B-195620.OM, AUG 11, 1980

B-195620.OM: Aug 11, 1980

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WE HAVE EXAMINED THE DEPARTMENT OF LABOR'S AUTHORITY TO USE GRANT FUNDS FOR FEDERAL ADMINISTRATION OF THE WORK INCENTIVE (WIN). ALTHOUGH THE DRAFT REPORT DOCUMENTS THAT WHAT LABOR IS DOING IS INAPPROPRIATE. FOR THE FOLLOWING REASONS WE ARE UNABLE TO FIND ANYTHING ILLEGAL ABOUT IT. IT IS DIFFICULT TO QUESTION THE DEPARTMENT OF LABOR'S USE OF GRANTS UNDER THE WIN AND CETA PROGRAMS SINCE THE SECRETARY OF LABOR HAS SUCH BROAD GRANT AUTHORITY UNDER THESE PROGRAMS. IT IS NOT ABSOLUTELY CLEAR THAT LABOR WOULD BE AUTHORIZED TO USE UI AND ES GRANTS FOR FEDERAL ADMINISTRATION PURPOSES. IF GRANT FUNDS ARE NOT AVAILABLE. THERE WOULD HAVE TO BE ANOTHER SOURCE OF FUNDS FOR FEDERAL ADMINISTRATION PRESUMBABLY PROGRAM ADMINISTRATION ACCOUNTS IF SUCH PURPOSES ARE TO BE ACHIEVED.

B-195620.OM, AUG 11, 1980

SUBJECT: DRAFT REPORT TO THE SECRETARY OF LABOR ON "PASS THROUGH" AGREEMENTS, B-195620-O.M. (CODE 203060)

ASSISTANT DIRECTOR, HRD - JAMES F. WALSH:

IN REVIEWING THE SUBJECT DRAFT REPORT, WE HAVE EXAMINED THE DEPARTMENT OF LABOR'S AUTHORITY TO USE GRANT FUNDS FOR FEDERAL ADMINISTRATION OF THE WORK INCENTIVE (WIN), COMPREHENSIVE EMPLOYMENT AND TRAINING ACT (CETA), UNEMPLOYMENT INSURANCE (UI), AND EMPLOYMENT SERVICES PROGRAMS. ALTHOUGH THE DRAFT REPORT DOCUMENTS THAT WHAT LABOR IS DOING IS INAPPROPRIATE, FOR THE FOLLOWING REASONS WE ARE UNABLE TO FIND ANYTHING ILLEGAL ABOUT IT.

IT IS DIFFICULT TO QUESTION THE DEPARTMENT OF LABOR'S USE OF GRANTS UNDER THE WIN AND CETA PROGRAMS SINCE THE SECRETARY OF LABOR HAS SUCH BROAD GRANT AUTHORITY UNDER THESE PROGRAMS. IT IS NOT ABSOLUTELY CLEAR THAT LABOR WOULD BE AUTHORIZED TO USE UI AND ES GRANTS FOR FEDERAL ADMINISTRATION PURPOSES, SUCH AS ENTERING DIRECTLY INTO THE CONTRACTS DESCRIBED IN THE REPORT OR USING THE STATE CONTRACTING DEVICE CRITICIZED IN THE REPORT. IF GRANT FUNDS ARE NOT AVAILABLE, THERE WOULD HAVE TO BE ANOTHER SOURCE OF FUNDS FOR FEDERAL ADMINISTRATION PRESUMBABLY PROGRAM ADMINISTRATION ACCOUNTS IF SUCH PURPOSES ARE TO BE ACHIEVED. HOWEVER, ES PROGRAM ADMINISTRATION FUNDS WERE APPARENTLY OMITTED IN LABOR'S FUNDING FOR 1979. EVEN IN THE YEARS IN WHICH THERE WERE PROGRAM ADMINISTRATION FUNDS FOR BOTH THE UI AND ES PROGRAMS, THESE FUNDS DO NOT APPEAR TO HAVE BEEN SUFFICIENT TO CARRY OUT WHAT LABOR CONSIDERED TO BE NECESSARY FEDERAL ADMINISTRATION OF THESE PROGRAMS. IN THESE CIRCUMSTANCES IT IS NOT CLEAR THAT CONGRESS INTENDED UI AND ES GRANT FUNDS TO BE UNAVAILABLE FOR FEDERAL ADMINISTRATION. THE IMPORTANT POINT IS THAT LABOR IS USING THIS GRANT MECHANISM IN ORDER TO OBTAIN SERVICES AND STUDIES THAT IT WANTS FROM CONTRACTORS OF ITS CHOOSING; THE REPORT ADEQUATELY RAISES THE ISSUES INVOLVED IN SUCH TRANSACTIONS.

WE FIND THE REPORT TO BE SATISFACTORY FROM A LEGAL STANDPOINT AND HAVE NO OBJECTIONS TO ITS ISSUANCE. WE DO SUGGEST THE FOLLOWING MINOR CHANGES.

PAGE 4, FIRST COMPLETE PARAGRAPH, CHANGE THE SECOND SENTENCE TO READ "NEVADA CANNOT BE RELIED ON TO PROTECT THE FEDERAL GOVERNMENT'S INTERESTS SINCE ITS ROLE IS MINIMAL-IT OBTAINS SIGNATURES ON THE AGREEMENTS AND PAYS BILLS FROM LABOR CERTIFIED INVOICES."

PAGE 4, SECOND COMPLETE PARAGRAPH, AT THE BEGINNING OF THE SENTENCE "UNDER LAW ...," ADD "ACCORDING TO THE DEPARTMENT OF LABOR,"