Improvements Can Be Made in the Fiscal Management of CETA

GAO reviewed the fiscal management practices and procedures at 8 Comprehensive Employment and Training Act (CETA) prime sponsors and 23 subgrantees in 4 Department of Labor regions.

GAO found that Federal interest costs could be reduced by better management of CETA cash held by prime sponsors and subgrantees. Four of the eight prime sponsors which GAO examined held excess cash and seven of the eight allowed their subgrantees to hold excess cash. There was inaccurate reporting of prime sponsor cash balances, surplus cash not recovered from prime contract periods, and premature advancement of cash to the subgrantees. Recent Labor actions should help correct the problems identified. Prime sponsors' property and managment systems did not provide adequate accountability over CETA property which they and their subgrantees used. As a result, some prime sponsors and subgrantees did not know how much property they were responsible for, while others could not account for all of their property. Questionable costs were charged to CETA because prime sponsors and subgrantees did not have adequate procedures for determining the reasonableness and allowability of costs. In addition, future problems may occur because prime sponsors and Labor do not know the cost, amount, and location of property acquired under the CETA program. Should the current prime sponsor structure change and the CETA property have to be transferred to other organizational units, such as States or private industry councils, Labor may not be able to ensure that the Federal Government's interests are protected.

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: Morton E. Henig Team: General Accounting Office: Human Resources Division Phone: (202) 275-5365