2000 - Audit Report

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

RESULTS OF YOUTH OPPORTUNITY DEMONSTRATION GRANT PROGRAM SHOULD BE USED TO IMPROVE OPERATIONAL GRANTS

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We conducted a performance audit of the Youth Opportunity (YO) demonstration grants in three pilot cities, Chicago, Houston, and Los Angeles. The purpose of this grant program is to improve employment prospects for out-of-school youth ages 16-24 in designated low-income neighborhoods of each city. YO grants are a new attempt by DOL to reach the youth of some of the poorest urban and rural communities in the country.

These grants are experimental in nature. Such grants do not always produce the desired results, but they do provide information for full program implementation. This audit report represents a snapshot of the early stages of the demonstration, and the results are intended to provide DOL management with independent information that can be used to improve the program. Our interim program audit results demonstrated that:

the program should aim toward having a greater impact on earnings;

the program needs to increase the level of services in order to accomplish the grants' objectives;

most enrollees' files did not indicate that any type of formal schooling or training was specifically needed;

approximately 15 percent of the grants' costs were for vocational training, education, or supportive services costs (while 85 percent of the grants' costs were for personnel and other general operating costs, with personnel costs including those of managers and mentors, integral components of the YO program services to youth); and

the quarterly enrollee status follow-up reporting as of September 30, 1998, was unauditable and appears to be of limited value in evaluating the programs' effects.

We recommended that ETA:

identify specific objectives and performance criteria for all YO demonstration and operational grants;

direct grantees to document specific services being provided and outcomes achieved by individual enrollees better;

implement a formalized participant tracking and reporting management information system that allows ETA specifically to evaluate the YO program's effectiveness; and

evaluate the ongoing pilot demonstration grants to determine whether the levels of services being provided to enrollees appear to be those that will help these youth attain self-sufficiency.

ETA, in its response:

agreed with the facts presented in the report and stated that low wages should be expected for the early period we evaluated;

indicated that lessons learned from these three pilot sites have been used to tighten the structure of the subsequent pilots and the larger operational grants; and

stated that the newer grantees have a much stronger management information system and that the three sites included in our audit have improved since audit fieldwork was completed.

(OA Report No. 06-00-002-03-340, issued March 22, 2000)

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