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Audit Report
This report reflects the findings of the Office of Inspector General at the time that the audit report was issued. More current information may be available as a result of the resolution of this audit by the Department of Labor program agency and the auditee. For further information concerning the resolution of this report's findings, please contact the program agency.
Letter Report Number: 04-98-002-03-001
Issue Date: October 9, 1997
We have discontinued an audit to determine if significant amounts of excessive cash remains in the hands of certain ETA's grantees and contractors following expiration of the agreements. Our audit was not completed because we could not rely upon critical data maintained in ETA's Grantees/Contractors Management Information System (GCMIS).
ETA's financial data is unreliable because many grantees' and contractors' expenditures had not been posted to the GCMIS. In many instances, grantees' and contractors' expenditure reports were not submitted to ETA. In other instances, the reports had been received but the financial data had not been entered, because the reports had not been forwarded to the accounting section.
According to ETA's financial records, 423 national grants and contracts had terminated before January 1, 1996 but still had an outstanding cash balance of at least $1,000, as of September 30, 1996. We selected a sample of 58 grants and contracts for review. The GCMIS indicated the 58 terminated grants and contracts had excessive cash balances that totaled $15 million. However, we found $13.8 million of grantees' and contractors' expenditures had not been posted to the GCMIS and were able to resolve all but $1.2 million of the balance.
ETA does not promptly close expired grants and contracts. At the time of our field work, up to 46 months had elapsed since the grants and contracts had terminated, yet they remained open. We also found grants and contracts whose periods of performance had been extended, although the GCMIS indicated they had ended.
We have recommend ETA improve its fiscal monitoring, ensure grants and contracts are promptly closed and that all financial data is entered into the GCMIS. We also recommended ETA investigate and resolve all discrepancies between cash receipts and expenditures reported by grantees and contractors. Finally, we recommended changes in ETA procedures that would direct grantees' and contractors' financial reports to the accounting section, immediately upon their receipt, so the data may be promptly entered into the GCMIS.
ETA responded that corrective action has been taken to better collect, organize, and record prior period reports which were delinquent or filed improperly. ETA is relying on improvements to the closeout process to address reporting for terminated grants and contracts.