Agreed-Upon Procedures Report on the Ohio Department of Job and Family Services Year 2000 Grant Expenditures
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SESA's Y2K Efforts Successful; OIG Questions Expenditure of $2,313,251 of Y2K
Grant Funds Made to Four SESAs
During FYs 1998 and 1999, ETA awarded grants totaling $255 million to State
Employment Security Agencies (SESAs) specifically to make their automated
Employment Service (ES) and Unemployment Insurance (UI) systems Year 2000 (Y2K)
compliant. In the prior two semiannual periods, we issued 3 of a series of 8 planned
audits of the SESA's expenditure of these grant funds (results for 2 of these are
reported on page 30 of the Semiannual Report to the Congress for the period ended
March 31, 2001). We have now issued 7 of 8 planned audit reports, and will issue the
final report in the next semiannual period. When completed, the OIG will have audited
about 23 percent ($61 million) of the $255 million in Y2K grant funds awarded to the
SESAs.
We reviewed SESA grant expenditures to ensureY2K grant funds were spent for
intended purposes, in conformity with the grant agreements and applicable Federal
requirements. We determined the SESAs were successful in avoiding Y2K
interruptions, but they did not always comply with requirements governing use of the
grant funds. In the seven reports issue to date, we questioned over $4 million of
expenditures.
DOL provides SESAs with annual appropriations to pay the costs of administering their
ES and UI programs. This includes "base-funded" personal services and benefit costs.
ETA established restrictions on the expenditures of Y2K funds for personal services to
ensure they were used to pay for only the overtime costs of base-funded staff working
on Y2K-related activities, and, additionally, did not supplant the costs of base-funded
activities. The largest single abuse, identified in 3 of the 7 audits we issued, involves
the SESAs charging base-funded personal costs to the Y2K grants. Other common
abuses we encountered were purchases of services, equipment, supplies and
maintenance agreements that were not related to Y2K readiness.
During the current reporting period, we issued audit reports on the expenditure of Y2K
grant funds by the SESAs of the following States:
In addition to recommending ETA recover the questioned costs, we also recommended
the Pennsylvania SESA return to the Treasury $459,158 in grant funds remaining after
the termination of its grant.
(Report Nos. 04-01-008-03-315, issued Sept. 21, 2001; 04-01-010-03-315, issued Sept.
17, 2001; 04-01-006-03-315, issued Sept. 21, 2001; and 04-01-005-03-315, issued
Aug. 22, 2001, respectively)
