Information on State Versus Local Administration of CETA Prime Sponsors in Michigan

GAO compared State and local administration of Comprehensive Employment and Training Act (CETA) programs in Michigan for fiscal year 1981 to determine whether State administration results in: (1) lower administrative costs for prime sponsors; (2) better program outcome; (3) better mechanisms for providing linkages in coordination between CETA programs and other employment and training activities; and (4) a more accurate identification of the demographics of the CETA eligible population.

Michigan had 23 regular prime sponsors that were units or consortiums of local governments. All other areas were served by the State prime sponsor. In fiscal year 1981, regular prime sponsors spent $272.9 million in CETA funds, State prime sponsors spent $62.1 million, and the State spent $27.2 million. State prime sponsors spent less than regular prime sponsors for administration, both on a statewide basis and for the sites visited. The major reason for this was that regular prime sponsors are generally in urban areas and thus have higher salary and rent costs than the generally rural State prime sponsors. Based on seven performance indicators, the balance of State prime sponsors' programs had comparable program results but were less cost effective than the regular prime sponsor's programs. This difference occurs because State prime sponsors tend to serve larger geographical areas than regular prime sponsors and are in rural areas where employment and training resources and opportunities are more limited and less accessible. Both the regular and the State prime sponsors had the same three advisory councils. In addition, the State had a fourth advisory council to facilitate linkages among CETA programs, education, business and industry, organized labor, and others. State data used to identify the demographics of the CETA eligible population for State prime sponsors are incomplete and may not be adequate for program planning purposes. Regular prime sponsors identify their CETA eligible populations by using whatever data they believe best for their jurisdictional areas.