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This document is a summary of a printed document. The printed document may contain charts and photographs which are not reproduced in this electronic version. If you require the printed version of this document, contact the Freedom of Information Act Officer, Office of Inspector General, U.S. Department of Labor, Washington, DC 20210, or call (202) 693-5116. This report reflects the findings of the Office of Inspector General at the time that the audit report was issued. More current information may be available as a result of the resolution of this audit by the Department of Labor program agency and the auditee. For further information concerning the resolution of this report's findings, please contact the program agency. OIG has started using Acrobat 4.0 to prepare it's latest Audit reports. If you are experiencing problems downloading some of the larger PDF files, you may want to download the latest version of the Adobe Acrobat Reader by clicking the link provided below. At the request of the New York Regional Administrator, Employment and Training Administration (ETA), we performed an audit of the New York State Department of Labor (NYSDOL) Job Training Partnership Act (JTPA) Title III program expenditures covering the period April 1, 1999 through June 30, 1999. The audit objectives were to determine the reason for the large increase in program expenditures during the last quarter of PY 1998, and if these costs were allowable. NYSDOL was awarded $35,511,680 for PY 1998 under JTPA Title III, Governor’s Reserve funding after the 2 percent Workforce Investment Act (WIA) set aside. For the three quarters ending March 31, 1999, NYSDOL reported expenses of $7,526,048. Expenditures significantly rose in the fourth quarter of PY 1998 by $15,776,284 and expenditures were $23,302,332 for the year ended June 30, 1999. NYSDOL transferred expenses from various cost centers to the JTPA Title III program to avoid recapture of PY 1998 allotments. As a result, expenditures reported on the Title III Worker Adjustment Formula Financial Report (WAFFR) for the year ended June 30, 1999, were overstated by $6,102,478.
We recommended that the Assistant Secretary for Employment and Training ensure that NYSDOL reduce June 30, 1999, reported JTPA Title III expenditures by $6,102,478 for personnel service and LEX system costs, and begin recapture and reallotment procedures if required. We also recommend that the Assistant Secretary require NYSDOL to allocate personnel service costs to appropriate programs based upon after-the-fact distribution of actual activity of each employee, and develop a basis for cost distribution of the LEX system based upon relative benefits received. NYSDOL responded to our draft report on August 15, 2000. NYSDOL disagreed with the findings and recommended reduction of $6,102,478 as presented in the draft report. In its response, NYSDOL stated it has provided documentation to support both the personnel service and LEX system adjusting entries. Moreover, NYSDOL disagreed that adjustments were made to avoid recapture and reallotment procedures.
On three separate occasions, including the entrance conference
signaling the beginning of the audit, NYSDOL representatives stated that
costs were transferred to the Title III program to avoid losing program
funds. While a portion of personnel service and the LEX system costs may
be allocable to the JTPA Title III program, it is NYSDOL’s responsibility
to adequately document that costs were allocated to a particular cost
category to the extent that benefits were received. The transfer of costs
from one grant to another should be made consistently among all programs
and should not be done for one grant to overcome fund deficiencies, or to
avoid restrictions imposed by law or terms of an award.
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