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_ .--
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)