U.S. Department of Labor
Office of Inspector General

Audit Report

FINANCIAL AND PERFORMANCE AUDIT OF THE ARC OF
THE UNITED STATES

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Report Title:  Financial and Performance Audit of The Arc of the United States, Title IV Employment and Training Disability Grant No. F-5563-5-00-80-60, Audit Period:  July 1, 1995 through June 30, 1997

Report Number:  06-98-007-03-340

Issue Date:  September 14, 1998

We conducted a financial, compliance, and performance audit of the noncompetitive Title IV Disability Program Grant No. F-5563-5-00-80-60 between the U.S. Department of Labor (DOL), Employment and Training Administration (ETA), and The Arc of the United States for the period July 1, 1995, through June 30, 1997. The grant was administered by The Arc's National Employment Training Program (NETP) division. The purpose of the grant was to provide on-the-job training (OJT) opportunities to individuals with IQS of 70 or below to enhance their opportunities to attach to the labor market.

We found the grantee's costs to be allowable and supported and the grantee's program outcomes to be positive.

Generally, we found that of the participants for whom employers received some OJT costs reimbursement, 76 percent were reported by The Arc as placed in unsubsidized employment after program completion or termination. Our independent analysis of 3 quarters of post-program wages for a sample of 300 participants supports The Arc's claimed 76 percent placement rate. In fact, we found 81 percent of our sample had some wages in one or more of the three quarters following the quarter they completed or were terminated from the OJT program. Furthermore, 36 percent of those participants with post program earnings had wages with one or more non-OJT employers, 47 percent had wages in all three quarters, and 81 percent had wages in at least two quarters.

Based on the average 3 quarters of earnings for the 300 participants evaluated, annualized earnings for these participants was approximately $3,600. While the annualized earnings may not appear to be significant, these earnings are for individuals with IQs of 70 and below who are working part-time, and who, without this program, may not have had the opportunity to earn any income. Consequently, the investment of $1,068 per enrollee appears to be reasonable for the program outcomes, both earnings and attachment to the labor market.

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