Hatch, Alexander Highlight GAO Report Confirming Need for Additional Oversight of Department of Labor Grants

WASHINGTON, Sept. 24 – U.S. Senator Orrin Hatch (R-Utah), Ranking Member of the Senate Finance Committee, and Lamar Alexander (R-Tenn.), Ranking Member of the Senate Health, Education, Labor and Pensions (HELP) Committee, today highlighted a new Government Accountability Office (GAO) report entitled, “DOL's Use of Financial and Performance Monitoring Tools Needs to Be Strengthened,” that found the Department of Labor’s Bureau of International Labor Affairs (ILAB) should improve its financial and performance oversight of its international labor grants.  The report, which was requested by Senators Hatch and Alexander, found that unless ILAB addresses gaps in the financial oversight of its grants, it would be difficult to ensure that federal resources are used efficiently and effectively.  ILAB has awarded nearly $225 million in grants between 2011 and 2013. 

“As the GAO noted with this report and in reports past, there is clearly an accountability problem with these grants at the Department of Labor,” Hatch said.  “By failing to verify documentation, DOL is recklessly and irresponsibly disbursing hard-earned taxpayer dollars abroad without any measure of whether the funds are being used for their intended purpose. DOL has a responsibility to safeguard taxpayer dollars by seeing that funds are spent efficiently.  It is my sincere hope the Department heeds GAO’s advice and acts to improve the financial and performance monitoring of ILAB grants.”

“Our government watchdog has been busy lately trying to keep an account of all the Obama administration’s wasteful spending of our tax dollars,” Alexander said.  “Today’s report shows mismanagement of tax dollars at the labor department, and I expect Secretary Perez to put a stop to it.”

The report builds on Hatch and Alexander’s oversight of ILAB.  In May, the GAO found that for 2013, 62 percent of award grant files had either missing documentation or no documentation at all and, of those, 15 percent of grants had no documentation at all. ILAB awarded nearly $70 million in grants to projects in foreign countries in 2013.

ILAB awards grants through international non-governmental organizations to combat child labor and improve working conditions and worker rights.  GAO found gaps in ILAB guidance and requirements that place these programs at an increased risk of not meeting their objectives.  GAO identified three keys areas that need improvement: (1) financial oversight of grants; (2) performance monitoring of trade and labor grants; and (3) oversight of subcontractor activities.

Key findings from the GAO report follow and a full copy of the report can be found HERE:

• Lack of ILAB Guidance Creates Difficulty in Assessing Program Performance: According to GAO, “Without guidance . . . it can be difficult for ILAB managers to identify and address financial issues in a timely manner, determine if federal funds are being used as intended, and identify the extent to which the project may be achieving its intended goals.”

• Improve Management’s Monitoring Tools: According to GAO, “Without [improved monitoring tools] it is difficult for the trade and labor office to assess progress across projects and overall progress towards the office’s goals, and whether its grantees are in compliance with relevant regulations.”

• Verify Subgrantees’ Activities: According to GAO, “Because of a lack of specific guidance, grantees may not be clear about [reporting] requirements . . . there is a risk of a lack of accountability for assets purchased with Department of Labor funds.”

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