oversight

Analysis of Federal Expenditures To Aid Cuban Refugees

Published by the Government Accountability Office on 1971-11-03.

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

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                           LM095497
                                      111111
                              COMF’TROUER     GENERAL     OF      THE       UNITED   STATES
                                            WASHINGTON.    D.C.     2c!U8




                B-164031(3)

                                     .



                Dear   -Mr. Chairman:

                        This is our report     on our analysis   of Federal      expendi-
                tures to aid Cuban refugees,       which was made pursuant           to your
                request    of IvIarch 10, 1971. The Department        of Health,    Educa-
                tion, and -.Yeffare is responsible      for administering      the program.

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

                                                                   Sincerely           yours,

    :
    .ii
                                                                   Comptroller                General
                                                                   of the United              States

              . The Honorable      Edward     M. Kennedy,   Chairman

          u4e
                .Subcommittee     to Investigate   Problems
                  Conneeited   With Refugees     and Escapees          ,+u-M
                                                                     -
          /
                Committee     on the Judiciary
                United States Senate
    C@kTROLLL?R GEldERA L ‘S i<.k'PORTTO THE                                       ANALYSIS OF FEDERAL EXPENDITURES
    SUBCOhMl-TTEE TO INVESTIGATE ?ROBLEM                                           TO AID CtiBAN REFUGEES
  . CliM4X’TEL’ WITH REFUGEES AND ESCAPEES                                       ( Social and Rehabilitation     Service 04
. COf@UTTEE ON THE JUDICIARY                                                    LDep?rtment    of Health,    Education,  0~~
    UNI5TED STATES SENATE                                                       1 and tielfare       B-164031 (3)

     DIGEST
     ------
                                                   .
     l&P
      --- “ZE REVIEW
                  ---- L’“S ‘5:;~
            In 1961 a Cuban refugee                     program was established           in the Department          of Health,
            Education,           and klfare            (HEW) to help ref~~~~~.~“~~.~-~~,,7:.,?,._th-~-_I~~ed
           St+tes and to provide        __        financia!__as.s,ist_ancfj!_tq     the State         a@ local       public
           agencies
            _llll-l _..-..which
                          .-. ‘.. %..pr~v<%%-%6i~~
                                     ..--2. .--*.- il-.=-._       to.the     r_e@.tgees.

           About 600,000 Cuban refugees       have entered  the United States since Fidel
           Castro came to power in 1959.        In 1965 the Department  of State began pro-
           viding chartered flights   (airlift)     into the United States at Miami, Florida.
           About 243,000 of the refugees have entered or! the airlift.

           Total         costs    for     the iefugee       program,       including     estimated     costs   for    fiscal
           years 1971 $nd 1972, have amounted to about $730 million.
           At the request of the Chairman, Subcommittee  to Investigate   Problems Con-
           nected With Refugees and Escapees, Committee on the Judiciary,     the General
           Accounting  Office (GAO) examined into payyen
           -g-
                  --to    Dade County, Florida,              for educating         Cuban refugees,
            &F--for        public       assistance    to needy refugees,               and
            -K-for         charter       flights   transporting   refugees              to the United      States.

           About 90 percent,  or $622 million,                         of the total   cost       of the refugee        pro-
           gram has been spent on these three                          program areas.

           The Department cf S+ate announced on August 31, 1971, that the Cuban refugee
           airlift would be Interrupted       for seve-al    weeks beginning   September 1, 1971.
           The number of remaining    airlift     i-lights  as Coziingent   upon the number of
           Cubans to be al !O;vrd by their      Mverr.;nent  to leave Cuba.

            Federal,         State      and loclrf       agencies   hake not formally          examined and commented
            on this        report.


     FI#DINGS AND CONCLUSIOfJS

           Educationa             costs
 .
            Federal assist,              ,cr ror       -?dwrr+.<zr, 5as been prnvided
                                                                          to Dade County on the
            bases that (1;              a 'arge,
                                           ilntolzsetn inl'lux of s:Fqol-age   children would
            strain        the capci ty of the ?Gbli L school sit itern 2nd (2) most of the refusees

     Tear
     -~~- Sheet                                                        I
                                                                                               I-HIV.
    'were without resources            and, therefore,    could not contribute       to the CM-
    munity through existing             tax structures.      (See p. 23.)

    Federal payments to Dade County public   schools increased                   from    $7 million
    for the 1965-66 school term to an estimated    $15.5 million                   for   the 1971-72
    school term.   (See p. 10.)

    The number of students             on whose behalf payments were made increased  from
    16,673 in the 1965-66             school term to 22,100 in the 1973-72 school term,
    (See p. 14.)

    Payments will  be made for about 9,, 'TX fpwer students      for the 1970-71 and
    1977-72 school terr: s.  This decrease cx L,e altributed        3 in par?, to
    (i) the effect  of agr~~r~i.s    bc:tk!een HEW id    Dade County kginnning      with
    the 1968-69 school term which discontinue        payments for certain     students
    after  they have been in the school system for 5 years and which discon-
    tinue payments for certain    other students     beginning  with the 1970-71 term
    and (2) the increasing   use of nonpublic     schools by the Cuban refugees.
    (See pp. 13, 15, and 78.)

    Despite the reduction      in the number of students      for whom payments are being
    made, the estimated     program contributions       to Dade County for the 1977-72
    school term will    be about the same as for the 1969-73 school term.              Total
    costs have not decreased significantly          because of large increases       in operat-        .
    ing costs per student      (up 56 percent    in 5 years)    and in contributions      per
    student  for the cost of construction         (up 70 percent   in 5 years).      Dade
    County's   cost increases     per student   are not out of line with those for other
    major school systems.        (See pp. 9, 16, and 23.)

    PubZie assis-kmce         costs

    Public assistance      is available       to needy Cuban refugees      in Miami who qualify
    under Florida's     eligibility       standards   through    the Cuban Refugee Assistance
    Unit of the Florida       Department      of Health and Rehabilitative      Services.   This
    unit--entirely    federally       funded--was    established    because of the.large   number
    of refugees    remaining       in Miami.     (See p. 24.)

    Elsewhere in the United States.          public  assistance    and medical services    are
    made available    to Cuban refugees       through t:,c offices    of State public   welfare
    departments.   The States are reimbursed          by the Cuban refugee program for their
    medical and assistance        payments to, or on behalf      of, refugees  whu qualify
    under the States'    eligibility      standards.     (bee p- 24.)

    Public assistance      payments,    includ.ing   payments for medical assistance,   for
    Cuban refugees    will    increase    from $26.5 million    in fiscal  year 7968 to an
    expected $106.2 million        in fiscal     year 1972.   (See p. ?5.)

    The substantive        increase      is due to the

      ;-increase       in the number of refugees  receiving assistance   from               about
.         34,000     in 1968 to an expected 92,000 i,l 1572 (see p. 32),

      --trend       toward increasing      the amoent G;;-' ,ssistar,ce   paid    co individual
          plrblir     assirt3ncc  recipients    (see p. 26),
                     --increasing        cost   of medical    care   (see p. 291,

                     --increase        in the ratio     of older persons in the Cuban refugee  caseload
                         requl '+;,j     public c;sistance     benefits (see pp. 32 and 341, and

                     --decreasing    potential  for self-support    due to a decreasing educational
                        level and English-speaking     ability   of refugees arriving  since the
                        airlift   began in December 1965 (see pp. 35 and 36.)

                   Payxnts      fpr    LEE. Cubm'airlift

                   In Nove;,.ber 1965 the United           States and Cuban Governments tig+-nzJ f:~i &!?o1~,
                   the United States to airlift             3,000 to 4,000 refugees  a month from Yaradero,
                   Cuba, to Miami.    The airlift           is administered  through the Department    of
                   State and has been operating             since December 1, 1965.    (See p. 38.)

                   The Cuban refugee airlift       has operated  twice a day, 5 days a week,               and has
                   brought about 850 refugees       to Miami each week.   The costs under the               airlift
                   contracts--which      are awarded on the basis of competitive    bids--have              increased
                   from about $465,000 in fiscal        year 1968 to an estimated  $848,000 in              fiscal
                   year 7972.       (See pp. 5 and 41.)

                   Some of the cost increase     is         due to the requirement     that the airlift        con-
                   tractors   use only propeller           aircraft.    GAO's analysis    indicates   that econ-
                   omies may hav e been possible             through the use of less costly       jet aircraft.
                   The question,   however, as to           whether the Cuban Government would permit
                   jets to be used in the airlift               was not resolved.    (See pp. 42 and 45.)




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            Tear Sheet                                           3
                          Contents
                                                                           Page

DIGEST                                                                       1

CHAPTER

  1        IK!XODUC~ION -&Jr, XSCRIPIlON OF TKE SriBAN
           ~~-yg& p~<Ioc;‘rzAM
                Cuban refugees in the Unixzed States
                Services to refugees
                Program administration
                Cost of the program
               Recent developments

  2          PAYMENTSFOR IMPACT ON DADZ COUN'Y PUBLIC
             scH00L SYSTEM                                                  9
         I       Operating costs                                           11                          f
                 Construction   costs                                      17
           I     Other educatisnal    costs                                21
                 s-ry                                                      23

  3        PUBLIC ASSISTANCEPAYMENTSTO CUBAN
           REFUGEES                                                        24
              Increase in amounts individual                                                           i
                 recipients receive                                        26
              Increase in medical. costs                                   29
              Increase in number of recipients                             32
              summary                                                      37

  4        PAYMENTSFOR Cl-l,'ZVERFLIGHTS TRANSPORTING
           CUBANREFUGEESTO THE UNITED CTP,TES                              38
              Summary of data pertainjng         to airiiit                41
              Increasse     in airl.;f: Ctii3truct ccsts 5or
                 fixaL    years 1971 z.& 372                               42
              Feasibility      of using jet aircraft        for             _
                 Cuban airlift                                             44

APPENDIX

  I        FUK+IONk     ORGkkII?,ATIONOF CUBAN-REFUGEE
           PROGRAM                                                         49




                                                                  .--I-r         -   ._   -ss-   -_.
CAB   Civil   Aeronautics   Board
GAO   General Accounting     Office

      Department    of Health,   Education,   and Welfare
             .
                                              9
                                                                                                                 --t




    CGX?‘Tc)LiE~i GENWAL ‘S i:‘EPGRT 2’0 TiYE                     ANALYSIS OF FEOERAL EXPENDITURES
    Sl,WXWXTTZE TO It’UESTIGATE Pl?OtiLEMS                        TO AID CUBAN REFUGEES                               i
    CGENECTEDWITU REFUGEES A11’DESCAPEES                          Social and Rehabilitation     Service
    COMVI’TTEE GB THE JiIDICIARi’                                 'apartment  ?f health,    Education,                i
    UNITE3 STATES SEtI. TE                                        and Welfare B-164031(3)

                                                                                                                  (
    DIGEST
    ------
                                                                                                             .   4
                                      .                                                                          I
    WHY T"?__F;L'T'TEW
                  _ _ w;' = .qr,,
                       ^-_-                                                                                       i

          In 1961 a Cuban refugee program was established      in the Department of l-lealth,                     I
          Education, and Welfare  (HEW) to help refugees    get settled  in the United                            i
                                                                                                                  i
          States and to provide financial   assistance  to the State and local public
          agencies which provided  services  to the refugees.

          About 600,000 Cuban refugees       have entered the United States since Fidel                          i
          Castro came to power in 1959.         In 1965 the Department of State began pro-                       /
          viding chartered flights   (airlift)      into the United States at Miami, Florida.                    i
          About 243,000 of the refugees        have entered on the airlift.

          Total      costs for the refugee program, including estimated             costs     for   fiscal
          years      1971 and 19?2, have amounted to about $730 million.

          At the request    of the Chairman, Subcommittee  to Investigate Problems Con-
          netted With Refugees and Escapees, Committee on the Judjciary,      the General
          Accounting  Office   (GAO) examined into payments made

             --to     Dade County, Florida,      for educating    Cuban refugees,
             --for     public  assistance    to needy refugees,     and
             --for     charter  flights   transporting    refugees   to the United        States.

          About 90 percent,  or $622 million,            of the total   cost    of the refugee       pro-
          gram has been spent on these three             program areas.

          The Department  of State Ta..iounced on August 31, 1971, that the Cuban refugee
          airlift would be interrupted       for several :.qecks beginni ng September 1, ?971.
i         The number of remaining    airlift     flights  is contifkyent upon the number of
          Cubans to be allowed by their        Government f7 leave Cuba

          Federal,      State    and local   agenc;cs   have not formally      examined     and commented
          on this      report.


    FINDINGS AND CONCLUSIONS

          Educational       costs

          Federal assistance   f,,* editcat-Ior, !?;r, been pro*?ided to Dade County on the
          bases that (1) a large,     unforeseen     influx of school-ag?  children would
          strain  the capacity   of the public     schooi system and (2) mosi of the refugees
         .
’




             were without  resources         and,   therefore,    could not contribute       to the com-
             munity through existing          tax   structures.      (See p. 23.)

          Federal payments to Dade County public   schools increased                     from    $7 million
        * for the 1965-66 school term to an estimated    $15.5 million                     for   the 1971-72
          scl-~01 term.  (See p. 10.)

             The number of students           on whose behalf payments were made increased  from
             16,673 in the 1965-66           school term to 22,100 in the 1971-72 school term.
             (See p. 14.)

             Payments wil ! be made for about 9,300 fewer students      for t;rb- lC,Z-71      and
             1971-72 school terms.    This decrease c-n b< dttribA.ed,      iif pa-t,    to
             (1) the effect  of agreements between HEW and L&a County begl,,;,ning          with
             the 7968-69 school term which discontinue      payments for certain      students
             after  they have been in the school system for 5 years and which discon-
             tinue payments for certain    other students    beginning with the 1970-71 term
             and (2) the increasing   use of nonpublic    schools by the Cuban refugees.
             {See pp. 13, 15, and 78.)

             Despite the reduction      in the number of students      for whom payments are being
             made, the estimated     program contributions      to Dade County for the 197‘1-72
             school term will    be abcut the same as for the 1969-70 school term.              Total
    ;        costs have not decreased significantly          because of large increases       in operat-
    ;        ing costs per student       (up 56 pert e P,t in 5 years)   and in contributions      per
             student  f,or the cost of construction        {up 70 percent   in 5 years).      Dade
             County's   cost increases     per studen t are not out of line with those for other
             major school systems.        (See pp. 9, 16, and 23.)

             FubZic   assistance     costs

             Public assistance        is available       to needy Cuban refugees      in Miami who qualify
             under Florida's       eligibility       standards   through the Cuban Refugee Assistance
             Unit of the Florida         Department      of Health and Rehabilitative      Services.   This
             uni+ ,--entirely    federally       funded--was    established because of the large number
             of refugees      remaining       in Miami.     (See p. 24.)

             Elsewhere in the United States,          public  assistance   and medical services   are
             made available    to Cuban refugees       through the offices     of State Fl;tlic welfare
             departments.   The States are reimbursed          by the Cuban refugee program for their          :
             med3cal and assistance        payments to, or on behalf of, refugees wk qljalify                  t;
             under the States'    eligibility      standards.     (See p. 24.)

             Public assistance      payments,   including   payments for medical assistance,         tor
             Cuban refugees    will   increase    from $26.5 million       in fiscal  year 1968 tq an
             expected $106.2 million       in fiscal    year 1972.       (See p. 25.)
                                                                     -'.*-* ~~;y~Qj~       kUA\iABiE
             The substantive    increase     is due to the         B-;&i

               --increase      in the number of refugees  receiving assistance  frci,l               about
                   34,000    in 1968 to an expected 92,000 in 1972 (see p. 32).

               --trend      toward increasing       the anorAnt of assistance     pa,-     to intiividu:il
                   public     assistance  recipi?r*,s    (se? p. 261,

                                                             2
        --increasing      cost   of medical   care   (see   p. 29),

        --increase      in the ratio    of older persons in the Cuban refugee  caseload
            requiring     public assistance    beqefits (sep op. 32 and 34), and

        --decreasing    potential  for self-support    due to a decreasing    educational
           level and English-speaking     ability   of refugees arriving   since the
           airlift   began in December 1965 (see pp. 35 and 36.)

      Pa mmt,-    --.w the
                        --- Cdbm
                             -   a&:1!.

      In kvember  1965 the United         States and Cuban Governments agreed to allow
      the United States to airlift         3,000 to 4,000 refugees  a month from Varadero,
      Cuba, to Miami.   The airlift        is administered  through the Department of
      State and has been operating         since December 1, 7965.    (See p. 38.)

      The Cuban refugee      airlift  has operated  twice a day, 5 days a week,          and has       :
      brought about 850 refugees       to Miami each week.    The costs under the         airlift
      contracts--nhich      are awarded on the basis of competitive     bids--have        increased;
      from about $465,000 in fiscal        year 1968 to an estimated   $848,000 in        fiscal
      year 1972.       (See pp. 5 and 41.)

      Some of the cost'increase     is     due to the requirement     that the airlift       con-
      tractors   use only propeller       aircraft.    GAO's analysis    indicates   that econ-
      omies may 'have been possible         through the use of less costly       jet aircraft.
      The question,   however, as to       whether the Cuban Government would permit                   I
      jets to be used in the airlift           was not resolved.    (See pp. 42 and 45.)               I
! .                                                                                                    I
                     l        CHAPTER1

                  INTRODUCTIONAND DESCRIPTION

                  OF THE CUBANREFUGEEPROGRAM

      When Fidel-Castro came to power in Ctiba early in ,954,
thousands of Cuban people .;lled that r,ountr~ dud xany oT them
came to the United States, principhily    to the :tiami, Florida,
areae Most of the refugees left all personal belongings        in
Cuba and arrived with virtually   no money or resources,

       Initially   emergency assistance    to meet the needs of the
refugees was furnished      by local public and private welfare
organizations.       It soon became apparent, however, that these
organizations     did not have the capacity to handle the large
influx    of refugees,   and an appeal for Federal aid was made
by Florida.          j

       I$ December 196G the President of the United States es-
tablished    a Cuban Refugee Emergency Center in Miami to re-
lieve the economic and social problems created by the heavy
influx    of refugees in the Miami area.   In February 1961 the
Ikesident    directed that a Cuban refugee program be estab-
lished in the Department of Health, Education,      and Welfare.

      Funds were provided from the Presidents*         contingency
funds until    June 1962 when permanent authority       for the pro-
gram was provided by the Migration        and Refugee Assistance
Act of 1962 (22 U.S.C. 2601).       C&an refugees are authorized
to enter the United States under the Immigratitin          and Nation-
ality Act of 1952, as amended (8 U.S.C. 1182).            The 1962
act provides for (1) financial      assistance   to needy refugees,
(2) financial    assistance  to State and local public agencies
which provide services for substantial        numbers of refugees,
(3) paying the costs of resettling       refugees from Miami, and
(4) establishing     employment and professional     refresLz.r   train-
ing courses for refugees.



       According to Immigration   and Naturalization SerLca cf-
fkials    and program records, &bout 6GG,C:O 3?bsm refugees
have s;ltert;?d the Znitod States since Fidel Castro came to

                                   3
power in Cuba. About 429,000 of them have registered       with                       '
the Cuban Refugee Rnerzency Center in Miami.      Until October
1962 many refugees arrived     in Miami on commercial air flights
which operated to and from Cuba. Then--because       of the mis-
sile crisis--frime    Minister  Castro banned all commercial
flights   to the United States.
       TT~L1l Septej&es 1955 --about 3 years later--few  Cubans
were abti!   to come IX the United States.    On September 28,
1965, however, Prime Minister      Castro announced that al1
those who wished to leave could do so, Within a week the
Resident    announced that he had directed    the Departments of
State, Justice,     and HEWw** to make all necessary arrange-
ments -to permit those in Cuba who seek freedom to make an
orderly entry into the United States."

       In an effort to create a safe and orderly   flow of ref-
ugees, the United States, through the Swiss Embassy in Ha-
vana, Cuba,1 negotiated    a maorandum of understanding   with
Cuba in November 1965 in which the United States agreed to
provide suificient   ais transportation between Cuba and the
United States to permit the entry of between 3,000 and
4,000 persons a month.
      On December 1, 1965, the first      chartered    aircraft
brought Cubans to Miami from the town of Varadero, Cuba,
75 miles east of Havana. This airlift          since has operated
on a twice-a-day,    s-day-a-week schedule.       Through July 31,
1971, about 243,000 refugees had arrived         in the United States
via the chartered    flights   at the rate of about 850 a week.
The ai;-l.ift arrangements are handled by the Department of
State, and the costs LX~ Taid from funds appropriated           to
HEW fo: &ministerLng       the program.2


      At the E1;3?n Refugee Emergency Center in Miami, special
arrangements irave been made with State and local agencies

1
 The Swiss Embassy agreed to represent       the interests           of the
 ULted States in Gtpba.
                                               ,
2The expenses of the airlift     were funded by the Pepertment
 of State through fiscal     year 1968.
                                  5

                                                             _.-I_        --?-ax---       .._
_-   -*--_._~.




     for refugee services because of the large number of Cubans
     who havesettledthere.       Services in Miami and other parts of
     Dade County, Florida,    are provided under agreements with the
     Florida Department of Health and Rehabilitative        Services,
     the Dade County Department of Health, and the Dade County
     Board of Public Instruction.       The University of Miami, un-
     der contract   with FEW, provides professional    refresher
     courses for refugee physicians.

            The resettlement     of refui;z.as Zrom Mi*api to other parts
     of the country always has been a major objective              of the Cu-
     ban refugee program.        Four national     voluntary    agencies with
     long experience     iti resettlement     have worked under contract
     with HEW in resettling       refugees since the program began.
     These agencies are the United States Catholic Conference,
     the Church World Service of the National Council of Churches,
     the United Hebrew Immigrant Aid Society Service, and the In-
     ternational    Rescue Committee.        In every State, local churches,
     SYw3?&pes s and civic organizations          ,&aye participated     with
     thesa agencies in the resettlement          program.

           At the State level needed ser;5ces are provided princi-
     pally through State welfare departments,   which are reimbursed
     fully  by HEWfor assistance  given the refugees.



           The Cuban refugee program is administered  by the So-
     cial and Rehabilitation  Servi.ce.of HEW. The program pro-
     vides for a number of services for the refugees,   including

                 --flights    from Cuba to Miami (adminizzxed              by the De-
                     partment of State),

                 --reception    and registration        upon arrival      in Miami,



                 --cash   assistance   and welfare         services    to those in need,

                 --education    and health     services,      and
                 --assistance    in planning        and und-zL;-a?&.ng restttkment.


                                                6
                    The Federal staff members employed in the program as
             of July 1971 nlqT:Jared 163 persons.   Eighteen employees were
6            located in Washington, D.C.; most of the employees were lo-
    -_ ..-   cated at the Cuban Refugee Emergency Center in Miami.

                    Withjz HEWother agencies participate      in the Cuban
             reflqee grog::am+ The Public Health Service provides over-
             aP1 ,yfdL,rce for the health screening of new refugees .uL
             aedical and dental services for needy refugees.           The Orflx
             of Education supervises programs relating      to the education
             of refugee children,    English and vocational     training   for
             adults,    and loans to needy Cuban refugee college students,

                   A chart showing the functional organization of the Cu-
             ban refugee program as of August 1971 is included as an ap-
             pendix to this report.




                                                                       .
                                                           .




                                             .
                                                 7 -
COST OF THE PiiOGRAH                                                                     .

       From the beginning of the program in 1961 thrbugti fis-
cal year 1971, Federal funds of about $586 million      have
been spent under the program.     Program officials   estimate
that, by June 30, 1972, about $730 million      will have been
spent.    The following  table shows a breakdown cf program
expenditures    for oath year.
                      Public
                    assistance                              h-ogram     Movement             Fiscal
Fiscal             payments and    &ha-         Resettle-   adminis-   of refugees            year
 Year                services       tion           merit    tration     from Cuba             total


 1961                 $     2.3.   $     1.0      $ 015      $ 0.2        $-                 $     4.1
 1962                      28.5          5.5        3.8           .7                              38.5
 1963                      41.9          9.5        3.7         1.0                               56.0
 1964                      33.2          9.7        2.2         1.0                               46.0
 1965                      20.7          9.6        1.3           .9                 ;            32.5
 1966                      18.9        10.4         4.5         2.0        0.4                    36.2
 I?57        l             23.5        14.3         5.8         2.0           .6                  46.2
 1968                      30.5        17.8         4.9         2.0           .6                  55.8
 1969                      44.5        i8.8         4.8         1.9           .6                  70.6
 1970                      59.3        20.5         4.7         2.3           .7                  87.4
 1971 (est.1               80.6        22.1         5.8         2.6           .9                 112.0
 1972 (est.1              112.0        21 . 8      E;.3       2.9          I.0                   144.1
         Total        $496.0       $160.9         $48.4      $19.6        $4.9
                                                                           --                $729.7
Note:      Coltmns may not add to totals        because of rounding.


RECEXIDEVELOPMENTS

      On August 31, 1971, the Departml.z? of State announced
that the Cuban authorities      planned to interrupt      ths CL!ban
refugee airlift    beginning   September I- 1971. ThE ir,terrup-
tion, according to the Cuban authorities,        -was to last for
several weeks to complete processing        of the final grcups of
names of Cubans who were to be allowed to ‘leave Cuba. Ac-
cording to program officials       estimtes   of th= number of such
Cubans conceivably     could range from 1,000 to 514,000. The
number of remaining Cuban refugee airlift         flights    is contin-
gent upon the number of Cubans whose names are placed by
their Government on the final list 0:: those to be allowed to
leave the country.
                                   CHAPTER2

                        PAYMENTSFOR IMPACT ON

               DADE COUNTYPUBLIC SCHOOLSYSTEM

      IJher the CuG:: refugee program was established           ir 1961,
tfie Presicknt    dirocred    ChileSecretary of HEM to furni&      Fe<-
era1 financial     assistance     for local public school costs re-.
lated to (1) the impact of Cuban refugee children            on local
teaching facilities       and (2) measures needed to augment train-
ing and educational       opportunities     for Cuban refugees.

       The Dade County public school system has received about
$89 million    on behalf of Cuban refugees for the 1960-61
through 1969-70 school terms.        HEWhas estimated that an ad-
ditional    $30 million    will be needed for the 1970-71 and 1971-
72 school terms.        A summary of these payments, by school
term, fol;Lows.

                                                  Federal payment
                       School   term                Cmillions)

          1960-61 (2d semester onlb>                      $    0.7
          1961-62                   _                          4.3
          1962-63                                              7.9
          1963-64                                              7.0
          1964-65                                              6.7
          1965-66                                              7.0
          1966-67                                             10.7
          1967 -58                                            14.0
          19i8-$9                                             14.6
          11469-70   '                                        16.0
                                                               0.    _
               Total     (actual    payments)                 88.9

          :970-71 (est.1                          '   _       14.7
          1971-72 (est,)                                      15.5

               Total Factual and esti-
                 tixced payments)
                                              .
.   .

        .




                   The payments to Dade County were, or are to be, made
            for   the following purposes.

                                                                  Amount
                                    Purpose                     (millions)

                     Operating costs                              $ 69.4
                     Constr~~ction costs                            24.7
                     SpeclzI! =;ervj c:es and sl?ppLies             11.5
                     Summer school program                                1.2
                     Vocational   and adult education
                       programs                                          12.3

                          Total                                   $119      l   1




                   In only two other localities   in the country--Union               City
            and West New York, New Jersey-- have the public school                  systems
            received educational    assistance  under the program.1

                  The Federal assistance     to the Dade Co-xety public school
            system is prtivided in accordance with agreements negotiated
            annually between the Office of Education,       I-IIW, in cooperation
            with officials    of the program, and the school system.       TO
            ascertain    the reasonableness   of the Federal payments, we an-
            alyzed available     information  supporting  the payments made or
            estimated since the airlift      began in December 1965. As shown
            on page 9, the total payments increased from $7 million          for
            the 1965-66 school term to an estimated $15.5 million         for
            the 1971-72 school term.

                 T're results     of our analysis   rf   each of the areas of
            cost follow*


            1Union City and West New York will receive an estimated
             $1.8 million and $1.2 million,  respe:i?qTely,  for the 1970-71
             school term, the only period in which ~uc?!r funds have been
             provided by the Cuban refugee program.
OPERATINGCOSTS

Contract   provisions

        In its first    agreement with Dade County--covering   the
1960-61 school term--the        Federal Government agreed to pay
the county half of the cost of educating all Cuban refugee
s nldenti,      The county estimated that, because -f language
diffcarences,      it would cost about 20 percent rnbrd LL~ educate
Cuban refugee students than to educate its regular stu-
dents --or     120 percent of the normal operating    cost per stu-
dent.      Therefore the Federal payment for each refugee stu-
dent was set at 60 percent of the Dade County operating
cost per student.        This 60-percent  rate remained in effect
through the 1964-65 school term.

       Because of indications    that many of the refugees were
becoming taxpaying members of the community, HEbj decided
that, in negotiating     an agreement for the 1965-66 term, as-
sistance for the costs of educating refugee students should
be given only for those whose families      %?ere receiving pub-
lic assistance.     Dade Co*unty officials  objected to this pro-
posal and a compromise agreement was reached whereby the
Federal Government would continue to pay 60 percent of the
cost of refugee students whose families      were receiving  fi-
nancial assistance    but only 45 percent for other refugee
students.

       Because of the President's     open-door policy announced
on October 3, 1965, however, a new influx         of refugees began,
and, on October 11, the Dade County School Board refused
admLttance to f:xther    Cuban refugee students,       claiming that
its resources were inadequate to provide for their educa-
tion.    Un Eiovember 22 the school board--on the basis of as-
surances from HEWofficials       that additional    Federal aid
would be forthcoming--   began admitting     refugee students
again.

      In January 1966 HEM and Dade County negotiated   an
agreement providing    for Federal assistance for those refugee
students arriving   after October 3, 1965. For these refugees
the Federal -,zyment was to be 100 percent of the Dade County
cost pz- student,    The agreement already reached for those


                                11
    refugee students who arrived on or before October 3 re-
    mained the same. The terms of this 1965-66 agreement con-
    tinued, with minor changes, during the 1966-57 and 1967-68
    school terms.

          In negotiating   a new agreement for the 1968-69 school
    term, the Cuban refugee program officials     desired to level
    off future Federal payments to Dade Cou~zty.      For all refugee
    students -.-ho arrived on or kItire   October 3, 13S, (regard-
    1eSS   Of   klic?tCl'?Z   tt-22~~
                                   I- families   were receldng   piublic   assis-
    tance), the Federal payment was to be 30 percent of the Dade
    County cost per student for the 1968-69 school term, 15
    percent for the 1969-70 school term, and nothing thereafter.

          For refugee students who arrived after October 3, 1965,
    Federal paymknt was to be made only for the first    5 years
    each refugeestudentwas    in the school system.   The payment
    was to be 60 percent of the Dade County operating    cost per
    student for the 1968-69 school term.

          The terms of this 19&S-69 agreement have continr?rd,  ex-
    cept that, under subsequent agreements, the payments have
    been set at 50 percent of the Dade County operating    cost per
    student.

            Following    is a table summarizing the results     of the ne-
    gotiations      for  the Federal payment for operating-costs1     from
    the inception       of the program through the 1971-72 school
    term.      '


1
    The term "operating     costs" a~ used here ha9 TVO meanings.
    For the purpose of making payments for refugee sttiderrts who
    arrived   on or before October   3, 1965,  qxrating     costs mean
    @.J costs, including     thcz ;ier&ining   t> eonstrxtion.      For
    the purpose of making payments for refugee students who ar-
    rived after that date, the term excludes costs pertaining
    to construction;    recognition  of these costs is made through
    a special one-time payment for such students.         (See pp. 17
    to 20.1
                    Portion of Dade County operating     cost
                     per student paid on behalf of Cuban
                           refugee students who arrived
 School                 Before                     After
  term            October 3, 1965            October 3, 1965
                                                          --  --
1960-61
  thrc@   _       I
  1964-65       SO%for    all   students

1965-66         60% for students in
  through       families   receiving
  1967-68       assistance    and 45%
                for all other stu-
                dents                      100% for   all   students

1968-69         30% for   all   students   60%.for all students;
                                           payments are limited-
                                           for each student to a
            .                              total of 5 years in
                                           the school system

1969-70         15% for   all   students   50% for all students;
                                           payments are limited
                                           for each student to a
                                           total of 5 years in
                                           the school system

                None                       Same   as 1969-70 school
                                           term
                None                       Same as 1969-70 school
                                           term




                                     13
-



    Federal   payments

          Federal payments to the Dade Catty  publjc         school sys-
    ten for operating  costs for the 1965-66 through         1971-72
    school terms are shown below.

                                  Average number of
    .                           Cuban rlftgze  students    Federal
          School         *         ior whom payment        payment
           I e-rm
           2:                           was
                                        -- Ir#sde         (millions)

          1965-66                       16,673              $ 4.8
          1966-67                       19,818                6.8
          1967-68                       23,620                9.8
          1968-69                       27,176                8.8
          1969-70                       31,292                8.5
          1970-71   (est.)              20,700                8.9
          1971-72   (est.1              22,100               10.1

            From the 1965-66      school term through the 1959-70 schaol.
    term, the enrollment        increased each year by about 3,000 or
    4,000 students.      This     growth resulted  from the continuing
    arrival    on the airlift      of refugee students and from the en-
    rollment of children        who had arrived pretiously   and who had
    reacfied school age.

           The decrease, for Federal payment purposes, in the
    average enrollment     for the 1970-71 and 1971-72 school terms
    is attributable    to two factors,    As shown on page 13, be-
    ginning with the 1970-71 term, Cuban refugee students who
    arrived    in this country  on or before October 3, 1965, were
    not counted for purp-: 2s of Federal payment.      Federal pay-
    ments for refugee students who arzLse;! after October 3, 1965,
    were to cease after +I-:y had been ill zshe school system for
    5 years.

          The following  table presents Dade County's    cost of'edu-
    eating the refugee stLaden?s fcr whom Federal payments are
    made, the portion met by the Federal
                                       .    Government in accor-
    dance with the agreements negotiated,    and related   fiscal
    data for the-1965-66    through 1971-72 school terms.
                                                                                                                                                             School              term
                                                                                                                                                                                                                         137G-71                   1971-72
                                                                                     LS65-66              i¶b6-67                   L967-68                       1968-69                     lY69-70                  (e5tinato)                (esrivate)
                                                                                      ----                                                                                                     --                       --                        ---

             1.      Total         ape:.-‘?g            co~%.ts        for
                         e.h.sr        lily     .: 1b.m      refugee
                          st.,de:lts         (rlote        a)                      S9,445,162            511,893.128               S15,494,632                S20,313,333                   $25,463,560                517,739.900               SM.211.5OO
             2.      Federal           payment          made         for
                         optrating              c0sts                              $4,781.084            S 6,788,925               S 9,807.576                $    8,749.802                S 8,530,852                S 8,RIO.OOO               jlO,lZ’L,OMJ
             3.      r.zmmr          ut L.xban           refugee
                         students            for       whom pay-
                         ment        YSS made                                              16,673                   19,818                    23.620                        27.176                      31,292                      20,700                    22.100
             4.      Average           operating              cost
                         p;r-s:dent                  (note         b)
                                                                                                5566                     $600                      5656                          $747                        5816                        $857’                     $915
             5.      Lerage         Federal        payment        rade                ’
                         Em eacll        Cut-m       refugee
                         stude.lt      :2 I 3)                                                  $287                     $343                      5415                          Z-3??                       S?i?                        $L-=                      ib5.3
             6.      Percent        of   operatinp           cost
                         net      by C&an        refugee
                                                                                           51                       57                        63                            43                          33                          50                        50
                         program       (5 + 4)

             ‘Tbzse            figures         are        obtained           by   multiplying            tk   total           number          of Cuban              refugee              students            for    Whom        SOW      Federal      pay-
               mmt           will      be nnde                               by   the     average        OF Dade          c~nrY*s             operating               cost         pet       student           used    in       computing        payznt
               under           the     progran            Kz           3.
             b                                                                                                                                            avereging          the            total     of          :l)       Dade     Couc.ty’s          “expense
                  These         fiEnes          were        computed      by        the    General        Acc~un:ing                OffICe    bY
                  costs’.         for      stnJdents          who arrived             on   or before         October              3, 136%-vhich                   contained                 all   costs               including          cozscr-xrion--
                  and      (2)       the     couWy*         s “0petatir.g            COStS“        fcr    students              who arrived               after      October                3, 1.965,            vhich          excluded          CCIS~S Of
                  construction.




                         The increases in the Federal payments for the 1966-67
                  and 1967-68 school terms over earlier    terms were caused by
                  (I) the additional    number of students for whom payments were
                  being &de and (3) an increase in Dade County's average op-
                  erating   cost per student.

                         Federal payments decreased for the 1968-69 and 1969-70
                  school terms --despite    additional   enrollments   and a higher
                  operating    cost per student-- because the Federal. percentage
                  of the county's operating       cost per student paid under the
                  program dropped sharply in these periods.          (See p= 13.)
                     The Federal payment to Dade County for operating       costs
              is expected to rise in the 1970-71 and 1971-72 school terms
              despite a large decrease in the number of Cuban refugee
              students for whom.payment is to be made,l This expected
              rise is due to the anticipated      increases in (I) the Dade
              CoTJqty operating    cost per student and (2) the enrollmc;it     of
              refugees who arrived after October 3, 1965--fro&        X,124 in
            . the 1969-70 school term to an estimated 20,700 and 22,100,
              respectively,     for the next two school terms.    Although pay-
              ments on behalf of 13,168 students who arrived before &to-
            ' ber 3, 1965, dropped from $1.8 million       in the 1969-70 term
f       .
I   .




;                 1The enrollment  of 31,292 in the 1969-70 school_ term co?-
                   sisted of 13,168 students who arrived before October 3,
/ :                1965, anfl X8,324 stLtder.ts :-ho alrived after October 3, 1965.

                                                                                                                                    15
to nothing in later terns , payments on behalf of students
who arrived after October 3, 1965, are expected to in-
crease-- because of the anticir:; Led increases in enrollment
and in the operating   cost per student--from   $6.7 million   in
the '1969-70 term to $8.9 million   and $10.1 million   in the
1970-71 and 1971-72 school terms, respectively.

       HISI statistTca1   'da-a kdicates      that   the increase   in
+,he D9tk  th.,",;/   c,rl.z.-atiq crest -per stdent     is in line with
cc.s% increases In other commaities.              For example, the aver-
age operating       cost per student (exclusive        of construction)
for each student in Dade County for the 1967-68 school term
was $586; such cost is estimated to increase by 46 percent
to  $857 for the 1970-71 school term.             This compares with an
increase of 45 percent in the operating              cost per student
for the entire State of Florida.             Also the estimated operat-
ing cost per student for the 1970-71 school term reported
by HEW for 13 large cities           in the United States ranged from
$576 to $1,256 compared with the $857 for Dade County.                  The
estimated cost for eight of the 13 cities              exceeded Dade
Countyps' estimated cost.




   i        :.’
    CONSTRUCTIONCOSTS
    ---
    Contract    provisions

          Beginning with the 1965-66 school term, the agreements               '
    between HEW and Dade County have provided separately     for
    Federal payments for operating   COPS and for a one- tim-
    Federal payment to the county for t_>e *.opst,uctioil of
    school facilities   on behalf of refugee students who c=liiered
    the United States after October 3, 1965.     (See note b on
    p. 15.1
           The payment for construction was $600 for each student
    for the 1965-66, 1966-67, and 1967-68 school terms.    This
    one-time payment was increased through negotiations   as fol-
    lows :
                     School term         Amount for each student
                I                          .
                    1968-69                       $ 765
                    1969-70                           865
                    1970-71   (est * >                955
                    1971-72   (est.)               1,022

           The annual agreements provide that Dade County (1) use
    the funds specifically     for constructing     and furnishing     addi-
    tional   school facilities    and (2)  show evidence    that   funds
    in the amount of the Federal payment for construction            have
    been budgeted for additional      school facilities,

    _Fpderal
     .L        payments

          The following  table shows the payment srade to Dade
    County for constxuetion     on behalf of each Cuban refugee
    student who arrived    in the United States after October 3,
    1965.


f




                                          17
             Facilities      added
                    (note   a)                              Cuban refugee
School                      Class-       Dade County       program payment
 term        Schools         rooms      cost (note a)           (note b)_

                                                     (mill ions)
                            %
196% 6l          ICI              292       $ 6.4                  $ 0.2
;9zj--52         LO               25s         5.8                      .6
1962-63           2                60         1.1                    1.0
1963-64          10               444        12.5                      .7
1964-65            3              164         6,O                      .6
1965-66           1                18           .7                   1.9
1966-67            3              130         4.8                    3.2
1967-68            4              135         4.4                    3.4
1968-69            2               54         1.6                    4.3
1969-70            7              177         7.4                    5.5
       s
     Total                      1,732       $50*?
                                             --                    $21.4

aDoes not include alterations   or additions   to existing fa-
  cilities.                   /
b
  Payments are made through (1) sharing in the IToperating ex-
  pense" (including  costs of construction)  for students who
  arrived on or before October 3, 1965, and (2) the one-time
 payment for students who arrived after October 3, 1965.

      The enrollment  for all students in Dade County has in-
creased from about 163,300 in June 1961 to about 240,100 in
June 1970--an increase of about 76,800 students.         The in-
crease of the Cuban refugee studtnt p.Jpulation during this
period was about ?7,20%--L 'rorl about 5,000 students to about
32,200.   Thus, of the total    increase,   the Cuban refugee stu-
dents accounted for &bout 35 percent.        At the same time the
Cuban refugee program contkibuted      about 42 percent of the
total cost of new classrooms constructed       in Dade County.
. .    .




      oI3zETIEDUCATIONALCCSTS

      Special   services     and supplies

            From the beginning  of the refugee program, Dade County
      has had a special educational    program for Cuban refugee
      students.   This special program consists    of assigning     ur,e
      teacher and two bilingual   ZI:ban refugee trsa+c:- 4des IIC
      groups of about 60 refuget .:+.cId~L>ts; The St-idcLlts remail? in
      the special program until they become sufficiently       proficient
      in English to attend the regular classes and to follow the
      normal county curriculum.

            Since 1961 the agreements between HEM and the county
      have provided for Federal payments toward the cost of this
      special educational        program, including  costs for special
      English-Spanish      textbooks and materials    for the students,
      The agreements covering refugee students arriving           after Cc-
      tober 3, 1905, added--as part of the special educational
      program-- ' visiting    teacher-counselors,   psychological    case-
      workers, and administrative         eqloyees,

           The Federal payments for the special educational    pro-
      gram for the 1965-66 throa,l-oh 1971-72 school terms are shown
      in the following table.

                    School                       Amount
                     term                      (millions)

                    1965-66
                    1966-67
                    1967-68
                    1968-69
                    1969-70
                    1970-71     (est.>
                    1971-72     (est.>

      By agreement with Dade County, the Federal payment i'or stu-
      dents who arrived  on or before October 3, 1965, was elimi-
      nated beginning with the 1970-71 school term.
            The Federal payments have increased r,Lh~tantially   dur-
      fng the past few year;.   The increase -'n payments is tittri-
      hutable "c the inxrease in the enrollment   of students
             .    .
         .




                 arriving after October 3, 1965, from an average              8,452   (1967-
                 68) to an estimated average 22,100 (1971-72).

                           The amaunt paid per student under the program for the
                 special educational       program during. the 1967-68 through 1969-
                 70 school terms was based on actual expenses and was between
                 13.5 and 15.5 ozrcent of Dade County's operating          cost per
                 SfL.-kT.”    . By agrtiEment the contribution    will be 14 percent
                 wi' t?.e coi-.nty's cgaratire     cost per student during the 197%
                 71 aA 1971.-72 terx,         regardless  of the actual costs in-
                 curred by the county for the special educational          program.

                 Summer school
                                                                       .


                      In 1961 Dade County initiated   a summer school             program
                 of English instpaction  for Cuban refugee children,

                       The costs of the summer school program--carried          out
                 over a 6-week period-- cbnsist principally         of salaries  for
                 teacher? and Cuban teach&-aides,        Other costs are incurred
                 for supplies,   supervision,
                                   _           and adxlinistration.

                         The annual Federal payment has remained relatively     con-
                 stant since the 1967-68 school term at approximately
                 $160,000.     During the summer of 1970, about '$143,000 of this
                 payment was for salaries     of teachers and Cuban teacher-aides
                 and about $17,000 was for supplies,      supervision, and admin-
                 istration.     Costs for this program for the &mmers of 1971
                 and 1972 also ark estimated to be $160,000,

                 Voca+i~nal    and adult    education

                           Dade County ms re.(~ti~;e< Federal payments since the
                 '1g6G-61 S"F‘OOl tam fsr the cost of adult Cuban refugees at-
                  Lcniiing vocatizza         and FrgLish education programs.          The
                 amount payable is based on the cost for each hour of instruc-
                 tion for c.cch course.                                  I
                                                                         I
-.                        The Federal payment reached the highest levef dzlring
-:
                 the 1962-63 school term when adult refugees were provided
‘1
b
     .           with about 2.9 million          hours of instruction     at a cost to the
                 Cuba!1 r&Jgee program of about $1.7 million.                Statistics   fbr
                 t+~;: ‘ii,3&5-1;7’ -2-x~~'~~ .LY;X-72 school_ terms follow.


                                                        22
   .                                                                Average cost        -
                                   Hours                                for each
       School                        of             Federal             hour of
        term                   instruction          payment          instruction
       1966-67                  1,796,OOO         $1,010,361            $.56
       1967-68                   1,519,ooo            863,596             .5'
       1968-69             -     LS46,OOO             s'ij4,,.523         .53
       1969- 70                 7-/$8C;OOO            8X,6t7              .55:
       1970-71    (est.    >    1,546,OriU         1,ooo,oirir            .65
       1971-72    (est.1         1,690,OOO         1,200,000              .71
SbMY

      Federal assistance   for education has been provided to
Dade County on the bases that (1) a large, unforeseen       influx
of school-age children    would strain the capacity   of the pub-
lic school system and (2) most of the refugees were without
resources and,'therefore,     could not contribute  to the com-
munity through czisting    tax structures.

      From time to time HEWhas attempted to phase out, or
at least reduce, Federal assistance     to Dade County for edu-
cating Cuban refugees.     Some success has been made as evi-
denced by (1) the discontinuing     of payments for refugees
who arrived   on or before October 3, 1965, and (2) the limit-
ing of payments for those refugees arriving     after October 3,
1965, to a 5-year period,

      Although these efforts     have curbed program costs                         to
som2 extent,   total costs in recent years I.~:--e remained
around $15 million     for each school term.    Total costs                        h:~2
not decreased significantly      because of la-rap increases                         i.;:
the operating    cost per student (a 56-peTcent increase                           in
5 years) and the contribution      per student for the cost                          of
construction    (a 70-percent  increase in 5 years).




                                             23
.*      ..




                                   CHAPTER3

             PUBLIC ASSISTANCE PAYWZNTSTO CUBANREFUGEES

            Public assistance    is made available    to needy Cuban
     refugees in Miami who qualify      under Florida's     eligibility
     ,:tandards thr :x&k the Cuban Refugee Assistance Unit of the
     ?z"
       A4~i&s. i)epaiY ant of Health and Rehabilitative        Services.
     Thic -nit-khich      "s entirely  federally   funded--was estab-
     lished because of the large number of refugees remaining
     in Miami.

             Elsewhere in the United States, public assistance        and
     medical services are made available         to Cuban refugees
     through the offices        o f State public welfare departments.
     The States are reimbursed completely under the Cuban refu-
     gee program for their medical and assistance         payments to,
     or on behalf of, refugees who qualify         under the States'
     eligibility   * standards.

            For budgeting purposes the Cuban refugee program main-
     tains separate public assistance   data for Cuban refugees in
     Florida   and for refugees located elsewhere.

             Until recently     the Federal public assistance   payment
     for refugees in Florida was a maximum of $60 a month for a
     single person and a maximuln. of $100 a month for a family
     regardless      of size.     Beginning July 1, 1971, these maximums
     were increased to $86 and $246, respectively.           Program of-
     ficisls     stated that these increases would bring financial
     assistance      for Cuban refugees up to a level that was clore
     nearly cornparablE to k‘l~~.iGa 's payments to regular welfare
     reciprents,      wtiirh ranged from $114 for a single person up
     to $246 for a family of 10 or more.
            The level of public assistance          payments varies else-
     where: dep.x-ding on a State's benefit           level for its regular
     welfare programs.        The following     table shows, for March
     1971, the average monthly payments to recipients               of feder-
     ally aided public assistance          program nationwide,       in Flor-
     ida, z-k? in three other States.           These   three other    States
     act *gug,L fcr r,bi:r?t 80 perrte:i;: of all Cuban refugees receiv-
     -..-
     4~.- -;-?blic assistance    outside ?'lmS.da.


                                         24
                   Average monthly assistance    payments for
                                 each recipient           -- -
                                     Aid to                                        ..Ii
                                                                                   T.,G
                The aged   The blind     The disabled    Families

Nationwide      $ 76.95         $104.10               $ 97.75            $49.60
Florida           57.65           76.20                  74.65            24.20
California       114:35          16r3.20               l33.25             52,25
New Jersey       -78.25          1~1,OO                LOT.35             62.50
New York          97.60          120.50                128.95             77.70

      Medical services to needy refugees in Miami are fur-                  2
                                                                            m
nished through a clinic         in the Cuban Refugee Emergency Cen-         3
ter and through accredited           local hospitals   and nursing          z
homes.     In  other areas   of    the   country,  needy refugees apply    z
for medical assistance       through the regular machinery of
State welfare agencies.           The States then are reimbursed        -$
fully by the Cuban refugee program for such assistance,                    -=z
                                                                           T,.
                              ;                                            -9
      The ~followirg    table shcws the public assistance          pay-
ments --including    medical payments--madc under the Cuban
refugee program for fiscal          years 1968 through 1972.
                            Public assistance       payments
                            including    medical services
                 Nationwide                   Cali-       New               New
Fiscal   year     (note a)       Florida      f ornia    Jersey             York

                                         (millions)

I.968               $ 26.5          $14.0       .; 7.2           $ 3.8     $ 4.4
1969                  40.4           16.6          2.5             5.2      10.7
1970                  54.8           20.4     ’    7.3             6.9      11.7
1971. (est,>          75,5           26.3         16.5            11.0      14.0
1972 (est.>          106.2           38.2         22.0            14.5      lb.0

aThese amounts are less than those she-m 011 page 8 because
 they exclude amounts for such things as admingstration   and
 distribution of surplus commodities.

       The 300-percent       increase in tota:: i-syments since 1968
is attributable       principally     to incrf.,fes   xi1 (1.1 the dnounts
individual     recipients      are receixTin& for public ass;stance,
(2) mec'i~al cost,,       ad (3) the nilnber of persons wile are
receiving    assistance,        These factors     are discussed below.

                                    25
INCREASE IN AMOUNTS
INDIVIDUAL RECIPTENTS
               --     RECTIVE
                         _--
         The national   trend of financial      assistance   benefits    for
persons     on welfare has been steadily        upward.    A comparison
of HEW's 1968 cost data with 1972 budget estimates shows
that the sverage monthly payment for persons receiving                 ben-
rg   ,
 -....fs  under tile various federally     assisted public assis-
ta1xeprogram.s (old-age assistance,          aid to the blind,      aicl ts
the permanently and totally        disabled,     and aid to families
with dependent children)       will increase 'by about 20 percent.

       The following      tables compare the change in average
monthly payment amounts for each recipient          from P3arch 1968
to March 1971 under the old-age assistance          and aid to fami-
lies with dependent children        programs, nationwide,in    Florida,
and in three other States.         Most of the refugees receiving
assistance     qualify    under the requirements .for these two pub-
lit assistance       programs.
             *
   PapeW
    month       Nationwide          Florida           California     New Jersey   New York

                                   Old-age        assistance
Mar.   1971        $76.95            $57.65              $114.35        $78.25     $97.60
Mar.   1968             68.65         46.55                99.85         72.00      94.25

 Increase
    from 1968      $- 8.30          $1~.10               $ 14.50        $- 6.25

 .'cL-Cext of
     increase            -I,-
                         AL               24                 15             9

                 Ai;t      to farnklies        with   dependent    children -

                   $49.60           $24.20               S 52.25        $62.50     $77.70
                    39.80            15.15                 45.85         57.80      61.45

Increase
   from 1968                                                                       $16.25
                                                                                    -

                                                                                     26
        ,.       *.
.   .        .




                             Payments for public assistance,     including       medical ser-
                      vices, for the Cu3an refugees have increased F're rapi??y
                      than similar payments for all other persons on public assis-
                      tance.    As noted earlier    (p. 251, from fiscal       year 1968 to
                      fiscal   year 1972, payments on behalf of Cuban refugees in-
                      creased by 30Q percent.      During the same period payments on
                      behalf of ail other pzrso-s receiving        ;.uF,'-f.c assistance    in-
                      creased by ~nl;~ 110 percent. IZIL*~! $5.6 3lllZon       '.o an esti-
                      mated $18 biLLor::)      This dif=erence   is shcxn in the graph
                      on the following    page.

                              Contributing    to the difference        between payments to Cu-
                      ban refuge&s and payments to other public assistance                  recip-
                      ients is the fact that, as of March 31, 1971, about 80 per-
                      cent of the refagees who were receiving               public assistance
                      outside Florida were concentrated             in California,      New Jersey,
                      and New York.        Tn contrast,     only about 30 percent of the
                      other public assistance         recipients--exclu;ding        those in Flor-
                      ida--lived      in these three States.          These three States' pay-
                      ments to most of their public assistance               recipients    were
                      higher than the national          average.
                            Cuban refugee program officials      estimate that, in fis-
                      cal year 1972, about 42,700 (47 percent) of the Cuban ref-
                      ugees on public assistance  will be in Florida.          Unlike its
                      policy elsewhere, the program has set limits          on the monthly
                      payments to refugees in Florida,      which are less than the
                      payments to other public assistance       recipients.     This anount
                      has remained constant from the beginning of the program
                      through fiscal   year 1971.

                            As noted on page 24, the benefit      paymxts     Zo;;: r&ugees
                      in Florida were increased in fLa~;;l year 1'372 (146-percent
                      increase for families--from      $1.00 to $246--a+     43-percent    in-
                      crease for individuals--from      $60 to $?b> to bring the bene-
                      fit levels closer to those of other Florida public assis-
                      tance recipients.      These increased ;a-flients will account
                      for a significant    increase in the overall     public assistance
                      costs for refugees in fiscal      year 1972.




                                                           27
           PERC,KSiM&REASE        IN PUBLlCASSISTAWCEPAYMEtdTS
            (tKLZ4G    YEDIC?t ,EXPENSES) FQR CUBAN REFUGEES
                  LX3 OTHER PUBLtC ASSISTANCE RECIPiEMTS
PERCENT




260


240




       -


180             .




120


100    -


 80    -


 60    -


 40    -
                                                 0 ther Public    Assistance
                                                         Recipients
 20    -


  0
   l',OS            *i -4.             1970                 1971                1972
                                                           (EST.1              1EI;T.)
                               FfSCX      YEAR
       The nationwide        increase     in medical     costs also has had
an impact on the cost of the Cuban refugee                   program since
the States     are reimbursed         under the program for medical
costs   incurred       for eljgible     refugees.       Gf the estimated
$106 millic-       of Cuban refuge*         ~*,Jli;: assistance     costs for
fiscal    yea;   19-1,     about $28 mrL7.ion is for piedical           services.

        Information      regarding     medical    costs for refugees       re-
settled      outside    Florida    is not readily      available     because,
prior     to fiscal     year 1970, HEW records         did not distinguish
between public         assistance     payments    to providers      of medical
services      and cash maintenance        payments to recipients.            Rec-
ords for fiscal         year 1970 showed that medical            costs for Cu-
ban refugees         who had resettled      outside     FlorFda   amounted to
$6.4 million.          The budget estimates         for fiscal.   year 1972
show that these costs are expected                to be $17 million--an        in-
crease o.f $10.6 million,            or 166 percent,       over 1970 costs.

        Our review       of the Cuban refugee            program budget justifi-
cation    and discussions          with a program official               indicated
that this      increase       was attributed        principally        to an antici-
pated large        increase      in the number of refugees               on whose be-
half medical         expenses would be paid under the program,                        fk-
cording     to information         in the budget justification,                  as shown
below,    the number of refugees              resettled       outside      Florida    re-
quiring     public      assistance      (including       medical      services)     at
June 30, 1970, was expected                to increase        substantially        by
June 30, 1972.

                                                           Rese:titid       refugees
                                 Total ;;umbqr           requiring        assistance
                                                                        ----o-w
                                 of resettled                             Percent    of
             Date                   refupees             Number              --total

June   30,    1970                   250,947             33,610              13.4
June   30,    1971 (est.>            282,947             43,210              15.3
June   30,    1972 (est.>            314,947             54,010              17.1

         The budget justificaticr      zi-a~ed tkcn: anotht:r        faci3r
contributing       to the incre:se  in medic-al costs wac the in-
rreasing      ages of the Cuban refugees        reczivi,Tg    public      assis-
tar,ce:,     As P ersons become older,      there    is usually      a greater

                                            29
 need for medical  services  and frequently          these            services     are
 in the form of more expensive    institutional-type                     care,    such
 as hospital,  and nursing  homes. 1

         According      to an HEW report         on a study in five States2
 comparing      characteristios         of Cuban refugee      public     assistance
 reciolfnts      in 1965 with       those in 1968, the average age of
 male rcc:. pients        increased     from 41.7 years to 52.6 years and
  ':he a-~ez=ige age of the female recipients              increased      fry     48.6
 years      to 56 years.        The study     also  showed   that    the  ratio    cf
 the number of recipients             receiving     public   assistance       who
 were over 64 years of age increased                 from 14 percent        in 1965
 to 28 percent        in 1968.

      The records   of the Cuban Refugee Emergency Center        in
 Miami showed that,   of the Cuban public    assistance  recipients
 in Dade County in April    1971, 80 percent   were over age 60.

        An additional      factor     contributing         to the rise     in ex-
 penditures,for       medical     services     under the Cuban refugee
 program is the adoption           by New Jersey         (which has about
 12 percent      of all Cuban refugees           receiving      public    assistance)
 of a Ihcedicaid program        (authorized        under title      XIX of the
 Social    Securiq     Act) in January          1970.     State medicaid        pro-
 grams generally       are more comprehensive              in their    coverage      of
 health    benefits    than predecessor          programs     and, thus,      more
 expensive.

         Also,     in January         1970, California      (which had about
  13 percent       of all Cuban refugees            who were receiving       public
*assistance)         changed its policy          from allowing     refugees    medical
 benefits       co,rr;>arable     to those allowed      general    assistance       re-
 cipients       tz a policy         of allowing     the refugees     the same bene-
  Lrits as peimitted          uldisr    the State's    more comprehensive        Med-
  icaid    p:.-ogram.
 - --
 1
     Medicaid costs for all federally     aided public    assistance
     programs averaged    $354 for each recipient    in fiscal    year
     1970; the average    for recipients  of old-age   assistance      was                i
     $628 for each recipient.                                                             ‘




 k,,,alifornia,     Illinois,     Louisiana,       New Jersey,      and New York.


                                           30                                             i-.
    .


I




                 This change, according to a Cuban refugee program of-
        -ficial,     increased the State's monthly claims for medic?1
          assistance     for Cuban refugees.    Our review of HEW's records
         showed that New Jersey's       and California's   claims increased
         from an average $89,000 and $38,000 a month, respectively,
         for the period July I, 1968, through December 31, 1969, to
         an average $197,000 and S277,OOG a mo!-ef; respectively,         for
         the perioi January 1, 197U, fik:.~~ut",hMarch 31, 1971 .

               HEW statistics   for Florida show that payments for medi-
        cal bills    under federally   aided public assistance    programs
        increased 83 percent for fiscal year 1970 over those for
        fiscal   year 1968, In comparison, medical costs for the Cuban
        refugee public assistance      recipients  in Florida  increased
        by only 63 percent during the same period.

              HEW's estimate of cost for medical services for Cuban
        refugees does' not appear to be out of line when compared
        with the overall    increase in medical costs and when consider-
        ing the 4ncrease in the ximber of recipients    and the average
        ages of the recipients.




                                          31
INCREASEIN NlJMBm OF RECIPIENTS

      As shown below E-X$!estimates that the number of Cuban
refugees receiving  public assistance will increase from
about 34,000 in fiscal   year 1968 to 91,800 in fiscal year
1972--an increase of 170 percent.
                      .
                                            Humber of
                                              refugees
                                            receiving
             Fiscal   year            public assistance

             1968                           33,995
             1969                           47,259
             1970                           60,439
             1971 (est.)                    74,453
             1972 (est.)                    91,803

      At the same time the number of nonrefugees receiving
public assistance   is expected to increase from 8,9 million
in fiscal   year 1968 to 15.2 million   in fiscal    year 1972--an
increase of 72 percent.    These anticipated      changes are shown
on the follor?ring graph.
       The number of Cuban refugees in the United States reg-
istered    in the Cuban refugee program will have increased
from about 251,000 on July 1, 1967, to an estimated 475,000
at June 30, 1972--a     increase of 90 percent.   At July 1,
1967, only 14 percent of the refugees were receiving      public
assistance    compared with an estimated 21 percent at June 30,
1972 e

      It appears that the principal      factors  causing the sharp
rise in the number of Cuban refugees receiving         assistance
are (1) the rjlder average age of the refugees and (2) the
decreasing level of education and English-speaking          ability
of refugees arriving   since the airlift      began in December
1965,

Increasing   ages of refugees

     Th?uugh July 31, 1971, the airlift  had brought about
243,WO rerucr,ezs to Y'ami. About 11 percent of these refu-
gezs vsre 61 years of age or olde- at the time ;f arrival;

                                 32
        .    .

I




                      PERCENT OF lNCREASE 1N NUMBEROF ~WMJ RFFUGEES
                       AND OTHER PERSONSRECEIVtNG PNUZ ASSrd-ANCE
            PERCENT
            180



            165


            150


            135


            120

    "                 1


            135


            90



            75



            60
                                             cr. *‘- Perwns

            P5



            30
                                              /d
                                         a
            15



             0                                                I
10 percent were between 50 and 60 years of age. The number
of older refugee,. recently arriving on the airlift has been
in line with the past progrm experience.    For example, for
the 4 months ended July 1971, about 11 percent of the arriv-
ing refugees were over 60 years old and about 10 perce.nt
were between 50 and 60 years old.

       Wit!: the passage of time since the airlif;;   temn in Pe-
cembc: 1965, the portion of this aging populatic;;       melzt'_zg
State standards for old-age assistance      has increased stead-
ily.    Those who have been able to find employment either have
not worked long enough to be eligible      for Social Security
benefits    or, because of their age, probably will not be able
to work that long.       Consequently, when they stop working or
become ill,     they frequently  apply for public assistance.

      As indicated     earlier  (see p. 30) -HEW's 1968 study of
the characteristics      of the Cuban refugee public assistance
caseload showed a significant       increase in the average age of
the refugees.       That study showed also an increase--from    14
to 28 percent-- in the number of heads of families        who were
65 or older.      The study also stated that most (93 percent)
of these heads of fami'iies had never been employed since
their arrival     in the United States.     Also, as indicated  ear-
lier (see p. 30), 80 percent of Dade County's current Cuban
caseload is over 60 years old.




                                 34
     Educational      training        and
     English-speaking          ability

             Only 4 percent         of the refugees             who had been resettled
     outside     Miami after        the begiming             of the program required
     public    assistance        in fiscal            year 1965.       As of January 1,
     1971, 15 percent         -iequI:~d      pil),lic       asSis;ance.       nne reason
     for the rzl-tivejy            SLG:-', ;+:cel>tage          in 1966 ~2s that all
     refugees     ~tio az',ived       prior       LO December '1965 were able to
     take advantage       of Eng' Lish lessons               and vocational       trak’G.ng
     offered     by the program in Miami before                      they left    and thus
     were better      equipped        to obtain           employment     at their     new lo-
     cations.      This program of instruction                     for refugees       to be
     resettied     was not availab1 ,e at the beginning                     of the airlift
     because nost of the refugees                      were resettled      within     a few
     days of their       arrival        in Mimi.,

.            The HEW study of the characteristics         of Cuban refugees
     receiving      public assistancz      in five States   (see p. 30)
     showed a sharv decline          in the educational   levels   of the
     refugees     in 1568 compared with those in 1965.           In 1968 40
     percent    of the total     refugees    covered by the study had re-
     ceived no education       compared with only 2 percent        in 1965.

            Another   HEW study of the characteristics               of Cuban ref-
     ugees-- this one dealing        with Eew York City--showed            that only
     12 percent     of the Cuban refugee      applicants        for public      assis-
     tance in February       1970 had more than 8 years of education.
     Information     which we obtained      at the Cuban Refugee Emergency
     Center in Miax& showed that,          as of April      1971, only 16 per-
     cent (J, the heads of Cuban refugee           public    assistance       fami-
     lies   in Dade County had more than 8 years of eEd:catlon.
     This limited     educational     le~ei contr?bl:tes        to the difficul-
     ties which refugees        fan? in cbtainin-,     eyzjloyllent.

             Lack of ability     to speak           English   also constitutes       a
     barrier     for Cuban refugees          in     obtainxng    employment,       HEW's .
     1968 study of Cuban refugees                 receiving    public    assi.TLance
     showed that 44 percent         of the          refugees   x&o could      speak En-
    .glish    (regardless    of fluen&             were eaployed      but that,     on
     the other hand, only 24 per"':.*                  of non-EnplTish-speaking
     refugees      were emloyed.      J-U--t      f?er   f   <.-- e   5 eTi:$--~   poiey+.ed
                                                                                         .. A -   Out




                                                35
       Since the airlift     started in December 1965, about
three of every four refugees have been resettled           from Miami
within a f~ T days 0; their arrival         and thus have been de-
prived of the English instruction          and vocational  training
opportunities     provided to refugees who arrived earlier.
According to program officials,         this resettlement    practice
is followed to minimize the impact on the Miami area despite
ack1.rr-l: tdgment by program officials      that such quick resettle-
ment contributes      to a rise in the number of resett2eC ;efza-
gees who need public assistance,

     We also reviewed the occupational       profile of the refu-
gees arriving  on the airlift.       Program records are kept in
seven major categories,       The following  table, which we pre-
pared from program records,      shows the ratio of arriving   ref-
ugees in each occupational      category since the airlift   began
in December 1965.

                                                                                   R-of                    Cuban     Refuoz+Arrivine.                                in        Hi@
                                                                        by        Ocu~s~r~o:~eL                 Cetegorr.          31nce                  December               1.       1965
                                                                                                                                                                                      .
                                         I
                                                       20      months
                                                             ev?d                           12   wnrhs                           12 momhs                                 12
                                                                                                                                                                         montks                                   12  .Tdnths
                                                           7-31-67                              ended                             ended                                ended                                         ended
                                                         (note       a)                       7-31-68                           7-31-69-                            7-31-70                                        7-31-71                       Total
                                                                     Per-                                    Per-                        Per-                                 Per-                                          PG-                          Fel--
                                                   L‘i-mber         -cent               -Nuqbrr             -cent          E;umDera                             Number        ceg                          mccnc                        m                cent:

 Professiomi,                  seni-
      professronal,                and
      mnagerial                                      5,2r6               7.1              2,785                 6.3          2,646                   6.5             2,031                    5.0               1,777             4.1       14,485            6.0
 Clerical           and   sales                      8,676             11.7               5,547               iZ.5           4,601                 11.2              4,573                  11.3                4,046             9.4       27.443          11.3
 Skilled                                           6.170            8.3                   4.i66                 9.4          4.339                 10.6              3.845                    9.5               3.377             7.9       21.897       9.(1

          Subcoral                                 20,092               27.2            12,498                28.2         il.586                  28.3         10.449                      25.7                9.200        21.4           63.825         26.3

 Sexziskilled             and   un-
      skilled                                        2.789                  3.8           1,197                     2.7      1.417                      3.5          2,071                      5.:             2,426             5.7        9,900              4.1
 Services                                            2,365                  3.2           1.351                     3.1      1,295                      3.2          1,314                      3.2             1,342             3.1        7,671              3.2
 Agricultural               and
     fishery                                         1,203                  1.6               699                   1.6               745               1.8                975                  2.4             1.234             2.9        4,856           2.0
 Students.           children,
     and      housewives                           L7.511               64.2            26.547                64.5         25.951                  63.3         25.79.i                   -65              28.704            66.9       156.507          64.4

          Total                                    ZLyg             &wow                44.292                                                                                                             L2.906          1on.c        2A2.759          lCO.0
                                                                                        ---                 --100.0        502                   -100.0         ~40.603                   -100.0           __-
 *
     ?   bv=~Sx~n~        of       L .Li)          dnce       for       per~uds             oE      less            than   20         months            UQS   not          readily                 available.

Nate:             F?rLc   .reges             may       not      rota1             LOU    percent              because            of         rounding.




Tl?p L;ble shows that the ratio of arriving    refugees in the
top three occupations1   categories--which   would indicate
greater potential   for self-support--has   been declining  dur-
ing recent years and that there has been a proportionally
greater number of refugees in the other categories,
SUMMARY

      Public assistance        costs, including      medical services,
for the Cuban refugees doubled from 1968 to 1970 and were
expected to double again by 1972. The reasons for these
increases are:                                                      .
                     ,
      -- iiLs xverafze n;l~'F-cL 05 rgfugrss       recelvizg ptlblic as-
         S l:,tar:c:   has increL:ed     steadily   and in 1972 is ex-
         pected to be almost         three times greater than the
         number receiving       assistance      in 1968.

      --There    has been a nationwide  trend of increasing          the
         level   of public assistance  payments.

      --There has been a nationwide        increase in medical costs
         under public assistance     programs.
                 .
      --The ratio of older Perkins In the Cuban refugee case-
        'load requiring     public assistance     benefits has in-
          creased steadily,

      --There has been a decreasing        potential   for self-
         support due to a decreasing       educational    level and
         English-sp eaking ability  of     refugees arriving     since
         the airlift  began.               I




                                    37
           PAYHENTSFOR CHARTERFLIGXTS TRANSPORTING

               CUi3A.NREFUGEESTC TEE UNITED STATES

       I"ne I!;zi:ed States and Cuban Governments agreed through
tr1e Zwiss Embassy on November 6, 1965, to a merq-a,-Lum o.F
understanding       allowing the United States to airlirt    5,X10 to
4,000 refugees a month from Varadero, Cuba,to -the United
States.     As noted on page 8, the number of flights       remaining
is contingent       upon the nmber of Cubans whose names are
placed by their Goverrzzent on the final list of those to be
allowed to leave the country.         According to program officials
estimates of the number of such Cubans conceivably          could
range from 1,000 to 94,000.        The airlift  is administered
through the DepartTnent of State and has been operating          be-
tween Varadero and Miami, a distance of about 195 miles,
since December. 1, 1965.                                                       .
        At a meeting on October 28, 1965, representatives            of
the Departments of State, Defense, and the Air Force set out
the operating     conditions     for the airlift     and selected the
Militarjl    Air Transportation      Service (later renamed Military
Airlift     Command), Department of the Air Force, to contract
with comercial       carriers    for the airlift.      Since its incep-
tion the airlift      has used propeller      aircraft   on a two-
flights-a-day,.     5-day-a-week basis (excluding         Saturdays,  Sun-
days 9 and holidays)       during daylight    hours.

        TI;P Military    Airlift    Command contracts    for the Cuban
airlsf:     by selecting      th e best offer from proposa.ls received
Zrom its existin,        commercial contract      air carriers    and then
ariLen3ing ;ha~ carrierts         contract  to include the airlift       re-
quirements.        The Government can terminate the airlift           ar-
rarlgemen't: without being subject to termination            charges.

       The airlift carrier rmrst obtain permission from the
Civil Aeronautics   Board (CAB> to (1) fly to a country with
which the United States maintains no diplomatic       relations
and f2! :zive the CAB regulations     covering charter tariff
rates.



                                      35
                     A charter tariff-rate            is a rate schedule submitted by
              an airline      and approved by CAB, covering a given territorial
              area.      This rate must be adhered to by t;iz carrier              :fhen con-
              tracting     for commercial charter flights              to that area,    Air-
              lines flying         the Cub&n airlift         have obtained exemptions from
              the CAB regulations            because of the limited       extent and un-
              usual circumstances            of the airlift,
                                      .
                      Frr I.,:>; of the rtirir?d, Dtkernkr I., 1~65 throtigh
              June 30, 197G, the MilitaLy               Airlift   Command was able to con-
              tract for the airlift            at a cost for each flight        computed on
              the basis of the same rates for each passenger mile as those
              used in arriving          at the amount to be charged for comparable
              Military     Airlift      Command charter flights.          The charge for
              the Cuban airlift          flights    increased from $752 for each round-
              trip flight       on December 1, 1965, to $966 in fiscal             year
              1970 --an increase of $214, or 28 percent,

I                      in fiscal     year   1971, the charge for the Cuban airlift
.             increasqd to $1,530 for each round-trip             flight.      The charge
              that would have been made for military            flights      under com-
!         .   parable circumstances           was $864. For fiscal       year 1972 the
              charge for the Cuban airlif t increased to $1,675 for each
    .'        round-trip      flight      compared with $814 for comparable militaq
              flights.
    I               Military Airlift   Command officiais   stated that commer-
              cial airlinek  probably could not profitably      operate the
              Cuban airlift  at rates for each flight    comparable to those
              charged for military   flights for two reasons.

                    1. For military     flights    ground supwrt     services    (load-
              ing 9 unloading,    etc.) are provided by the military          at no
              cost to the airlines,         For the Cuba;: trir!.Lft  the airline
              must furnish     the se'rwices at its 0x1 tiqense.         The military
              rate does not provide for these costs.

                      2. Military    rates are calculaLeil. on the assumption that
              the aircraft      will be flown at least 10 hours a day.           But the
              Cuban airlift       repGres  only 4 hours of flying       time a day.
    .y-       Certain costs, such as inst:cnce         and depreciation,      must be
    :         incurred and remain cons~=rt xkther           -?TIzi?cxft     is flown
              4 hours a day or 10 hour,. ‘2 ct;y.       C;o;ts 02 this nattire (fixed
    *         costs!,    khen spread over 4 nours of flying,         resuit   in a
higher    cost for   each hour than when spread over 10 hours of          '
flying*                                                                   f
                                                                          j
         The lo-hour assumption would be comparable to the time           1:3
involved in five round-trip         flights each day for the Cubar?.
airlift.       Thus, for the two flights    being made each day un-
de7 the Cuban airlift,        the fixed cost of operating   the air-      I
                                                                          f
CPL-i results       in a higher cost per flight   than for the miii-      s
tay charter flights.

        Further discussion   of the costs   incurred   for   the Cuban,
airlift     follows.




                       .
          SWMY           OF DATA PERTAIWNG TO AIRLIFT

                  Following is a sumnary of data pertaining  to the Cuban
          airlift     for the S-year period ending June 30, 1972.
                                                            cost for           Number        Total        Zumber of
                                       Duration     of         each              Of         amount         refugees
              Contractor                                     f'-ieht          i.,ilghts
                                                                                    .     -ended        transported
                                   l    coni:aci
                                                                                              --
          NationaL J:--                 7.- l-67 to         $      850           "58       $219,300        22,354
             lines,    Inc.            12-31-67
i         Airlift    Inter-             l- l-68 to                 966           254        245,278        21,371
B
             national,      Inc.        6-30-68
               Total--fiscal
                 year 1968                                                       --512     $464,578
                                                                                            5-r. --_5      43.725
          Airlift    Inter-              7- l-68    to             966           496       $478,9672       41,383
             national,      Inc.         6-30-69
          Airlift    Inter-              7- l-69    to             966           493        476,070        40,866
             national,      Inc.         6-30-70
          Eastern Air                    7- l-70    to          1,530            502        768,060b       42,879
             Lines, Inc.                 6-30-71
          Overseas. National             7- l-71    to          1,675             506b      847,550b       40,MGL
             Airways, Inc.               6-30-72
          2An additional   $9,957 was paid under this contr2ct                        for the return of American
           citizens   who were passengers on commercial flights                        which were skyjacked to
           Cuba.
          b Estimates      furnished      by Military    Airlift         Command.


               CAB officials    informed us that the airlift    costs could
          be considered reasonable if they fell somewhere betvaen the
          comparable c'omercial     charter tariff  rate and the lower
          rate set by C14Bfur niliter-7     charter flights,

                .Although the actual. or estimated Szost: fog each flight
          of the Cuban airlift        increased Zy 9.7 percent   frm      July 71,
          1967, to Jme 30, 1972, it vap, sti1.l          c&ape?,   chrotlg'n  fis-
          cal year 1971, than the comparable comercial             charter tariff
          rate.     The Cuban airlift      contra:;  rate for fiscal      year 1972
          could not be coqared with a c0mp~rabl.e commercial CIzrter
          rate because the contractor          had not filed such a tariff
          rate with CAB at the time of our review.
    >
    i             From July 1, 1967, +h~a~:& June 30, 1970, the rates es-
           tablished     by CAB for ~&T.:ta.y ~h-~~-~~f f;j&j:s     un<e-r compa-
    :.i    rable ci:cLastances      d.o*L.d :la-.;e beer?_the same as zr)r the Cu-
    :                                                          when the charges
           5,7n airlift,    except for a L-U:  -mnth   pedd
for the Cuban airlift   were slightly     less. For fiscal   years
1971 and 1972, the Cuban airlift      charges were considerably
greater 'A&n the cl!arges that would have been made for mili-
tary flights under comparable circuizstances.

INCPEASES 1X AIRLIFT CONTRACTCOSTS
FOR :ISCAL YEARS 1971 AND 1972
m--.
        In April 197C the Cuban airlift            contractor,      ?icTift
International,      Incorporated,advised         the Military       &rlifr
Command that it could not: accept any further                   Cuban airlift
awards at the existing         contract     rate of $966 for each round-
trip flight.       The contractor      also stated that it had lost
$230,000 on the airlift         operation      during a recent 8-month
period.     This contractor      had been operating           the Cuban air-
lift  with propeller      aircraft     at the $966 rate since Janu-
ary 1968. The company further             indicated       that, although it
wished to dispose of its propeller              aircraft,       it would accept
an airlift     contract   at the rate of $1,552 for each round-
trip flight     if no other acceptable          carrier     was available.

Contract    award for      fiscal   year 1971

      Proposals were received from three airlines       to operate
the airlift   with propeller aircraft    on the regular    schedule
during fiscal    year 1971. The contract was awarded to East-
ern Air Lines at a cost for eachround-trip flight         of $1,530
and an estimated total contract     cost for the year of
$774,000.

        An alternate          proposal submitted by Eastern Air Lines,
based or tI-e use of propeller              aircraft,      and a proposal from
anothe-:      c,3r-ii2r     would  have reduced     total    annual costs to
$57,;. ~lfitl0 dnd $678,3SO, respectively,              Military    Airlift    Com-
mazd c;L'ici,A.s stated that they did not accept either of
these proposals because these proposals required less than
LTV flights             a day for 5 days a week since the number of
p,sr=engers for each flight             would have been increased.             Cu-
ban refugee program officials               considered that such a change
in schedule would have created fluctuations                      in the work
load of program employees who processed the incoming refu-
gees and >hus would have resulted                 in alternate      periods of
rtve;t,im2 cn3 perirjr's of less than optimum use of such em-
ploy-ees.         Thzreicjre 5 the program qfficl'als          conridered   it
desirable          to maintain the existing         Fla$t     schedule.
                                       42
        Eastern  Air Lines also submitted          a proposal     calling  for
use of jet aircraft        at a lesser   total     ann7rA1- cost t; .-,n under
the accepted     proposal.     The proposal      for a jet aircraft       was
not accepted     because (1) the flight        frequency      would have
been less than the established         schedule      and (2) there was
uncertainty     as to whether     jet aircraft      would be permitted      to
land at Varadero.



       Eastern   Air Lines proposed          to the Department         of State
that the airline's        engineers       be allowed   to evaluate       the sur-
face‘composition        of the runway at Varadero            so that a deci-
sion could be made as to whether              jet aircraft      might be used
for the Cuban airlift,             The Department     of State forwarded
the proposal     to the Cuban Government            in April    1972 and re-
quested    the Military      Airlift      Command to obtain       offers    on
both jet and propeller           aircraft    for the fiscal       year 1972
Cuban airlift      con&act.
        ,
         Pregovals     wfre received    from two airlines       for propeller
aircraft      service     and from three airlines      for jet aircraft
service     l  A Department      of State official     informed     XIS that
the jet proposals          could not be given further        consideration
because no reply          had been received     from the Cuban Govern-
ment to the Departmen t's reqilest          for permission        to evaluate
the Varadero        runway surface.

        The contract     was awarded to Overseas National              Airways
for propeller      aircraft   service       at a cost for each round-trip
flight    of $1,675 and an esti L-ted total             contract    cost   for
fiscal    year 1972 of about $847,000.              The !&er.szu,': k:ional
Airways'     bid was the lot~st      ;rti';osal.    has-d on the c:rrrent
schedule     of two flights    a day for 5 deys           c? week tar trans-
porting    3,000 to 4,000 relugees            esch. month.

       Alternative        proposals      for usjn:; propeller         aircraft     arid
for using jet aircraft            would have reduced total              annuT- cost
from   about $847,000         to amoUntS ranging       from about $628,000--a
26-percent       reduction--    to about $836,000--a          l-percent        reduc-
tion.     These proposals,          whi.c.1 CTffered    from the established
flight     frequency      or invoIv:Z       tie LISP ;r jets,       beye ;ejected.




                                          43
FEASIBILITY  OF USING JET AVOCET
FOR CU3A.N ATRLIFT

        Because of      the increasing     charter     cost and the decreas-
ing     availability       of propeller    aircraft,      we inquired into
the     feasibility       of using jet    aircraft     for the Cuban air-
lift,
                          1
      A Kj.itary         Airlift    Command official    informed    L..T tiIr,t ko
was uncertain          whether    the runxay at the Varadero        airport
could support          regular    use by a jet aircraft       and that he
believed      that     propeller     aircraft  must continue     to be used
in the airlift           until   other arrangements     could be worked out
with the Cuban           Government.

       The Department      of State's      current      Coordinator         of Cuban
Affairs    also doubted the Varadero              airport's       capability      of
supporting     continuous       use of jet aircraft.              A prior     Coor-
dinator    of Cuban Affairs,           who participated         in the October
1955 meeting      at which oFcrating           conditions       for the airlift
were cstablis+A          inforr;ied     us that the use of jet aircraft
was not considerbd         then because (1) the cost of chartering
the jets     in corrrrnercial     service    in 1965 would have exceeded
the cost of chartering            lighte r weight       propeller      aircraft
and (2) the runway at Varadero               could not safely          accommodate
the heavier     jet aircraft.

      An official     of the Department of the Air               Force ex-
pressed    the belief    that the Cuban Government               had refused       to
permit   the use of other than propeller-driven                   aircraft.

       Since ?9?5 two lighter        weight  jet aircraft         (Dozing   737
and DC-S) 1,;~1ve elitered     commercial     service.      Both of these
'tit
J      aixcra:i   weigh  iess    than   the propeller      aircraft     used on
the zlLS.i,t     aud can accommodate enough passengers                to main-
tain the twice-a-day,         5-day-a-week     schedule.        These jets
z2.r~ weigh less than the jet aircraft              proposed      for use in
fisL:aI    years 1971 and 1972.         (See pp. 42 and 43.1

      We questioned         officials      of the Military     Airlift      Conrnand,
Eastern        Air Lines,    and the Federal      Aviation      Administration
:bout       thz Tcasibi3ity        of using one of these       jet aircraft
ftr   tlr,--n ailLift,
     The Military  Airlift Command official  erpressed his
belief  that permission would have to be obtained from the
Cuban Government to allow any type of jet aircraft     to lzld
at Varadero and that further  information   on the strength
of the Varadero runway should be obtained before a jet
could be flown.

     An Eastern-Air      Li,ies ofrlci,', stated ;I"\,at it. XLS im-
possible     tr Ze:.:rmin:; if a jet ailrcraft  c0;l.d opcrzte oil
the airfield      without knowing tne composition       of the runway
and that Eastern airlines        would not want to Se held re-
sponsible      for the repair of the runway in the event that it
could not support a jet adequately.

      A Federal Aviation Administration       official  stated that
the agency, which was responsible        for regulating    air com-
merce in such a manner as to promote its development and
safety,   had evaluated the effect of an aircraftls         weight       :
on a runway surface.      This official     was cf the'opinion     tti?gf'
a jet ,aircraft   which was lighter     than the prope!ler     aircraft
being used in the airlift     would not cause any more runway
strain than the propeller     aircraft.

         To determine the economic feasibility         of using one cjf
the lighter        weight jets for the airlift,       we computed and
compared Eastern Air Lines1 commercial c‘harter tariff
rates      for one of these jets with the tariff          rates for a
propeller       aircraft    of the type currently     being used in the
airlift.        This comparison showed that the jet would be
cheaper for flights          of over 250 miles.      A round trip under
the Cuban airlift         from Mimi    tc Varadero is 390 miles.         If
such a jet had been contracted             for at this cfi,,rter tariff
rate, the cost of the airlift            for two flights     r: day, 5 ti/l'*
a week would have been about $ST',OOC less Lha,i the esti-
mate for fiscal year 1972. Tne qu?5tl * or?, iwwmw-, of
whether the Cuban Government would have permitted jets to
be used in the airlift          was not resol;~I,




                                      45
.
                                                                      FUh!CTIONAL OR~A~~~~~~~~ OF CUBAM REFUGEE PROERAM
                                        SOClAL         AND l?Ei4A5ILITATION                          SERVICE           DEPARTMENT                       OF HEALTH,                 EDUCATION,            AND WELFARE


             COOPERATING                PUBLIC       AGENCIES                                               AOMINISTRATOR,                    SOCIAL AND
                                                                                                             REHAElLrrATlOM                    SERVICE
     TRANSPORT           AND     ENTRY       two     U.S. 0~
       REFUGEES:
                                                                                                           ASSOCIATE ADMINlSTRbTOR                              FOR
                                                                                                                 FIELD OPERATlhlNS
          U.S. DEPARTMENT                 OF STATE
          U.S.   JUSTIC       DEPARTMENT                                                         RESPONSIBLE           TO THE          SECRETARY              OF HEALTH,
             IMMIGRATION            AND NATURALIZATION                                           EDUCATION,         AND     WELFadE              Fok     ALL    ASPECTS
             SERVICE                                                                             OF CUBAN       REFUGEE               PROGRAM,          INCLUDING
                                                                                                 WELFARE,   HEALTH,              EMPLOYMENT.                EDUCATION
     HEALTH          SERVICES:
                                                                                                 AND RESETTLEMENT                 ACTIVITIES.              PROMUL.
          U.S.   PUBLIC        HEALTH        SERVICE
                                                                                                 GATES pOLIC!ES  FOR IMPLEMENTATION                                 OF
          DADE        COUNTYHEALTHDEPARTMENT
                                                                                                 VAPIOUS ASPECTS   OF THE PROGRAM.                                                                                                ,
     EDUCATIONAL              ACTIVITIES:
          U.S. OFFICE          OF   EDUCATION                                            -                                _E---.““.                                                     c                       --
          ELEMENTARY             AND SECONDARY               PUBLIC
                                                                                                                 OFFICE Of DIRECTOR,                                                                        ASSt.z”ANCE PAYMENTS
            SCUOOL        SYSTEMS,          PRIMARILY        DADE

II          f”!.,
            WL NT y !!<?Ai7J.l pr 3! I!- !.:(3 r!.JST‘i; c T,?N                              -        ----..-
                                                                                                              C:JRf*N RF.r:ilC:F
                                                                                                                     --_.--
                                                                                                                                      i’:;c~;;‘lJiln
                                                                                                                                 ----__-. -..----~
                                                                                                                                                -----I                                  i--.ll-.-

                                                                                                                                                                                            PRO’/IOES
                                                                                                                                                                                                               As \IN!STRATIOH
                                                                                                                                                                                                                  ---“..----
                                                                                                                                                                                                           THP%.IGH               A    LOhTHAC7UAL
                                                                                                                                                                                                                                                                   -1-....
                                                                                                                                                                                                                                                                 ARRANGE

     UNIVERSITIES:
                                                                                 I 1         AND COOR3lNATION                   OF CI’BAN              RZf UGEE                         IMENT       W!TH    Ttit       “‘-ORIDA            DEPARTMENT              OF
                                                                                             PROGRAM.           MAINTAINS              LIAISON         WITH    NATIONAL                 ‘PUBLIC         WELFARE              FO’)      ASSISTANCE           AND
          STUDENT         LOANS                                                      I
                                                                                 I           AND OlHER          ORGANIZATIONS                    AND COMMUNITIES                            SERVICES       TO P’:EOY              CUBAN         REFUGEES.           IN-

I. -      PROFESSIONAL              TRAINING
                                                                                 I
                                                                                 JI
                                                                                     I       TO OBTA!N
                                                                                             WELFARE
                                                                                                                COOPERATION
                                                                                                              OF REFUGEES
                                                                                                                                            IN PROMOTING
                                                                                                                                           AND       IY STIMULATING
                                                                                                                                                                       THE              kLUDtNG           FlNANCtPL
                                                                                                                                                                                            TION OF FOODS, A .lD I’OSPITALIZATION.
                                                                                                                                                                                                                                  h$SISTANCE.            DISTRIBU-


                                                                                             RESETTLEMENT               OPPORTUNITIES                   OUTSIDE         OF                  THROUGH  WELFAhF    1,EPARTMENTs       OF OTHER
                                                                                     I

     .--..                                               ---.,
                                                                                     I
                                                                                     1
                                                                                             THE
                                                                                             CENTER
                                                                                                     MIAMI     AREA.
                                                                                                             AT MIAMI.
                                                                                                                            SUPERVISES
                                                                                                                             u
                                                                                                                                ,
                                                                                                                                                      BUBAN      REFUGEE

                                                                                                                                                                               -
                                                                                                                                                                                        ‘STATES.
                                                                                                                                                                                            TO RESETTLEI
                                                                                                                                                                                                         PROVIDE5                I- JR ffELFARE
                                                                                                                                                                                                                      ‘: ‘. AN REFUGEES
                                                                                                                                                                                                                                                         ASSISTANCE
                                                                                                                                                                                                                                                         WHO BECOME




    RESETTL
            -“-
            C Jr v-RATING

                     EMENTI
                                      PR’VATE           AGENt:IES                1 I                                                   1
                                                                                                                                                                                        iNEEDY
                                                                                                                                                                                         WITH
                                                                                                                                                                                         COOPERATIVE
                                                                                                                                                                                                        AFTER
                                                                                                                                                                                                    SRS REGION
                                                                                                                                                                                                                     ‘E”:’
                                                                                                                                                                                                                             ’
                                                                                                                                                                                                                                      TLEMENT
                                                                                                                                                                                                                                  ‘JFFICES.
                                                                                                                                                                                                                     REL 4’ IONSHIPS
                                                                                                                                                                                                                                                      IN COOPERATIO
                                                                                                                                                                                                                                                     MAINTAINS
                                                                                                                                                                                                                                                     WITH    VARIOUS
                                                                                                                                                                                        ‘SOCIAL         WELFAKE              AGENCIES.

I-
i
          UNt!


          U’dcTED
                 :D STATES
            ‘CATHOLIC)
                       HIAS
                                    CAT”~LfC


                               SERV\.-E
                                                    CONFf        RENCE

                                                                                             RECEIVES
                                                                                             APPROVES
                                                                                                              AND
                                                                                                               STATUS
                                                                                                                       REGISTERS
                                                                                                                             OF PERSONS
                                                                                                                                            CUBAN         REFUGEES;
                                                                                                                                                       AS REFUGEES,
            ( ‘EWISH)
              ‘EWIS
                                                                                             REFERS         REFCGEES          FOR       JOB      CLASSIFICATION,
          C~IL’RCH      WORLI
                        WORLD       SERVICE
                                                                                             RESETTLEMENT.                PUBLIC           ASSISTANCE,           AND
            (PROTESTANT)
                                                                                             HEAL,TH        SERVICES: EVALUATES                        VARIOUS
          IrJT.iRNATIONAL
          IrJI  .:KNAI lUNAL         RESCUE
                                     ?7t>cUt       COMll
                                                   LUI   tTTEE
                                                                                             ASPECTS         OC THE PROGRAM.
I-    %- -
          (N’NSECTARIAN)
                                                                         .-I             I          ~---        ;..-           ~~                A
    ~./CFNTRALIZED               PERSONNEL,          A+ZZ~UNTIN;.              AND   AUDITING          PROVIDED           BY OFFICE              OF THE        ADMINISTRATOR,           SRS.!                                                   I*           I
    GAO     ~‘JTE:      FURNISHED           BY CUBAN        REFUG        :E PROGRAM              OFFICIALS       . . IN EFFECT              AS OF AUGUST               1971.