Claim for Payment of Contributions for CETA Employee

GAO was asked whether an agency had the authority to pay an invoice for retirement contributions made by a grantee for a Comprehensive Employment and Training Act (CETA) employee assigned to the agency. As a program agent for CETA, the grantee provided employment for CETA participants and, upon request, by assignment to outside agencies such as the agency in question. CETA regulations specifically provide that assigned employees are considered employees of the employing agency and not the agency to which they are assigned. The grantee decided that it would pay the retirement costs for its CETA employees and would request reimbursement for the retirement contributions for employees assigned to other agencies. CETA regulations discourage retirement contributions where, as here, the payments do not vest rights in the employees when made. Since the Act does not authorize agencies to reimburse subgrantees for their retirement contributions for CETA employees assigned to the agency, the agency can make those reimbursements only if it is otherwise authorized to do so. In this instance, the grantee is the employer of the CETA worker and thus must make the payment into the retirement fund. The arrangement between the grantee and the agency did not appear to provide for the agency to reimburse the grantee for its retirement contributions. There is no statutory authority for participating CETA program Federal agencies to make those payments. Moreover, because of the short-term employment under CETA, the use of CETA grant funds for retirement contributions to CETA employees are carefully limited. Accordingly, the agency was not authorized to make the reimbursement.