International Labor Grants:

DOL's Use of Financial and Performance Monitoring Tools Needs to Be Strengthened

GAO-14-832: Published: Sep 24, 2014. Publicly Released: Sep 24, 2014.

Additional Materials:

Contact:

Thomas Melito
(202) 512-9601
melitot@gao.gov

 

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

What GAO Found

The Department of Labor's (DOL) Bureau of International Labor Affairs' (ILAB) child labor office and trade and labor office both have guidance for the financial monitoring of grants, but could improve their financial oversight. For example, we found that project managers completed their acceptance or rejection of about 20 percent of quarterly financial reports more than 90 days after receipt from the grantee, after the next quarter's report was due. ILAB does not have guidance that provides time frames and criteria for accepting or rejecting quarterly financial reports. In addition, although the child labor office supplements federal financial requirements with attestation engagements of selected projects to, among other things, assess the accuracy and reliability of grantee financial and performance data, the trade and labor office has not yet implemented its plan to conduct such attestation engagements of its grants, although officials said they plan to do so by November 2014. Without addressing these gaps in financial oversight, it could be difficult for ILAB to ensure federal resources are used efficiently and effectively to achieve desired objectives. The figure below outlines selected financial and performance monitoring tools and requirements from each office.

Financial and Performance Monitoring Tools and Requirements

Financial and Performance Monitoring Tools and Requirements

ILAB uses a number of tools to monitor the performance of its projects, but the trade and labor office's monitoring could be strengthened. Twenty-two of 26 grant files we reviewed included key monitoring documents, such as periodic performance progress reports. The child labor office requirements have generally been more comprehensive than those of the trade and labor office. For example, in contrast to the child labor office, the trade and labor office does not have common indicators that are used across projects and, as stated above, has not conducted attestation engagements of its grants. Without common indicators and attestation engagements, it is difficult for the trade and labor office to assess overall progress across projects and toward the office's goals, and whether its grantees are in compliance with relevant regulations.

ILAB conducts final evaluations for all projects to assess the performance of the project, including an assessment of performance against goals and objectives. Officials said they have drawn lessons learned from these evaluations that they have incorporated into subsequent projects, including addressing monitoring and evaluation issues earlier in a project. ILAB has also commissioned impact evaluations to determine whether a project has an effect and to quantify how large the effect is, and two have been completed to date.

Why GAO Did This Study

According to the International Labour Organization, millions of children worldwide are engaged in labor that hinders their development. Recent incidents, including a factory collapse in Bangladesh, have highlighted poor working conditions overseas. ILAB's child labor office and trade and labor office provide funding to improve working conditions by supporting worker rights and combating child labor, mainly through international and nongovernmental organizations. The child labor office obligated about $56 million and the trade and labor office obligated about $13.5 million in fiscal year 2013. You asked us to review issues related to ILAB's international technical assistance. This report examines how ILAB (1) ensures the financial accountability of its technical assistance funds, (2) monitors the performance of its projects, and (3) evaluates its projects and uses the results of the evaluations. To address these objectives, GAO reviewed ILAB documents on financial requirements, performance monitoring, and evaluation. GAO analyzed a nongeneralizable sample of 26 grants that were active in calendar years 2011-2013. GAO selected this sample based on several factors, including dollar value and geographic location.

What GAO Recommends

GAO recommends that the Secretary of Labor take actions such as establishing guidance on time frames and criteria for accepting or rejecting financial reports, and implementing the trade and labor office's plans to conduct attestation engagements and develop common indicators. DOL agreed with GAO's recommendations.

For more information, contact Thomas Melito at (202) 512-9601 or melitot@gao.gov.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: DOL agreed with the findings in the GAO report and has taken steps to implement them. In response to GAO's recommendation, as of March 2015, ILAB had updated the operations manuals for the Office of Trade and Labor Affairs and the Office of Child Labor, Forced Labor, and Human Trafficking to specify timeframes in which project managers must accept or reject a quarterly financial report. The operations manuals for both offices have also been amended to include criteria for accepting or rejecting the financial reports.

    Recommendation: To improve ILAB's financial and performance monitoring, the Secretary of Labor, in concert with ILAB management, should, to facilitate the effective financial oversight of its grants, establish guidance specifying time frames in which project managers must accept or reject quarterly financial reports and the criteria for accepting or rejecting the reports.

    Agency Affected: Department of Labor

  2. Status: Closed - Implemented

    Comments: DOL agreed with the findings in the GAO report and has taken steps to implement them. In response to GAO's recommendation, as of March 2015, ILAB had updated the management procedures and guidelines to specify that grantee reporting requirements related to inventory must also include items purchased by subgrantees.

    Recommendation: To improve ILAB's financial and performance monitoring, the Secretary of Labor, in concert with ILAB management, should, to better ensure accurate accounting of federal funds, revise ILAB policies to specify that subgrantee inventories of equipment and real property purchased with federal funds are included in inventory lists submitted by the grantee.

    Agency Affected: Department of Labor

  3. Status: Closed - Implemented

    Comments: DOL agreed with the findings in the report and has taken steps to implement the recommendations. In May 2015, ILAB sent GAO the final reports from the attestation engagements conducted on two trade and labor grants. In addition, in August 2015, the trade and labor office established guidance on the management of attestation engagements. The guidance includes specific tasks project managers are responsible for throughout the course of an attestation engagement.

    Recommendation: To improve ILAB's financial and performance monitoring, the Secretary of Labor, in concert with ILAB management, should, to improve financial and performance monitoring of trade and labor grants, implement the trade and labor office's plan to conduct attestation engagements and develop guidance on the management of these engagements.

    Agency Affected: Department of Labor

  4. Status: Closed - Implemented

    Comments: DOL agreed with the findings in the GAO report and has taken steps to implement them. In response to GAO's recommendations, as of March 2015, the trade and labor office had developed common indicators to use across projects. The indicators include outcome goals and supporting output measures.

    Recommendation: To improve ILAB's financial and performance monitoring, the Secretary of Labor, in concert with ILAB management, should, to improve performance monitoring of trade and labor grants, ensure that the trade and labor office implement its plan to develop common indicators to track progress across projects.

    Agency Affected: Department of Labor

 

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