Weak Internal Controls Make the Department of Labor and Selected CETA Grantees Vulnerable to Fraud, Waste, and Abuse

GAO reviewed activities in the Department of Labor and selected Comprehensive Employment and Training Act (CETA) grantees to determine: (1) whether Labor had a system of internal controls to protect adequately against fraud, waste, and abuse; and (2) how grantees of the CETA program protect against improper use of federal funds and assets.

Internal controls over disbursements, receipts, and property management at Labor headquarters and four regional offices are not adequate to protect federal funds and assets. The result is fraud and abuse of federal funds at Labor headquarters, some regional offices, and selected CETA grantees. Labor officials have not sufficiently monitored CETA grantee programs and activities in terms of: (1) verifying internal controls; (2) ensuring that required audits are performed; and (3) ensuring that funds disbursed to grantees were spent in accordance with CETA legislation. Labor has initiated several efforts intended to improve its internal controls and visibility over grantee activities. When fully implemented, these actions should improve controls over receipts and disbursements. Although these actions should result in a more effective CETA program, further improvements are still needed.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

Director: John J. Adair Team: General Accounting Office: Accounting and Financial Management Division Phone: (202) 275-5200