U.S. Department of Labor Office of Inspector General

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Report Title: The Falmouth Institute

Report Number: 18-94-001-07-735

Issue Date: October 29, 1993

The Falmouth Institute is a for-profit corporation whose workload largely involves consultant services to Native American and Indian organizations. ETA awarded Falmouth a contract to provide training and technical assistance through on-site visits for Native American and Indian grantees funded under JTPA and to conduct specified training seminars.

On September 7, 1994, the ETA Contracting Officer issued a final decision disallowing $141,882 of the $145,411 questioned costs in the OIG audit report issued on October 29, 1993. The questioned costs result from the OIG's audit of the direct and indirect costs claimed during the period June 20, 1990 to June 20, 1992. The questioned costs were primarily due to:

• Falmouth's president and DOL project director both charged their time directly to DOL when they actually worked on either (a) training courses conducted by another firm owned entirely by the president, or (b) on other contracts;
• fringe benefits relating to the questioned salaries, including a $5,000 bonus to Falmouth's vice president for administration, who is the president's wife; and
• duplicate consulting fees, unallowable post-contract period costs, travel costs not provided for in the budget, and overhead and general and administrative costs applicable to the questioned direct costs.