BUREAU OF LABOR STATISTICS 

 

02-A12-345-67-890 Office of Inspector General—Office of Audit 

BLS COULD DO MORE TO ENSURE THAT 

LABOR FORCE STATISTICS PROGRAM FUNDS 

ARE EXPENDED AND REPORTED IN 

ACCORDANCE WITH THE LABOR MARKET 

INFORMATION AGREEMENTS 

Date Issued: March 31, 2011

Report Number: 17-11-001-11-001
U.S. Department of Labor 

Office of Inspector General 

Office of Audit 

BRIEFLY... 

Highlights of Report Number 17-11-001-11-001, to 

the Commissioner of the Bureau of Labor Statistics 

WHY READ THE REPORT 

BLS is responsible for producing some of the 

nation's most sensitive and important economic 

data. BLS is an independent national statistical 

agency that collects, processes, analyzes, and 

disseminates essential statistical data to the 

American public, the U.S. Congress, other federal 

agencies, state and local governments, and 

businesses. BLS serves as a statistical resource to 

DOL by providing data and technical expertise. 

BLS data must satisfy a number of criteria, 

including relevance to current social and economic 

issues, timeliness in reflecting today’s rapidly 

changing economic conditions, accuracy and 

consistently high statistical quality, and impartiality 

in both subject matter and presentation. 

Since 1917, BLS has used cooperative 

agreements (Agreement) with states, territories 

and the District of Columbia (State) to fund the 

collection and analysis of Labor Market Information 

(LMI) data that BLS uses in its national statistical 

programs. In fiscal year 2010, BLS reported that it 

provided $83,029,112 in funding to 54 States for 

the LMI program, specifically $62,650,903 for 

personnel services, $12,507,264 for non-personnel 

services, and $7,870,945 for administrative 

services. 

WHY OIG CONDUCTED THE AUDIT 

Our audit objective was to answer the following 

question: 

Did BLS ensure that funds for the Labor 

Force Statistics Program were expended and 

reported in accordance with the LMI 

Agreements? 

READ THE FULL REPORT 

To view the report, including the scope, 

methodology, and full agency response, go to: 

http://www.oig.dol.gov/public/reports/oa/2011/17-

11-001-11-001.pdf

March 2011 

BLS COULD DO MORE TO ENSURE THAT 

LABOR FORCE STATISTICS PROGRAM 

FUNDS ARE EXPENDED AND REPORTED IN 

ACCORDANCE WITH THE LABOR MARKET 

INFORMATION AGREEMENTS 

WHAT OIG FOUND 

While we noted no exceptions in our review of the 

four States’ reported personnel services and 

administrative services transactions, we found 

discrepancies in the non-personnel services 

transactions in two States and noted late reporting 

of financial information in three States. In two 

States, we found discrepancies in 118 

non-personnel services transactions totaling 

$39,273 of the $106,000 reviewed. Officials of the 

two States could not provide supporting 

documentation to demonstrate that transactions 

were allowable in accordance with Agreement 

requirements and federal regulations. 

We also found three of the four States were late in 

submitting monthly financial reports to their 

respective BLS Regional Offices as required by 

their Agreements. 

WHAT OIG RECOMMENDED 

We recommended that the Commissioner for BLS 

(1) improve monitoring of State LMI financial 

transactions to ensure records are maintained that 

fully support LMI program expenditures, (2) 

enforce policies and procedures currently in place 

to ensure the States’ timely submission of monthly 

financial reports, and (3) recover questioned costs 

totaling $39,273 for non-personnel service 

transactions that the States could not support. 

The Commissioner of BLS stated that BLS does 

extensive financial monitoring of grantees and 

disagreed with the OIG’s first recommendation to 

improve monitoring of State LMI financial 

transactions. The Commissioner of BLS generally 

agreed with the OIG’s second and third 

recommendations and has planned to take actions 

to address them.

 
U.S. Department of Labor – Office of Inspector General 

Table of Contents 

Assistant Inspector General’s Report ......................................................................... 1

Results In Brief.............................................................................................................. 2

Objective — Did BLS ensure that funds for the Labor Force Statistics Program 

were expended and reported in accordance with the LMI Agreements?................. 4

BLS did not fully ensure that funds were expended and reported for the 

Labor Force Statistics Program in accordance with the LMI Agreements. ........... 4

Finding 1 — BLS did not fully ensure that federal funds expended were 

allowable........................................................................................... 4

Finding 2 — Monthly financial reporting deliverables in three of four States 

were not always submitted timely. .................................................... 6

Recommendations ........................................................................................................ 7

Exhibit

Exhibit Untimely Financial Reports .................................................................... 11

Appendices

Appendix A Background ..................................................................................... 15

Appendix B Objective, Scope, Methodology, and Criteria .................................. 17

Appendix C Acronyms and Abbreviations .......................................................... 21

Appendix D BLS Response to Draft Report........................................................ 23

Appendix E Acknowledgements ......................................................................... 25

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U.S. Department of Labor Office of Inspector General 

 Washington, D.C. 20210 

March 31, 2011 

Assistant Inspector General’s Report 

Keith Hall 

Commissioner 

Bureau of Labor Statistics 

U.S. Department of Labor 

Postal Square Building 

2 Massachusetts Avenue, NW 

Washington, DC 20212 

The Bureau of Labor Statistics (BLS) is responsible for the production of some of the 

nation's most sensitive and important economic data. Since 1917, BLS has used 

cooperative agreements (Agreement) with states, territories and the District of Columbia 

(State) to provide funding for the collection and analysis of Labor Market Information 

(LMI) data that BLS uses in its national statistical programs. Within BLS, the Office of 

Field Operations in conjunction with the Division of Financial Planning and Management

oversees the Labor Force Statistics Program and is responsible for monitoring LMI 

Agreements with the States. Each LMI Agreement defines the products to be delivered 

to BLS, the time frames for delivery, and the performance requirements. Federal 

funding is provided to the State Workforce Agencies (SWA) within the States and is 

intended to fully cover the costs to meet the LMI Agreement requirements. In Fiscal 

Year (FY) 2010, BLS reported that it provided approximately $83 million in funding to 54 

States for the LMI program, specifically $63 million for personnel services, $12 million 

for non-personnel services, and $8 million for administrative support and technical 

services (administrative services). 

Our audit objective was to answer the following question: 

Did BLS ensure that funds for the Labor Force Statistics Program were expended 

and reported in accordance with the LMI Agreements? 

The audit covered the FY 2010 LMI Agreements between BLS and four States — the 

District of Columbia, New Jersey, Rhode Island, and Vermont. We interviewed 

representatives from BLS and the States to gain an understanding of the BLS LMI 

Agreements and their related activities (e.g., spending, modifications, re-obligations, 

and de-obligations). To assess applicable internal controls at both BLS and the SWAs, 

we analyzed 100 percent of non-personnel services, and a random sample of personnel 

services for all four States reviewed. In addition, we analyzed 100 percent of 

administrative services activities for Rhode Island and Vermont, and reviewed a random 

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sample of administrative services activities for New Jersey and District of Columbia to 

ensure they were allowable. We also reviewed the deliverables required by the LMI 

Agreements to determine if they were submitted in a timely manner. 

We conducted this audit in accordance with generally accepted government auditing 

standards (GAGAS) for performance audits. Those standards require that we plan and 

perform the audit to obtain sufficient, appropriate evidence to provide a reasonable 

basis for our findings and conclusions based on the audit objective. We believe that the 

evidence obtained provides a reasonable basis for our findings and conclusions based 

on the audit objective. Our objective, scope, methodology, and criteria are detailed in 

Appendix B. 

RESULTS IN BRIEF 

While we noted no exceptions in our review of the four States’ reported personnel 

services and administrative services transactions, we found discrepancies in the nonpersonnel services transactions in two States and noted late reporting of financial 

information in three States. 

Our review of personnel services transactions totaling $305,000 showed actual time 

worked was allocated correctly and to the appropriate LMI personnel services accounts. 

Likewise, our review of administrative services transactions totaling $270,000 showed 

costs were allocated to the appropriate LMI statistical programs based on the number of 

hours worked for each program. 

However, in Vermont and Rhode Island, we found discrepancies in 118 non-personnel 

services transactions totaling $39,273 of the $106,000 reviewed. This amounted to 37 

percent of non-personnel services expenses, but less than 6 percent of total expenses 

reviewed. Officials of the two States could not provide supporting documentation to 

demonstrate that transactions were allowable in accordance with Agreement 

requirements and federal regulations. 

While the LMI Agreements state that BLS may conduct periodic on-site reviews to 

evaluate the SWAs’ financial management systems, none were conducted at the four 

States. Additionally, financial reports required by the LMI agreements did not contain 

transaction-level detail, only aggregate spending. Without performing periodic on-site 

reviews, BLS is systemically vulnerable at the non-personnel services transactional 

level nationwide. 

We also found three of the four States were late in submitting monthly financial reports 

to their respective BLS Regional Offices as required by their Agreements. This includes 

6 of 36 reports that were between 30-92 days late. Without timely financial reporting, 

BLS cannot adequately monitor fund utilization and may be prevented from timely 

identification of potential anomalies in the overall use of program funds. 

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We recommend that the Commissioner for BLS (1) improve monitoring of State LMI 

financial transactions to ensure records are maintained that fully support LMI program 

expenditures, and (2) enforce policies and procedures currently in place to ensure the 

States’ timely submission of monthly financial reports, and (3) recover questioned costs 

totaling $39,273 for non-personnel service transactions that the States could not 

support. 

BLS RESPONSE 

BLS stated that it does extensive BLS financial monitoring such as using the grantees’ 

financial reports to monitor how they are using their federal funds. When warranted, 

BLS requests supporting information from the grantees in order to justify their costs. It 

considered review of detailed financial records and transaction to be auditing. BLS also 

cited its reliance on the Single Audit Act requirements to fulfill its audit obligations, 

believing that additional audits are not required and would be duplicative. 

Regarding the enforcement of States’ timely submission of monthly financial reports, 

BLS stated that these reports go above and beyond the OMB Federal requirements of 

quarterly reporting. BLS said it will continue to work with its regional staff to ensure they 

are following up with the grantees on delinquent reports. In addition, BLS will reiterate 

the reporting requirements to the grantees in the transmittal memorandum for the 

FY 2012 cooperative agreement application package. 

Lastly, BLS stated that it will work with the BLS Grant Officer, regional offices and the 

States to review the details that OIG provides on the questioned non-personnel service 

costs. The BLS Grant Officer will make a determination as to the costs’ allowability 

under the cooperative agreement. 

OIG CONCLUSION 

The OIG does not believe that reviewing the LMI financial reports is sufficient to monitor 

detailed financial activity of the LMI program. The financial reports required by the LMI 

agreements contain only aggregate spending. Performing periodic on-site reviews of 

transaction-level details as part of regular assigned duties or developing alternative 

monitoring processes would allow BLS to better monitor the use of federal funds and 

identify improper transactions. On-site monitoring to ensure grantees have adequate 

documentation to substantiate their federal spending does not rise to the level of an 

audit, but does provide assurance of proper stewardship of federal funds. The BLS 

Labor Force Statistics Program is not a major program as defined by the Single Audit 

Act. As such, BLS’s reliance on the States’ single audit reports would not provide 

assurance of adequate audit coverage of program expenditures. 

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RESULTS AND FINDINGS 

Objective — Did BLS ensure that funds for the Labor Force Statistics Program 

were expended and reported in accordance with the LMI 

Agreements? 

BLS did not fully ensure that funds were expended and reported for the Labor 

Force Statistics Program in accordance with the LMI Agreements. 

While we noted no exceptions in our review of the four States’ reported personnel 

services and administrative transactions, we found discrepancies in the non-personnel 

services transactions reviewed in two States and noted late reporting of financial 

information in three States. 

Finding 1 — BLS did not fully ensure that federal funds expended were allowable. 

BLS did not fully ensure that funds expended and reported for the Labor Force Statistics 

Program were in accordance with the LMI Agreements. While we noted no exceptions 

in our review of the four States’ reported personnel and administrative services 

transactions, officials in two of four States in our sample were not able to demonstrate 

that $39,273 of federal funds used for non-personnel services were allowable. 

In the four States in our sample, we reviewed 139 personnel services transactions 

totaling approximately $306,000 and noted no exceptions. These transactions represent 

costs for personnel services and personnel benefits for staff directly contributing to the 

work performed to accomplish Agreement deliverables. Our review of the personnel 

services transactions was conducted to determine if all timesheets were approved, 

hourly rates and net pay were documented and correctly calculated, transactions were 

posted to the appropriate LMI personnel services accounts, and all employees’ time 

charges were for work performed on the LMI projects. Our review determined that the 

personnel services transactions were accurately and appropriately allocated to 

personnel related sources as outlined in the LMI Agreements. 

We also reviewed 34 months of administrative services transactions totaling 

approximately $271,000 and noted no exceptions (see Table 4 in Appendix B). 

Administrative services transactions include all direct or allocated personnel services 

and personnel benefits costs for staff who work in an administrative capacity benefiting 

multiple programs administered by the SWA, including the LMI program. Our review 

determined that the administrative services transactions were properly allocated based 

on the number of hours worked on LMI program activities. 

 

However, our review of 1,211 non-personnel service transactions totaling approximately 

$106,000 identified $39,273 of non-personnel services discrepancies in the States of 

Rhode Island and Vermont. This amounted to 37 percent of non-personnel services 

expenses, but less than 6 percent of total expenses reviewed. Non-personnel services 

transactions include the cost of all goods and services other than personnel services 

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and personnel benefits used by the staff in support of the activities shown in the work 

statements. These include supplies, communication, travel, equipment, rent and utilities 

(see Table 1 below for the summary of transaction testing). 

Table 1: Summary of Transaction Testing 

Total Sampled 

Transactions 

/Months 

Tested 

Total Amount 

of 

Transactions 

Tested 

Total Amount 

of Exceptions 

Percentage 

Personnel 

Services 

139 

Transactions 

$305,579 $0 0% 

Administrative 

Services 

34 Months $270,819 $0 0% 

Non-Personnel 

Services 

1,211 

Transactions 

$106,431 $39,273 37% 

$682,829 $39,273 5.75 % 

According to the 2010 LMI Agreement for each State: 

A State agency will retain records in accordance with 29 CFR 97.42, 

Retention and access Requirements for Records. A State agency will 

retain all records pertinent to the Agreement, including financial and 

statistical records and supporting documentation, for a period of three 

years after the close of the Agreement period. 

According to Office of Management and Budget (OMB) Circular A-87, Cost Principles 

for State, Local and Indian Tribal Governments, page 10, to be allowable under federal 

awards, costs must be adequately documented and authorized under state or local 

laws, or regulations. 

We found the States of Rhode Island and Vermont had no documentation to support 

that 48 non-personnel services transactions totaling $14,082 and 70 non-personnel 

services transactions totaling $25,191, respectively, were allowable. In the absence of 

supporting documentation (e.g., requisitions, purchase orders, receiving reports, and 

payment vouchers), we are questioning $39,273 in costs that these States reported to 

BLS through their Agreements (see Table 2 below for the results of our non-personnel 

service transaction testing). 

 BLS Oversight of Labor Force Statistics Program Funds 

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Table 2: Results of Non-Personnel Services Transaction Testing 

State Total 

Sampled 

Transactions 

Transactions 

Not 

Supported 

Total Amount of 

Transactions Not Supported 

Rhode Island 150 48 $14,082 

Vermont 949 70 $25,191 

New Jersey 64 0 0 

District of 

Columbia 48 0 0 

Total 1,211 118 $39,273 

While the LMI Agreements state that BLS may conduct periodic on-site reviews to 

evaluate the SWAs’ financial management systems, none were conducted at the four 

States. Additionally, financial reports required by the LMI agreements did not contain 

transaction-level detail, only aggregate spending. Performing periodic on-site reviews of 

transaction level details as part of regular assigned duties or developing alternative 

monitoring processes would allow BLS to better monitor the use of federal funds and 

identify improper transactions. Without performing periodic on-site reviews of nonpersonnel services transactions, BLS is systemically vulnerable nationwide to misuse of 

federal funds that could potentially affect the formula BLS uses to allocate LMI funds to 

a State in future years. 

 

Finding 2 — Monthly financial reporting deliverables in three of four States were 

not always submitted timely. 

We found that three of the four States in our sample did not always submit monthly 

financial reports to their respective BLS Regional Offices within 30 days of the reporting 

period, as required by their Agreements. Only the State of Rhode Island submitted its 

financial reports on time. 

The administrative requirements of the 2010 LMI Cooperative Agreement states, 

“Monthly financial reports must be submitted to the BLS Regional Office within 30 days 

of the end of the reporting period. “ 

In addition, the Agreements require that State agencies must report monthly for each 

regular ongoing program, showing total accrued expenditures, total obligation, and the 

total cash received for the month and cumulatively for the current fiscal year. We 

reviewed 36 monthly financial reports submitted to the respective BLS Regional Offices 

and identified 18 of the reports were submitted late. Six of the 18 reports were at least 

30 days late and one report was more than 90 days late (see Table 3 below for analysis 

of late submittal of monthly financial reports and Exhibit). 

 

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Table 3: Analysis of Monthly Financial Report Timeliness 

State Total 

Reports 

Reviewed 

Total 

Reports 

Late 

Percent 

Late 

Number of 

Reports At 

Least 30 

Days Late 

Rhode Island 12 0 0% 0 

Vermont 12 8 66.6% 2 

New Jersey 6 4 66.6% 0 

District of 

Columbia 6 6 100.00% 4 

Total 36 18 50% 6 

BLS officials stated that numerous State personnel turnovers resulted in untimely 

submission of monthly reports. Without timely financial reports, BLS cannot adequately 

monitor fund utilization and may be prevented from timely identifying potential 

anomalies in the overall use of program funds. 

In addition, over the last 2 years, the States of Michigan and Ohio received an approved 

variance not to submit monthly financial reports because each of the State’s accounting 

systems did not have monthly reporting capability. While each State submitted quarterly 

reports, the approved variance affected the timeliness of the financial data submitted 

from those States and prevents BLS from having timely financial reports available to 

review. 

RECOMMENDATIONS 

We recommend the Commissioner for the Bureau of Labor Statistics take steps to: 

1. Improve monitoring of State LMI financial transactions to ensure records are 

maintained that fully support LMI program expenditures. 

2. Enforce policies and procedures currently in place to ensure the States’ timely 

submission of monthly financial reports. 

3. Recover questioned costs totaling $39,273 for non-personnel service transactions 

that the States could not support. 

 BLS Oversight of Labor Force Statistics Program Funds 

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We appreciate the cooperation and courtesies that BLS and State LMI personnel 

extended to the Office of Inspector General during this audit. OIG personnel who made 

major contributions to this report are listed in Appendix E. 

Elliot P. Lewis 

Assistant Inspector General 

 for Audit 

 BLS Oversight of Labor Force Statistics Program Funds 

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Exhibit 

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Exhibit 

Untimely Financial Reports 

• Vermont - Eight of twelve monthly reports were submitted untimely to the BLS 

Regional Office. 

Vermont Late Monthly Reports 

Monthly Report Date Submitted 

Required 

Submission Date

Number 

of Days 

Late 

October 2009 December 8, 2009 November 30, 2009 8 Days 

November 2009 January 12, 2010 December 30, 2009 13 Days 

December 2009 February 4, 2010 February 1, 2010 3 Days 

January 2010 May 13, 2010 March 2, 2010 72 Days 

February 2010 May 13, 2010 March 30, 2010 44 Days 

March 2010 May 13, 2010 April 30, 2010 13 Days 

April 2010 June 7, 2010 May 30, 2010 8 Days 

May 2010 July 6, 2010 June 30, 2010 6 Days 

• New Jersey - Four of six reports were submitted untimely to BLS Regional Office. 

New Jersey Late Monthly Reports 

Monthly Report Date Submitted 

Required 

Submission Date

Number 

of Days 

Late 

October 2009 December 9, 2009 November 30, 2009 9 Days 

November 2009 January 11, 2010 December 30, 2009 12 Days 

January 2010 March 4, 2010 March 2, 2010 2 Days 

February 2010 April 19, 2010 March 30, 2010 20 Days 

• District of Columbia - Six of six reports were submitted untimely to the BLS 

Regional Office. 

District of Columbia Late Monthly Reports 

Monthly Report Date Submitted 

Required 

Submission Date

Number 

of Days 

Late 

October 2009 March 2, 2010 November 30, 2009 92 Days 

November 2009 March 8, 2010 December 30, 2009 68 Days 

December 2009 April 1, 2010 January 30, 2009 61 Days 

January 2010 April 1, 2010 March 2, 2010 30 Days 

February 2010 April 20, 2010 March 30, 2010 21 Days 

March 2010 May 5, 2010 April 30, 2020 5 Days 
U.S. Department of Labor – Office of Inspector General 

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Appendices 
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Appendix A 

Background 

BLS is responsible for the production of some of the nation's most sensitive and 

important economic data. BLS is an independent national statistical agency that 

collects, processes, analyzes, and disseminates essential statistical data to the 

American public, the U.S. Congress, other federal agencies, state and local 

governments, and businesses. BLS also serves as a statistical resource to the DOL by 

providing data and technical expertise. BLS data must satisfy a number of criteria, 

including relevance to current social and economic issues, timeliness in reflecting 

today’s rapidly changing economic conditions, accuracy and consistently high statistical 

quality, and impartiality in both subject matter and presentation. 

Since 1917, BLS has used agreement with States to fund the collection and analysis of 

LMI data that BLS uses in its national statistical programs. Within BLS, the Office of 

Field Operations in conjunction with the Division of Financial Planning and Management

is responsible for monitoring LMI Agreements with the States. Each LMI Agreement 

defines the products to be delivered, time frames for delivery, and performance 

requirements. Federal funding is provided to the SWAs within the States and is intended 

to fully cover the costs to meet the LMI Agreement requirements. 

Section 14 of the Wagner Peyser Act authorizes the Secretary of Labor to reimburse the 

States to provide data for national statistical programs. In FY 2010, BLS reported that it 

provided $83,029,112 in funding to 54 States for the LMI program, specifically 

$62,650,903 for personnel services, $12,507,264 for non-personnel services and 

$7,870,945 for administrative services. 

The LMI programs are expected to provide comprehensive and timely information on 

the labor force, employment, unemployment, and related labor market characteristics at 

the national level; industrial and occupational employment at the state and local levels; 

and labor force and unemployment at state and local levels. In addition, these programs 

develop projections of the labor force, economic growth, industrial output, and 

employment by industry and occupation for 10 years into the future for the Nation as a 

whole. This performance indicator is composed of the underlying performance 

measures of output, timeliness, accuracy, and long-term improvement for the Labor 

Force Statistics programs. BLS demonstrates continuous improvement by setting more 

ambitious targets on its overall indicator, as well as the individual measures that 

underlie the indicator. 

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Appendix B 

Objective, Scope, Methodology, and Criteria 

Objective 

Our audit objective was to answer the following question:

Did BLS ensure that funds for the Labor Force Statistics Program were expended and 

reported in accordance with the LMI Agreements? 

Scope 

The audit covered the FY 2010 LMI Agreements between BLS and the District of 

Columbia, New Jersey, Rhode Island, and Vermont. The audit team reviewed personnel 

services, non-personnel services and administrative services funds expended and 

reported for the 1st and 2nd quarters of FY 2010 for the District of Columbia and New 

Jersey, and all four quarters of FY 2010 for Rhode Island and Vermont. Initial testing 

performed in the District of Columbia and New Jersey produced limited results; 

therefore, the scope was expanded to encompass the entire year for testing in Rhode 

Island and Vermont. Through interviews with BLS Philadelphia Regional Office officials 

we also learned that the majority of LMI funds are expended during the last two quarters 

of the fiscal year. In addition, we obtained information regarding reporting variances that 

BLS had approved for the States of Michigan and Ohio. 

Fieldwork was conducted at the BLS National Office in Washington, D.C.; the BLS 

Philadelphia and Boston Regional Offices; including SWAs in the District of Columbia, 

New Jersey, Rhode Island, and Vermont. 

We conducted this audit in accordance with GAGAS for performance audits. Those 

standards require that we plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and conclusions based on our 

audit objective. We believe that the evidence obtained provides a reasonable basis for 

our findings and conclusions based on our audit objective. 

Methodology 

In planning and performing the audit, we reviewed the LMI Agreements, OMB 

regulations, and BLS policies and procedures to determine the federal and State 

requirements for the LMI program. To gain further understanding of BLS policies and 

procedures and the LMI program requirements we interviewed BLS and SWA officials 

and their staffs. 

We reviewed each State’s cost allocation policy and budget for the LMI program, 

including the salaries expended to operate the program. We interviewed financial 

managers at both BLS and the SWAs. In addition, we tested the accuracy of salaries 

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and hourly rates charged to the LMI program as well as financial reporting requirements 

under the LMI Agreement. 

We reviewed personnel services transactions to determine if all timesheets were 

approved, hourly rates and net pay were documented and correctly calculated, 

transactions were posted to the appropriate LMI personnel services accounts, and all 

employees’ time charges were for work performed on the LMI projects. We reviewed 

administrative services transactions to determine if they were properly allocated based 

on the number of hours worked on LMI program activities. We reviewed purchasing 

documents such as requisitions, purchase orders, receiving reports, and payment 

vouchers related to non-personnel services to determine if they were allowable. We 

also reviewed monthly and quarterly financial reports submitted by the SWAs to their 

respective BLS Regional Office to determine if the reports were submitted timely. 

We designed a two-stage stratified cluster sample to select LMI transactions for audit 

testing. The first stage of the sample design randomly selected BLS regions and States 

to be included in the audit scope. The second stage of the sample design selected 

individual transactions to be tested at the State level. For the second stage of the 

sample design, we used a stratified random sample to select individual transactions 

from the following three areas: (1) personnel services, (2) non-personnel services, and 

(3) administrative services. These are the areas in which the States report costs to BLS 

as part of their work on LMI programs. Based on the final sampling plan the audit 

results cannot be projected and are limited to the four States included in the audit. 

While the States responded that they could provide the total number of LMI personnel 

services transactions, not all States could provide the same information for nonpersonnel and administrative services. Some States responded that their cost 

accounting system could only provide the total amount charged per month for nonpersonnel and administrative services. We analyzed 100 percent of non-personnel 

services, and a random sample of personnel services for all four States. In addition, we 

analyzed 100 percent of administrative services activities for Rhode Island and 

Vermont, and reviewed a random sample of administrative services activities for New 

Jersey and District of Columbia. In each State we reviewed the following number of 

transactions: 

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Table 4: Sample Population of Personnel, Non-Personnel and 

Administrative Services 

State 

Personnel 

Service 

Transactions 

NonPersonnel 

Services 

Transactions 

Administrative Services 

District of 

Columbia 

20 48 5 Months (Random sample 

excluded February) 

New Jersey 20 64 5 Months (Random sample 

excluded January) 

Vermont 55 949 All 12 Months 

Rhode Island 44 150 All 12 Months 

Total 139 1,211 34 

The universe provided by the four States was as follows: 794 personnel service 

transactions totaling $1,512,000; 1,211 non-personnel services transactions totaling 

$106,431; and 36 months for administrative services totaling $290,639. 

For administrative services, we reviewed 5 months of transactions, excluding February 

for the District of Columbia; 5 months of transactions, excluding January for New 

Jersey; and all 12 months of transactions for Vermont and Rhode Island. 

We reviewed 139 personnel service transactions totaling $305,579.15; 1,211 

transactions for non-personnel services totaling $106,431; and 34 out of 36 months for 

administrative services totaling $270,819. 

We reviewed 100 percent of the monthly and quarterly financial reports submitted to 

BLS from the SWAs. For two States — the District of Columbia and New Jersey — we 

reviewed six monthly financial reports and two quarterly financial reports. For the States 

of Rhode Island and Vermont, we reviewed 12 monthly financial reports and four 

quarterly financial reports. 

In performing the audit, BLS provided us with their expenditures reports for the States. 

We performed a data reliability assessment to ensure we had complete and accurate 

LMI data. To determine whether the data was reliable to select our sample, we 

compared the LMI financial data reports BLS provided us with a report from the Health 

and Human Service’s Payment Management System–financial system and LMI financial 

information received from the 54 States. We did note a few differences, but the 

differences were not material for the purpose of selecting a sample of State LMI 

transactions to review. We concluded the data to be sufficiently reliable for our audit 

purposes. 

We evaluated internal controls used by BLS and SWAs for reasonable assurance that 

the SWAs complied with appropriate laws and regulations in expending and reporting 

LMI funds. Our consideration of internal controls related to the expending and reporting 

 BLS Oversight of Labor Force Statistics Program Funds 

19 Report No. 17-11-001-11-001 
U.S. Department of Labor – Office of Inspector General 

 BLS Oversight of Labor Force Statistics Program Funds 

20 Report No. 17-11-001-11-001 

LMI funds would not necessarily disclose all matters that might be reportable conditions. 

Because of inherent limitations in internal controls, misstatements, or losses, 

noncompliance may nevertheless occur and not be detected.

Criteria 

• LMI Agreements for selected States 

• OMB Circular A-87, Cost Principles for State and Local and Indian Tribal 

Governments

• OMB Circular A-123 – Management’s Responsibility for Internal Control

• OMB Circular A-133 – Audits of States, Local Governments, and Non-Profit 

Organizations

• Title 29, Parts 93, 96, 97, 98 and 99 of the Code of Federal Regulations

• Workforce Investment Act of 1998, as amended
U.S. Department of Labor – Office of Inspector General 

 Appendix C 

Acronyms and Abbreviations 

Administrative Services Administrative Support and Technical Services 

Agreement C ooperative Agreement 

BLS Bureau of Labor Statistics 

DOL Department of Labor 

FY Fiscal Year 

GAGAS Generally Accepted Government Auditing Standards 

LMI Labor Market Information 

OIG Office of Inspector General 

OMB Office of Management and Budget 

State States, Territories and the District of Columbia 

SWA State Workforce Agency 

 BLS Oversight of Labor Force Statistics Program Funds 

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U.S. Department of Labor – Office of Inspector General 

 PAGE INTENTIONALLY LEFT BLANK

 BLS Oversight of Labor Force Statistics Program Funds 

22 Report No. 17-11-001-11-001 
U.S. Department of Labor – Office of Inspector General 

Appendix D 

BLS Response to Draft Report 

 BLS Oversight of Labor Force Statistics Program Funds 

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U.S. Department of Labor – Office of Inspector General 

 BLS Oversight of Labor Force Statistics Program Funds 

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U.S. Department of Labor – Office of Inspector General 

 

 BLS Oversight of Labor Force Statistics Program Funds 

25 Report No. 17-11-001-11-001 

Appendix E 

Acknowledgements 

Key contributors to this report were Tracy Katz, Zaunder Saucer, Tinuke Aruwayo, 

Grover Fowler, Jr., Barry Weiss, Deborah Jarmon, Lawrence Alli, Jr., Steven Johnson, 

Adams Kondeh, and Christine Allen. 
TO REPORT FRAUD, WASTE OR ABUSE, PLEASE CONTACT: 

Online: http://www.oig.dol.gov/hotlineform.htm 

Email: hotline@oig.dol.gov 

Telephone: 1-800-347-3756 

 202-693-6999 

Fax: 202-693-7020 

Address: Office of Inspector General 

 U.S. Department of Labor 

 200 Constitution Avenue, N.W. 

 Room S-5506 

 Washington, D.C. 20210