International Labor Grants:
Labor Should Improve Management of Key Award Documentation
GAO-14-493: Published: May 15, 2014. Publicly Released: May 15, 2014.
What GAO Found
The Department of Labor's (Labor) Bureau of International Labor Affairs (ILAB) has guidance and criteria for developing projects covering trade and labor and child labor. In fiscal year 2013, the child labor office obligated about $56 million and the trade and labor office obligated about $13.5 million for technical assistance projects. Officials from both offices said they consider many factors in deciding where to provide technical assistance, including the nature and extent of the problem, U.S. government priorities, and host government commitment. Each office uses a variety of information sources to develop project ideas. Once ILAB has decided to develop a project, the draft grant solicitation must go through Labor's agency-wide clearance process.
Labor has established procedures to select recipients of its funding, including processes for evaluating applications for grants, such as assessing applicants' past performance and capacity to manage grant funds. Officials said they have difficulty attracting a large number of applicants because the pool is potentially constrained by the specialized nature of the work, challenging location of the grants, and size and complexity of the grants. According to officials, ILAB takes steps to maximize competition, such as publishing Notices of Intent to give applicants more time to develop proposals.
Incomplete documentation makes it difficult to determine if Labor is following its grant award procedures, including conducting due diligence on financial viability and past performance of applicants. Based on GAO's review of 26 grant award files, over half of the files were missing some documentation, and 4 were missing all pre-award documents (see figure). Officials said that the procurement office has been trying to improve the organization of the files so that it is easier to follow the steps of the award process. For example, procurement officials said they are trying to more consistently use a checklist to record the documents the office receives, such as past performance information. However, use of this checklist is not required, and Labor guidance does not clearly state what documents must be retained in award files. According to Standards for Internal Control in the Federal Government , internal control, all transactions, and other significant events need to be clearly documented, and the documentation should be readily available. Further, the standards state that all documentation and records should be properly managed and maintained. Without such assurance that Labor is following its grant award procedures, ILAB is at increased risk of not meeting the goals of its programs.
Summary of key documents found in 26 award files
Why GAO Did This Study
Recent incidents, including the collapse of a factory building in Bangladesh, have highlighted poor working conditions overseas. According to the International Labour Organization, millions of children worldwide are engaged in labor that hinders their development. ILAB provides technical assistance mainly through international and nongovernmental organizations to improve working conditions by supporting worker rights and combating child labor. You asked us to review issues related to ILAB's international technical assistance. This report examines (1) how ILAB develops its technical assistance projects, (2) how ILAB selects recipients of its funding, and (3) how Labor manages its grant award documentation.
To address these objectives, GAO reviewed Labor guidance on procurement, ILAB project manager manuals, and grant solicitations. GAO examined a nongeneralizable sample of 26 award files that were active in calendar years 2011-2013. GAO selected this sample based on several factors, including dollar value and geographic location. GAO also interviewed officials from ILAB and the Labor procurement office as well as ILAB grantees in Washington, D.C.
What GAO Recommends
To ensure the integrity of the procurement process for ILAB grants, the Secretary of Labor should provide guidance about documents required in grant award files and ensure that the guidance is implemented. Labor agreed with the recommendations.
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Recommendations for Executive Action
Status: Closed - Implemented
Comments: Labor agreed with the recommendation. In March 2016, officials described actions taken to address the recommendation and told GAO that DOL supplemented its use of an electronic grants management system with a new shared drive and checklists as guidance to document the grant award process. Since the electronic grants management system does not have the capability to include all the relevant grant-related documents, DOL uses a shared drive to store the additional documentation, such as conflict of interest forms. The shared drive folder structure is set up as a guide for what documentation to include for each grant award with folders for the steps in the grant selection process. For example, the funding opportunity announcement folder will have subfolders for the grant applications, the review panel documents, and is the repository for the checklist on the award file contents. In addition, DOL created 2 checklists that act as guidance to make sure the relevant documents have been included in the electronic grants management system and the shared drive.
Recommendation: To ensure the integrity of the procurement process for ILAB grants, the Secretary of Labor should provide guidance as to what documents should be in the grant award files to show that all grant award requirements were met.
Agency Affected: Department of Labor
Status: Closed - Implemented
Comments: Labor agreed with the recommendation. In March 2016, officials described actions taken to address the recommendation and told GAO that DOL uses a combination of an electronic grants management system, a shared drive, and checklists to document the grant award process. DOL officials described how they now use the electronic grants management system, E-grants, to ensure guidance on grant management is implemented. E-grants requires 2 sets of signatures from the program office (ILAB) and 2 sets of signatures from the grants office. The signatures from the program office show approval that the appropriate documents are in the system and approves (although does not obligate) funds. The signatures from the grants office shows that the contents in the E-grants file have been checked by both a grant specialist and a grant officer, whose signature indicates review of the grant specialist's work, including that the appropriate documents are in the file, and obligates the grant funds. E-grants does not allow the same person to sign in both places; it requires 2 different people's signatures. In addition, the use of 2 checklists provides an additional mechanism to ensure that the guidance on grant award documentation is being implemented. One checklist, on the grant selection process, is used by the grant specialist to ensure that the grant files include the appropriate documents. At the end of the grant award process, the grant officer then uses a checklist on award file contents to verify that the grant specialist has included all the necessary documentation or provided a reason for its absence. A copy of that checklist, with checks or explanations noted for each item, is saved in the shared drive folder for each grant award.
Recommendation: To ensure the integrity of the procurement process for ILAB grants, the Secretary of Labor should establish a mechanism to ensure that the guidance is implemented.
Agency Affected: Department of Labor