The Office of Inspector General audited Job Training Partnership Act (JTPA) program expenditures of the Atlanta Private Industry Council (PIC). Our examination focused on selected JTPA Title IIA contracts awarded vendors to provide program participants training, placement and other services, during Program Year (PY) 1996. We found many JTPA requirements either were not followed or misapplied and questioned $543,117 in grant expenditures.

Poor planning contributed to hasty selection of contractors, several of whom were not competitively procured. Often the PIC did not determine the contractors’ capabilities to deliver services, complete adequate price or cost analysis or consider the contractors’ past records of success prior to awarding the contracts. We also found fixed-unit-price contracts were improperly negotiated, as were some training contracts that were improperly awarded as commercially available training packages.

Many aspects of the PIC’s monitoring, including its own and contractors’ activities, also require improvement. Although the PIC had established a monitoring plan and developed adequate guidance for its staff, the plan was not completed and established procedures were not followed. As a consequence, we identified a variety of financial problems with both the PIC’s and its contractors’ financial activities, including funds advanced to contractors that had not been recovered, expenditures charged to the wrong JTPA grant, and unsupported contractors’ costs billed to the JTPA program.

The PIC’s contracts need to be better written, as many we reviewed did not contain sufficient requirements to monitor the contractors’ effectiveness or ensure participants were well served. Missing were criteria that identified prerequisite knowledge participants should have possessed to benefit from training and criteria for testing participants to determine what they had learned. Even when sufficient requirements were included in the contracts, they were not followed.

Also, in several instances, the contractors’ records were partially or wholly missing. Finally, we identified several instances of abuse, such as the contractors’ claims they had placed participants in jobs that our contacts with employers indicated had not occurred. We believe better monitoring by the PIC should have detected such situations.

To help strengthen the PIC’s management of its contract procurement and monitoring processes, we recommended the PIC observe existing procurement and contracting requirements and improve its monitoring. We also recommended the Assistant Secretary for Employment and Training recover $543,117 in misspent JTPA funds.

In its comments to our draft report, the PIC disagreed with several of our findings and provided additional documentation we considered in completing this report. The PIC’s response did not include information that caused us to change our findings or recommendations