Information on Prime Sponsor CETA Expenditures Related to Membership Organizations

GAO reviewed prime sponsors' use of Comprehensive Employment and Training Act (CETA) funds for activities related to membership organizations to determine: (1) the Department of Labor's authority to allow prime sponsors to use CETA funds for activities related to membership organizations, (2) the amount of CETA funds used for such activities, (3) the services that membership organizations provide to CETA prime sponsors, (4) the nature of CETA participation benefits resulting from such activities, and (5) the use of CETA funds to indirectly support lobbying. GAO also determined whether prime sponsors of similar size made comparable expenditures related to services and activities of membership organizations.

CETA does not explicitly authorize Labor to permit prime sponsors to purchase memberships or services from membership organizations. However, CETA authority is sufficiently broad to enable Labor to authorize prime sponsors to use CETA funds to enter into membership or service fee arrangements for staff to attend conferences sponsored by membership organizations. CETA prime sponsors reported spending $1.8 million in fiscal year 1979 for activities related to membership organizations. Membership organizations provide services such as information and technical assistance, sponsor conferences, and act as advocates for the prime sponsors. Prime sponsors believe that the expenditures are worth the services received. Prime sponsors indicated that CETA participants are beneficiaries of the improved quality of program administration and services that result when prime sponsors spend funds for activities related to membership organizations. GAO found no evidence that membership organizations are using CETA funds to support their lobbying activities. GAO did not perform the detailed audit work which would be necessary to determine this. While explicitly directing prime sponsors not to use CETA funds to obtain memberships in organizations that lobby, Labor has allowed them to purchase employment and training services from such organizations. Some membership organizations acknowledge that association with prime sponsors indirectly aided their lobbying efforts and influenced CETA legislation with lobbying activities.