2000 - Audit Report

U.S. Department of Labor
Office of Inspector General
Office of Audit

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THE CHILDREN'S VILLAGE

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The OIG performed a financial and compliance audit of outlays reported by The Children's Village (CV) under JTPA Title IV-D for the period October 1, 1994 to December 31, 1998. The audit objective was to determine whether reported outlays were allowable and within terms and conditions of the grant award and program regulations.

CV is a not-for-profit organization which maintains an institution for the treatment and education of emotionally disturbed children and operates small group facilities and foster homes for their care. ETA awarded CV a grant targeting 14-16 year old youths who were economically disadvantaged and who were not enrolled in or attending an educational program.

In our opinion, except for questioned costs, the Financial Status Reports (FSR) presented fairly the results of CV's operations in accordance with applicable laws and regulations for the grant period. For the audit period, CV reported outlays of $1,769,502 of which we question $101,174 or 5.7 percent.

We questioned $54,237 in excess reported outlays. While reported outlays on the FSRs for Program Years 1994, 1995 and 1996 agreed with recorded costs, the outlays reported on the FSR for Program Year 1997 exceeded recorded costs by $54,237.

We questioned $22,103 of fringe benefits. Reported fringe benefits were based on a budgeted rate of 25 percent of personnel costs. However, actual fringe benefits incurred were lower than what was reported.

We questioned $24,834 of unsupported subgrantee costs.

CV did not obtain an approved indirect cost rate from the Office of Cost Determination. Although reported indirect costs were proportional to DOL's share of total activity, to close out the grant CV is required to obtain approved indirect cost rates.

We recommended that the Assistant Secretary for Employment and Training recover $80,939, representing the Federal share of $101,174 in questioned costs, and ensure that CV complies with grant and OMB Circular A-122 requirements by obtaining final indirect cost rates. Generally, CV agreed with the findings but disagreed with questioned costs of $24,834 related to unsupported subgrantee costs. However, CV did not provide any additional documentation to support subgrantee costs. CV also indicated that it has submitted final indirect cost proposals to the Office of Cost Determination.

(Report No 02-00-201-03-340, issued November 15, 1999)

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