Activities Managed F3yCommunity Action Migrant Program, Inc. Fort Lauderdale, Florid 8-130515 Office of Economic Opportunity UNITED STATES GENERAL ACCOUNTING OFFICE UNITED STATES GENERAL ACCOUNTING OFFICE WASHINGTON, D.C. 20548 CIVIL DIVISION B-130515 Dear Mr. Carlucci: This is our report on activities managed by Community Action Migrant Program, Inc., Fort Lauderdale, Florida, Our findings, conclusions, and recommendations are sum- marized in the digest which is bound in the report. Your atten- tion is invited to section 236 of the Legislative Reorganization Act of 1970 which requires that you submit written statements of the action taken with respect to the recommendations. The statements are to be sent to the House and Senate Committees on Government Operations not later than 60 days after the date of this report and to the House and Senate Committees on Ap- propriations in connection with the first request for appropri- ations submitted by your agency more than 60 days after the date of this report. We shall appreciate being advised also of the action taken on our recommendations. Copies of this report are being sent to Representative Paul G. Rogers and to the Director, Office of Management and Budget, to the House and Senate Committees on Govern- ment Operations, and to the House and Senate Committees on Appropriations. Sincerely yours, Director, Civil Division The Honorable Frank C. Carlucci Director, Office of Economic Qpportunity - 50TH ANNIVERSARY 1921-1971 I iENER4LACCOUNTING OFFICE ACTIVITIES #ANAGEDBY COMMUNITV I I REPORTTO THEDIRECTOR, ACTION MIGRANT PROGRAM,INC., FORT I OFFICEOF ECONOMIC OPPORTUNITY LAUDERDALE, FLORIDA I I ifylcg;,;f Economic Opportunity I I I DIGEST ------ I I I I I WHYTHE REVIEW WAS MADE I / I The Community Action Migrant Program, Inc. (CAMP), Fort Lauderdale, I I Florida'; conducts migrant and seasonal farmworker antipoverty programs. I I CAMPreceived Federal funds of about $1.1 million during the period May I 1969 through June 1970. The funds were provided under grants by the I I Office of Economic Opportunity (OEO) and under a contract with the Of- I fice of Education, Department of Health, Education, and Welfare, I I I OEO provided funds to CAMP for (1) the administration and operation of I education, training, housing, senior citizens, and other programs di- I I rected toward improving the living conditions of migrant and seasonal I I farmworkers and their families and (2) a research and demonstration proj- I ect designed to find alternative ways to improve the life of families who I want to leave the migrant stream and obtain permanent employment. I I I The Office of Education provided funds to CAMP for the operation of an I educational talent search program designed to encourage migrant youths I who had dropped out of school to reenter or seek vocational training and I I to assist youths to continue their education. The General Accounting Office (GAO) examined into CAMP's management of grant funds and inquired into selected aspects of program operations. I I FINDINGSANDCONCLUSIONS I I I 'CAMP administered a variety of antipoverty programs that provided bene- I ficial services to migrant and seasonal farmworkers in southern Florida; I I however3 certain employment projects were experiencing difficulties. I (See p. 6.) I I Of the 308 persons enrolled in training programs involving stipends, I about'218, or 71 percent, were not eligible to participate in the pro- I I grams under applicable OEO criteria, in GAO's opinion. CAMP paid sti- I I pends of about $71,300 to these ineligible persons. Also, CAMP spent I about $8,000 for travels meals, and housing for ineligible participants I in one of its employment projects. I , I Tear Sheet I The high incident e of ineligible participants detracted from the effec- tiveness of CAMP"s programs. Persons who were ineligible to participate in CAMP programs could have received similar types of assistance under other programs designed for those who were not migrants or seasonal farmworkers. (See p. 14.) None of the 72 residents living in a CAMP-sponsored housing project met OEO eligibility criteria because 61 residents were not migrant or sea- sonal farmworkers and 11 residents earned incomes in excess of the pre- scribed limitations. (See PC lg.> The executive director of CAMP disagreed with GAO that ineligible per- sons participated in the training programs and in the housing project. He stated that the infomation on such participants in CAMP's files was not necessarily valid because many participants did not want to show that they were farm laborers on their applications for enrollment in the programs. He stated also that the information shown on loan ap- plications was the type required by the Federal Housing Administration before it would approve loans for the purchase of units in the housing Project. (See ppe 16 and 19.) Although the executive director indicated that the participants in- cluded misleading information on their applications for enrollment in the programs GAO interviews of 20 participants who received stipends under the training programs indicated, in general, that the informa- tion was accurate. GAO also noted that the information contained on applications for loans I to purchase housing units had been verified by the CAMP housing staff I and by credit bureaus before the applications were submitted to the lending institution and to the Federal Housing Administration for re- view and approval. (See pp. 16 and 19.) Improvements were needed in CAMP's accounting for employee leave and compensatory time, travel, purchases of supplies and equipment, and accountable property. GAO noted some expenditures which had not been budgeted or authorized by OEO. Also controls over program revenues were not adequate. (See p* 21.) CAMP has taken certain actions to correct some of the weaknesses in the administration of grant funds. Additional actions9 however, are needed to improve the accounting for travel, property, and revenues and to avoid expenditures which have not been budgeted, authorized, or approved by OEO in advance. (See p. 27.) RECOMVENDATIONS OR SUGGESTIONS I I The Director, OEO, through the Office of Operations should --ensure that CAMP, in selecting participants for its various pro- grams, adheres to OEO's eligibility requirements (see p- 20) and I 2 I --closely monitor CAMP's financial management practices to ensure that corrective actions regarding travel practices; control over, and use of, accountable property; fund expenditures; and accounting for pro- gram revenues are implemented (see p. 28). I I Tear Sheet I 3 Contents Pane DIGEST 1 CHAPTER 1 INTRODUCTION 4 2 PROGRAMACTIVITIES 6 Regional offices 6 Employment projects 7 Senior citizen program 12 Housing program 12 Talent search program 13 3 IMPROVEMENTSNEEDED IN SELECTING PROGRAM PARTICIPANTS 14 Training programs involving stipends 14 Housing project 19 Conclusions 20 Recommendation 20 4 IMPROVEMENTSNEEDED IN ADMINISTRATION OF GRANT FUNDS 21 Payrolls and related costs 21 Travel 22 Procurement 23 Controls over accountable property 23 Expenditures for items not budgeted or authorized 25 Accounting for program revenues 26 Conclusions 27 Recommendation 28 5 SCOPE OF REVIEW 29 APPENDIX I Funds received by CAMP, and related expen- ditures for the 1969-70 grant year 33 II Salaries of principal CAMP officials as of July 1, 1970 34 APPENDIX Page III Members of the CAMP board of directors as of July I, 1970 35 ABBREVIATIONS CAMP Community Action Migrant Program, Inc. GAO General Accounting Office OEO Office of Economic Opportunity ' GENEtiL, ACCOUiVTINGOFFICE ACTIVITIES MANAGEDBY COMMUNITY REPORTTO THE DIRECTOR, ACTION MIGRANT PROGRAM,INC., FORT C'FFICE OF ECONOMICOPPORTUNITY LAUDERDALE, FLORIDA Office of Economic Opportunity B-130515 DIGEST ------ WHYTHE REVIEW WAS MADE The Community Action Migrant Program, Inc. (CAMP), Fort Lauderdale, Florida, conducts migrant and seasonal farmworker antipoverty programs. CAMP received Federal funds of about $1.1 million during the period May 1969 through June 1970. The funds were provided under grants by the Office of Economic Opportunity (OEO) and under a contract with the Of- fice of Education, Department of Health, Education, and Welfare. OEO provided funds to CAMP for (1) the administration and operation of education, training, housing, senior citizens, and other programs di- rected toward improving the living conditions of migrant and seasonal farmworkers and their families and (2) a research and demonstration proj- ect designed to find alternative ways to improve the life of families who want to leave the migrant stream and obtain permanent employment. The Office of Education provided funds to CAMP for the operation of an educational talent search program designed to encourage migrant youths who had dropped out of school to reenter or seek vocational training and to assist youths to continue their education. The General Accounting Office (GAO) examined into CAMP's management of grant funds and inquired into selected aspects of program operations. FINDINGS AND CONCLUSIONS CAMP administered a variety of antipoverty programs that provided bene- ficial services to migrant and seasonal farmworkers in southern Florida; however, certain employment projects were experiencing difficulties. (See p- 6.) Of the 308 persons enrolled in training programs involving stipends, about 218, or 71 percent, were not eligible to participate in the pro. grams under applicable OEO criteria, in GAO's opinion. CAMP paid sti- pends of about $71,300 to these ineligible persons. Also, CAMP spent about $8,000 for travel, mealsI and housing for ineligible participants in one of its employment projects. 1 The high incidence narticipants ~1:‘ ‘wligiblc detracted from the effec- tiveness of CAPlP'5 Persons who were ineligible pri~;:rrrms I to participate in CAMP programs czl!C: Ihave received similar types of assistance under other programs designed for thos e who were not migrants or seasonal farmworkers. (See p. 'IQ.) None of the 72 residents living in a CAMP-sponsored housing project met QEO eligibility criteria because 61 residents were not migrant ar sea- sonal farmworkers and 11 residents earned incomes in excess of the pre- scribed limitations. (See p. 19.) The executive director of CAMPdisagreed with GAO that ineligible per- sons participated in the training programs and in the housing project. He stated that the information on such participants in CAMP's files was not necessarily valid because many participants did not want to show that they were farm laborers on their applications for enrollment in the programs. He stated also that the information shown on loan ap- plications was the type required by the Federal Housing Administration before it would approve loans for the purchase of units in the housing project. (See pp* 16 and lg.) Although the executive director indicated that the participants in- cluded misleading information on their applications for enrollment in the programs GAO interviews of 20 participants who received stipends under the training programs indicated, in generals that the informa- tion was accurate. GAO also noted that the information contained on applications for loans to purchase housing units had been verified by the CAMP housing staff and by credit bureaus before the applications were submitted to the lending institution and tc~ the Federal Housing Administration for re- view and approval. (See ppO 16 and 19.) Improvements were needed in CAMP's accounting for employee leave and compensatory time, travel, purchases of supplies and equipment, and accountable property. GAO noted some expenditures which had not been budgeted or authorized by OEQ. Also controls over program revenues were not adequate. (See p+ 21.) CAMP has taken certain actions to correct some of the weaknesses in the administration of grant funds. Additional actions3 however, are needed to improve the accounting for travel, property, and revenues and to avoid expenditures which have not been budgeted, authorized, or approved by OEO in advance. (See pa 27.) RECOk?&'ENDATIONS OR SUGGESTIONS The Director, OEO, through the Office of Operations should --ensure that CAMP, in selecting participants for its various pro- grams, adheres to OEO's eligibility requirements (see p. 20) and 2 --closely monitor CAMP's financial management practices to ensure that corrective actions regarding travel practices; control over, and use of, accountable property; fund expenditures; and accounting for pro- gram revenues are implemented (see p. 28). 3 CHAPTER 1 INTRODUCTION The Community Action Migrant Program, Inc. OXMP) 9 fiort Lauderdale, Florida, is responsible for conducting migrant and seasonal farmworker antipoverty programs under grants from th e @ffice of Economic Opportunity (OEO) and under a contract with the Office of Education, Department of Health, Education, and Welfare. CAMPwas preceded by a nonprofit agency which was in- corporated in 1965 under the name Community Action Fund, Inc., located in St, Petersburg, Florida. In August 1967 the corporation moved to Fort Lauderdale and in 1968 the name was changed to Community Action Migrant Program, Inc, At July 1, 1970, CAMP Rad a staff of 80 full-time em- ployees and was governed by a 14-member board of directors, six of whom represented farmworkers. A schedule of the salaries of principal CAMP officials is included as appen- dix II and a list of board members is included as appen- dix III. To assist migrant and seasonal farmworkers in 10 coun- ties located in southern Florida, CAMP received Federal funds of about $1.1 million during the period covered by our re- view, May 1969 through June 1970. During this period CAMP expended over $1 million-- $961,000 from QEO funds, $43,000 from the Office of Education funds, and $29,000 from pro- gram revenues. (See app. I.> CAMP stated in its refunding proposal to CEO for the 1969-70 grant year ending May 31, 1970, that it planned to contact and provide services to 20,000 migrant or seasonal farmworkers, of which 4,000 would be heads of households. CAMP reported to CEO that, in fiscal year 1970, it had as- sisted (1) about 8,800 poar persons through contacts in the field, contacts in its regional offices, referrals to other agencies, and follow-up activities on persons previously assisted and (2) 308 persons enrolled in training programs involving stipends during the 1969-70 grant year. CAMP was refunded by OEO in the amount of $840,000 for the 1970-71 grant year and by the Office of Education in the amount of $63,700 for the program year ended May 31, 1971. rnTER 2 PROGRANACTIVITIES During the 1969-70 grant year9 CAMP administered a va- riety of antipoverty programs directed toward assisting mi- grant and seasonal farmworkers. A brief discussion of the more important programs and projects administered by CAMP is presented below. Although our review was not directed toward evaluating CAplpDs program activities, we noted that certain employment projects were experiencing difficulties. We have included in the discussion, where they were readily identifiable, the reasons for the difficulties, REGIONAL OFFICES CAMP established six regional offices in southern Flor- ida to provide services to migrant and seasonal farmworkers. The regional offices were responsible for (1) organizing and sustaining resident participation in community action and (2) mobilizing the resources of other local agencies in a concerted and unified effort to assist migrant and seasonal farmworkers, Major activities of the regional offices included --identifying the poor migrant and seasonal farmworkers in the area and gathering information on their needs, making them aware of available programs, and encour- aging them to seek assistance through the regional offices and from other government programs that could provide assistance; --following up on services provided and on the continu- ing needs of persons to whom services have been pro- vided; --forming job cl,ubs to provide initial orientation to migrants and seasonal farmworkers on the responsibil- ities of obtaining and holding a job; and 6 --assisting in the operation of Federal credit unions, recommending persons for articipation in employment projects, and operating several of the employment projects. Under an CEO research and demonstration grant, CAMP initiated a number of job development, training, and place- ment projects designed to find a%ternative ways to improve the %ife of families who want to leave the migrant stream and obtain permanent employment. Demonstration grant funds were used for the operation of these projects through Feb- ruary %970, when CEO instructed CAMP to terminate demonstra- tion grant fund expenditures, except for staff salaries. Upon termination of the demonstration grant, CAMP transferred some of the employment projects to the OEO- funded migrant program and continued the projects, Addi- tiona%%y under the migrant program, CAMP initiated several other employment projects and provided administrative and port to the employment projects. Discussions of the more important employment projects fo%%ow. Mechanics pro.ject In May 1968 CAMP developed a mechanics-training project for migrant and seasonal farmworkers in cooperation with an automobife manufacturer and several car dealers. Later, c expanded the project to another automobile manufacturer. During the 1969-70 grant year, CAMP expended demonstra- tion and migrant program grant funds of $26,186 for 43 trainees to partici ate in the two manufacturerse mechanics- training programs. Under the mechanics-training project, CAMP screened and tested applicants and referred them to car dealers for spon- sorship in the manufact,urers@ programs. Upon acceptance by a deafer, the applicant-trainee first received on-the-job training for 30 to 60 days from the dealer before entering one of the manufacturers@ training schools in Jacksonville, FPorida. 7 One cf the manufacturer's mechanics-training programs lasted 17 weeks-- the trainee divided his time between the training S@h,oOPand the sponsoring dealership. The other mechanics- training program lasted 23 weeks--l0 weeks of in- struction at the training school and 13 weeks of on-the-job training at the sponsoring dealership, Neither a formal contract nor a working agreement existed between CAMP and the sponsoring dealers. The dealers, however, signed let- ters agreeing to sponsor specific trainees. CAMP paid the entire cost of room and board and a training cost of $25 a week for each trainee while the stu- dents were in training. Upon successful completion of training, CANP billed the sponsoring dealer for half of the total csst 0 CAMP paid each trainee a stipend ranging from $33 to $63 a week depending upon the number of his depen- dents. After their training the participants returned to the sponsoring dealerships for further on-the-job training, dur- ing which time they received at least the minimum wage set by Federal law. Automobile-reconditioning pro.ject In January 1969 CAMP initiated a training project to train migrant and seasonal farmworkers in the skill of recon- ditioning automobiles, The project objective was to provide individuals with an opportunity to leave the migrant stream by obtaining jobs with local automobile dealers or with private firms that re- condition automobiles, Trainees were scheduled to complete their training in 12 weeks. CAMF furnished instructors and other personnel to man- age the project and provided participants with training and instruction in the methods of reconditioning automobiles. CAMP furnished also the necessary materials for the course. Automobiles to be reconditioned were solicited from automo- bile dealers and private individuals who were charged a fee of $18 to $20 for the service. During the 1969-70 grant year, a total of 67 persons participated in the project. . 8 The automobile-reconditioning project was conducted at two locations. One facility, called Mr. Kar Kleen, began operations at Pompano Beach, Florida, in January 1969, In September 1970 CAMP terminated all financial assistance to the Mr. Kar Kleen facility, However, two CAMP employees, who were being paid salaries totaling $11,815 annually,con- tinued to provide technical and management assistance to personnel at the facility. The second facility, called Florida Auto Cleaners, be- gan operations at Fort Lauderdale in June 1969 but was ter- minated in December 1969 because of insufficient business. The reconditioning project was initially funded under an OEO demonstration grant, but OEO directed CAMP by letter dated January 28, 1970, not to spend any more demonstration grant funds on the project after February 1970. OEO stated that the Mr. Kar Kleen facility had outlived its usefulness as a demonstration project and that, if CAMP wanted the fa- cility to continue operating, funds from the OEO migrant program grant should be used, CAMP decided to continue operating the facility with funds from OEO's migrant program grant until the facility became self-sufficient. During the l-year period ended May 31, 1970, Mr. Kar Kleen sustained a net loss of about $66,000 on its opera- tions --costs totaled about $89,000 and sales totaled about $23,000. The costs of operating the facility included: Stipends $35,020 Salaries 25,441 Travel 3,147 Lease of facilities 5,900 Supplies, utilities, and petty cash purchases 19,521 Total $89,02ga aDoes not include an amount for central office administrative costs associated with bookkeeping and cost of supplies con- sumed at the training facilities. 9 Fishing project In May 1968 CAMP initiated a training project in the operation and maintenance of small boats and in the skills and techniques of ocean fishing, CAHP was to establish a commercial fishing cooperative which would supply fish to local restaurants and provide employment for the individuals trained under the project. Training was scheduled to take from 8 to 9 weeks, during which time the trainees would re- ceive stipend payments. Training started in CAMP's Pompano Beach region but was later transferred to Bimini Island in the Bahamas because of problems encountered with residents and boat owners in the Pompano Beach area. The cost of operating the training project during the 1969-70 grant year was $23,365, including stipends totaling $3,349 paid to 11 trainees, Another training project in commercial fishing was started in the Fort Myers, Florida, region in July 1969. Costs of $2,800 were incurred for operating this project. Included in these costs were the instructor's salary of $1,374 and stipends totaling $1,263 paid to six trainees, After an onsite review of the fishing projects, OEO instructed CAMP on September 5, 1969, to close out the fish- ing projects no later than October 1, 1969. OEO stated that its decision was based on the following factors. 1, Excessive expenditure of funds had been made. 2. Capital equipment that cost in excess of $500 had been purchased without OEO's prior consent, 3. Funds expended for staff, supplies, and equipment had not been authorized by the terms of the grant. 4. Adequate supervision or direction had not been pro- vided 'under the project. 5. OEO approval had not been obtained prior to hiring instructors and support staff for the project. 6. Cooperatives had not been established as proposed. 7, organized instruction had not been provided to proj- ect participants. 8. Time and attendance records had not been kept on trainees who had received stipends. c advised OEQ by letter dated September 29, 1969, that i board of directors had unanimously agreed to comply with CEO's instruction. The project had received unfavor- able publicity which the board believed could have had an adverse effect on C 's overall operations, In 1968 CAPP"s regional office in Homestead, Florida, started a training project with the objective of establish- ing a farming cooperative. CAMP leased farmland for use by project participants to grow and harvest crops. The project became inactive in December 1969 and was terminated because financial backing aside from CAMP could not be obtained. During the 1969-70 grant year, the operating expenses amounted to $6,601 and stipends paid to the participants amounted to $3,408. Receipts from sales of farm products totaled $4,005. 54 Bakery nroject A training project was initiated in June 1969 by the regional office in Homestead to organize a cooperative bak- ery to be operated as an independent business by individmls who had received baker training. Bakery products were sold door to door. The bakery project was terminated in May 1970 because proceeds were not sufficient to cover expenses and CAMP could not obtain financial support from sources other than QEO, During the 1969-70 grant year, the bakery operating expenses totaled $14.,289, incl,uding stipends of $11,693 paid to five trainees, Receipts from the sale of baked goods during this period totaled $2,656. SENIOR CITIZEN PROGRAM In July 1969 CAMP was awarded a $40,000 l-year grant by OED to operate a senior citizen program through June 1970 for migrant and seasonal farmworkers aged 55 or over. During the 1969-70 grant years CAMP expended $38,800 to operate the program and to provide food, employment as- sistance, transportation, limited health services, and legal aid to the elderly poor, CAMP reported to OEQ that, during this period, 1,534 elderly poor had participated in the pro- gram. In November 1970 OEC awarded a grant of $40,000 to CAMP to continue the program through June 1971. HOUSING PROGRAM During the 1969-70 grant year, CAMP expended about $44,000 to operate a housing program, the primary purpose of which was to encourage migrant families to settle in one locality and thereby have an opportunity to seek year-round employment, to provide their children with a normal education, and to become citizens in the local community and thus q-ual- ify for community benefits. Most of the funds were expended to operate a CAMP- sponsored housing project that was established in March 1968 under section 221(h) of the National Housing Act, as amended (12 U.S,C. 1715). In July 1968 the housing project borrowed $73,700 from a lending institution to rehabilitate and convert an apart- ment building into 72 two-, three-, and four-bedroom town- houses to be sold to migrant farm laborers. The loan was insured by the Federal Housing Administration, Department of Housing and Urban Development, In the spring of 1969, the rehabilitation of the units Was completed and the housing project began taking applica- tions from CAMPes program participants for the purchase of the townhouses. The amount of the purchase price of the townhouses was loaned to the residents by the lending in- stitution, and the loans were insured by the Federal 12 Housing Administration, The residents* loan applications were approved by CM, the lending institution, and the Fed- eral Housing Administration. c entered into a cost-reimbursable contract not to exceed $50,000 with the Office of Education, Department of Health, Education, and Welfare, for a talent search program to be operated during the 1969-70 grant year. The program was designed to assist migrant youths from the seventh grade through college to continue their education and to encourage migrant youths who had dropped out of school to reenter school or seek vocational training, CAMP expenditures under the program were about $43,000s CAMPss efforts under the talent search program were di- rected toward (1) assisting youths to obtain high school equivalency certificates through programs funded by OEO and operated by various colleges, (2) referring students with high potential but low achievement to colleges, under an Office of Education-sponsored college education achievement program, and (3) providing students with college placement services. The talent search annual report for the year ended June 1, 1970, showed that,, of 3,614 students contacted by CAMP, 204 had been placed in the high school equivalency program, 174 had been placed in college, and 673 had been referred to colleges and were awaiting acceptance and ap- proval of financial aid, The Office of Education awarded UN? a cost-reimbursable , contract for about $64,000 to continue the program through May 31, 1971. CHAPTER 3 IMPROVEHENTSNEEDXD IN SELECTING PROGRAMPARTICIPANTS The purpose of CAiiss programs was to assist poor mi- grants and seasonal farmworkers and their families to im- prove their living conditions and to develop the necessary s'kills for a productive and self-sufficient life in an in- creasingly complex and technological society, In selecting persons to participate in its training programs involving stipends and in its housing project, however, CAMP had not established policies and procedures to inform interview counselors at the regional offices of applicable QEO eligi- bility requirements, As a result, a large number of pro- gram participants were selected by CAMP who were not mi- grants or seasonal farmworkers. The high incidence of ineligible participants detracted from the effectiveness of CAMPDs programs. If CAMPhad fol- lowed applicable eligibility requirements, the ineligible participants who were poor would not have been without help because other programs were available under which those who were not migrants or seasonal farmworkers could have re- ceived similartypesof assistance offered by CAMP. TRAINING PROGRAMSINVOLVING STIPENDS Of the 308 persons enrolled in training programs dur- ing the 1969-70 grant years CAMP paid stipends totaling about $71,300 to 218 participants, or 71 percent, who, in our opinion, were not eligible for participation in the programs under applicable QEO criteria. In addition, CAMP spent about $8,000 for travel, meals, and housing for in- eligible participants in the mechanics-training project. Special conditions of OEO migrant and seasonal farm- worker program grants under title III, part B of the Econo- mic Opportunity Act, as amended, restrict eligibility for enrollment in the programs to migrant and other seasonally employed agricultural families who, during the year preced- ing the commencement of the program have --earned at Least 50 percent of their total income as agricultural employees, --been employed only on a seasonal basis and not by one employer for the entire calendar year, and --earned incomes below the poverty level as defined by OEO* In addition, the participants must have been classified ac- cording to OEO definition as migrant farmworkers or farm laborers. OEQ grant agreements required that, for persons to be eligible to participate in programs involving stipends, they must be: 1, Migrant or seasonal farmworkers who are unemployed at the time they enter the program. 2, Heads of households, The head of a household shall be a male unless there is no adult male in the household. Cur review showed that 218 persons who had received stipends while enrolled in training programs were not eli- gible to participate in the programs for one or more of the reasons listed below, Reason for ineligibility Number Not a migrant or seasonal farmwor'ker Not head of household Employed at the time of entering the program Total 218a aC&P records for 14 other participants did not contain suf- ficient information to determine whether they were eligible, Of the 218 ineligible participants, 116 were ineligible for more than one reason, but the three reasons shown above were most common, Fo~f.Iowin~ are examples of ineligible participants in the various--training programs, --A participant in the mechanics-training project who received stipends of $495, was employed by a bus earn- pany prior to participating in the project and had not been a farmworker, Also, he lived with his par- ents and was not the head of the household, --Another participant in the mechanics-training proj- ect, who received stipends of $819, was employed by a lawn-mowing service prior to participating in the project and had not been a farmworker, Also, he was not the head of the household. --A participant in the automobile-reconditioning proj- ect, who received stipends of $554, had not been a farmworker, was not head of the household, and was employed prior to participating in the project, We are aware that, of the 218 ineligible participants, 73 were paid stipends under the OEO demonstration grant au- thorized by title II, part C of the Economic Opportunity Act, as amended, and that this part of the act does not con- tain the specific eligibility restrictions contained in ti- tle III, part B of the act, The purpose of demonstration projects, however, is to "test or assist in the development of new approaches or methods that will aid in overcoming special problems,tq in this case, the training of migrant and seasonal farmworkers to develop the necessary skills to ob- tain permanent employment, In our opinion, it is not appropriate under a demon- stration project to use significant resources on activities which, after the pilot stage had been completed, would not be appropriate for funding on a continuing basis under other sections of the Economic Opportunity Act, We believe that 0EO"s eligibility requirements for title III, part B pro- grams should also be applicable to persons who participated in the demonstration project, CAMP's executive director disagreed with our finding on ineligible participants, He stated that the information on the participants contained in CAMPBs files had been what the participants wanted to show on their application for en- rollment in a program and was not necessarily valid. He stated also that many of the participants did not want to show that they were farmworkers. We interviewed 20 program participants receiving sti- pends, who were readily available for interviews at the time of our fieldwork, to determine whether the information on their applications was correct0 In general, they confirmed that the information in their application files was correct and not misleading as claimed by the executive director of cm. The executive director also made the following comments concerning our basis for concluding that participants were ineligible for training, Not a migrant or seasonal farmworker--the executive di- rector stated that, in certain areas of southern Flor- ida, farmwor'k was the only employment available for poor people. In these areas there was no need for CAMP to verify the eligibility of the applicant, because he was either a farmworker or a potential farmworker, re- gardless of the information furnished on his applica- tion for CAplp programs, CAMP officials could not provide us with supporting data on the percentage of residents who lived in these areas of southern Florida that were farmworkers. They stated that they had obtained the information verbally over the telephone from the Department of Labor. We subsequently contacted the Farm Labor Area supervi- sor in Miami, Florida, who was responsible for Department of Labor activities in most of the areas serviced by CAMP. The supervisor informed us that in certain small sections in southern Florida--areas of less than a square mile each-- there would be concentrations of farmworkers as high as 50 percent of the population, The supervisor also furnished us with employment statistics which showed that, for eight of of the 10 counties serviced by CAMP, farmworkers, including migrant and seasonal farmworkers, accounted for less than 10 percent of the total population even dur%ng the peak pe- riod of farmworker employment, 17 Participant was not a head of household--the executive director chillenged the definition of a head of house- hold in CEO's eligibility criteria. He stated that, when there was only a female adult in the family and most of the income was contributed by the children, the adult female and the children contributing to the fam- ily income would be considered the head of the house- hold and that QEO's definition of a head of household would not apply, that is, there was no one head of household, In February 1971 QEQ officials informed us that in De- cember 1969 OEO relaxed its head of household criteria for use in deciding whether participants were eligible for training stipends, We found no evidence however, that the special conditions of CAMPDs grant were modified for the 1969-70 program year, the period covered by our review. Un- der the revised special grant conditions for migrant and seasonal farmworker programs, training stipends may be pro- vided either to the head of household or to a child of the household who would benefit more from the training than the head of household, Some of the participants whom we consid- ered ineligible because they were not a head of household may have been eligible under the revised guidelines. Participant was not unemployed--the executive director stated that all participants were unemployed at the time they entered the program. He said that they might have been employed the minute before entering the program, but when entering the program they became unemployed. Cur interpretation of OEO's eligibility criteria as set forth in its grant agreements is that persons must be unemployed prior to acceptance into training programs in- volving stipends, HQUSING PRQJECT None of the 72 residents 'hiving in the CAMP-sponsored housing project met 0 eligibility criteria because 61 res- idents were not migrant or seasonal farmworkers and 11 res- idents earned incomes in excess of the prescribed limitations. Following are the income and other characteristics of two ineligible residents. 1. The credit report and verification of employment of the head of a household of a family of five showed that he had an annual income of $5,700 and had been employed as a plumberps helper for over 8 years when he applied to purchase an apartment. OlZQ"s income limitation for a family of five at the time of ap- plication was $3,900 for a nonfarm family and $2,800 for a farm family. Since he was neither a migrant nor seasonal farmworker and his income ex- ceeded the limitation, he was not eligible to partic- ipate in the housing project. 2. The mortgage application, credit report, and verifi- cation of employment for the head of a household of a family of six showed that he had an annual income of $5,240 and had been working as a construction worker for 14 months when he applied to purchase an apartment. 0 8s income limitation for a family of s9x at the time of application was $4,400 for a nonfarm family and $3,100 for a farm family. Since he was neither a migrant nor seasonal farmworker and his income exceeded the limitation, he was not eli- gible to participate in the housing project. The executive director, C&P, agreed that some of the occupants of the housing project were not migrant and seasonal farmworkers according to information shown in the credit re- ports and 'Loan applications. He stated, however, that the information shown was the type of information required by the Federal Housing Administration before it would approve loans for the purchase of units in the housing project. Although the executive director indicated that the res- idents of the housing project included misleading informa- tion in their loan applications, we noted that the information contained in the applications had been verified by the C&&P housing staff and by cred%t bureaus before the applications were submitted to the lending institution and to the Federal Housing Administration for review and approval, With regard to income limitations, the executive di- rector stated that most of the migrants and seasonal farm- workers did not know how much they earned each year because they did not keep records and the growers or farmowners did not give them earnings statements. He stated also that in 1 week farmworkers might earn $150 and the next week they might earn nothing. CONCLUSIONS CAPE' needs to improve its policies and procedures for ensuring that persons selected for participation in CAPP programs are migrant and seasonal farmworkers and otherwise meet OEO eligibility requirements. Further, bec,ause of the high incidence of ineligible persons participating in the training programs and CAHPps lack of emphasis on ensuring that persons are eligible for enrollment, OEXI should closely monitor the actions taken by CAMP to ensure that Federal funds are expended to assist only those persons for whom CAMP programs were intended. The high inch_dence of ineligible participants detracts from the effectiveness of CAMPss programs in providing as- sistance to the sizable migrant and seasonal farmworker population in southern Florida. WECOMIENDATION We recormnend that the Director, OEO, through the Office of Operations, ensure that CAMP, in selecting participants ! for its various programs, adheres to OEC eligibility re- quirements, 20 CHAPTER4 IMPROVEMENTSNEEDED IN ADMINISTRATION OF GRANT FUNDS Improvements were needed in CAMP's accounting for em- ployee leave and compenstitory time, travel; purchases of supplies and equipment, and accountable property. We noted some expenditures which had not been budgeted or authorized by OEO. Also controls over program revenues had not been adequate. PAYROLLS AND RELATED COSTS CAMP reported expenditures of about $616,000 for pay- rolls and related costs for OEO and Office of Education pro- grams during the 1969-70 grant year. This amount repre- sented about 61 percent of the total grant fund expenditures of about $1 million recorded by CAMP. We reviewed payroll and related costs of about $49,000 incurred for administration and operation of CAMP programs and activities. In general, these payroll costs had been properly supported and accurately computed. CAMP and OEO regulations require that all absences for compensatory and annual leave be requested, approved, and recorded in advance of such leave. We ndted certain in- stances in which CAMP had not been adhering to the regula- tions. For example: 1. Compensatory leave of 4,115 hours, valued at $9,711, was taken by 79 employees. We estimate that, for 3,200 hours valued at $7,500, leave requests were not prepared as required by regulations. CAMPBs director of fiscal affairs stated that all employees would henceforth be required to submit written re- quests before taking compensatory leave. * 2. Fayments for accrued annual leave of 674 hours, val- ued at $1,963, were made to 12 employees who were continuing their employment with CAMP. CAMP regula- tions provide for payment for accrued annual leave only upon termination of employment. In June 1970 21 OEQ directed that the practice of making payments for accrued annual leave to those employees who were continuing employment with CAMP be discontinued. 3. Mathematical errors in recording the leave of seven employees resulted in an overstatement of accrued leave of 47 hours. CN's director of fiscal af- fairs stated that a double-check procedure had been initiated to ensure the accuracy of postings to leave records. TRAVEL CAMP reported expenditures of about $80,000 for travel and local transportation during grant year 1969-70, which was about 8 percent of its total recorded expenditures for the period. CAMI?"s travel policy requires that travel be authorized and approved prior to any travel by its employees outside their assigned region. We examined the travel vouchers to- taling about $10,000 for 128 trips made by 13 CAMP employees outside their regions and noted 44 trips for which the files did not contain authorizations for travel. For another 24 trips, a reason for the travel was not stated on the autho- rization form. Travel costs for secretarial employees totaled over $4,000 during the period. CAMP officials stated that the purpose of this travel was to allow the secretaries to at- tend workshops, staff meetings, and conferences. In a June 25, 1970, letter to CAMP discussing travel by secretaries, OEO stated that: "-k-k* The use of travel funds by clerical person- nel seems excessive and the justification for it is questionable. Clerical travel should not be permitted in the future." CAMP disagreed with QEQ on the necessity for travel by the clerical staff but advised OEO on July 14, 1970, that clerical personnel would be invited to meetings requiring travel only when their attendance was necessary. We noted 22 that from July 14 to October 30, 1970, travel costs for nine secretaries to attend meetings and workshops totaled $1,052. With regard to the practice of secretarial travel, the executive director of CAMP stated that it would be contin- ued because he thought it was necessary. He stated also that CAMP secretaries performed functions not usually,per- formed by secretaries, such as filling out forms and reports, and that the workshops were necessary to teach them how to do this; otherwise, supervisory personnel would have to take time off from their other duties to instruct the secretaries on these matters. PROCUREMENT During the 1969-70 grant year, CAMP's procurement costs for supplies, equipment, space, and other items totaled about $100,000, or about 10 percent of its total expendi- tures. Our examination of 163 procurement actions involving $31,570 revealed that 79 procurements totaling $15,515 were not supported by adequate requisitions or purchase orders as provided for in CAMP's Administrative Manual. In December 1970 the director of fiscal affairs agreed that deficiencies had existed in the preparation of requisi- tions and purchase orders for procurements, but that the situation had been corrected and that the purchasing proce- dures contained in CAMP's Administrative Manual were being followed. CONTROLSOVER ACCOUNTABLEPROPERTY As of June 24, 1970, CAMP had property on hand valued at about $76,000. The provisions of CAMP's Administrative Manual were not followed in taking physical inventories. Also, property was not adequately safeguarded and effec- tively utilized, or disposed of, in accordance with proce- dures prescribed 8 in the manual. Cm"s Administrative Manual provides that periodic inventories be taken by regional office personnel and veri- fied by central office personnel. Pnysical inventories, however, were taken personally by the central office's di- rector of fiscal affairs, who was also the property officer. 23 To maintain proper internal control over property, inven- tories should be taken by persons independent of the prop- erty office and accounting office. Therefore inventories of CAMP's property should be taken by regional office per- sonnel or by persons other than the director of fiscal af- fairs. The director of fiscal affairs agreed that internal controls would be strengthened if the inventories were taken by someone else. We noted evidence of deterioration and inadequate uti- lization of property at the regional offices. For example, at the Mr. Kar Kleen facility, a truck and two motor scoot- ers valued at $2,800 had not been used for over 6 months and were deteriorating from exposure to the weather. At the regional office in Homestead, we noted in September 1970 that a tractor and a 44-passenger bus had been exposed to the weather and had begun to rust and deteriorate. This property, valued at $1,580, had not been used after late 1969 when the farm training project to which the property was assigned was terminated. We believe that property in excess of CAMP's needs should be identified and transferred to the General Services Administration for disposal. CANT?employees were permitted to drive CAMP vehicles to their homes at night and on weekends, reportedly so that the vehicles would be protected from possible theft or van- dalism. During our review one vehicle was involved in an accident while being used by a CAMP employee for personal reasons. T'he employee informed us that he had sometimes operated the vehicle for his personal use. We believe that CAMP should not permit its employees to use CAMP vehicles for other than business purposes. 24 During the 1969-70 grant year9 CAMP expended grant funds of about SE3,QOO budgeted for temporary housing to make payments on mortgages and for utilities relating to its permanent housing project. Under the special conditions of QE08s grant, C&V was required to obtain written approval from OEO before disbursing any of these funds, which were supposed to be used only for emergency temporary housing for migrants and seasonal farmworkers. c made the mortgage payments because some housing units were unoccupied and because some slow-paying occupants of other units were renting until their applications to pur- chase the units were approved by the Federal Housing Ad- ministration, c did not obtain -written approval from OEO prior to using the emergency housing funds. On day 25, 1970, about the end of its grant year, CAMP requested permission from 0E0 to write off the $l3,000 as uncollectible. CAMP justi- fied the write-off as follows: I'*** We feel that the cost of Vwriting off' the loan can be justified in that it was a cost of simply getting migrants into adequate housing; not on a temporary basis but on a permanent basis. Seventy-two (72) migrant families rep- resenting approximately 475 persons own their homes and are accruing equity rather than hold- ing a handful of rent receipts., These persons have truly left the migrant stream.!' Of the 72 residents occupying the housing project, 61 were not migrants or seasonal farmworkers and 11 had incomes in excess of CEO limitations and therefore were not eligible for housing assistance under OEO's eligibility criteria. (See pe 19.1 On August 11, 1970, the Director, Migrants Division, OEXI, approved C Bs request but made the following stipula- tion. 25 stLet me emphasize that despite our approval, we nevertheless have serious reservations about the judgment exercised by CAMP in this matter. There- fore, we will expect in the future where program- matic and financial matters are not clearly within the scope of existing OEO instructions and guide- lines that you will consult with this office be- fore taking actionegQ In January 1970 CAMP obtained OEO approval to use $16,000 of its emergency housing funds to establish guaran- teed loan funds with federally chartered credit unions to loan money to migrants for temporary and emergency housing, CAMP entered into agreements with three credit unions, which provided for making guaranteed loans not to exceed $125 to eligible program participants. CAMP selected the prospec- tive borrowers and authorized the credit unions to make the loans. The loans made by the credit unions were not restricted, however, to temporary and emergency housing loans. As of September 1970 the credit unions made 18 loans totaling $2,170, of which only three loans totaling $375 were for temporary or emergency housing. CAMP officials informed us that the restriction that the loans be used only for emergency and temporary housing had been removed by OEO, but they were unable to furnish us with documentation or correspondence to this effect. OEO headquarters officials informed us, however, that the re- striction on the use of the $16,000 for only emergency and temporary housing loans had not been removed. ACCOUNTING FOR PROGRAMREVENUES During the 1969-70 grant year, CAMP received income of over $29,000 from program operations in the regional offices. The regional offices, however, did not maintain detailed financial records accounting for sales and receipts for some programs and did not record all sales for other programs. Also revenues from some program operations were not for- warded to CAiWBs central office. 26 We could not verify the amount of Mr. Kar Kleen sales because 206 sales invoices could not be located. Our exam- ination of the sales journal showed that some prenumbered sales invoices had not been accounted for and that others had been voided after being entered in the sales journal. Accounting records of the automobile-reconditioning facility in Fort Lauderdale could not be located, but, on the basis of available sales invoices, we estimated that sales were about $300 more than shown by the central office records. For the period September 30 to November 5, 1969, the cash receipts journal for Mr. Kar Kleen showed receipts of $1,045; however, records at the central office showed that only $874 in funds were forwarded to the central office, Conversely, for December 15 to 18, 1969, the central offZce records showed receipts of $155 in excess of the amount recorded in the Mr. Kar Kleen cash receipts journal. The director sf the Fort Myers region informed us that the Fort IMyers fishing cooperative had some revenues from harvesting fish and crabs and that these funds had been distributed to trainees and workers of the fishing coopera- tive. The director of fiscal affairs informed us that he was aware that the fishing cooperative had revenues of abcut $300 to $400 and acknowledged that the funds had not been forwarded to the central office. He stated, however, that he thought that the funds had been used to offset the ex- penses of the program and that he was not aware that the funds had been distributed to the trainees and workers. Because of the lack of adequate records, we were unable to determine whether all revenues had been used for program purposes. CONCLUSIONS Improvements are needed in CAMP1s controls over and ad- ministration of grant funds. CAMP has taken certain actions to correct some of the weaknesses in the administration of grant funds. Additional actions, however, are needed to im- prove the accounting for travel, property, and revenues and to avoid expenditures which have not been budgeted, autho- rized, or approved by QEQ in advance., We recommend that the Director, OW, through the Office of Operations, closely monitor CMss financial management practices to ensure that corrective actions regarding travel practices; control over, and use of, accountable property; fund expenditures; and acsounting for program revenues are implemented. 28 CHAPTER 5 SCOPE OF REVIEW Our review was conducted primarily at the CAMP central and regional offices in Florida and included an examination of selected transactions under the following Federal grants and contract: Program or activity Period Amount OEO migrant program grant (CG 0771-E/0) 6- l-69 to 5-31-70 $736,000 Conduct and administration Educational training Emergency and temporary housing Credit unions OEO job development, training and placement pilot project (CG 8216-B/0) 5-12-69 to 5-12-70 250,000 OEO senior opportunities and services (CG 8328-B/0) 7- 1-69 to 6-30-70 40,000 Office of Education migrant education talent search contract [OEC-0-9-716057- 4274(417)] 6- l-69 to 5-31-70 50,000 Our review was directed toward (1) inquiring into the nature and scope of CAMP program activities, (2) determining whether participants enrolled in certain CAMP programs and residents in its housing project were eligible to receive such assistance, and (3) evaluating CAMP's procedures and controls over expenditures and property. We reviewed pertinent legislation, OEO policies and procedures p grant agreements, and the contract with the Of- fice of Education. We examined CAMP records and interviewed individuals associated with CAMP, OEO, Office of Education, and certain other persons whom we believed had information pertaining to the matters under review. 29 APPENDIXES 31 . APPENDIX I FUNDS RECEIVED BY CAMP AND RELATED EXPENDITURES FOR THE 1969-70 GRANT YEAR Office of Education Total OEO grants contract FUNDS RECEIVED: Carry-over from prior year $ 15,734 $ 15,734 $ - New grant funds 1,061,834 1.011,834 50,000 Total funds received 1,077,568 1,027,568 50,000 Program revenues 29,070 29,070 Total funds available 1,106,638 1,056.638 50,000 EXPENDITURES: Personnel 616,492 589,371 27,121 Consultant and contract services 3,790 3,790 Travel 79,841 72,073 7,768 Space cost and rental 30,989 30,989 Consumable supplies 13,031 10,980 2,051 Rental, lease, and purchase of equipment 50,990 50,545 445 Stipends 102,398 102,398 Other costsa 135,182 129,574 5,608 Total expenditures 1,032,713 989.720b 42,993 UNEXPENDED BALANCE $ 73,925c $ 66,918' $ 7,007 aOther costs include telephone, utilities, insurance, repairs, and costs associated with the operation of training programs and the housing proj- ect. b Includes program revenue of $29,070 which was applied as offsets to pro- gram expenses when received. The net expenditure from OEO grants is $960,650. 'Includes $16,000 on deposit with three Federal credit unions for guaran- teed loan funds. 33 SPaLmIES OF PRINCIPAL CAMP OFFICIALS AS OF JULY 1, 1970 Position Annual-salary Executive director $18,020 Director, program operationsa 15,651 Director, fiscal affairs 12,020 Public relations 9,010 Housing director 10,000 Director, talent search 12,135 Counselor, talent search 10,176 Director, aging 10,812 Regional director, Fort Myers, Florida 11,130 Regional director, Belle Glade, Florida 12,190 Regional director, Boynton Beach, Florida 10,000 Regional director, Pompano Beach, Florida 10,812 Regional director, Homestead, Florida 10,454 aAlso regional director, Plant City, Florida 34 APPENDIX III MEMBERSOF THE CAMP BOARDOF DIRECTORS AS OF JULY 1, 1970 Renresentation Rev, Samuel W. George, Ministerial Association president National Association for the Advancement of Colored People Mr. Willie Cohen Farmworkers Mrs. R. W. Glasner Florida Council on Human Relations Mrs. Bessie Brunt National Association for the Advancement of Colored People Mrs. Willard Findling Community at large Rev. C. D. Lazier National Association for the Advancement of Colored People Mr. Robert Kaufman Legal services Mr. August VandenBosche Farmworkers Mr. Albert Lee Farmworkers Rev. John Freund Catholic Archdiocese of Miami Mrs. Juanita Barrerea Farmworkers Mr. Elijah Boone Farmworkers Mrs. Ethel Williams Farmworkers Mrs. Louise Buie National Association for the Advancement of Colored People U.S. GAO, Wash., D.C. 3.5
Activities Managed by Community Action Migrant Program, Inc., Fort Lauderdale, Florida
Published by the Government Accountability Office on 1971-06-16.
Below is a raw (and likely hideous) rendition of the original report. (PDF)