Summary

Pursuant to a congressional request, GAO provided information on the: (1) Job Training Partnership Act (JTPA) Program's vulnerability to waste, abuse, and mismanagement; and (2) adequacy of JTPA program oversight to prevent and detect such practices.

GAO found that: (1) the majority of service delivery areas (SDA) underreported administrative expenditures, causing a misrepresentation of program costs and amounting to a circumvention of the statutory limitation placed on administrative costs; (2) 9 of the 12 SDA reviewed often reported administrative salaries as training costs and other administrative expenditures as participant costs; (3) if those administrative expenditures had been charged properly, 7 of those SDA would have exceeded the specified administrative cost limitation by an average of 68 percent; (4) most SDA visited wasted JTPA funds on excessive on-the-job training (OJT), and used OJT contracts to subsidize portions of employers' salary and training expenses; (5) two-thirds of SDA used questionable contract administration and monitoring practices, making contracting with training vendors vulnerable to potential waste, abuse, and mismanagement; (6) state agencies failed to identify improper cost reporting, questionable uses of OJT, and inadequate procurement practices occurring at SDA; (7) the Department of Labor's (DOL) program oversight is limited, and its policy guidance lacks a definition of administrative costs, acceptable OJT contracts, or adequate state monitoring; and (8) required independent financial and compliance audits did not compensate for inadequate state and federal monitoring and oversight.