Devereaux Inc.

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OIG RECOMMENDS THAT ETA TERMINATE THE DEVEREAUX CORPORATION'S WTW GRANT

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OIG performed a postaward survey of the Devereaux Corporation's (Devereaux) WtW competitive grant program. The purpose of the survey was to examine Devereaux's financial management and program systems and make an assessment of the Devereaux Corporation's capability to administer the grant in accordance with the applicable regulations. ETA awarded Devereaux a $3,044,457 Welfare-to-Work (WtW) competitive grant on September 30, 1999. Devereaux is located in Lanham, Maryland.

The survey concluded that Devereaux does not have either the experience or past performance record that is presented in the grant application and which formed the basis for the competitive award. Therefore, the awarding of this grant may have deprived a more qualified applicant from receiving a WtW competitive grant. The survey also found a number of instances in which Devereaux is not complying with the WtW regulations. Specifically:

Devereaux's grant fund drawdowns exceeded actual disbursements by over $247,000.
The approved grant budget included excessive and questionable costs.
Staff salaries appear unreasonable and Devereaux incurred questionable transportation and travel costs.

It is our opinion that these problems, taken as a whole, clearly demonstrate that Devereaux is not the organization that it presented in the grant application, and it does not have the capability to comply with the WtW regulations. We recommended that the Assistant Secretary for Employment and Training direct the ETA Grant Officer to take the steps necessary to terminate Devereaux's WtW grant at the earliest possible time for failure to respond fairly and accurately to ETA's grant solicitation, upon which this competitive grant was awarded, and for failure to demonstrate that Devereaux can administer the WtW grant according to the WtW regulations. We also recommended that the Assistant Secretary for Employment and Training:

Recover the unexpended grant funds, including any interest earned on the excess cash balance.
Disallow and recover the incurred questionable costs.

The Assistant Secretary for Employment and Training shared OIG's concerns and expressed his intent to review all relevant information and take appropriate action including possible termination. In the meantime, ETA removed Devereaux's access to the advance Payment Management System and put it on a cost reimbursement basis.
(Audit Report No. 03-00-006-03-386, issued May 22, 2000)

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