The U.S. Department of Labor (DOL), Office of Inspector General (OIG), contracted with Harper, Rains, Stokes & Knight, P.A., to perform a financial and performance audit of DOL Grant Number AC-10750-00-55 with Proteus, Inc. (Proteus). Proteus was audited for the period July 1, 2000 through June 30, 2001.

Under the authority of the Workforce Investment Act of 1998 (WIA), DOL's Employment and Training Administration (ETA) awarded Proteus a grant to provide training and services to eligible migrant and seasonal farmworkers to strengthen their ability to achieve economic self-sufficiency.

FINDINGS AND RECOMMENDATIONS

For the audit period, Proteus reported costs of $1.16 million for 332 participants. In our draft report we questioned $233,988 charged to the DOL grant because Proteus provided training and services to 79 ineligible participants as described below. For his final report, we have accepted documentation received from Proteus that has reduced the questioned costs to $215,792.

Finding No. 1:

Refugees and other ineligible participants were enrolled in the National Farmworker Jobs Program

We question $233,988 charged to the DOL grant because Proteus provided training and services to 79 ineligible participants. Sixty-nine of these participants were discovered by ETA's Division of Seasonal Farmworker Programs (DSFP) during a monitoring visit and Proteus terminated these participants as a result of ETA's report. The remaining 10 ineligible participants were discovered during our audit in which we reviewed a sample of 30 participant files. The questioned costs consist of allowance payments, support payments, and related overhead charges.

Many of the participants enrolled in these programs were refugees with unverifiable foreign farmwork, or participants who either could not show an employer/employee relationship or had not been primarily employed in farmwork. Proteus' programs should be carefully evaluated to determine if they still fit the goal of training eligible farmworkers to achieve economic self-sufficiency.

In its response to the draft report, Proteus provided documentation to support the eligibility of the participant we questioned because of her step-father's self-employment, and noted that 13 of the participants questioned had not attended ESL; therefore, the costs the auditors prorated for these participants should be eliminated.

Based on our review of the information provided by Proteus, we have accepted the one individual as being eligible and reduced the costs we questioned pertaining to the ESL program. Therefore, the questioned costs are reduced from $233,988 to 215,792.

Finding No 2:

Job placements reported to ETA included participants who were employed prior to and after training in substantially the same job.

We question six unsubsidized employment placements that Proteus reported in its DOL Program Status Summary. These six placements involved participants who were identified as being ineligible for the program in Finding No. 1.

We also question Proteus' practice of reporting participants as placements when the participant maintained the same employment from the time they enrolled in the program to the time they exited the program. Three of the six questioned placements fell into this category. Had these participants been eligible, reporting them as an employment placement would not have been an appropriate outcome.

In its response to the draft report, Proteus said that its practice is to document placements only on participants that have located substantially different jobs as a result of core, intensive or training services. Proteus acknowledged that it did make an error in reporting placements on three participants.

Our recommendation to the Assistant Secretary remains unchanged.

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