ATLANTA, GEORGIA
                                                                  if;i;;l;f  Economic Opportunity



        DIGEST
        ------
I
        WHYTHE REVIEW WASMADE
           ' The Office         of Economic Opportunity    (OEO) awarded a contract        to Frontiers
          : Unlimited,          Inc., of Atlanta,  Georgia,To-provide     tr'$il??ii'~""and technical
             assistance         in community organization     to Community Action Agencies in the
             OEO Atlanta          Region.

              Under the l-year contract,   dated June 30, 1969, Frontiers    was to provide
              1,000 man-days of assistance   at an estimated cost of about $158,000.
              The contract was later amended to provide 900 man-days of assistance        at
              a cost of about $230,700 over a longer period.    Actual billings    by Fron-
              tiers under the contract amounted to $187,860.

              During the contract     period a total of 751 man-days of assistance was
              provided   by 43 specialists       at 41 Community Action Agencies.      At the re-
              quest of‘Congressman     Fletcher       Thompson, the General Accounting Office
              (GAO) reviewed certain       activities     of Frontiers in an effort   to ascer-
              tain whether:
I
                 --the work performed had been necessary, had served a constructive
                    purpose, and had been beneficial to the agencies served;

                 --OEO had exercised        control      over   Frontiers'   scheduling    of work;

                 --Frontiers'       performance       had been in accordance     with     the terms of the
                    contract;      and

                 --the specialists    provided under the contract              had the qualifications
                     necessary to carry out their assignments.                                 .
              GAO reviewed also a selected number of payments under the contract,       es-
    I         pecially   those made on a cost-reimbursable     basis, and ascertained, at
              the request of Congressman Thompson, whether any funds had been used to
              establish    or operate a catfish-breeding   venture in Hancock County,   Geor-
              gia.

              GAO's review was made, in part, at 10 of the 41 Community Action Agen-
              cies which had received  technical assistance under the contract. Fron-
              tiers, OEO,and other parties mentioned in this report have not been

         Tear Sheet

                                                                                JULY12,197!.
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                                                                                                                          I
                                                                                                                          I
    given an opportunity                to     formally       examine    and    comment      on the   contents    of      I
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    this  report.
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                                                                                                                              I
FINDINGS AND CONCLUSIONS                                                                                                      I
                                                                                                                              I
                                                                                                                              I
    Need for services and benefits                                                                                            I
    to agencies served                                                                                                        I

                                                                                                                              I
    With some exceptions                the      recipients       considered      the technical     assistance                I
    provided   by Frontiers               to     have been       satisfactory       and the results      to have              I
    been beneficial.
                                                                                                                              I
                                                                                                                              I
    Officials           at six of the 10 Community                 Action   Agencies    visited     by GAO                    I
    stated      that,      as a result   of Frontiers'                work,  their   staffs     were better                   I
                                                                                                                              I
    qualified           to perform   community  action              work.                                                     I
                                                                                                                              I
                                                                                                                              I
    Two of the           10 agencies  considered    the specialists'                      services    to     have been        I
    unsatisfactory           or could  not identify     any immediate                     benefits.        (See pp. 7         I
                                                                                                                              I
    and 8,)                                                                                                                   I
                                                                                                                              I
                                                                                                                              I
    Prior    to the Frontiers'                  contract,   the OEO Atlanta      Region     did not perform
    a formal      study of the               need for training    and technical        assistance   in com-                   I
                                                                                                                              I
    munity     organization.                 Nationwide   studies  made by OEO in 1968 indicated                              I
    to OEO, however,         that            a need for such services       existed.        (See p. 9.)                       I
                                                                                                                              I
    OEOcontrol               of Frontiers'       work schedule                                                                I
                                                                                                                              I
                                                                                                                              I
    Frontiers'       specialists        were to be sent to Community       Action    Agencies     only                        I
    upon receipt         of written      authorizations   from OEO.     This procedure        gener-                          I
    ally    was followed,         and most of the specialist       man-days     charged    by Fron-                           I
                                                                                                                              I
    tiers      had been authorized,           in writing, by OEO.     In some cases Frontiers                                 I
    obtained      verbal      authority     from OEO when it needed to use more man-days                                      I
                                                                                                                              I
    than had been authorized              to accomplish   its  tasks.     (See pp. 9 and 10.)                                     I
                                                                                                                                  I
                                                                                                                                  I
    CompZiance with               contract      provisions                                                                        I

                                                                                                                                  i
    The work performed          by Frontiers    and the procedures          followed    by its spe-                               I
    cialists       in providing     assistance   and in reporting         results    generally     were                           I
    in accordance        with the terms and objectives            of the contract.         GAO did                                I
                                                                                                                                  I
    note some deviations          from contract     requirements,       the most significant                                      I
    being    that:                                                                                                                I
                                                                                                                                  I
                                                                                                                                  I
       --Although       the contract        had called    for 900 man-days         of assistance,                                 I
                                                                                                                                  I
          only 751 man-days          actually     had been provided.           Frontiers     informed                             I
          GAO that       it had been unable         to provide      the required       number of                                  I
          man-days      because    there      had been a slowdown of work during               an in-                             I
                                                                                                                                  I
          vestigation        of its operations         and because      OEO had not given         timely
          approval      to requests      for technical       assistance      from Community         Ac-                           1
          tion     Agencies.                                                                                                      I

                                                                                                                                  I
       --AS of April    23, 1971, Frontiers       had not submitted                            the required   final               I
          report.    OEO was withholding    final    payment  until                          receipt    of the re-                I
          port.   (See p. 11.)                                                                                                    I
                                                                                                                                  I
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                                                          2
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                                                                                                                                  I
          Contractor's    speciaZists

          The specialists    employed by Frontiers to advise the Community Action
          Agencies generally    appeared to possess the educational background,   train-
          ing, and/or work experience necessary to carry out their assignments.

          Fees paid to the specialists   ranged from $30 to $100 a day and usually
          were based on the annual salaries    paid the specialists by their previous
          employers.

          The vice president-chairman     of the board of Frontiers,         while a full-time
          employee of the Department of Health, Education,          and Welfare (HEW), pro-
          vided at one agency--without     administrative     approval    from HEW--41 days
          of assistance costing $5,931.      This was in violation        of an HEW require-
          ment that outside professional     and consultative      services     receive admin-
          istrative   approval.    (See pp. 14 and 15.)

          Cost-reimbursabZe     payments

          On January 15, 1971, the Defense Contract Audit Agency issued a report
          on the OEO contract with Frontiers.     The Audit Agency questioned  $48,085
          in costs and recommended that Frontiers    refund $45,037 to the Government.
          As of April 23, 1971, OEO had not made a final    resolution  of the Audit
          Agency's findings.

          GAO limited  its examination    of the costs to a test of the costs claimed
          on two vouchers.     This test indicated   that the Audit Agency's audit was
          sufficiently   comprehensive   to disclose all questionable  items.  (See
          p. 18.)
          Catfish-breeding     ventum
          GAO's examination     of Frontiers' expenses under the OEO contract,  as well
          as an interview    with Frontiers'  deputy project director, did not reveal
          that contract   funds had been expended for this venture.     (See p. 18.)




Tear   Sheet
                           Contents
                                                                     Page

DIGEST                                                                  1

CHARTER

   1      INTRODUCTION                                                  4

   2      EVALUATION OF TECHNICAL ASSISTANCE SERVICES                   6
               Evaluation   of specialists'     services     by
                 recipient   agencies                                   6
               Need for services                                        9
               OEOcontro11   over Frontiers'      scheduling
                 of work                                               9
               Compliance with contract      grovisions               11
               Contractor's   specialists                             13

   3      AUDIT OF SELECTED COST-REIMBURSABLE PAYMENTS                16
               Catfish-breeding venture                               18

                            ABBRRVIATI~NS

DCAA      Defense    Contract     Audit    Agency

GAO       Genera.1 Accounting         Office

HEW       Department     of Health,       Education,   and Welfare

OEO       Office    of Economic       Opportunity
COMPTROLLERGENERAL'S REPORT TO                                   REVIEW OF SELECTED ASPECTS OF A
THE HONORABLEFLETCHER THOMPSON                                   TRAINING AND TECHNICAL ASSISTANCE
HOUSE OF REPRESENTATIVES                                         CONTRACT WITH FRONTIERS UNLIMITED,
                                                                  INC., ATLANTA, GEORGIA
                                                                 if Fi;;l;f Economic Opportunity



DIGEST
------

WHY THE REVIEW WASMADE

    The Office           of   Economic     Opportunity        (OEO) awarded       a contract     to Frontiers
    Unlimited,           Inc.,     of Atlanta,       Georgia,     to provide      training    and technical
    assistance           in community        organization       to Community        Action   Agencies    in the
    OEO Atlanta            Region.

    Under the l-year   contract,      dated June 30, 1969, Frontiers          was to provide
    1,000 man-days   of assistance       at an estimated     cost of about $158,000.
    The contract   was later     amended to provide       900 man-days  of assistance      at
    a cost of about $230,700       over a longer     period.     Actual billings    by Fron-
    tiers  under the contract      amounted   to $187,860.

     During   the contract      period       a total   of 751 man-days        of assistance      was
     provided    by 43 specialists           at 41 Community       Action    Agencies.      At the re-
     quest of Congressman        Fletcher        Thompson,   the General       Accounting     Office
     (GAO) reviewed     certain      activities       of Frontiers        in an effort    to ascer-
     tain whether:

         --the    work        performed  had been necessary,   had served  a constructive
             purpose,         and had been beneficial   to the agencies   served;

         --OEO    had exercised          control      over    Frontiers'      scheduling          of work;

         --Frontiers'           performance        had been    in    accordance     with    the     terms     of   the
            contract;          and

         --the    specialists       provided    under the contract                had the    qualifications
             necessary      to carry     out their   assignments.

     GAO reviewed      also a selected       number of payments     under the contract,   es-
     pecially    those made on a cost-reimbursable           basis,    and ascertained, at
     the request     of Congressman      Thompson,   whether     any funds had been used to
     establish     or operate   a catfish-breeding       venture    in Hancock County,   Geor-
     gia.

    GAO's review was made, in part,          at 10 of the 41 Community        Action  Agen-
    cies which had received      technical      assistance      under the contract.    Fron-
    tiers, OEO,and other    parties      mentioned      in this    report have not been
    given   an opportunity              to formally         examine     and comment      on the   contents    of
    this  report.


FINDINGS AND CONCLUSIONS
    Need for services and benefits
    to agencies served
    With some exceptions                the    recipients       considered     the technical     assistance
    provided   by Frontiers               to   have been       satisfactory      and the results      to have
    been beneficial.

    Officials           at six of the 10 Community               Action   Agencies    visited     by GAO
    stated      that,      as a result   of Frontiers'              work,  their   staffs     were better
    qualified           to perform   community  action            work.

    Two of the           10 agencies  considered    the specialists'                  services    to    have been
    unsatisfactory           or could  not identify    any immediate                  benefits,        (See pp. 7
    and 8.)

    Prior    to the Frontiers'              contract,   the OEO Atlanta      Region     did not perform
    a formal      study of the           need for training    and technical        assistance   in com-
    munity     organization.             Nationwide   studies  made by OEO in 1968 indicated
    to OEO, however,         that        a need for such services       existed.        (See p. 9.)
    OEO control              of Frontiers'      work schedule
    Frontiers'       specialists        were to be sent to Community       Action     Agencies     only
    upon receipt         of written      authorizations   from OEO. This procedure             gener-
    ally    was followed,         and most of the specialist      man-days      charged     by fron-
    tiers      had been authorized,           in writing, by OEO.    In some cases Frontiers
    obtained      verbal      authority     from OEO when it needed to use more man-days
    than had been authorized              to accomplish   its tasks.     (See pp. g and lo.)

    Compliance with contract                   provisions
    The work performed          by Frontiers    and the procedures          followed    by its spe-
    cialists       in providing     assistance   and in reporting         results    generally    were
    in accordance        with the terms and objectives            of the contract.        GAO did
    note some deviations          from contract     requirements,       the most significant
    being    that:

       --Although        the contract       had called    for 900 man-days         of assistance,
          only 751 man-days          actually     had been provided.           Frontiers     informed
          GAO that       it had been unable         to provide      the required       number of
          man-days      because    there      had been a slowdown of work during               an in-
          vestigation        of its operations         and because OEO had not given              timely
          approval      to requests      for technical       assistance     from Community          Ac-
          tion     Agencies.

      --As of April    23, 1971, Frontiers       had not submitted                        the required  final
         report.    OEO was withholding    final    payment  until                      receipt   of the re-
         port.   (See p. 11.)

                                                      2
Contrue tar 's s pecia Es ts

The specialists    employed by Frontiers to advise the Community Action
Agencies generally    appeared to possess the educational background,   train-
ing, and/or work experience necessary to carry out their assignments.

Fees paid to the specialists   ranged from $30 to $100 a day and usually
were based on the annual salaries    paid the specialists by their previous
employers.
The vice president-chairman     of the board of Frontiers,         while a full-time
employee of the Department of Health, Education,          and Welfare (HEW), pro-
vided at one agency--without     administrative     approval    from HEW--41 days
of assistance costing $5,931.      This was in violation        of an HEW require-
ment that outside professional     and consultative      services    receive admin-
istrative   approval.    (See pp. 14 and 15.)

Cost-reimbursabZe    papnenks
On January 15, 1971, the Defense Contract Audit Agency issued a report
on the GE0 contract with Frontiers.     The Audit Agency questioned  $48,085
in costs and recommended that Frontiers    refund $45,037 to the Government.
As of April 23, 1971, OEO had not made a final    resolution  of the Audit
Agency's findings.

GAO limited  its examination    of the costs to a test of the costs claimed
on two vouchers.     This test indicated   that the Audit Agency's audit was
sufficiently   comprehensive   to disclose all questionable  items.  (See
p. 18.)
Catfish-breeding    venture

GAO's examination     of Frontiers' expenses under the OEO contract,  as well
as an interview    with Frontiers'  deputy project director, did not reveal
that contract   funds had been expended for this venture.     (See p. 18.)




                                   3
                                        CHARTER 1

                                     INTRODUCTION

          On June 30, 1969,          the Office  of Economic Opportunity
    awarded a contract        for    $158,000 to Frontiers   Unlimited,
    Inc.,  to   provide    1,000     man-days of technical   assistance  in
    community organization           to Community Action   Agencies in the
    OEO Atlanta     Region.

           Our review was made pursuant                to the August 21, 1970,
   request    to the Comptroller           General from Congressman
   Fletcher     Thompson.       In discussions          with the Congressman's
   office,    we agreed to (1) evaluate                the work performed         by
,, Frontiers      to ascertain       whether it had been necessary,                 had
   served a constructive            purpose,      and had been beneficial            to
   the agencies       served,     (2)   assess      the   control    exercised      by
   OEO over Frontiers'          scheduling        of work, (3) ascertain
   whether    the work performed           by Frontiers         had been in ac-
   cordance with the terms of the contract,                       (4) ascertain
   whether    the specialists          provided       under the contract         had
   the qualifications         necessary to carry out their                 assign-
   ments, and (5) review a selected                   number of payments under
   the contract,        concentrating        particularly         on the cost-
   reimbursable       portion     of the contract0           'We agreed also to
   examine into whether any funds under the contract                         had been
   expended to establish            or operate        an OEO-financed       catfish-
   breeding     venture     operated      by the Georgia Council            on Human
   Relations      in Hancock County.

            Our review was made at Frontiers         Unlimited,    Inc.     In
    addition,    we did work at the OEO Atlanta           Regional   Office
    and at the Department       of Health,     Education,     and Welfare
    office    in Atlanta.     We visited     10 Community Action Agencies
    in Georgia,      Florida,  South Carolina,      and Tennessee,      where
    services    had been provided       under the contract.

            We reviewed    the contractor's      records,       reports,    and
    files    relating    to the technical,      administrative,          and fi-
    nancial      aspects of the contract       and two reports         of audits
    made by the Defense Contract           Audit Agency for OEO which
    covered payments made under the contract.                  We also


                                           4
interviewed      selected Community Action         Agency officials     and
several     of the community organization          specialists     used by
Frontiers.

         Contract     B99-5019,   dated June 30, 1969, was negotiated
by OEO pursuant         to 41 U.S.C. 252(c)(lO)      and section   602(n)
of the Economic Opportunity            Act, 1964, as amended.      The
total     estimated     contract    amount of $158,000 included     a
firm-fixed        price of $63,550 to cover all administrative           and
operational        costs for furnishing     1,000 man-days of technical
assistance        and a cost-reimbursable       amount of $94,450 for
payment of specialists'           fees, travel,    and subsistence    ex-
penses.

       The original       contract   period was from June 30, 1969,
through June 30, 1970, but was later               extended      through Octo-
ber 31, 1970.        Other modifications        to the contract         in-
creased the total        estimated     contract    amount to $230,700 and
provided   $92,450 for the fixed-price             portion      and $138,250
for the cost-reimbursable           portion.     The amount of technical
assistance     required     by the contract      was reduced from 1,000
to 900 man-days.         As of April       30, 1971, OEO had not awarded
another contract        to continue      the services      previously       per-
formed by Frontiers.




                                      5
                                 CHAPTER 2

             EVALUATION OF TECHNICAL ASSISTANCE SERVICES

      This chapter    discusses   the results  of our work as it
relates  to the first     four areas of the review listed      on
page 4. The results       of our audit of selected     payments un-
der the cost-reimbursable       portion  of the contract   are dis-
cussed in chapter     3.

EVALUATION OF SPECIALISTS'           SERVICES
BY RECIPIENT AGENCIES

       The technical       assistance     services    in community organi-
zation   provided     by Frontiers      through    its specialists   gen-
erally   were considered          by the recipient      agencies to have
been performed       satisfactorily       and to have been beneficial.

      During the 16-month contract     period, a total   of 751
man-days of technical     assistance services  were provided    by
43 specialists    at 41 Community Action Agencies.     The types
of technical   assistance   services provided  to the Community
Action Agencies were as follows:

                                                                  Number of
                                                                   agencies
                  Types of service                                 involved

Assessment of needs of Community
   Action Agency and community                                         33
Training    of agency board members and staff                          22
Organizing    community groups                                         11
Assistance    to community groups                                      11
Community leadership       development  training                        5
Sensitivity     training                                                4
Assistance    in elections     of Community
  Action Agency board members                                            2
        In accordance with the data-reporting               requirements     of
the contract,       Frontiers     designed an evaluation          form which
was to be completed by the Community Action Agencies re-
ceiving    technical      assistance     services.      This form provided
for a rating      of the specialist         indicating    whether he (1) had
been well prepared         for the assignment,         (2) had been well

                                      6
qualified    to render technical assistance,       (3) had used his
time wisely,    (4) had provided assistance      in a meaningful,
relevant   manner, and (5) had provided      the technical    assis-
tance needed.
         The Community Action Agencies were requested              to evalu-
ate    the performance    of the specialist       providing     the services
by    assigning   a numerical   rating   of 1 (poor) to 5 (excellent)
to    each of the five areas.        Our tabulation       of these ratings
is    shown in the following      table.
                                  Number of
          Rating                   ratings                      Percent

             5                         108                          60
             4                          40                          22
             3                          23                          13
             2                           4                           2
             1                           5                           3

                       Total           =180                        100

         Frontiers     itself     was dissatisfied         with the performance
of four specialists            and did not use them again.              Frontiers
terminated        the services        of a fifth      specialist    because there
were numerous complaints               concerning      his conduct from commun-
ity officials         and because an investigation               of his activities
by the OEO Inspections              Division     had indicated      that his con-
tinued employment would not be in the best interest                         of the
program.
         To obtain     fairly      broad geographic        coverage of Frontiers'
activities,         we visited       10 Community Action Agencies           in Flor-
ida, Georgia,         South Carolina,         and Tennessee where 230 man-
days of technical            assistance      services     had been provided        by
13 specialists.
         Officials      at six of the Community Action Agencies vis-
ited stated that,             as a result     of training       received    from
Frontiers'         specialists,      their    staffs     were better     qualified
to perform community organization                    work; officials      at three
of the six agencies             said that several         community groups had
been organized          as a result        of the efforts       of Frontiers'      spe-
cialists,          At another Community Action             Agency, officials
stated that they had not been satisfied                      with the specialists'
services.          This was the agency where Frontiers                 had terminated

                                           7
the services    of the specialist.     One of the other three
agencies   that we visited    could not identify   any immediate
benefits   gained from the services,     and, at the remaining
two agencies,    Frontiers  had made only an assessment of needs.




                               8
NEED FOR SERVICES

       OEO's Atlanta     Regional      Office   did not make a formal as-
sessment of the need in the region for technical                     assistance
in community organization.             The former chief of the OEO
Training     and Technical    Assistance       Program Branch in Atlanta
informed us that nationwide            Community Action Agency evalua-
tion studies     made in 1968 indicated           that there was a need
for training     and technical       assistance      in community organiza-
tion,    The Preliminary      Training       and Technical       Assistance
Plan for fiscal      year 1969 showed that one of the goals of
the OEO Atlanta      Regional     Office was to strengthen             various
problem aspects of Community Action Agencies and that com-
munity organization        was anticipated        to be a problem.           The
plan contemplated       community organization          training       for the
staffs   and boards of certain          Community Action Agencies and
some direct     community organization          was planned.

       Prior to the Frontiers        contract,     technical        assistance
in community organization          was provided     under a nationwide
contract     awarded by OEO headquarters.            Because this contract
was being phased out, the Atlanta             Regional     Office      decided to
develop a consultant        resource    system in the Atlanta             Region.
The former chief of the Training            and Technical         Assistance
Program Branch decided to separate             the technical          assistance
contracting     for community organization           from other technical
assistance     contracting     in such areas as economic development,
manpower, and management,on          the rationale       that each contrac-
tor could concentrate         on the most effective         utilization         of *‘
specialists'      services.

      The region did not prepare         documentation     showing that
there was a need for the 1,000 man-days of services               origi-
nally   contracted    for, nor did it develop a plan showing
where the services       were to be provided.        As shown on page 6,
one of the functions       generally   performed     by Frontiers    was a
determination      of an agency's    specific   needs in the area of
community organization.

OEO CONTROL OVER FRONTIERS'
SCHEDULING OF WORK

       Frontiers'      specialists  were to be sent to Community               Ac-
tion   Agencies     only upon receipt   of written authorizations

                                         9
from OEO. This procedure          generally     was followed,  and most
of the specialists'      man-days charged by Frontiers         under the
contract    had been specifically        authorized     by OEO. At cer-
tain locations,     however, more or fewer man-days than had
been authorized     actually    were expended by Frontiers        in pro-
viding   technical   assistance     services.

       Clause I of the contract,         Statement  of Work, requires
that the contractor      provide     the services   of specialists      af-
ter receipt     of a request     from OEO. According      to Frontiers'
Operating    Procedures   Manual, the request       for technical     as-
sistance    was to be initiated        by the Community Action     Agency,
sent to OEO for approval,          and forwarded   by OEO to Frontiers.

        Frontiers      provided     a total    of 751 man-days of technical
assistance        in community organization          at 41 Community Action
43 encies.       Available      records     showed that  OEO formally had
authorized       only 632 man-days of services.

        The discrepancy           between man-days authorized              and actually
provided      stemmed from the fact that,               at certain       locations,
Frontiers        had provided        more man-days than had been autho-
rized in writing             by OEO to accomplish          its task and, at
others,     had provided          less man-days than had been authorized,
The overages at certain                locations    exceeded the underages             at
the other locations              and accounted      for the fact that not all
man-days of service             provided       had been authorized         in writing.
Frontiers'        officials       informed us that,          at some Community
Action     Agencies,         the man-days authorized           in writing      had not
been sufficient            and that verbal        approval     had been obtained
from OEO for the additional                  man-days required,         An OEO of-
ficial     verified        that such approval         had been given to Fron-
tiers,




                                            10
COMPLIANCE WITH CONTRACT PROVISIONS

        The work performed            by Frontiers      and the procedures      fol-
lowed by its specialists               in providing      assistance    to Commu-
nity Action Agencies and in reporting                    the results     of its ef-
forts    generally       were in accordance with the terms and objec-
tives of the contract.                We did note some deviations          from
contract     requirements,          the most significant         being that Fron-
tiers--because         of certain        circumstances--had       not provided
all the called-for           man-days of service           and had not submitted
the required       final     report      under the contract.

        Of the 900 man-days called        for by the contract,          751
man-days actually       were provided.      Frontiers'      officials    in-
formed us that they had been unable to provide                   all the man-
days of technical       assistance    required     because there had
been a slowdown in work while their             operation      was being sub-
jected    to an investigation      and because OEO had not given
 timely   approval  to requests     for technical        assistance     ser-
vices from Community Action Agencies.

         The contract    required      that Frontiers      submit its final
report      on October 31, 1970.          The report was to summarize the
activity      under the contract         and was to include       recommenda-
tions and conclusions.            As of April       23, 1971, the report          had
not been submitted.          On November 25, 1970, and again on
March 1, 1971, the OEO Contracting                Officer   informed      Fron-
tiers     that no further      payment would be made under the con-
tract until       the required     final    report     had been received         and
that failure        to submit the report        was seriously       jeopardiiing
the satisfactory        completion       of the contract.        FrontiersP       of-
ficials      said that they intended          to submit a final        report     and
that the unpaid vouchers           submitted       to OEO totaled      about
$5,500.

        We also noted certain            other deviations       from the con-
tract    terms, which are discussed              below.     The contract      re-
quired     Frontiers     to use specialists           who resided     in the At-
lanta OEO Region.            Contrary     to the contract,        Frontiers,
without     obtaining     written       approval    from OEO, used four spe-
cialists     who resided        outside     the Atlanta     Region.      For two
other specialists,           Frontiers      did not comply with the con-
tract    requirement       that documentation          be maintained       on the
education,       experience,       and employment of each specialist              as
justification        for the fees paid.       Frontiers     did not execute
Agreements       for Personnel     Services with six of the 43 spe-
cialists,       even though its Operating        Procedures     Manual,
prepared      in compliance     with the contract,       required   that such
agreements       be executed.      Also agreements with seven other
specialists        were executed after     they had started       work.
        To comply with the contract               requirement        that data on
specialist      utilization         be acquired,      tabulated,        summarized,
analyzed,      and reported         to OEO, Frontiers          designed and used
Agency Assignment            Reports,    Specialist      Utilization       Reports,
and Specialist         Utilization       by State Reports.            We noted a
few instances         in which (1) the reports            had not been pre-
pared,     (2) cumulative          man-days had been overstated             or under-
stated,      and (3) cost data was missing or incorrect,                       The re-
ports in question            were   not used as a basis for preparing
payment vouchers but served to keep OEO apprised                          of contract
performance.

        In accordance with the data-reporting                      requirement         of
the contract,         Frontiers        designed     a specialist        evaluation
form which was to be completed by the agencies                             receiving
specialist       services.          Of the 41 Community Action                 Agencies
receivingspecialists'               services,     18 did not submit evalua-
tion reports        covering        322 man-days worked by 21 specialists.
In fact,      Frontiers      did not receive           specialist       evaluation        re-
ports from any of the recipient                   agencies during            the period
September 1969 through May 1970.                     Frontiers'        officials
stated     that evaluations            had not been received            during      this
period     because either           Frontiers     had failed       to mail out the
forms on time or the agencies,                   contrary      to requirements,
had not returned          the forms.          Frontiers,      however,         submitted
monthly Specialist           Utilization         Reports,     which showed a rat-
ing for each specialist,                to the OEO Atlanta           Regional       Office.
Frontiers'      officials         informed us that the evaluations                    had
been based on telephone                conversations      with the agencies
served and on reviews of the specialists'                         daily      logs and
reports.




                                              12
CONTRACTOR'S SPECIALISTS

       Information        on file     showed that the specialists              uti-
lized by Frontiers           to provide      technical      assistance     in com-
munity organization            generally     had the educational          back-
ground,     training,      and/or work experience             necessary    to carry
out their       assignments.        Under the terms of the contract,
Frontiers      was to provide         specialists      qualified     to assist
and advise in improving             community organization           patterns.
The contract        required     Frontiers       to also utilize        specialists
who recently        had been poor, provided            that the task was such
that it could be performed               by such persons.

           A summary of the educational   background   of the spe-
cialists       used by Frontiers   is shown in the following   table.

                                                Number of        Man-days
                        Education              specialists        served

           No data in file                           2                 8
           Less than high school                     2                13
           High school diploma                       1                 4
           Bachelor's    degree                     13               365
           Master's   degree                        10               178
           Attended   college--degree
              not shown                             -15              183

                Total

Most of the degrees held by the specialists      were in the ar-
eas of psychology,  sociology, political    science,  business,
and education.

       The educational      background      and work experience     for two
of the 43 specialists         were not documented in the personnel
files    maintained     by Frontiers.       Of the 41 remaining     special-
ists,     six did not attend the two conferences           conducted    by
Frontiers      to provide    specific   training    to its staff    in the
area of community organization            (these conferences     were re-
quired by the contract)          and did not appear to have work ex-
perience     related    to community organization        or OEO programs.




                                          13
      Fees paid to the 43 specialists    ranged from $30 to
$100 a day and generally   were computed on the basis of the
annual salaries   received by the specialists    at their   previ-
ous places of employment,   divided   by 250 days.    A tabula-
tion of fees paid, the number of specialists       in each cate-
gory I and the number of man-days worked is shown below.
                                                          Number of
              Ranges of fees            Number of         man-days
                paid a day             specialists         ,worked

                $30   to $ 40                    5              25
                 41   to   50                    8              64
                 51   to   60                    7             104
                 61   to   70                    5              92
                 71   to   80                    9             239
                 81   to   90                    5             174
                 91   to 100                 4                 53

                       Total

        The vice president      of Frontiers,      who also is chairman
of the board, provided        41 man-days of specialist          services
at one co;nmunity organization,           for which he received        a to-
tal of $5,931 in fees, travel,            and per diem.      He did not
receive    a salary from Frontiers          for his duties    as vice
president     or chairman.      During the period June 1969 to Febru-
ary 13, 1970, he was also a full-time              employee--GS-14      Civil
Rights Specialist      --of the Department        of Health,   Education,
and Welfare.       The services     provided     under the contract       by
this specialist      were performed       either   on weekends or while
he was on annual leave from HEW.

         The HEW Manual on Standards             of Conduct requires          admin-
istrative      approval      for any outside         work which creates        an
apparent     conflict     of interest        or a question       of propriety
and for all professional                and consultative      services.       The
specialistOs       personnel        folder   contained     no evidence of ad-
ministrative        approval      for his work under the Frontiers              con-
tract,     and officials         of HEW said that he never had discussed
the outside       work with them.           He ultimately      resigned     from his
position     at HEW. The specialist's               work at the community or-
ganization      included       the preparation         of a proposal    and
budgets for OEO funding.      The HEW Manual   on Standards   of
Conduct specifically   precludes   this type   of outside   work by
HEW's employees.




                                15
                                                                                             CHAPTER 3

                 AUDIT OF SELECTED COST-REIMBTJRSAl3LE PAYMENTS

        The total      estimated      contract      cost, as amended, was
$230,700,     of which $92,450 represented                  the total    for the
fixed-price       portion     of the contract          and $138,250 represented
the total     for the cost-reimbursable                portion    of the contract.
Actual billings         through the completion              of the contract
amounted to $187,860,             of which $90,000 represented              the
fixed-price       portion,      including      profit,      and $97,860 repre-
sented the cost-reimbursable                portion.        At the completion      of
our review,       about $5,500 of the amount billed                   had not been
paid by OEO, primarily             because of the failure             of Frontiers
to submit its final           report.        -

        The expenses incurred    under the fixed-price     and cost-
reimbursable     portions  of the contract   are categorized    as
follows:
                                                                                        Fixed-Price              Portion          (note    a)

                                                         DescriDtion                                                                                                           Amount
      Officers'           salaries                                                                                                                                            $23,301
      Office       salaries                                                                                                                                                     35,523
      Rent                                                                                                                                                                        2,820
      Telephone          and telegraph                                                                                                                                            3,570
      Office       supplies                                                                                                                                                       2,049
      Repairs        and maintenance                                                                                                                                                  924
      Interest         and bank charges                                                                                                                                                 78
      Office       equiprent        rental                                                                                                                                            742
      Payroll        taxes                                                                                                                                                        2,212
      POStage                                                                                                                                                                         237
      1nsura"ce                                                                                                                                                                       436
      Legal      and accounting            fees                                                                                                                                   3,225
      Taxes and licenses                                                                                                                                                                82
      Miscella"eouS                                                                                                                                                                   761
o(r   Advertisement                                                                                                                                                                   255
      Dues and subscriptions                                                                                                                                                          160
      Contract         negotiations                                                                                                                                              1,956
      Furniture          and fixtures,          less          depreciation                                                                                                       3,209
      Depreciation                                                                                                                                                             353

                     Total     expenses          biled                                                                                                                         81,893
      Rofit                                                                                                                                                                    8.107

                     Total,      fixed-price              portion         of      billings                                                                                    $90
                                                                                                                                                                               A       000

                                                                              Cost-Reimbursable                       Portion

      Specialists:
              Fees                                                                                                                                                            $54,042
              TElVf21                                                                                                                                                           21,568
            Per diem                                                                                                                                                            14,242
      Administrative:
            Travel                                                                                                                                                                  1,970
            Per diem                                                                                                                                                                619
             Subcontract           for     administrative,                    fiscal,           and        training         support                                              5,075
      Minor      adjustments             to accounting              records                                                                                                    344
                     Total,     cost-reimbursable                      portion            of    billings                                                                      @J-&O

      aFrontiers          was not         required       to itemize                 these         costs         in    its       billings        to OEO.   We obtained   the    break-
       down from          Frontiers'            records.



                                                                                                       16
        The Defense Contract      Audit Agency (DCAA) audited       the
cost-reimbursable      expenses incurred         by Frontiers  on a test
basis for the period        July through December 1969 and on a
loo-percent     basis for the period         January through October
1970.     On January 15, 1971, DCAA issued an audit report             on
the OJZOcontract      with Frontiers,        in which DCAA questioned
costs of $48,085.        After   considering      unpaid vouchers,  DCAA
recommended that Frontiers         refund $45,037 to the Government.

     The major cost-reimbursable            expenses   questioned-by   DCAA
were as follows:

      --Costs      of $7,571 incurred      by the administrative      staff
         were questioned        because DCAA believed      that such costs
         should be charged to the fixed-price           portion   of the
         contract.       Included    in this amount were costs of
         $5,931 for travel,         per diem, and specialists@      fees
         paid to the chairman of the board of Frontiers.

      --Costs of $13,275 were questioned    because the Request
      . for Services  from OEO was not available    for review.

      --Travel      costs of $1,216     were questioned because no
          supporting     information    was shown on fee and expense
         vouchers.

      --Travel,       per diem, and fees of. specialists     amounting
         to $5,425 for two training        conferences   held for
          specialists      were questioned   because DCAA believed
          that these costs should be charged to the fixed-price
          portion     of the contract.

      --Travel     advances of $3,390       were questioned    because
         they were not subsequently          liquidated   against   expense
         vouchers.                                          9

      --Subcontract    costs of $5,075 were questioned  because
         DCAA believed   that such costs should have been
         charged to the fixed-price    portion of the contract.

      An official of the DCAA informed   us that    the final      re-
sults of the audit would be subject    to further     negotiations
between OEO and Frontiers'  officials.    By letter     dated


                                       17
~.arch 17, 1971, Frontiers  formally    appealed      the audit find-
ings and asked QZD to cmsider       the allowability         of
aicmed costs in the context    of the total       saegotiatio
Eween Frontiers    and QED. As of April      23, 1971, final     reso-
1Pltion of the audit findin   s had rmt been mad@* we have
asked 6     to advise us of ts final     actim       on this mttere

       We limited     our examination   of the costs to a test of
the costs claimed on two vmckerso            This test indicated that
DC 9s audit was sufficientPy          comprehensive   to disclose all
questionable      items.



       As part of our review of contract            costs, we examined
into whether any funds under the Frontiers                contract      had been
expended for the establishment          or operation        of an QEXL
financed   catfish-breeding      venture,     operated      by the Georgia
Council   on Hman Relations,        in Hancock County.           Qur examina-
tion of expenses incurred        by Frontiers       under the contract
and our interview       with Frontiers'      deputy.project        director
for the contract       did not reveal     that contract       funds had been
expended for this venture.




                       ,




                                      18