Improper Payments of Basic Hourly Allowances to CETA Participants

HRD-81-132: Published: Jul 31, 1981. Publicly Released: Jul 31, 1981.

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GAO reviewed the Department of Labor and prime sponsor management of CETA funds. GAO found that several prime sponsors were paying training participants a basic hourly allowance instead of a weekly incentive allowance as required by Labor's regulations. Because the hourly payments were considerably more than the weekly allowance, a significant amount of CETA funds was spent inappropriately.

GAO interviewed representatives at four prime sponsors to determine why hourly allowances, rather than weekly incentive allowances, were made to participants who were receiving public assistance. In general, the cause of the problem is a lack of understanding by prime sponsors that, in addition to federally supported assistance payments, recipients of general assistance payments funded by State and local governments are eligible only for the weekly incentive allowance. In most cases, the prime sponsors' personnel thought that public assistance included only federally supported payments when determining eligibility for basic hourly allowances.

Recommendation for Executive Action

  1. Status: Closed

    Comments: Please call 202/512-6100 for additional information.

    Recommendation: GAO recommended that Labor remind prime sponsors, either directly or through the regional offices, that both Federal and nonfederally funded assistance payments are to be considered when determining eligibility for training allowances. GAO further recommended that Labor direct the regional offices to ascertain how prime sponsors are determining eligibility for training allowances during their annual assessments and other periodic reviews.

    Agency Affected: Department of Labor


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