oversight

EDA: Treatment of Blacks at the Economic Development Administration in the 1980s

Published by the Government Accountability Office on 1990-09-26.

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

                                       I1nit.d   Statvs   General   Accounting   Office

                                       Report to the Chairman, Committee on
                                       Government Operations, House of
                                       Representatives

    ---_---    .^f_l l...“lll---.-.-
1   sc”pt~cw~ kr       1 !l!N
                                       EDA
                                       Treatment of Blacks at
                                       the Economic
                                       Development
                                       Administration in the
                                       1980s


                                                                                                   I3



                                                                                          142305




    GAO/‘flKI)-90-148
__-_------_.-   ____.   -   .._.   -   ---_--   I-
                                                     -   ;
          United States
GAO       General Accounting  Office
          Washington, D.C. 20548

          Human Resources Division

          B-240432

          September 26,199O

          The Honorable John Conyers, Jr.
          Chairman, Committee on Government Operations
          House of Representatives

          Dear Mr. Chairman:

          On July 10,1989, you asked us to examine allegations concerning the
          treatment of blacks at the Economic Development Administration (EDA)
          in the Department of Commerce. These allegations, raised by a former
          EDA employee, involved (1) personnel and equal employment opportu-
          nity (EEO) matters affecting black EJM employees and (2) programmatic
          decisions dealing with the award of grant funds and how these activities
          affected black applicants. The alleged incidents and decisions occurred
          between 1981 and 1984, but you questioned whether similar situations
          have existed at EDA since then.

          In subsequent discussions with Committee staff, we agreed to

      . review the allegations for 1981 through 1984 to the extent that docu-
        mentation was available.
      l examine the employment rates of blacks in EDA’S work force to deter-
        mine if they are represented according to Equal Employment Opportu-
        nity Commission (EEOC)criteria (that is, in proportions equal to or
        greater than blacks in the civilian labor force [cL,F]~ );
      l review EDA’s affirmative employment plans and accomplishment reports
        for fiscal years 1986 through 1989 to determine whether planned
        actions were initiated and if they were completed;
      l obtain the number, bases, and resolution of formal discrimination com-
        plaints filed by black employees in EDA during fiscal years 1986 to 1989;
      . review the formal discrimination complaint files of two individuals
        named in your request, to determine if federal policies and procedures
        were followed;
      l determine if black organizations and communities headed by black
        mayors or other black officials received a proportionate share of EDA
        grants during fiscal years 1986 through 1989;
      . determine if and the extent to which EDA grants benefitted minority
        communities; and



          ICLF data include persons 16 years of age and older, excluding those in the Armed Forces, who are
          employed or seeking employment. These data are developed through the nation’s census conducted
          every 10 years. The data used for our review were collected in 1980.



          Page 1                                GAO/HRLbB&14l3     Treatment   of Blacks at EIIA in the l@We
                       B-240432




                   l   determine whether EDA grants created jobs, saved jobs, or both, espe-
                       cially for minorities.

                       Our review involved obtaining documentation and interviewing officials
                       and staff throughout EDA'S Washington, D.C., headquarters. Because
                       most grant application and review activities take place in EDA'S regional
                       offices, we also visited EDA'S Atlanta regional office to obtain data
                       relating to the last three objectives discussed above. We performed our
                       work between September 1989 and April 1990 in accordance with gener-
                       ally accepted government auditing standards.


                       The allegations concerning the incidents and decisions that occurred
Results in Brief       between fiscal years 1981 and 1984 could not be reviewed because
                       related documentation was unavailable. EDA generally does not retain
                       records and files for more than 3 years. (See p. 9.)

                       During fiscal years 1986 through 1989, blacks were relatively well rep-
                       resented in all federal job categories and grade levels at EDA when com-
                       pared with the national CLF, even though EDA'S funding and staffing
                       levels had decreased significantly. (See p. 12.)

                       EDA generally prepared annual affirmative employment plans and
                       accomplishment reports as required by EEDC guidelines, although it did
                       not always initiate or complete actions stated in its affirmative employ-
                       ment plans. Because blacks were well represented, EDA'S affirmative
                       employment plans for 1985 through 1989 generally did not address
                       blacks. (See p. 16.)

                       During fiscal years 1985 through 1989, seven formal discrimination
                       complaints were filed by five EDAstaff. Three were filed on the basis of
                       race-all by blacks. One case was later withdrawn, one is still active,
                       and the third found no discrimination. EDA'S processing of two formal
                       discrimination complaints filed by blacks in fiscal year 1984, mentioned
                       in the request letter, did not meet the timeframes for actions prescribed
                       by EEOC requirements. EDA generally followed federal policies and
                       Department of Commerce procedures, however, and these two files were
                       complete. The allegations raised in these two cases were not sustained.
                       (See pp$ 10-12.)

                       We could not determine the ratio of EDA grants received by black organi-
                       zations and communities headed by black officials in fiscal years 1986
                       through 1989. Federal statutes and laws do not require EDA to collect


                       Page 2                      GAO/HRD&O-148   Treatment   of Blacks at EDA in the 198Oa
i-240432




minority data on applicants and grantees and        EDA   has not done so. (See
pp. 18-19.)

Data on the extent that minorities benefit from EDA grants were not
available. Although EDA collected data relating to whether minorities
would benefit from the projects funded through EDA grants, we could not
use the data because they were inaccurate and unreliable. (See pp. 19-
20.)

Data on the number of jobs created for minorities were also unreliable.
EDA officials consider job creation and conservation in deciding which
applicants to fund. Grantees receiving EDA public works grants must
estimate the number of jobs the project will create or save-by minority
and sex-and grantees must report on the actual number of such jobs.
However, EDA does not follow up with grantees that do not report this
information. Nor does EDA validate or use the data it does obtain. (See
p. 21.)


In keeping with the policy of your office, we did not obtain written
agency comments. But we discussed the contents of this document with
Department of Commerce and EDA officials, who generally agreed with
our observations. We incorporated their comments where appropriate.

Copies of this report are being sent to interested congressional commit-
tees and subcommittees; the Assistant Secretary for Economic Develop-
ment, Department of Commerce; the Director, Office of Management and
Budget; and other interested parties. If you have any questions about
the report, please contact me on (202) 275-1656. Other major contribu-
tors to this report are listed in appendix II.

Sincerely yours,




Linda G. Morra
Director, Intergovernmental
   and Management Issues




Page 3                        GAO/HItIMO448   Treatment   of Blacks at EDA in the lB8Oe
Contents


Letter
Appendix I                                                                                                 6
Economic                 Objectives, Scope, and Methodology
                         Background
                                                                                                           6
                                                                                                           7
Development              Data Unavailable to Review Allegations Regarding EDA,                             9
Administration:               Personnel and EEO Decisions
Treatment of Blacks in   Blacks Well Represented in EDA’s Work Force                                      12
                         EDA’s Affirmative Employment Plans and                                           16
the 1980s                     Accomplishment Reports
                         Allegations-About EEO Decisions Affecting EDA’s Grant                            18
                              Programs

Appendix II                                                                                               22
Major Contributors to
This Report
Tables                   Table 1.1: Biennial EDA Funding and Staffing History                               8
                             (Fiscal Years 1979-89)
                         Table 1.2: Comparison of Black Employees in EDA With                             14
                             Blacks in National CLF, According to Federal Job
                             Category (Fiscal Years 1986 and 1989)
                         Table 1.3: Comparison of Black Employees in EDA by                               14
                             Grade Band (Fiscal Years 1986 and 1989)




                         Abbreviations

                         CW        civilian labor force
                         EDA       Economic Development Administration
                         EJiXI     equal employment opportunity
                         EEOC      Equal Employment Opportunity Commission
                         FY        fiscal year
                         NCBM      National Conference of Black Mayors
                         OPM       Office of Personnel Management
                         SJZS      Senior Executive Service
                         SMSA      standard metropolitan statistical area


                         paee4                      GAO/lSltDW148   Treatment   of Blacka at EM   in the 198Oa
Page 5   GAO/HRD-@@148   Treatment   of Blacka at EDA in the 1980e
                                                                                                                I




Appendix I

Economic Development Administration:
Treament of Blacks in the 1980s

                          On July 10,1989, the Chairman of the House Committee on Government
                          Operations asked us to examine a series of allegations concerning the
                          treatment of blacks at the Economic Development Administration (EDA)
                          in the Department of Commerce. These allegations, raised by a former
                          EDA employee, involved (1) personnel and equal employment opportu-
                          nity (EEO) matters affecting black EDA employees and (2) programmatic
                          decisions dealing with the award of grant funds and how these activities
                          affected black applicants. The alleged incidents and decisions referred
                          to in the Chairman’s letter occurred between 1981 and 1984, but the
                          Chairman was concerned about whether similar situations have existed
                          at EDA since then.


                          In discussions with Committee staff, we agreed to
Objectives, Scope,and
Methodology               review the allegations for 1981 through 1984 to the extent that docu-
                          mentation was available.
                          examine the employment rates of blacks in EDA'S work force to deter-
                          mine if they are represented according to Equal Employment Opportu-
                          nity Commission (EEOC) criteria (that is, in proportions equal to or
                          greater than blacks in the civilian labor force [cLF]~);
                        . review EDA'S affirmative employment plans and accomplishment reports
                          for fiscal years 1986 through 1989 to determine whether planned
                          actions were initiated and if they were completed;
                          obtain the number, bases, and resolution of formal discrimination com-
                          plaints filed by black employees in EDA during fiscal years 1986 to 1989;
                          review the formal discrimination complaint files of two individuals
                          named in the Chairman’s request, to determine if federal policies and
                          procedures were followed;
                        . determine if black organizations and communities headed by black
                          mayors or other black officials received a proportionate share of EDA
                          grants during fiscal years 1986 through 1989;
                          determine if and the extent to which EDA grants benefitted minority
                          communities; and
                          determine whether EDA grants created jobs, saved jobs, or both, espe-
                          cially for minorities.

                          We obtained documentation and interviewed officials and staff
                          throughout EDA'S Washington, D.C., headquarters. Because most grant

                          ‘CLF data include persons 16 years of age and older, excluding those in the Armed Forces, who are
                          employed or seeking employment. These data are developed through the nation’s census conducted
                          every 10 years. The data used in our review were collected in 1980.



                          Page 6                                GAO/HIUMKb148      Treatment   of Blaclw at J3DA in the 1980s
                           Appendix I
                           Economic Development     Administration;
                           Treatment of Blaclr~ in the 1980s




                           application and review activities take place in EDA’S regional offices, we
                           also visited EDA'S Atlanta regional office to obtain data relating to the
                           last three objectives discussed above.

                           Our review objective was not to determine whether EDA discriminated
                           against blacks, but whether blacks were employed at rates in line with
                           appropriate CLF data. To confirm that EDA'S administrative process was
                           consistent with federal policies and procedures, we agreed to review the
                           formal discrimination complaint files. However, we neither reinvesti-
                           gated these cases nor questioned the resolution of the complaints. For
                           two formal complaint cases the Chairman asked us to review, we noted
                           that EEOC and the US. District Court for the Eastern District of Penn-
                           sylvania decided against the complainants. We did not investigate the
                           two cases further. We performed our work between September 1989 and
                           April 1990 in accordance with generally accepted government auditing
                           standards.


                           EDA was established in 1966 to generate new jobs, help protect existing
Background                 jobs, and stimulate commercial and industrial growth in economically
                           distressed areas. It provides economic assistance to rural and urban
                            areas experiencing high unemployment, low average income levels, or
                            sudden and severe economic distress.


Economic Growth Fostered   To achieve its mission, EDA provides loan guarantees and awards grants
by Grants and Loans        for public works projects, technical assistance, planning activities,
                           research studies, and facilities that contribute to creating or saving jobs.

                       . Loan guarantees to industrial and commercial firms provide funds to
                         maintain and expand existing operations or construct new factories or
                         plants.
                       l Public works grants are awarded to local government units, private non-
                         profit organizations, and American Indian tribes to help build or expand
                         public facilities necessary to facilitate industrial and commercial
                         growth. EDA generally funds up to 60 percent of the cost of projects,
                         such as developing industrial parks, installing water lines, and
                         improving roads.
                       . Technical assistance grants are used by communities or firms to help
                         solve problems that stifle economic growth. These grants often go to
                         fund economic feasibility studies or procure expert assistance to help
                         businesses solve problems.



                           Page 7                                     GAO/HID-99-148   Treatment   of Blacks at EDA in the 1980s
                                              Appendix I
                                              Economic Development    Administration:
                                              Treatment of Blacks in the 1999s




                                          . Planning grants to cities, states, local government units, and American
                                            Indian tribes are used to plan, implement, and coordinate economic
                                            development activities.
                                          . Research grants support studies to increase knowledge about causes of
                                            economic distress and approaches to alleviate such problems.
                                          . Grants to private nonprofit organizations and government jurisdictions
                                            assist communities in developing facilities to stabilize and diversify local
                                            economies and improve living conditions in an area, such as installing a
                                            sewer system.
                                          l Special economic adjustment assistance grants are awarded to states
                                            and communities to solve problems caused by serious job losses and to
                                            reverse long-term economic deterioration.

                                              Application procedures for funds available from EDA are announced
                                              annually in the Federal Register. For each, the announcement includes
                                              information on available funding, project requirements, eligibility fac-
                                              tors, and application directions. Applicants are invited to compete for
                                              available funds according to the standards and conditions set forth in
                                              the Federal Register. EDA regional office staff provide technical assis-
                                              tance to applicants, review formal applications, and recommend the
                                              projects that should be approved and funded to the Assistant Secretary
                                              for Economic Development.


Budget and Staffing                           Since fiscal year 1981, in each annual budget the administration has
Declined in 1980s                             proposed that EDA be terminated and its programs be transferred to
                                              another agency in the Department of Commerce. The Congress, how-
                                              ever, has authorized and appropriated funds each year to continue EDA'S
                                              programs and activities. In the early 198Os, EDA experienced sharp
                                              funding and staffing decreases. As shown in table I. 1, these decreases
                                              continued throughout the 1980s.

Table 1.1: Bhnnial EDA Funding and
Staffing Hlrtory (Fiscal Years 1979-89)       Dollars in millions
                                                                                                                                 Total perma;~;
                                              Fiscal war                                                       Budaet
                                              1979                                                                  $549.0                    1,155
                                              1981                                                                  $476.5                     560
                                              1903                                                                  $295.3                     437
                                              1985                                                                  $259.1                     434
                                              1987                                                                  $214.9                     349
                                              1989                                                                  $206.8                     328




                                              Page 8                                    GAO/HRLWO-149   Treatment     of Blaclw at EDA in the 1980s
                          Ikonomic    Development    Admidstcationz
                          Treatment    of Blacka in the 1980s




Annual Reports Required   Each year, as required by EEOC, EDA develops and submits to the Depart-
on EEO Plans,             ment of Commerce an annual affirmative employment plan and accom-
                          plishment report2 The plan is incorporated into the consolidated plan
Accomplishments           the Department of Commerce submits to EEOC. EDA'S plan covers both
                          headquarters and the regional offices. It usually includes statistical data
                          on its work force according to federal job categories (that is, profes-
                          sional, administrative, technical, clerical, and other positions) and grade
                          bands 1 to 16. It also compares the agency’s work force with the appro-
                          priate CLFto indicate whether minority groups are proportionately rep-
                          resented. Finally, the plan evaluates agency policies, practices, and
                          procedures to show whether problems or barriers to EEO exist. If they
                          do, the plan describes the specific actions the agency will take to elimi-
                          nate them.

                          At year’s end, EDA submits to EEOC,through the Department of Com-
                          merce’s Office of Civil Rights, an annual accomplishment report, which
                          describes progress made in achieving objectives and completing the
                          action items included in the affirmative employment plan. It addresses
                          whether items listed as problems or barriers have been corrected or
                          removed.


                          We could not review the allegations concerning incidents and decisions
Data Unavailable to       on personnel issues at EDA from 1981 to 1984. EDA does not generally
Review Allegations        retain records and files for more than 3 years, and most documentation
Regarding EDA             relating to the allegations had been destroyed.
Personnel and EEO         Most of the incidents and decisions cited in the materials accompanying
Decisions                 the Chairman’s request letter were anecdotal and without supporting
                          documentation. Also, many of the blacks affected by these alleged inci-
                          dents and decisions were no longer employed by EDA. At the time of our
                          review, of 10 individuals cited in the request letter materials, 3 were
                          employed by EDA, 2 in regional offices and 1 at Washington, D.C., head-
                          quarters. Of the other individuals mentioned in the allegations, one had
                          retired and one had transferred out of EDA to another agency in the
                          Department of Commerce. Two left EDA before the allegations were
                          made. One person was never appointed to a position in EDA, and EDA had
                          no records that the other two had ever been EDA employees.



                          %DA was not required by the Department of Commerce to prepare an affirmative employment plan
                          in fiscal year 1986 because of an anticipated reduction-in-force.



                          Page 9                                      GAO/HRD-90-148   Treatment   of Blacks at EDA in the 1980s
                           Appendix I
                           Economic Bevelopment   Administration:
                           Treatment of Bbcka in the 1990s




                           Two of the 10 employees identified had filed formal discrimination com-
                           plaints. These files were available for review. In these two cases the
                           allegations were not sustained. One was decided by EEOC. The other case
                           was decided by the U.S. District Court for the Eastern District of Penn-
                           sylvania. The district court case involved an employee who had been
                           transferred to EDA headquarters from a regional office in 1981, but alleg-
                           edly was not given the opportunity to return in 1984 when others in the
                           same occupational position were transferred. This case is discussed on
                           page 11.


Formal Complaint Process   From our review of the records, it appears that EDA acted properly in
Followed in CasesCited     processing the two formal discrimination complaints by black employees
                           whose cases were cited in the request to us; although we could not deter-
                           mine why resolution of the cases took so long. The case decided by EEOC
                           took 4 years and the case decided by the court took 4-l/2 years.

                           EEOChas established policies on discrimination complaints for federal
                           agencies and employees to follow. The policies extend from when an
                           employee first contacts an EEO counselor, through the final agency deci-
                           sion, the appeal to EEOC, or the filing of a suit in federal court. If the
                           complaint is not resolved informally, the employee may file a formal dis-
                           crimination complaint through the agency’s administrative process.
                           Under this process, employees who file a formal complaint with the
                           agency and are not satisfied with the agency decision may appeal their
                           cases to EEOC or file suit in the U.S. district court. They may also go to
                           court if the agency does not issue a decision within 180 days after they
                           have filed a formal complaint.

                           The official files were available at EDA for the two formal discrimination
                           complaints filed by the black employees identified in the request. One
                           case was resolved by EEOC, the other by a federal district court in Penn-
                           sylvania. Neither resolution favored the complainant. From the docu-
                           mentation in these two files it appeared that EDA had included the
                           required documents, followed applicable federal regulations and Depart-
                           ment of Commerce procedures, and acted properly in processing the
                           cases. EEoc-required timeframes were not met, however.

                           The two formal complaints did not move through the complaint process
                           in a timely manner. One case took 4-l/2 years from the date the formal
                           complaint was filed until the final court decision. The case decided by
                           EEOCtook about 4 years. In both cases, EDA did not reach a determination
                           within the 180 days required by EEOC. Neither complainant, however,


                           Page 10                                  GAO/BBD-90448   Treatment   of Blacks at EDA in the 1980s
                         Appendix    I
                         Economic    Development     AdmhMmhni
                         Treafment     of Blacks in the 1SWh




                         chose to file a suit in court at that point, although allowed to do so under
                         EMX procedures.


No Discrimination in     The Chairman’s request referred to the case of an individual who filed a
Transfers of EDA Staff   formal discrimination complaint in 1984 because he was not transferred
                         from IBA’S Washington, D.C., headquarters office to the Philadelphia
Found                    region, In deciding this complaint, the court found no evidence to show
                         wrongdoing on EDA’S part.

                         The matter began in 1981, when the administration reduced EDA’S
                         annual funding and proposed terminating EM and transferring its pro-
                         grams to another Commerce agency. In reorganizing its operations, EDA
                         shifted EEOcompliance review functions related to its grant and loan
                         guarantee programs and transferred four equal opportunity specialists
                         from regional offices to headquarters3 In 1984, these functions and
                         staff positions were transferred back to the regional offices.

                         Of the four equal opportunity specialists who were required to transfer
                         in 1981, only one moved with his family to the Washington, DC., area.
                         The other three specialists did not move their families.4 Although they
                         were officially assigned to headquarters, they were often detailed to
                         work in the regional offices from which they were transferred. In 1983,
                         the Assistant Secretary for Economic Development decided to shift the
                         functions and transfer the staff back to the regional offices. The three
                         specialists who had frequently requested to leave Washington and
                         return to the regions were transferred. The fourth, who had moved his
                         family, did not ask to be transferred back and was not. Later, the
                         regional office position was filled by someone else through a competitive
                         vacancy announcement. The staff member who had moved to Wash-
                         ington, later said that he would have returned to the region had he been
                         officially asked, and filed a formal discrimination complaint because he
                         was not reassigned to the regional office. The complaint was ultimately
                         decided in the U.S. District Court for the Eastern District of Penn-
                         sylvania in Philadelphia. The court found that EDAhad not discrimi-
                         nated against the complainant.


                         3EDA’s compliance review division, in addition to establishing and monitoring EE0 standards for
                         grant recipients, also is responsible for other activities. These include developing uniform standards
                         and procedures for reviewing EIX projects, amducting on-site inspections, and coordinating EDA’s
                         environmental   activities.

                         40ne specialist resigned from EIIA rather than accept the transfer. When EDA offered this person a
                         position in J3DAheadquartera 10 months later, she accepted.



                         Page 11                                 GAO/BlUMW48        Treatment    of Blacks at EDA in the 1980~
                          Appendix I
                          Economic Development    Adminbtratiom
                          Treatment of Blacka in the lBfHk3




                          In addition to reviewing available documentation, including data in the
                          official discrimination complaint file, we spoke with EDA officials
                          involved in these transfer decisions and interviewed the complainant.
                          EDA exercised its prerogatives in transferring these functions and staff
                          positions and did not act improperly. An agency has considerable lati-
                          tude to organize work functions to best meet its needs. Office of Per-
                          sonnel Management (OPM) regulations permit an agency to transfer an
                          identifiable segment of its organization to perform its mission, regard-
                          less of whether the change is authorized by statute or reorganization
                          plan. Employees are entitled to the opportunity to transfer with the
                          work if not transferring would result in demotion or separation. Fur-
                          thermore, OPM regulations authorize an agency to assign its work force
                          to meet its needs, including relocating employees to different jobs and
                          duty stations.


Formal Discrimination     Few EDA employees filed formal discrimination complaints during fiscal
Complaints Few in EDA.9   years 1986 to 1989. In 1985, four individuals filed six complaints. Two
                          were based on race (black), two on sex (female), and two on reprisal.6
1985 to 1989              One of the complaints based on race was withdrawn. The other com-
                          plaint based on race was appealed to EEOC after an agency decision
                          found no discrimination. EEOC also declared no discrimination had
                          occurred. The case was not further appealed.

                          No formal complaints were filed by EM staff during fiscal years 1986 to
                          1988. One formal discrimination complaint, based on race (black) and
                          sex (male), was filed in 1989. This case is active and being considered in
                          EIZA'S administrative process.


                          Generally, the ratio of blacks employed in EDA during fiscal years 1986
Blacks Well               to 1989 was at least equal to the ratio of blacks in the national CLF. EDA
Represented in EDA’s      employs fewer than 500 staff nationwide. In accordance with EEOC
Work Force                guidelines, it uses the national CLFas a basis for comparison and
                          prepares one national affirmative employment plan annually.6


                          6Federal regulations issued by EEOC prohibit reprisal, or retaliation, against individuals who have
                          filed discrimination complaints.
                          6EEOC requires agencies or components within agencies with more than 600 staff to develop separate
                          affirmative employment plans. They must compare their minority work-force profiles with the
                          appropriate CLF data for the nation, region, state, or metropolitan area. A minority group is consid-
                          ered to be fully represented when the ratio in an agency’s work force is equal to or higher than the
                          ratio in the CLF.



                          Page 12                                 GAO/EJRD9O-148    Treatment    of Blacks at   EDA in the 1980s
Appendix I
Economic Development    Adminiatratiom
Treatment of Blacks In the 1SfMa




As of fiscal year 1986, in all federal job categories blacks were fully
represented in EDA, except for black males in clerical jobs (see table 1.2).
In that job category, had two additional black males been employed, EDA
would have reached parity with the CLF rates. Recruiting black males as
clerical workers in the federal sector, however, is a difficult task. Also,
in fiscal year 1989 when 69 fewer staff were employed by EDA than in
1986, blacks in all job categories were fully represented when compared
with national CLF rates, as the table shows.




Page 13                                  GAO/HRD-ml48   Treatment   of Blacks at EDA in the 1980s
                                                                                                                                         -
                                         Appendix I
                                         Economic Development    Adminbtration:
                                         Treatment of Blacka in the 1980s




Table 1.2:Comparison of Black
Employees In EDA With Blacks in                                                                                         Fiscal year 1986
National CLF, According to Federal Job                                                                No. of              Blacks
Category (Fiscal Years 1986 and 1989)    Federal job category                                     Employees           Male       Female
                                         Professional                                                      75              8                 3
                                         Administrative                                                   218             15             16
                                         Technical                                                            30           4             13
                                         Clerical                                                             74           1             42
                                         Otherb                                                               0            0                 0
                                         Total                                                            397             28             74




Table 1.3:Comparison ot Black
Employees in EDA by Grade Band                                                                                Fiscal year 1986
(Fiscal Years 1986 and 1989)                                                                                              Blacks
                                                                                                             No. of
                                         Grade band                                                      Employees     Male Female
                                         1-4                                                                     16        1     11
                                         5-8                                                                     86        4     43
                                         9-12                                                                   130       10     16
                                         13-15--                                                                156       13      4
                                         SE??                                                                         9         0            0
                                         Total                                                                     397         28        74




                                         Page 14                                  GAO/HRD99-149   Treatment    of Blacks at EDA in the 1989s
                                                           Appendix I
                                                           Economic Development    Admihtratiom
                                                           Treatment of BLrlre in the 1980s




                                                                          Fiscal year 1989
       Percent black                          No. of           -         Blacks                        Percent black                        CLF rates’
       Male       Female                 employees                   Male        Female                Male       Female                  Male        Female
       10.66                  4.00                 77                   6               4               7.79              5.19            2.33             2.79
     6.88                  7.33                   175                   9              11               5.14              6.28            3.64             3.13
   13.33                 43.33                     20                   1              12               5.00             60.00            3.54             6.34
   -I- _..-_.-..__-_.
                   --...--
     1.35 -.--.--__.--_56.75
_.-..-..                                           56                   2              33              3.57              58.92            2.77             9.29
         0                    0                     0                   0               0                 0                  0            8.34             1.61
     7.05                16.64                    328                  18              60              5.49              18.29            4.94             4.84

                                                          aThe CLF rates are based on fiscal year 1980 census data and were the same in fiscal years 1966 and
                                                          1969.

                                                          bEDA had no employees in this category during these fiscal years.


                                                          As shown in table 1.2, the ratio of black males in all job categories
                                                          decreased from 7.05 to 5.49 percent of EDA'S total work force between
                                                          fiscal years 1986 and 1989. The ratio for black females decreased
                                                          slightly, from 18.64 to 18.29 percent. The fiscal year 1989 rates, how-
                                                          ever, still were higher than the total CLFrate of 4.94 percent for black
                                                          males and 4.84 percent for black females.


             Fircal year 1966                                                     Fiscal year 1989
        Percent black            Total                     No. of            Blacks             Percent black
        Male     Female       percent                  Employees
         6.25                68.75        75.00                 9            0               6         0         66.67           66.67                   -8.33
..-.     4.65
        .--                  50.00
            --....._.._-..----_---        54.65
                                       --.._      -.           66            3              38      4.55         57.58           62.13                   +7.48
         7.69                12.31        20.00                93            5              10      5.38         10.75           16.13                   -3.87
         8.33                 2.56        10.89               155           10               6      6.45          3.87           10.32                   -0.57
               0                   0          0                 5.           0               0         0             0                0                        0
         7.05               18.64        25.69                328           18              60      5.49         16.29           23.78                   -1.91
                                                          %enior Executive Service.


                                                          Table I.3 shows the distribution of black employees by grade bands for
                                                          fiscal years 1986 and 1989. The total number of EDA employees
                                                          decreased by 69, or over 17 percent, during the period. The proportion
                                                          of blacks in EDA'S work force, however, remained almost constant in that
                                                          in 1986 blacks comprised 25.69 percent of the work force and in 1989,
                                                          23.78 percent. In addition, the proportion of blacks in each grade band
                                                          changed only slightly.




                                                          Page 16                                 GAO/HRLb90-148     Treatment   of Blacks at EJN in the 1980s
                          Economic Development    Admlnlstratlom
                          Treatment of Blacks in the 199013




                          In all grade bands, the ratios of black males decreased slightly, as table
                          I.3 shows. The ratio of black females decreased slightly in grade bands
                          l-4 and 9-12, while increasing in the other two grade bands.


                          During fiscal years 1985 through 1989, EDA annually prepared and sub-
EDA’s Affirmative         mitted to EEOC an affirmative employment plan except for 1986 when
Employment Plans          the agency was anticipating a major reduction-in-staff, EDA prepared an
and Accomplishment        accomplishment report for all 5 fiscal years. Each year, the plans
                          focused on overcoming the effects of actions in the early 1980s when
Reports                   staff were downgraded and transferred; these effects included low staff
                          morale and an absence of vacancies for promotion opportunities.
                          According to EDA officials, the effects from the September 1981 reduc-
                          tion-in-force still limit the grade structure and advancement opportuni-
                          ties in EDA.

                          Blacks as a group generally were well represented in EDA'S work force
                          during fiscal years 1986 through 1989 relative to the CLF, as tables I.2
                          and I.3 show. As a result, they were not prominently mentioned in EDA'S
                          affirmative employment plans for these years. Where blacks were men-
                          tioned, EDA recognized the need to improve employment rates. Black
                          males in clerical positions were underrepresented in fiscal years 1985
                          and 1986. EDA'S analysis of 1987 data showed a need to improve the
                          employment rate for black females in all grade band 13-16 positions. In
                          both cases, the rates improved in subsequent years, so that in EDA'S
                          fiscal year 1989 affirmative employment plan blacks are not mentioned
                          as under-represented, when compared with national CLFdata, in any
                          grade band.


SomePlanned Actions Not   For fiscal years 1985 through 1989, EDA did not initiate or complete all
                          the actions its affirmative employment plans stated would be taken to
Completed                 maintain or improve the employment rates of minorities. This lack of
                          action affected all minorities, including blacks and women, because
                          minority groups often were referred to collectively in the plans and
                          accomplishment reports.

                          EDA cited several reasons for not initiatingor completing the actions,
                          among them a vacancy in the position of Deputy Assistant Secretary for
                          Economic Development. The person filling this position is designated as
                          EDA'S EEO officer and provides leadership over and monitoring of EEO
                          actions. EDA also cited the continued decrease in staffing levels and the
                          few available employment and promotion opportunities as reasons for


                          Page 16                                  GAO/HBIMO-148   Treatment   of Blacks at EDA in the 1980s



                                                                          i
                       Appedlx   I
                       JCconomic Development Adndnbtratlom
                       Treatment of Black6 In the 199911




                       not initiating other actions. The Deputy Assistant Secretary position
                       was filled in May 1990. EDA has no assurance, however, that its staffing
                       authorization will not continue to decrease and, if so, that its hiring and
                       promotion opportunities will also decrease.

                       EDAplans to review its corrective action plans and take or complete
                       actions where warranted. EDA also plans to continue to (1) encourage
                       minorities and women to compete for higher graded positions and (2)
                       involve minorities and women in developmental training opportunities
                       where they exist.


Upward Mobility and    Upward mobility programs and individual development plans are
Career Opportunities   methods to improve employees’ career advancement opportunities. We
                       reviewed these opportunities because of the minimal hiring and promo-
Available Informally   tion opportunities in EDA during the 1980s.

                       EDA has no formal upward mobility program and does not systematically
                       use individual development plans. Its affirmative employment plan for
                       fiscal year 1987 included a discussion of plans to establish such a pro-
                       gram. The absence of vacancies at the higher grade levels, however,
                       kept the agency from implementing such a program, EDA officials told
                       us. The unavailability of these vacancies made detailed career advance-
                       ment planning-a basic element of an upward mobility program-
                       almost impossible. Further, the officials indicated that not being able to
                       replace employees who went into the upward mobility program proved
                       to be an impediment to having such a program.

                       In lieu of a formal agencywide program, Ell4 has permitted, in recent
                       years, informal arrangements to help EDA staff change job series or
                       otherwise improve their promotion opportunities. Arrangements were
                       made between supervisors and staff members on an individual basis.
                       For example, in one office one white and five black female clerical
                       workers took advantage of opportunities to acquire more education and
                       eventually two assumed professional positions.

                       Also, EDA set up a multisession workshop in 1988 for employees in
                       grades 1-7 who wanted to become more competitive for higher level
                       positions within the agency. The program emphasized what employees
                       should do to pursue their career goals.




                       Page 17                               GAO/HRD-99.149   Treatment   of Black   at EM   in the 199Oa
                                                                                                                         r




                          Economic    Development   Adminimtratiom
                          lkeahnent    of Black in the 19990




                          We were asked to determine if organizations and communities headed by
Allegations About         black officials received a proportionate share of EDA grant program
EEO Decisions             funds during fiscal years 1986 through 1989. We also agreed to try to
Affecting EDA’s Grant     obtain data on the extent to which EDA'S grants (1) benefitted minorities
                          in the community and (2) created or saved jobs in the community in gen-
Programs                  eral and for blacks in particular.

                          We could not address the allegations that blacks were treated unfairly;
                          that is, that they did not receive a proportionate share of grants. To be
                          approved and funded, grant applicants must assure EDA that they will
                          comply with all federal statutes and regulations relating to civil rights
                          and EEO.' However, EDA was not required to and did not gather the data
                          that would allow us to determine the extent to which organizations and
                          communities with black leaders applied for and received grant awards.
                          EDA did compile data on whether minorities in communities would ben-
                          efit from an EDA grant project. But, because the system did not contain
                          accurate and reliable information, we did not use it.

                          Information on current and projected employee levels, by race and sex,
                          is required from organizations that receive or benefit from EDA grants
                          and create or save 16 or more jobs on public works projects. They also
                          must highlight the number of jobs to be created or saved as a result of
                          receiving the grant. Applicants must estimate this information in their
                          grant proposals, and then report on the actual number of jobs created
                          and saved. But grantees are not penalized for not reporting the informa-
                          tion, EDA officials told us, and EDA neither verifies nor uses the informa-
                          tion that is reported.


No Data on Treatment of   EIU does not collect data that would reveal whether black organizations,
Grant Applications by     cities, and other localities headed by black mayors or similar officials
                          had received a proportionate share of grants from EDA. No federal law or
Black Organizations and   regulation requires that such data be collected. The allegations cited in
Communities Collected     the request letter specifically named one black organization, the
                          National Conference of Black Mayors (NCBM), but identified no specific
                          city or other locality headed by blacks.

                          NCBM received technical assistance grants from EDA from the mid-1970s
                          through 1986, NCBM'S Executive Director told us. When NCBM applied for

                          7These include: title VI of the Civil Rights Act of 1964; title VIII of the Civil Rights Act of 1968, as
                          amended; title IX of the Education Amendments of 1972, as amended; the Rehabilitation Act of 1973,
                          as amended; and the Age Dim-imination Act of 1976, as amended.



                          Page 18                                    GAO/BRD-90-149   Treatment   of Blacks at EM    in the 1980s
Appendix I
Economic Development     Administration:
Treatment of Blaclra in the 19fMa




a grant in 1986, its application was rejected. NCBM officials said that at
first they believed the rejection was because the organization is com-
prised of minorities, but later they realized there were other reasons.
The officials explained that EDA funding had been significantly reduced
during the 19809, and EDA had shifted its funding emphasis from urban
to rural areas. Also, EDA had started to approve more grants for public
entities that could provide matching funds, and fewer for private, non-
profit organizations that generally could not. As a result, NCBM sought
grant funds from other sources.

Since no other organizations were cited in the Chairman’s request, we
contacted 13 other private, nonprofit organizations in the Washington,
DC., area to determine whether they had experienced problems with
EDA.* As of January 1990, two had active EDA grants and six had been
EDA grantees, but were no longer. Two organizations had never received
an EDA grant. Three of these 13 organizations, in addition to NCBM, have
memberships comprised mostly of minorities.

One organization stated it had experienced problems with EDA, saying
that EDAreviewers did not strictly follow grant standards and conditions
published in the Federal Register in 1982 or 1983. A representative of
another organization said the published standards were quite broad and
ELH grant funds were limited. Thus, he asserted, EDA reviewers had nar-
rowed the standards to screen out some applications and facilitate the
selection of grant recipients. Neither representative believed EDA’S
actions involved EEO issues.

We sought data on cities and other communities headed by blacks who
had applied for EDA grant awards. But no such data were available, EDA
officials told us. Federal statutes and regulations do not require that
such application data be collected. Also, we were told that in most cases
EDA returns rejected applications to the applicants, rather than retaining
them. We could not learn, therefore, to what extent EDA rejected applica-
tions from black organizations and communities headed by blacks.

Currently, no EDA grant program funds are earmarked or otherwise set
aside for minority groups. EUA’S grant standards and conditions in no

sin addition to NCBM, we contacted: the U.S. Conference of Mayors; the National Center for Munic-
ipal Development, Inc.; the National League of Cities; the National Community Development Associa-
tion; The National Urban Coalition; the National Council for Urban Economic Development; the
National Urban League, Inc.; the National Association of State Development Agencies; the Northeast
Midwest Institute; the International Downtown Association; the National Association of Development
Organizations; the National Association of Minority Enterprises; and the National Association of
Minority Contractors.



Page 19                                    GAO/HUD-90-148   Treatment   of Blacka at EDA in the 1980s
                             Appendix I
                             Economic Development    Administration:
                             Treatment of Blacks in the 1980s




                             way distinguish minority organizations or communities with large
                             minority populations applying for grants from other grant applicants
                             competing for available funds.


Coding System for            Data on whether minorities will benefit from EDA grant projects is col-
Minorities in Commu.nities   lected by regional EDA staff, using a system developed in the 1970s. But
                             the system has not been revised since then, its use is no longer man-
Not Useful                   dated, and the data it generates are unused. Because EDA’S use of the
                             coding system is based on general criteria and individual judgment, it is
                             unsystematic. EDA officials acknowledged the information generated is
                             neither accurate nor reliable, therefore, we did not use it.

                             The computer information system, part of which includes minority
                             coding information, was originally developed in response to congres-
                             sional requests for data on EDA’S grant awards made to minority busi-
                             nesses, EDA officials said. Regional office staff enter data into the system
                             when an application is received. The system tracks projects that benefit
                             Negroes, Hispanics, Orientals, and American Indians9 Under EDA proce-
                             dures, a grant project that will benefit a community with at least 30
                             percent of its population made up of one or more of these four minority
                             groups is coded as benefitting minorities.

                             EDA’S  application of its criteria in using this minority coding system is
                             unsystematic. US. census data on minority groups are compiled by
                             state, county, and standard metropolitan statistical area (SMSA). EDA
                             grant projects benefit communities and localities that are much smaller
                             than a county or SMSA; official minority population data for these
                             smaller communities are not usually available. EDA regional officials
                             acknowledge that the coding is based primarily on staff knowledge of
                             and experience with the areas they service, rather than on documented
                             population data.

                             As of June 1990, EDA officials were considering discontinuing the
                             minority coding system because it was no longer used. They had no
                             plans, they said, to implement another system to record data about
                             minorities for EDA grant programs. These officials planned to issue
                             revised guidance to EDA staff on this matter soon.



                             RBlacks, Hispanics, Asians or Pacific Islanders, and American Indians or Alaskan Natives are the
                             primary minority groups currently recognized by EEOC and the federal government.



                             Page 20                                   GAO/BR.MO-148   Treatment   of Blacks at EM   in the 198oe
                         Appendix I
                         Jkonomic Development    Administration:
                         Treatment of Blacks in the 1980s




Reporting Public Works   EDA requires grantees with public works projects to report on the
Jobs Created and Saved   number of jobs created and saved as a direct result of the grant and the
                         number of minorities who fill these jobs. But EDA does not follow up to
for Minorities           assure that the reported jobs were created and saved as a result of the
                         EDA grant. Nor does it otherwise use the reported data.

                         As a condition to receiving grant funds, applicants for EDA public works
                         grants must estimate the number of jobs to be created or saved directly
                         as a result of receiving the grant. Applicants whose projects create or
                         save jobs may be more competitive than applicants whose projects do
                         not, according to EDA grant announcements in the Federal Register. If 15
                         to 50 jobs are to be created or saved, a work-force profile according to
                         minority group is required. In addition, when 60 or more jobs are to be
                         created or saved an affirmative employment plan must be submitted as
                         part of the application. Equal opportunity specialists in EDA regional
                         offices review this portion of the applications and help applicants com-
                         plete the application.

                         But after the data are collected and the grant project begins, EDA does
                         not follow up with grantees to determine the numbers of actual jobs cre-
                         ated or saved due to the EDA grants. Consequently, no one systematically
                         gathers data on the numbers of minorities who were employed or
                         retained their jobs because of EDA grants. Nor is there generally a sys-
                         tematic monitoring of whether a grantee’s work-force profile includes a
                         proportionate representation of minorities, EDA officials acknowledged.
                         Grantees are not penalized, according to EDA, if they do not create or
                         save the number of jobs estimated, do not fill vacancies with minorities
                         as estimated, or both. EDA staff are so busy reviewing and approving
                         applications and funding new grant projects, EDA officials said, that they
                         do not have the time or resources for such follow-up actions.

                         In June 1990 EDA officials told us that they were reconsidering (1) the
                         need for all grantees to report on the numbers of jobs created and saved
                         because of EDA grants and (2) EDA regional offices’ monitoring of
                         grantees in this regard and use of the data provided. They said that
                         revised directives were being developed to address these issues.




                         Page 21                                   GAO/HR.D-99-148   Treatment   of Blacks at EDA in the 1980s
                                                                                            I




Appendix   II

Major Contributors to This Report


                   Larry Horinko, Assistant Director, (202) 623-9131
Human Resources    Greta M. Tate, Evaluator-in-Charge
Division,
Washington, D.C.




(llRZH2)           Page 22                    GAO/HRD-99-148   Treatment   of Blacks at EDA in the 19908
    _.
         Ordering   Inforrnat.itm

         ‘I‘ht~ first, five copit~ of each GAO rtqmrt are frtv. Adtiit,ional copit*s
         art’ $2 each. Orders shoiilcl he senl. lo t.he following address, acc’tm-
I        paniett hy a check or money or&r made out t.o the Stlperint.~ntlcllit
         of Dotx~~ntmt~, when necessary. Ordt~rs for 100 or more copies t,o be
/
         rnailtd t.0 a single address art* tlisttount~td 25 ptvt*tanE e

         IJ.S. Gtweral Accounting Offiw
!
1        I’.(). Box 6015
1        <hit hersburg, MD 20877
I
         Orders may also be plactvl by calling    (202) 275-624 1,
--   .--....   ll”-l..--l_   .--