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Office of Inspector General—Office of Audit 

EMPLOYMENT AND 

TRAINING 

ADMINISTRATION 

RECOVERY ACT: ETA NEEDS TO STRENGTHEN 

MANAGEMENT CONTROLS TO MEET 

YOUTHBUILD PROGRAM OBJECTIVES 

Date Issued: March 31, 2011 

Report Number: 18-11-001-03-001 
 

 

 

 

 

U.S. Department of Labor 

Office of Inspector General 

Office of Audit 

BRIEFLY... 

Highlights of Report Number 18-11-001-03-001 to 

the Assistant Secretary of Employment and 

Training Administration, issued March 31, 2011. 

WHY READ THE REPORT 

The Office of Inspector General (OIG) conducted a 

performance audit of Employment and Training 

Administration’s (ETA) effectiveness in administering 

the YouthBuild program. The YouthBuild Transfer Act of 

2006 transferred the program from the Department of 

Housing and Urban Development to DOL. The 

YouthBuild program provides educational and job 

training opportunities within the construction industry for 

at-risk youth who are ages 16-24, are school dropouts, 

and are disadvantaged. 

Since beginning the administration of the program, ETA 

has awarded 290 grants to 226 grantees totaling $280 

million. Of these grants, 75 were funded under the 

American Recovery and Reinvestment Act (ARRA) and 

215 were non-ARRA grants. As of March 31, 2010, ETA 

reported a total of 12,483 participant enrollments 

(enrollees) and 5,975 participants who exited (exiters) 

the program. 

WHY OIG CONDUCTED THE AUDIT 

We conducted the audit to answer the following 

questions: 

1.		 Did ETA ensure eligible participants received 

allowable training and services? 

2.		 Did ETA ensure YouthBuild program core 

objectives and performance measures were met? 

3.		 Were allegations in the hotline complaints against 

two YouthBuild grantees valid? 

We sampled 543 participants served by 27 grantees 

and evaluated ETA’s controls for determining 

participants’ eligibility and reporting performance 

outcomes. 

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/2011/18-

11-001-03-001.pdf 

March 2011 

RECOVERY ACT: ETA NEEDS TO STRENGTHEN 

MANAGEMENT CONTROLS TO MEET YOUTHBUILD 

PROGRAM OUTCOMES 

WHAT OIG FOUND 

ETA did not always ensure eligible participants received 

allowable training and services. Officials at 10 of 27 

grantees did not enroll eligible youth ages 16 to 17. 

Conversely, we estimate 20 percent of participants 

served may be ineligible. We estimate $5.7 million of 

direct program costs were expended on these 

potentially ineligible participants. 

ETA officials reported they met performance goals for 

participants obtaining degrees/certificates, recidivism of 

youth offenders, and literacy and numeracy gains. 

However, ETA did not meet program performance goals 

for placement or retention. In addition, we estimate ETA 

and the grantees could not support the reported 

outcomes of 10 percent of the exiters. 

Other deficiencies were identified in reporting 

enrollment and exit data and in providing participants 

with resources to obtain industry-recognized certificates 

after completing occupation skills training. Furthermore, 

seven grantees could not demonstrate that they met the 

25 percent matching funds requirement. We attributed 

these results to a lack of effective ETA and grantee 

oversight and inadequate policies and procedures. 

Finally, based on our audit work, allegations against two 

grantees could not be substantiated. 

WHAT OIG RECOMMENDED 

We recommended that the Assistant Secretary for ETA 

determine how youth ages 16 to 17 are best served. In 

addition, ETA should develop and implement controls to 

ensure that program eligibility and reporting 

requirements are met; grantee agreements include 

performance goals; participants receive industryrecognized certificates; and the increased number of 

affordable permanent housing units is measured. We 

also questioned costs associated with ineligible 

participants and undocumented matching funds. 

In response to our draft report, ETA generally agreed 

with our findings and recommendations. However the 

Assistant Secretary stated local grantees have flexibility 

under the YouthBuild Transfer Act and Solicitation for 

Grant Applications to determine which ages among 

eligible youth they will serve based upon locally 

determined factors. Also, these low-income youth may 

choose other options, such as WIA youth formula 

program services through the One-Stop Career Center 

network in their local areas. 
 

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

PAGE INTENTIONALLY LEFT BLANK 

Management Controls Need to be Strengthened 

Report No. 18-11001-03-001 
 

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

Table of Contents 

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

Results in Brief .......................................................................................................... 2
	

Objective 1 — Did ETA ensure eligible participants received allowable training 

and services?.................................................................................... 3
	

Eligible participants were not always provided allowable training and 

services, while other eligibility requirements could not be supported ................... 3
	

Finding 1 — YouthBuild program could do more to provide opportunities to 

Youth ages 16 to 17......................................................................... 4 

Finding 2 — Grantees intake processing controls did not ensure sufficient 

documentation was obtained to verify participants met 

eligibility requirements. .................................................................... 4 

Objective 2 — Did ETA ensure that YouthBuild core objectives and program 

measures were met? ........................................................................ 7
	

ETA’s controls were not effective for ensuring all core objectives and 

program measures were met................................................................................ 7
	

Finding 3 — ETA lacked effective controls to ensure that grantees met two 

of five program performance measures. .......................................... 7
	

Finding 4 — Improvements are needed to ensure that reported 

performance data are accurate or supported................................... 8
	

Finding 5 — Participants did not always receive industry-recognized 

certificates after completing occupational skill training. ................... 9
	

Finding 6 — ETA has not designed and implemented a process to 

measure the increase in the supply of affordable homes for 

low income families........................................................................ 10
	

Objective 3 — Were allegations in the hotline complaints against two 

YouthBuild grantees valid? ........................................................... 11
	

Allegations of improprieties were not substantiated............................................ 11 

Finding 7 — The allegations of improprieties against two YouthBuild 

grantees were not substantiated.................................................... 11
	

Finding 8 — Grantees could not always demonstrate the 25 percent 

matching funds requirements were met......................................... 12
	

Recommendations .................................................................................................. 14
	

Management Controls Need to be Strengthened 

Report No. 18-11001-03-001 
 

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

Exhibits 

Exhibit 1 List of Sampled Grantees Audited ....................................................... 17
	

Exhibit 2 Grantees Who Excluded Youth Ages 16 to 17..................................... 19
	

Exhibit 3 Attributes for Projections...................................................................... 21
	

Exhibit 4 Schedule of Questioned Costs ............................................................ 23
	

Exhibit 5 Grantees Who Did Not Meet Performance Goals ................................ 25
	

Exhibit 6 Grantees Who Reported Inaccurate Performance Data or Lacked 

Support for Outcomes.................................................................... 27
	

Exhibit 7 Grantees Who Could Not Demonstrate 25 Percent Match .................. 29
	

Appendices 

Appendix A Background ..................................................................................... 33
	

Appendix B Objectives, Scope, Methodology, and Criteria ................................ 37
	

Appendix C Acronyms and Abbreviations .......................................................... 41
	

Appendix D ETA Response to Draft Report ....................................................... 43
	

Appendix E Acknowledgements ......................................................................... 51
	

Management Controls Need to be Strengthened 

Report No. 18-11001-03-001 
 

 

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

U.S. Department of Labor Office of Inspector General 

Washington, D.C. 20210 

March 31, 2011 

Assistant Inspector General’s Report 

Jane Oates 

Assistant Secretary 

for Employment and Training 

U.S. Department of Labor 

Room S2307 

200 Constitution Avenue, NW 

Washington, D.C. 20210 

The Office of Inspector General conducted a performance audit of the Employment and 

Training Administration’s (ETA) effectiveness in administering the YouthBuild program. 

YouthBuild provides educational and job training opportunities within the construction 

industry for at-risk youth who are ages 16-24, are school dropouts, and are members of 

at least one of the disadvantaged groups (youth offender, foster youth, low-income 

youth, youth who are individuals with disabilities, children of an incarcerated parent, or 

migrant youth). 

In September 2006, the YouthBuild Transfer Act of 2006 (Transfer Act) authorized a 

transfer of the YouthBuild program to the Department of Labor (DOL). ETA administers 

the program under a provision added to the Workforce Investment Act. The DOL 

assumed grant administration for all DOL-awarded YouthBuild grants beginning in 

Fiscal Year 2007. Since beginning the administration of the program, DOL has awarded 

290 grants to 226 grantees totaling $280 million. Of these grants, 75 were funded under 

the American Recovery and Reinvestment Act (ARRA) and 215 were non-ARRA grants. 

As of March 31, 2010, ETA reported a total of 12,483 participant enrollments (enrollees) 

and 5,975 participants who exited (exiters) the program. 

We conducted the audit to determine whether (1) ETA ensured eligible participants 

received allowable training and services; (2) ETA ensured that YouthBuild program core 

objectives and performance measures were met; and (3) allegations in the hotline 

complaints against two YouthBuild grantees were valid. 

To accomplish our audit, we reviewed ETA’s practices, policies, and procedures for 

administering the grant process. We sampled 543 participants (270 enrollees and 273 

exiters) served by 27 grantees (see Exhibit 1) and reviewed documentation to evaluate 

the adequacy of ETA controls for determining participant eligibility and reporting 

performance outcomes. We analyzed grantee financial and performance data as well as 

outcome measures. 

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1 Report No. 18-11001-03-001 
 

 

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

The audit covered the period July 1, 2007, through December 31, 2010. Audit work was 

performed at grantee worksites in Alabama, California, Florida, Illinois, Massachusetts, 

Mississippi, Oklahoma, and Rhode Island. 

We conducted this performance audit in accordance with generally accepted 

government auditing standards. 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 objectives. We believe that the evidence 

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

audit objectives. Our objectives, scope, methodology, and criteria are detailed in 

Appendix B. 

Results In Brief 

ETA did not always ensure eligible participants received allowable training and services. 

Officials at 10 of 27 grantees did not enroll eligible youth ages 16 to 17 due to concerns 

that these youth were more susceptible to worksite injury and had more limited 

employment potential than older youth. Conversely, based on the results of our 

statistical sample, we estimate that 2,534 (or 20 percent) of the 12,483 participants 

served between July 1, 2007, and March 31, 2010, may be ineligible –– mostly due to 

insufficient documentation to support their status as low income, disadvantaged, or 

school dropout. We estimate $5.7 million of direct program costs were expended on the 

potentially ineligible participants. Additionally, we estimate that 1,803 otherwise eligible 

participants had not complied with Federal law requiring military selective service 

registration. 

ETA officials reported they met performance goals for participants obtaining 

degrees/certificates, recidivism of youth offenders, and literacy and numeracy gains, but 

did not meet program performance goals for placement or retention. Only 43 percent of 

youth who exited the program were placed in jobs or other educational programs 

compared to the goal of 70 percent; while 64 percent of those youth attaining placement 

retained employment or stayed in school compared to the goal of 75 percent. There 

were 10 of 14 (or 71 percent) grantees who had substantially completed their grants, 

who did not meet placement performance goals as of December 31, 2010. 

In addition, we estimate ETA and the grantees could not support the reported outcomes 

for 605 of the total 5,975 (or 10 percent) participants who exited the program. There 

were other deficiencies identified in reporting enrollment and exit data at 14 grantees, 

as well as for 2 grantees that did not provide exiters with industry recognized certificates 

after they completed occupational skills training. Furthermore, 7 grantees did not track, 

report, or could not demonstrate that they met the 25 percent funds matching 

requirement. 

We attributed these results to a lack of effective grantee oversight and inadequate 

policies and procedures. In addition, in reviewing ETA’s monitoring of grantee activities, 

we found that required site visits were not consistently performed, and even when 

Management Controls Need to be Strengthened 

2 Report No. 18-11001-03-001 
 

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

performed, did not detect weaknesses that directly impacted the program’s outcomes. 

Furthermore, grant agreements did not always include performance goals and DOL has 

not issued regulations for the program, which according to some grantees, contributed 

to confusion and hampered them in meeting program requirements. 

Finally, we evaluated eight allegations made in two hotline complaints. Based on our 

audit work, the allegations could not be substantiated. 

Recommendations 

To better ensure the YouthBuild program meets program objectives, we recommended 

that the Assistant Secretary for Employment and Training determine how youth ages 16 

to 17 are best served. In addition, ETA should develop and implement controls to 

ensure that program eligibility and reporting requirements are met; grantee agreements 

include performance goals; participants receive industry recognized certificates after 

completing occupation skills training; and the increased number of affordable 

permanent housing units as a result of the program is measured. We also questioned 

costs associated with ineligible participants. 

In response to our draft report, the Assistant Secretary for ETA generally agreed with 

the recommendations; however, she disagreed the program does not serve the 16 to 17 

year old youth, stating that local grantees have flexibility under the YouthBuild Transfer 

Act and Solicitation of Grant Application (SGA) to determine which ages among eligible 

youth they will serve based upon locally determined factors, including safety concerns 

and State compulsory education laws. 

We acknowledge there are legitimate safety concerns for all youth on construction sites, 

regardless of their age. We think the Act does consider safety as well as many other 

factors and concluded youth ages 16 to 24 can participate effectively in the program. As 

we noted, a third of the grantees in our sample intentionally excluded youth ages 16 to 

17, and if left unchecked, other grantees could do the same without consequence. As a 

result, youth ages 16 to 17 may suffer by being denied opportunities to obtain 

educational and employment skills through the YouthBuild program. Overall, we believe 

the report fairly presents program activities we reviewed. 

The Assistant Secretary’s response is included in its entirety in Appendix D. 

RESULTS AND FINDINGS 

Objective 1 — Did ETA ensure eligible participants received allowable training 

and services? 

Eligible participants were not always provided allowable training and services, 

while other eligibility requirements could not be supported. 

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3 Report No. 18-11001-03-001 
 

 

 

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

Finding 1 — YouthBuild program could do more to provide opportunities to Youth 

ages 16 to 17. 

Officials at 10 of 271 (or 37 percent) grantees sampled excluded youth ages 16 to 17 

from the YouthBuild program. Grantees who excluded youth ages 16 to 17 from the 

program cited reasons such as (1) liability costs related to the increased potential for 

youth to sustain worksite injuries, (2) the youth maturity level or life experience to 

successfully complete the program, and (3) the difficulty of participants in meeting 

certain performance benchmarks, especially job placements, retention, and passage of 

the General Education Development (GED) exam. 

ETA’s Solicitation for Grant Applications (SGA) allowed grantees to decide who to serve 

within the youth group population without consequence for excluding specific members 

of the youth population. The SGA states, “Organizations are not required to serve the 

entire age group population between 16 and 24, but all participants must fall within this 

range.” While not mentioned by grantees, ETA officials contend that workplace 

restrictions hamper serving youth ages 16 to 17. For example, ETA officials pointed to 

the National Institute for Occupational Safety and Health (NIOSH)2 recommendations 

that restrict the work of youth under the age of 18 on construction sites. In addition, ETA 

officials indicated the Transfer Act does not require all youth within the age population to 

be served in the program. 

ETA identified 3,220 youth in the YouthBuild population (or approximately 25 percent of 

our universe) who were ages 16 to 17. However, grantees that excluded youth ages 16 

to 17 denied those youth opportunities to obtain educational and employment skills, 

which could have helped them contribute to their community in a productive and 

meaningful way as the Transfer Act intended. See Exhibit 2 for grantees who excluded 

youth ages 16 to 17. 

Finding 2 — Grantee intake processing controls did not ensure sufficient 

documentation was obtained to verify participants met eligibility 

requirements. 

Grantees lacked effective controls to ensure that only eligible participants received 

program services. Based on the results of our testing of 270 enrollees and 273 program 

exiters in a sample of 27 grantees, we found 103 participants enrolled by 21 grantees 

that did not meet program eligibility requirements. Specifically, 57 (or 21 percent) 

enrollees and 46 (or 17 percent) participants exiting the program did not meet program 

requirements to verify eligibility –– mostly due to insufficient documentation to support 

low income, disadvantaged, and school dropout status. We are 95 percent confident 

that 2,534 (or 20 percent) of the 12,483 in our population of reported enrolled 

1

See Exhibit 1 for List of Sampled Grantees. 

2

NIOSH is the Federal agency responsible for conducting research and making recommendations for the prevention 

of work-related injury and illness. 

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4 Report No. 18-11001-03-001 
 

 

 

 

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

participants were ineligible.3 Table 1 provides an analysis of grantees/participants 

eligibility requirements not met. 

Table 1: Grantees/Participants Who Did Not Substantiate Meeting 

Eligibility Requirements 

Deficiencies Identified Participants Grantees* 

School Dropout 45 11 

Low Income Disadvantaged Status 36 15 

Disadvantaged Status & School Dropout 13 5 

25 Percent Exception Rule 7 4 

Foster Care Disadvantaged Status 1 1 

Re-enrollment Requirement Not Met 1 1 

Total Ineligibles/Grantees 103 37 

*11 Grantees had more than one type of deficiency; therefore, the total number of grantees shown 

exceeds the total number (21 of 27 grantees) where eligibility requirements were not met. 

The Transfer Act provides that eligible YouthBuild participants must be: 

(i) ages 16 to 24 on the date of enrollment; 

(ii) an individual with a disadvantaged status;4 and 

(iii) a school dropout.5 

In addition, the Transfer Act allows up to 25 percent of participants (25 percent 

exception rule) to be individuals who do not meet the disadvantaged status or 

educational need requirements but who are basic skills deficient. 

ETA provides guidance in its “Book of Knowledge” on the types of documentation that 

can be utilized to verify participant eligibility, including their low income status. For 

example, participants may provide pay stubs, bank statements (direct deposit), 

employer statement/contact information, tax returns, and public assistance records to 

verify income status. A birth certificate or other forms of state documents may be used 

to verify the participant’s age; and school records or an applicant’s statement may be 

provided as support for a participant’s dropout status. 

According to ETA officials and the YouthBuild MIS Training Manual, only unsuccessful 

exiters may be re-enrolled in the program. We identified five individuals, one within our 

sample that reportedly completed the program successfully under a 2007 grant and 

re-enrolled under the 2009 grant. The grantee re-enrolled the participant so that they 

could attain their GED. 

3

We are 95 percent confident that at least 1,311 enrollees and as many as 3,757 enrollees were ineligible. 4

The term “disadvantaged status” means youth from low income families, youth in foster care (including youth aging 

out of foster care), a youth offender, a youth with a disability, a child of incarcerated parents, or a migrant youth. The 

term “low-income families” means those families whose incomes do not exceed 80 per centum of the median income 

for the area, as determined by the Secretary with adjustments for smaller and larger families. 5

Per Training and Employment Guidance Letter 11-09 – The YouthBuild program may serve an individual who 

dropped out of school and re-enrolled in an alternative school, if that re-enrollment is part of a sequential strategy. 

Management Controls Need to be Strengthened 

5 Report No. 18-11001-03-001 
 

 

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

Grantee officials stated they failed to obtain documents to verify participants’ eligibility 

because they believed the documents were not required, documents could not be 

located, or the documents were inadvertently not collected. We found grantees lacked 

formal procedures and effective oversight of participant eligibility intake processes to 

ensure program eligibility requirements were met. For example, 17 of the 27 (or 63 

percent) grantees reviewed did not have effective verification procedures for the 

accuracy of information used in eligibility determinations or proper management review 

of various eligibility determinations. 

We identified a total of $214,124 in questioned cost related to 103 ineligible participants, 

and we estimate that $5.7 million could have been put to better use if funds were 

expended on eligible participants.6 See Exhibit 3 Attributes for Projections and Exhibit 4 

for Schedule of Questioned Costs resulting from providing services to ineligible 

participants. 

In addition, 38 of 270 (or 14 percent) sampled participants enrolled by 19 grantees did 

not meet the eligibility requirements due to noncompliance with Federal law requiring 

military selective service registration. We estimate that 1,803 of the 12,483 (or 14 

percent) participants in our population did not meet this requirement.7 The Transfer Act 

was incorporated as a separate section in the Workforce Investment Act of 1998 (WIA). 

Section 189 (h) of the WIA requires the Secretary to ensure each individual participating 

in any program or activity established under WIA to comply with the Military Selective 

Service Act by presenting and submitting to registration. Grantee officials admitted they 

did not ensure that all program candidates were registered for selective service prior to 

enrollment, and others stated a lack of awareness of the requirement. 

We attributed deficiencies to the sampled grantees’ lack of effective oversight and 

inadequate policies and procedures. At 26 of 27 (or 96 percent) of the grantees, we 

found deficiencies related to eligibility determination processes. In addition we found 

that ETA lacked effective monitoring of grantee operations. Furthermore, at 8 of 27 (or 

30 percent) sampled grantees, ETA monitoring site visits were not consistently 

performed. Of the 19 grantees that received a monitoring site visit, only 6 received a 

visit during their first year of operation even though onsite monitoring was essential for 

ensuring that grantee controls are designed and implemented effectively. Furthermore, 

only 7 of the 19 monitoring site visits detected control weaknesses that directly 

impacted the program’s outcome regarding participant eligibility determinations and for 

reporting program/participant achievements. Finally, DOL has not issued regulations for 

the program, which according to some grantees interviewed, contributed to confusion 

about program requirements and hampered them in meeting program goals. 

6

We are 95 percent confident that at least $2,065,487 and as much as $9,296,491 in costs could have been put to 

better uses on eligible participants.

7

We are 95 percent confident that at least 584 enrollees and as many as 3,021 enrollees are ineligible. 

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

Objective 2— Did ETA ensure that YouthBuild program core objectives and 

performance measures were met? 

ETA’s controls were not effective for ensuring all core objectives and program measures 

were met. 

Finding 3 — ETA lacked effective controls to ensure that grantees met two of five 

program performance measures. 

ETA met three of the five established program performance measures for YouthBuild 

grantees who substantially completed their initial grant award. ETA officials reported 

they met performance goals for participants attaining degrees/certificates, recidivism of 

youth offenders, and literacy and numeracy gains, but did not meet the program 

performance goals for placement or retention.8 Only 43 percent of youth who exited the 

program were placed in jobs or other educational programs compared to the goal of 70 

percent; while 64 percent of those youth attaining placement retained employment or 

stayed in school compared to the goal of 75 percent. Table 2 shows the goals and 

actual outcomes for the five program performance measures as of December 31, 2010. 

Table 2: Analysis of YouthBuild Performance Measures 

Program Measures Goal Actual 

Placement in Education or Employment 70% 43.46% 

Retention of Education or Employment 75% 63.58% 

Literacy and Numeracy Gains 50% 50.28% 

Credential Attainment 50% 61.30% 

Recidivism of Youth Offenders <20% 11.72% 

Our sample included 14 of 27 grantees, who substantially completed their grants. For 

10 of 14 (or 71 percent) grantees, placement goals had not been met as of December 

31, 2010. Grantee officials stated grant goals for placement and retention were not met 

mostly due to the downturn in the economy. 

While ETA contended that all grantees were aware of the program’s performance goals, 

2 of 14 (or 14 percent) sampled grant agreements did not specify placement goals. Of 

the remaining 12 grantee agreements, 5 specified placement goals that were below 

ETA’s program goal levels. Furthermore, 10 of the 12 (or 83 percent) grantees did not 

achieve the placement goals specified in their grant agreements, which were below 

ETA’s program goal levels. 

For the retention goal, 6 of 14 (or 43 percent) sampled grant agreements did not specify 

a particular goal. Of the remaining 8 grantee agreements, 5 specified retention goals 

that were below ETA’s program levels. Furthermore, 7 of the 8 (or 88 percent) grantees 

did not achieve the retention goals specified in their grant agreements. When grantees’ 

8

This refers to 96 percent of participants exiting as of December 31, 2010, from the 2007 grants awarded. 

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

goals are not stated or are below those of ETA, it undermines ETA’s ability to ensure 

program goals are met. See Exhibit 5 for grantees who did not meet performance goals. 

According to the YouthBuild Project Director, since grantees were still serving youth in 

the program, an increase in actual outcome percentage could result. In addition, the 

Director stated that program year 2007 grantees were allowed no-cost extensions from 

October 15, 2010, to September 30, 2011. ETA contends an accurate analysis of the 

program year 2007 grantees’ performance will not be available until November 2011.9 

However, given that 96 percent of participants have exited the program as of 

December 31, 2010, we conclude it is unlikely that a significant change in reported 

outcomes will occur. 

Finding 4 — Improvements are needed to ensure that reported performance data 

are accurate or supported. 

Deficiencies found indicate a lack of ETA and grantee controls over the reported 

program/participant achievements. We estimate that 605 (or 10 percent) of the 5,975 

participants exited had overstated reported outcomes due to insufficient documentation 

for achievements or ineligibility for the program. 

We found 14 of 273 (or 5 percent) participant files lacked documentation to support 

reported outcomes, such as employment verification forms, payroll records, GED 

certificates, or high school diplomas. As a result we estimate that 286 of 5,975 (or 5 

percent) exiters did not have sufficient documentation to support their reported 

outcomes.10 We also found 10 grantees reported outcomes for 18 program exiters that 

did not meet program eligibility. As a result, we estimate 319 of 5,975 (or 5 percent) 

participants’ outcomes are overstated because of outcomes reported for ineligible 

participants.11 

In addition, we identified deficiencies in 14 of 27 (or 52 percent) grantees reported 

outcomes on their March 31, 2010, Quarterly Performance Reports (QPR). To illustrate: 

y Ten grantees incorrectly reported a total of 36 participants either as enrollees or 

exiters on their QPR. For example, one grantee reported a total of 24 enrollees when 

the actual number was 32 enrollees. Another grantee reported 90 enrollees when the 

actual number was 95 enrollees. 

y Four grantees incorrectly reported 12 participants as successful completers even 

though they were in the program for less than 17 days; or had no measurable 

outcomes, such as literacy and numeracy gains or educational credentials. 

9

Programs (grantees) are allowed up to three quarters following a participant’s exit to achieve the credential 

attainment measure. Retention in employment and education applies to those who are placed in the first quarter after 

exit and is calculated for three quarters following exit. 

10We are 95 percent confident that at least 14 and as many as 600 exiters in our population did not have adequate 

support for the performance data reported. See Exhibit 3 for details. 11We are 95 percent confident that performance outcomes for at least 93 exiters and as many as 545 exiters are 

overstated because of ineligible participants. See Exhibit 3 for details. 

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

The grantees’ officials provided various reasons for the performance data 

inconsistencies. For example, four grantees contended they were unaware of program 

requirements due to unclear guidance, and other grantees contended that 

documentation for placement verification was not available at the time of the review. We 

attribute deficiencies to the sampled grantees lack of formal procedures and effective 

oversight over the reporting of program outcomes to ensure program outcomes were 

accurately reported. 

In addition, ETA officials stated that they have developed and implemented a Case 

Management Information and Performance System to ensure that reliable performance 

data are available for the YouthBuild program and perform quarterly desk reviews and 

site visits. However we found ETA’s oversight did not ensure grantees’ outcome 

reporting processes accurately reported performance data nor were achievements 

adequately supported. 

Inaccurate performance data casts doubt on the validity of the reported program 

outcomes, challenges the ability to evaluate program effectiveness, and distorts the 

results program officials use as a basis for making key funding decisions. See Exhibit 6 

for grantees who reported inaccurate performance data or lacked support for outcomes. 

Finding 5 — Participants did not always receive industry-recognized certificates 

after completing occupational skill training. 

ETA lacked effective oversight to ensure grantees provided adequate training for 140 

participants to earn industry-recognized certificates. Our sample included 2 of the 27 

grantees that did not provide any of their exiters industry-recognized certificates after 

completing occupational skills training. Specifically, 62 exiters at the Urban League of 

Broward County (ULBC) and 78 participants at the City of Greenfield YouthBuild 

Program did not receive industry-recognized certificates. 

WIA common measures for youth suggest industry-recognized occupational skills 

certificate is obtained after construction training for performance measure expectations. 

Training and Employment Guidance Letter No.17-05 (February 17, 2006) states: “. . . 

the focus of the certificate measure is attainment of measurable technical or 

occupational skills. . .” 

In addition, ETA’s SGA requires applicants (grantees) to discuss the occupational skills 

training component of the program including where and how the training will be 

conducted, how the curriculum is developed, the type of industry recognized credentials 

that result from the training, and the involvement of industry partners in the development 

of the training. 

The primary reason noted at the ULBC was that participants did not receive training 

from a qualified trainer. While at the City of Greenfield YouthBuild Program, officials did 

not sustain relationships with partners who were responsible for providing the 

Management Controls Need to be Strengthened 

9 Report No. 18-11001-03-001 
 

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

industry-recognized training. Therefore, no such qualified training was provided to their 

participants. The YouthBuild Project Director stated that the program’s intent is for 

participants to receive industry-recognized credentials to be prepared for the job market. 

During a technical assistance review at ULBC, officials were informed that a certified 

construction manager was needed so the participants could receive the proper 

industry-recognized credentials. Also, the ETA Federal Program Officer cited the City of 

Greenfield for not having the required system in place to provide occupational skills 

development activities. However, similar reviews were not conducted at all grantees in 

our sample. 

Due to the lack of oversight over grantees, ETA cannot ensure that all grantees are 

providing industry-recognized certificates to prove the participants attained technical or 

occupational skills; therefore, those affected participants are less likely to be competitive 

in the job market. 

Finding 6 — ETA has not designed and implemented a process to measure the 

increase in the supply of affordable homes for low-income families. 

ETA has not attempted to measure the increase in supply of affordable homes for lowincome families that can be attributed to the program, which would address the fourth 

objective of the Transfer Act. Specifically, the Transfer Act Section 173A states its 

purpose is “to expand the supply of permanent affordable housing for homeless 

individuals and low-income families by utilizing the energies and talents of 

disadvantaged youth.” Therefore, by not setting goals and tracking outputs for the 

increase in affordable housing units for homeless and low-income families, ETA cannot 

accurately measure to what extent the program is meeting this core objective. 

According to the YouthBuild Project Director, ETA does not measure the program 

success through the number of housing units built, but rather prefers to focus on 

participants to receive the maximum exposure in construction skill development, 

education, and employment. To this point, ETA has made modifications to the program 

that focus on increasing the skilled workforce available for the construction trade. 

As part of ETA’s SGA process, grantees identify worksites they will use to train 

participants and those worksites are incorporated into their grant agreements. 

Discussions with grantees indicated that some find it more beneficial to partner with 

other non-profit organizations; while others develop their own worksites when providing 

construction training. During our audit, we noted that grantees who partnered with nonprofit organizations, such as Habitat for Humanity or city housing authorities, tend to 

show a greater increase in the number of houses that were constructed versus grantees 

that financed their own worksites. However, both approaches are acceptable to ETA. 

ETA contends that the number of housing units built is not the measure of success of 

the program, but rather it is participant training in construction skill development, 

education, and employment. While we conclude that ETA’s focus on training, education, 

and skill certification addressed other core objectives of the Transfer Act, it is also clear 

Management Controls Need to be Strengthened 

10 Report No. 18-11001-03-001 
 

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

that expanding the supply of affordable housing units for low-income families is a core 

objective of the Transfer Act. 

Objective 3 — Were allegations in the hotline complaints against two YouthBuild 

grantees valid? 

Allegations of improprieties were not substantiated. 

Finding 7 — The allegations of improprieties against two YouthBuild grantees 

were not substantiated. 

We evaluated eight allegations made in the two complaints of improprieties against two 

YouthBuild grantees. Able Disabled Advocacy was one of our 27 statistically selected 

grantees and Eagle Ridge Institute was included in our review as a separate complaint. 

Based on our audit work at both locations, none of the eight allegations could be 

substantiated. 

Able Disabled Advocacy, Inc. (San Diego, CA) 

1. The complaint against Able Disabled Advocacy alleged funds were 

misappropriated. Specifically, the complaint alleged the Director of Information 

Technology spent most of his time driving the Executive Director to places, such 

as Costco, and creating conflict within the office. In addition, it alleged that the 

Director misused computer equipment designated for various programs by 

keeping the equipment in his home. We conducted interviews with the Executive 

Director, the Director of Information Technology, and the Accountant regarding 

the complainant’s allegations. 

We tested a sample of financial transactions at this site and found the 

transactions to be both reasonable and supported. Also, we obtained a list of 

computer equipment and noted that no YouthBuild funds were used to purchase 

computer equipment. 

Eagle Ridge Institute (Oklahoma, OK) 

The complaint against Eagle Ridge Institute alleged that: 

2. The Program Director paid students every week, even when they were not 

present and participating in the program. We compared the sign-in log and 

timesheets for 24 of the 78 participants’ attendance and stipends to verify the 

accuracy of the information. We found three participants who received stipends 

but did not have sign-in sheets to support the payments; however, we were 

unable to associate this deficiency to the Program Director as the complainant 

alleged. 

Management Controls Need to be Strengthened 

11 Report No. 18-11001-03-001 
 

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

3. One participant was in jail for 60 days and received checks for all the weeks 

incarcerated. We found five participants who were incarcerated during the 

program and none were found to have been paid stipends while incarcerated. 

4. Participants only attended class for as little as 2 hours per day. We found 

participants were required to sign in for classroom and onsite training, and for 

daily van transportation to attend classes. It was difficult to determine all 

hours/days attended because sign-in sheets were missing. According to the 

Program Director the agency moved during that time and participants were 

assigned to groups and signed in at several locations. Consequently, there was 

not sufficient evidence to substantiate the allegation. 

5. Participants slipped out for smokes and slept through class. We did not observe 

participants smoking or sleeping in classes during our site visit. However, the 

GED instructor interviewed stated that some of the participants are homeless and 

sometimes may have fallen asleep in the classroom. We were unable to gather 

sufficient evidence to substantiate the allegation. 

6. Only 1 of 18 participants graduated. We found 4 of the 24 (or 17 percent) 

students enrolled in January and March of 2008 received GED diplomas. 

According to the Program Director, 11 of remaining 20 students improved their 

educational skill levels. However, 7 of the 20 students either were only in the 

program for a short period or had no post-training test scores. While we have 

concerns that the percentage of credential attainment of 17 percent falls well 

below the approximate 50 percent outcome reflected program-wide, we found no 

evidence that substantiated program abuse. 

7. One participant left the state for approximately 2 months and was still paid 

stipends. We found no evidence that the participant in question was paid 

stipends or even enrolled in DOL’s YouthBuild program during the time period 

alleged. In fact, the participant’s file indicated she was enrolled under the HUD 

YouthBuild program when the allegation occurred. 

8. The Program Director re-enrolled some participants for a second year although 

they were not eligible. We did not find any of the 24 participants that successfully 

completed the program re-enrolled in the program. Participants are allowed to 

re-enroll in the YouthBuild program if they were unsuccessful exiters under a 

previous grant. 

As stated above, none of the eight allegations could be substantiated. 

Finding 8 — Grantees could not always demonstrate the 25 percent matching 

funds requirements were met. 

ETA lacked effective oversight to ensure that grantees met the 25 percent matching 

funds requirement. We found 7 of 27 (or 26 percent) sampled grantees did not put the 

Management Controls Need to be Strengthened 

12 Report No. 18-11001-03-001 
 

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

necessary emphasis on tracking and reporting the matching requirements. Because 

aligning resources and leveraging funding are key components of success under the 

YouthBuild grant, ETA implemented the matching requirement. However, 7 grantees did 

not track, report, or could not demonstrate that the 25 percent matching requirement 

was met. Grantees typically reported the value of the use of buildings, instructors 

provided by charter schools (partners), and receipts of goods and services provided by 

non-profit organizations to satisfy their matching requirements. However, none of the 7 

grantees clearly documented they met $768,356 in matching funds or the in-kind 

contributions requirement. As a result of the seven grantees failure to provide proof of 

the grant matching requirements, we noted an unsupported or unreported matching 

amount of $768,356. See Exhibit 7 for grantees who could not demonstrate the 25 

percent match. 

Federal Register Volume 73, page 58658 (Solicitation for Grant Application) states: 

Applicants must provide cash or in-kind resources equivalent 

to at least 25 percent of the grant award amount as matching 

funds. Neither prior investments nor Federal resources may 

count as match....Upon completion of the grant, if the 

matching funds are found to be an unallowable cost, the 

amount of DOL grant funds may be decreased on a dollarfor-dollar basis. 

The grantees acknowledged they have a matching requirement, but attribute their lack 

of compliance to not having a mechanism in place for tracking the match amount. 

Grantees are required to report their matching efforts on their quarterly financial report. 

Although ETA reviews these documents as part of their desk monitoring function and 

reported detection and follow up on the lack of compliance, we found seven grantees 

that did not report the amount, and there was no indication that ETA followed up. For 

example, two grantees operated the program for more than 6 months, had not reported 

matching information, or made an effort to collect such information. 

Because the seven grantees failure to demonstrate a process in place and evidence to 

support having met the grant matching requirements, we identified $768,356 of 

unsupported matching funds. ETA officials stated these grants do not expire until 

June 30, 2012, and at that time will determine any costs that are disallowed during the 

closeout should the grantee fail to meet the required match levels. We conclude the lack 

of effective grantee processes in place and ETA monitoring of grantee compliance does 

not ensure all program funds are timely made available and may put at risk the recovery 

of federal grant funds and grantees meeting the program objectives. 

Management Controls Need to be Strengthened 

13 Report No. 18-11001-03-001 
 

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

RECOMMENDATIONS 

We recommend the Assistant Secretary for the Employment and Training 

Administration: 

1. Determine how to best serve youth ages 16 to 17 who are excluded from the 

YouthBuild program. 

2. Develop and implement controls to ensure that program eligibility and reporting 

requirements are met. 

3. Recover the $214,124 in questioned cost associated with ineligible participants. 

4. Develop and implement controls to ensure (1) performance goals are included in 

grant agreements; and (2) grantees are meeting program goals through the 

oversight of stated goals in grantee agreements. 

5. Develop and implement controls to ensure performance measures are accurately 

reported. 

6. Develop and implement controls to ensure participants receive 

industry-recognized certificates after completing occupation skills training, 

7. Develop a process to measure the increased number of affordable permanent 

housing units as a result of the program. 

8. Ensure grantees are appropriately meeting the program’s 25 percent matching 

fund requirements. 

We appreciate the cooperation and courtesies that ETA 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 

Management Controls Need to be Strengthened 

14 Report No. 18-11001-03-001 
 

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

Exhibit 

Management Controls Need to be Strengthened 

15 Report No. 18-11001-03-001 
 

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

 PAGE INTENTIONALLY LEFT BLANK 

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16 Report No. 18-11001-03-001 
 

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

Exhibit 1 

List of Sampled Grantees Audited 

Grantee City State 

1 Able-Disabled Advocacy, Inc. San Diego CA 

2 Aletheia House* Birmingham AL 

3 Century Center for Economic Opportunity Gardena CA 

4 City of Greenfield YouthBuild Program Greenfield CA 

5 City of Jacksonville, Florida Jacksonville FL 

6 City of Peoria Workforce Development Department Peoria IL 

7 City of Sanford YouthBuild Sanford FL 

8 Coalition for Responsible Community Development* Los Angeles CA 

9 Community Teamwork, Inc.* Lowell MA 

10 Emerson Park Development Corporation* East St. Louis IL 

11 Fresno County Economic Opportunities Commission* Fresno CA 

12 Hale Empowerment and Revitalization Organization, Inc.* Greensboro AL 

13 Just-A-Start Corporation Cambridge MA 

14 Lewis and Clark Community College Godfrey IL 

Los Angeles Communities Advocating for Unity, Social 15 Los Angeles CA Justice (LA CAUSA) 

16 M S Action for Community Education* Greenville MS 

17 San Diego Imperial Counties Labor Council San Diego CA 

18 San Gabriel Valley Conservation Corps El Monte CA 

19 Southwest Florida Workforce Development Board, Inc. Fort Myers FL 

20 Springfield Urban League, Inc. Springfield IL 

21 The Metropolitan Area Advisory Committee Project* Chula Vista CA 

22 United Methodist Children’s Home* Mt. Vernon IL 

Fort 23 Urban League of Broward County* FL Lauderdale 

24 Urban League of Rhode Island Providence RI 

25 West Jackson Community Development Corporation Jackson MS 

26 WorkNet Pinellas, Inc.* Clearwater FL 

27 YouthBuild USA Somerville MA 

* 11 Grantees who accepted ARRA funds. 

Management Controls Need to be Strengthened 

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

PAGE INTENTIONALLY LEFT BLANK 

Management Controls Need to be Strengthened 

18 Report No. 18-11001-03-001 
 

 

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

Exhibit 2 

Grantees Who Excluded Youth Ages 16 to 17 

Grantee City State 

1 Alethia House Birmingham AL 

2 Century Center for Economic Opportunity Gardena CA 

3 City of Jacksonville Jacksonville FL 

4 City of Peoria Workforce Development Department Peoria IL 

5 Fresno County Economic Opportunities Commission Fresno CA 

6 Just-A-Start Corporation* Cambridge MA 

7 San Diego Imperial Counties Labor Council San Diego CA 

8 Southwest Florida Workforce Development Board Ft. Meyers FL 

9 Urban League of Broward County Ft. Lauderdale FL 

10 WorkNet Pinellas, Inc. Clearwater FL * Excluded only 16 year olds 

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19 Report No. 18-11001-03-001 
 

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

PAGE INTENTIONALLY LEFT BLANK 

Management Controls Need to be Strengthened 

20 Report No. 18-11001-03-001 
 

 

 

 

 

 

 

 

 

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

Attributes for Projections 

Exhibit 3 

Attributes for Projections 

Universe Size 

Sample Size 

A 

12,483 

270 

Type of Error 

B 

12,483 

270 

C 

5,975 

273 

D 

5,975 

273 

Number of Cases with Errors Identified in Sample 57 38 14 18 

Point Estimate of Percentage of Cases in 

Universe with Errors 

Point Estimate of Cases with Errors 

20.30% 

2,534 

14.44% 

1,803 

4.78% 

286 

5.34% 

319 

Projected Percent of Lower Limit Cases in 

Universe 

Lower Limit Estimate of Cases with Errors in 

Universe 

10.50% 

1,311 

4.68% 

584 

0% 

0 

1.56% 

93 

Projected Percent of Upper Limit Cases in 

Universe 

Upper Limit Estimate of Cases with Errors in 

Universe 

30.10% 

3,757 

24.20% 

3,021 

10.05% 

600 

9.12% 

545 

Point Estimate of Financial Impact $5,680,989 ----- ----- -----

Lower Limit Estimate of Financial Impact $2,065,487 ----- ----- -----

Upper Limit Estimate of Financial Impact $9,296,491 ----- ----- -----

Type of Error: 

• A = Ineligible participants in the enrollment sample 

• B = Other ineligible participants in the enrollment sample-Selective Service Registration 

• C = Missing support for performance outcomes 

• D = Overstated performance data because of ineligible participants 

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

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Management Controls Need to be Strengthened 

22 Report No. 18-11001-03-001 
 

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

Exhibit 4 

Schedule of Questioned Costs 

Grantee Name Total 

Enrolled 

Participants* Total 

Questioned 

Costs 

1 Able-Disabled Advocacy, Inc 115 1 $2,619.00 

2 City of Greenfield YouthBuild Program 78 7 27,670.00 

3 City of Jacksonville** 32 3 0.00 

4 Coalition for Responsible Community 

Development 18 4 10,747.79 

5 Community Teamwork, Inc. 30 3 3,883.00 

6 Emerson Park Development Corporation 136 6 7,654.04 

7 Hale Empowerment and Revitalization 

Organization 95 7 8,670.13 

8 Just-A-Start Corporation 26 2 8,993.00 

9 LA Communities Advocating for Unity, 

Social Justice and Action 64 1 737.00 

10 Lewis and Clark community College 23 1 2,161.55 

11 M S Action for Community Education 109 10 11,870.00 

12 San Gabriel Valley Conservation Corps 22 1 1,885.00 

13 Sanford / Seminole County YouthBuild 26 1 600.00 

14 Springfield Urban League, Inc. 62 14 15,543.36 

15 SW Florida Workforce Develop. 109 5 37,323.93 

16 The Metropolitan Area Advisory 

Committee Project 37 3 8,794.00 

17 United Methodist Children’s Home 101 5 8,294.71 

18 Urban League of Broward County 94 2 9,180.00 

19 Urban League of Rhode Island 67 9 20,360.75 

20 WorkNet Pinellas, Inc. 35 15 25,496.79 

21 YouthBuild USA 164 3 1,640.00 

Totals 1,443 103 $214,124.05 

* Includes individuals from both the enrollee and the exiter samples 

** Grantee serves inmates and does not provide wages or stipends 

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

PAGE INTENTIONALLY LEFT BLANK 

Management Controls Need to be Strengthened 

24 Report No. 18-11001-03-001 
 

Analysis of Goals for 2007 Grants 

Grantee 

Outcome 

Goal Per per 

Grant 12/31/10 Not 

Grantee Agreement* QPR Met 

1 Able-Disabled Advocacy, Inc. 53 31 X 

2 Aletheia House*** 81.00% 63.41% X 

3 City of Greenfield YouthBuild Program*** N/A 14.29% N/A 

4 Community Teamwork, Inc. 49 27 X 

5 Emerson Park Development Corporation** 30.00% 63.64% 

6 Fresno County Economic Opportunities Commission*** 70.00% 54.90% X 

7 Just-A-Start Corporation** 79 42 X 

8 Los Angeles Communities Advocating for Unity, Social 

Justice 36 36 

9 Southwest Florida Workforce Development Board*** 34 17 X 

10 United Methodist Children’s Home 75.00% 41.18% X 

11 Urban League of Broward County 80.00% 43.33% X 

12 Urban League of Rhode Island 30 10 X 

13 West Jackson Community Development Corporation N/A 70.59% N/A 

14 YouthBuild USA 100 50 X 

Total Grantees that Did Not Meet Placement Goal 10 

 

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

Exhibit 5 

Grantees Who Did Not Meet Performance Goals (1 of 2) 

Placement in Education or Employment 

QPR = December 31, 2010 Quarterly Performance Report 

N/A = Information not available. Goal not specified in grant agreement. 

* = If available in the grant agreement, used the number of participants projected to meet the goal rather 

than the percentage of participants. 

** = Two grantees had participants who had not exited as of March 31, 2010. 

*** = No activity for four grantees for the period ended December 31, 2010; therefore, we used the 

Quarterly Performance Report as of September 30, 2010 for this analysis. 

Management Controls Need to be Strengthened 

25
	 Report No. 18-11001-03-001 
 

 

Analysis of Goals for 2007 Grants 

Grantee 

Outcome 

(*) Goal Per per 

Grant 12/31/10 Not 

Grantee Agreement QPR Met 

1 Able-Disabled Advocacy, Inc. 45 25 X 

2 Aletheia House*** 83.00% 75.00% X 

3 City of Greenfield YouthBuild Program*** N/A 20.00% N/A 

4 Community Teamwork, Inc. N/A 0.00% N/A 

5 Emerson Park Development Corporation** 15.00% 14.29% X 

6 Fresno County Economic Opportunities Commission*** 65.00% 78.57% 

7 Just-A-Start Corporation** N/A 93.75% N/A 

8 Los Angeles Communities Advocating for Unity, Social 

Justice 30 23 X 

9 Southwest Florida Workforce Development Board*** 26 9 X 

10 United Methodist Children’s Home 80.00% 52.38% X 

11 Urban League of Broward County 75.00% 53.85% X 

12 Urban League of Rhode Island N/A 20.00% N/A 

13 West Jackson Community Development Corporation N/A 77.14% N/A 

14 YouthBuild USA N/A 66.00% N/A 

Total Grantees that Did Not Meet Retention Goal 7 

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

Exhibit 5 

Grantees Who Did Not Meet Performance Goals (2 of 2) 

Retention of Placements 

QPR = December 31, 2010 Quarterly Performance Report 

N/A = Information not available. Goal not specified in grant agreement. 

* = If available in the grant agreement, used the number of participants projected to meet the goal rather 

than the percentage of participants. 

** = Two grantees had participants who had not exited as of March 31, 2010. 

*** = No activity for four grantees for the period ending December 31, 2010; therefore, we used the 

Quarterly Performance Report as of September 30, 2010 for this analysis. 

Management Controls Need to be Strengthened 

26 Report No. 18-11001-03-001 
 

Type of Errors Reported 

Grantee 

Number of 

Participants 

Enrolled / 

Exited 

Participants 

Reported as 

Successful 

Completers 

Performance 

Outcomes of 

Participants 

Not Program 

Eligible 

Unsupported 

Participant 

Performance 

Outcomes 

1 Able-Disabled Advocacy, 

Inc. X 

2 City of Greenfield 

YouthBuild Program X 

3 City of Jacksonville X X X 

4 City of Sanford YouthBuild X X 

5 Coalition for Responsible 

Community Development X 

6 Community Teamwork, Inc. X 

7 Emerson Park Development 

Corporation X X 

8 Hale Empowerment and 

Revitalization Organization X X 

9 M S Action for Community 

Education X X X 

10 Southwest Florida 

Workforce Development X 

11 Springfield Urban League X X X 

12 The Metropolitan Area 

Advisory Committee X X 

13 United Methodist Children’s 

Home X X 

14 Urban League of Broward 

County X X 

15 Urban League of Rhode 

Island X X 

16 West Jackson Community 

Development Corp. X X 

17 YouthBuild USA X X 

Total Grantees 10 4 10 6

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

Exhibit 6 

Grantees Who Reported Inaccurate Performance Data or Lacked Support for 

Outcomes 

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

Exhibit 7 

Grantees Who Could Not Demonstrate 25 Percent Match 

Did Not Track, 

Grantee Report or 

Support 

1 Century Center for Economic Development $179,522 

2 City of Sanford YouthBuild 26,758 

3 Emerson Park Development Corporation 131,476 

4 LA Communities Advocating for Unity, Social Justice 180,865 

5 The Metropolitan Area Advisory Committee Project 104,078 

6 United Methodist Children’s Home 108,682 

7 WorkNet Pinellas, Inc. 36,975
	

Total $768,356 

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

Appendices 

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

Appendix A 

Background 

The YouthBuild Transfer Act (Transfer Act) enacted on September 22, 2006, transferred 

the YouthBuild program from the U.S. Department of Housing and Urban Development 

(HUD) to the U.S. Department of Labor (DOL), and amended the Workforce Investment 

Act of 1998 (WIA) Title I by adding section 173 A, to subtitle D. The Employment and 

Training Administration (ETA) administers the program under a provision added to the 

WIA. The DOL assumed grant administration for all DOL-awarded YouthBuild grants 

beginning in FY 2007. YouthBuild provides educational and job training opportunities 

within the construction industry for at-risk youth who are between the ages of 16-24, are 

school dropouts, and are members of at least one of the eligibility groups (youth 

offender, foster youth, low-income youth, youth who are individuals with disabilities, 

children of an incarcerated parent, or migrant youth). 

The transfer was an effort to address concerns about overall program quality, and better 

align the program with existing youth workforce and training programs under WIA. The 

Transfer Act outlines four core objectives. The first three objectives address assisting 

economically disadvantaged youth to (1) obtain the education and employment skills 

necessary to achieve economic self sufficiency, (2) provide youth opportunities for 

meaningful work and service to their communities, (3) and develop leadership skills. 

The fourth objective addresses the expansion of affordable housing for low-income 

families and homeless individuals. 

The program targets at-risk youth. According to the Transfer Act, an individual may 

participate in a YouthBuild program only if the individual is: 

(i) ages 16 to 24 on the date of enrollment; 

(ii) an individual with a disadvantaged status;

12 and 

(iii) a school dropout.13 

However, up to 25 percent of participants may be individuals who do not meet the 

income or educational need requirements but who are basic skill deficient, despite 

attainment of a secondary school diploma, General Education Development (GED) 

credential, or other State-recognized equivalent. Eligible participants should be offered 

full-time participation in the program from 6 to 24 months. 

To evaluate performance, the ETA uses five measures (1) placement in employment or 

education; (2) employment retention rate; (3) attainment of a degree or certificate; (4) 

literacy and numeracy gains; and (5) youth offenders’ recidivism rate. ETA also 

12The term “disadvantaged status” means youth from low income families, youth in foster care (including youth aging 

out of foster care), a youth offender, a youth with a disability, a child of incarcerated parents, or a migrant youth. The 

term “low-income families” means those families whose incomes do not exceed 80 per centum of the median income 

for the area, as determined by the Secretary with adjustments for smaller and larger families. 13Per Training and Employment Guidance Letter No. 11-09 - The YouthBuild program may serve an individual who 

dropped out of school and re-enrolled in an alternative school, if that re-enrollment is part of a sequential strategy. 

Management Controls Need to be Strengthened 

33 Report No. 18-11001-03-001 
 

YouthBuild Program Budget Activities 

Non ARRA ARRA 

Program Year 

(PY) 

2007 

(in thousa

Funding 

$93,681 

 

nds) 

No. of 

Grants 

96 

(in thousa

Funding 

0 

nds) 

No. of 

Grants 

0 

Grant Period 

10/15/07 to 10/14/10 

2008 8,875 

 

11 0 0 07/21/08 to 07/20/11 

2009 105,159 108 $72,238 75 07/01/09 to 06/30/12 

 

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

established enrollment goals for each YouthBuild grantee but they are not considered 

an outcome measure. 

Since beginning the administration of the YouthBuild program in 2007, DOL has 

awarded 290 grants to 226 grantees for approximately $280 million. The first of these 

grants were awarded on October 15, 2007. Of these grants, 75 were funded under the 

American Recovery and Reinvestment Act (ARRA) and 215 were non-ARRA grants. 

See Table below for more details. 

Note: Grant awards in PY 2008 were based on PY 2007 competition after ETA received additional funding. 

Total amount of the award is $279,953,000 (approx. $280 million). 

Both ARRA and non-ARRA grants are used to fund the same training and services in 

the YouthBuild program. However, Section 1512 (c) of the ARRA requires grant 

recipients report on the use of ARRA funds, including financial and programmatic 

information no later than 10 days after the end of each quarter calendar. 

YouthBuild grants are competitively awarded and provide at-risk youth “a second 

chance” through education and employment-skills training. As of March 31, 2010, ETA 

reported a total of 12,483 participant enrollments (enrollees) and 5,975 participants who 

exited (exiters) the program. YouthBuild grants cover a 3-year period, with the first 2 

years focusing on education and training, and the 3rd year reserved for follow-up 

activities. 

ETA indicated that several program improvements were made to the program in the 

areas of performance, grant administration and oversight, technical assistance efforts, 

and increased intra-agency collaboration. For example, ETA contended they have: 

 Established performance goals for grantees including enrollment, placement in 

education and employment, credential attainment, literacy/numeracy gains, retention 

in education and employment, and recidivism. These measures were not tracked by 

HUD. 

 Responded to a GAO recommendation to provide multiple years of funding for 

YouthBuild programs and developed the competitive process for award grants. 

Management Controls Need to be Strengthened 

34 Report No. 18-11001-03-001 
 

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

 Worked collaboratively with the Office of Apprenticeship to complete the YouthBuild 

Apprenticeship Pilot including the YouthBuild Apprenticeship Guide, and the Office 

of Federal Contract Compliance Programs to create employment opportunities for 

YouthBuild graduates. 

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Management Controls Need to be Strengthened 

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

Appendix B 

Objectives, Scope, Methodology, and Criteria 

Objectives 

Our audit objectives were to answer the following questions: 

1. Did ETA ensure eligible participants received allowable training and services? 

2. Did ETA ensure YouthBuild program core objectives and performance measures 

were met? 

3. Were allegations in the hotline complaints against two YouthBuild grantees valid? 

Scope 

The audit covered ETA and grantees’ practices, policies, and procedures over the 

YouthBuild program between July 1, 2007, and March 31, 2010. Our testing and audit 

work was performed at ETA in Washington, D.C., and at grantees worksites in 8 states: 

Alabama, California, Florida, Illinois, Massachusetts, Mississippi, Oklahoma, and Rhode 

Island. In all, we visited 2714 randomly selected grantees from a universe of 223 who 

reported data during our audit period. In addition, we extended our scope to include 

program measures for the period ended December 31, 2010. 

In addition, our audit focused on two separate complaints against (1) Able Disabled 

Advocacy, Inc., San Diego, California; and (2) Eagle Ridge Institute, Oklahoma City, 

Oklahoma. 

Methodology 

We conducted this performance audit in accordance with generally accepted 

government auditing standards. 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 objectives. We believe that the evidence 

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

audit objectives. 

To accomplish our audit objectives, we identified ETA’s written policies and procedures 

over the YouthBuild program; analyzed ETA’s oversight responsibilities and their efforts 

to ensure grantees’ accountability and compliance; and obtained Federal Project Officer 

monitoring reports for selected grantees and identified performance and management 

issues and what corrective actions had been taken. 

14We visited one additional grantee to address a complaint, Eagle Ridge Institute that was not part of our statistical 

sample. 

Management Controls Need to be Strengthened 

37 Report No. 18-11001-03-001 
 

 

 

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

We developed a statistical sampling plan to test the 22315 YouthBuild grantees and the 

ETA reported data between July 1, 2007 and March 31, 2010. We used both attribute 

and variable sampling at a 95 percent confidence level to estimate the monetary impact 

of grantees that enrolled and exited participants who did not meet eligibility and/or 

program-outcome requirements. We designed a 3-stage stratified cluster sample, with 

the grantees assigned to 1 of 26 clusters based on geographic location. The 26 clusters 

were stratified into two strata, with one stratum containing clusters with less than $10 

million in grant funds, and the second stratum containing those with greater than $10 

million. We randomly selected 3 clusters from each stratum and then randomly selected 

a total of 27 grantees from 6 randomly selected clusters. For each grantee, we 

randomly selected a sample of program enrollees and a sample of program exiters. In 

total, we selected a statistical sample of 543 participants; tested a total of 270 enrollees 

of 12,483, and 273 exiters from 5,975, served by the 27 grantees. The results of our 

tests of enrollees and exiters were projected to their respective universes. 

At each grantee location, we performed the following work: 

•	 Identified controls over activities and costs, cash management, eligibility and 

program services, matching funds reporting, and equipment and real property. 

•	 Tested program costs to determine whether costs were allowable, allocable, 

reasonable, and properly reported. 

•	 Reviewed administrative costs to ensure that costs did not exceed the 15 

percent statutory limitation. 

•	 Calculated the average cost per participant to assess whether the average cost 

was within the normal range for YouthBuild programs. 

•	 Determined if at least 75 percent of participants met the disadvantaged status or 

educational requirement for eligibility. 

•	 Tested samples of program enrollees and exiters to ensure that grantees 

enrolled eligible participants, did not serve participants using multiple 

YouthBuild grants, provided necessary and allowable services, and reported 

outcomes accurately. 

•	 Identified the training and services provided to enrollees to ensure they were in 

accordance with YouthBuild legislative and Solicitation for Grant Application 

guidelines. Additionally, ensured that participants were provided leadership and 

community service opportunities, and whether some of those work opportunities 

led to an increase in the supply of affordable housing for low income families or 

homeless individuals. 

15 Of the 226 grantees who were awarded 290 grants, 223 grantees reported program activities during our audit 

period. The 223 grantees were awarded a total of 287 grants (213 non-ARRA grants and 74 ARRA grants). For our 

purposes, we combined the grant awards and outcome data for those grantees who received multiple grants. 

Management Controls Need to be Strengthened 

38 Report No. 18-11001-03-001 
 

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

•	 Identified grantees that did not serve 16-or 17-year-old-youth. 

•	 Ensured that DOL funds were properly accounted for if the program was 

supplemented with other financial resources. 

•	 Determined if the grantee met the 25 percent matching requirement or was on 

track to do so. 

•	 Determined if construction costs exceeded the 10 percent limitation. 

•	 Determined if the grantee operated a mental toughness program, and if so, 

assessed the program to ensure it was consistent with ETA guidelines. 

In planning and performing our audit, we considered whether internal controls significant 

to our audit objectives were properly designed and placed in operation. This included 

the review of documentation to evaluate the adequacy of ETA controls for determining 

participant eligibility and reporting outcomes and the grantees’ policies and procedures 

as they related to the YouthBuild program. We confirmed our understanding of these 

controls through interviews and review and analysis of documentation. We evaluated 

the adequacy of internal controls used by ETA for reasonable assurance that 

YouthBuild grantees were operating and reporting financial expenditures and results in 

compliance with federal regulations and guidance. We evaluated grantees’ controls for 

reasonable assurance that controls were in place over areas such as program eligibility, 

appropriateness and allowability of services, cash management, property and 

equipment, and matching costs. Our consideration of internal controls would not 

necessarily disclose all matters that might be significant deficiencies. Because of 

inherent limitations in internal controls, misstatements or noncompliance may 

nevertheless occur and not be detected. 

To achieve the assignment’s objectives we relied on the computer-processed data 

contained in YouthBuild Management Information System (MIS) System. We assessed 

the reliability of the data by (1) performing various testing of required data elements; (2) 

interviewing ETA and YouthBuild grant officials knowledgeable about the data; and (3) 

reviewing Quarterly Performance Reports (QPRs) data and outcome measures, and 

controls for preparing the QPRs. Based on these tests and assessments, we concluded 

the data was sufficiently reliable to use in meeting the audit objectives. 

We also evaluated allegations of improprieties made against two grantees — one 

grantee from our original sample and one additional grantee — as a result of separate 

complaints. The results from the complaints are discussed separately in the report. 

Specifically, as it relates to: 

Management Controls Need to be Strengthened 

39 Report No. 18-11001-03-001 
 

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

Able Disabled Advocacy, Inc 

To determine whether the complaint had merit regarding the misuse of program funds 

and computer equipment, we interviewed program officials, reviewed program 

transactions during the period from October 15, 2007, through March 31, 2010, and 

tested 20 transactions to ensure that each was allowable and adequately supported. 

We reviewed equipment purchases to identify whether any YouthBuild funds were used 

to purchase computer equipment. We obtained an inventory of computer equipment at 

the agency and discussed the list and the operations of the Information Technology (IT) 

department with the Director of IT and assessed his understanding of the department. 

We also reviewed personnel costs charged to the YouthBuild grants. 

Eagle Ridge Institute 

We focused on program activities related to the 2007 grant award as the complaint 

suggested. We interviewed the Program Director to respond to issues specific to the 

complaint. We selected 24 of the 78 participants enrolled in the program and performed 

tests specific to the allegations. We also reviewed participant files, compared the sign-in 

log and timesheets for 24 participants’ attendance and stipends to verify the accuracy of 

the information. We also observed participants during class hours to detect any unusual 

activities. 

Criteria 

We used the following criteria to perform this audit: 

y YouthBuild Transfer Act of 2006 

y Workforce Investment Act of 1998 

y Solicitation for Grant Application (YouthBuild Grants) 

• The American Recovery and Reinvestment Act of 2009 

• Training and Employment Guidance Letter No.17-05 (February 17, 2006) 

• Training and Employment Guidance Letter No. 11-09 (December 4, 2009) 

• “Book of Knowledge” issued by the Employment and Training Administration 

Management Controls Need to be Strengthened 

40 Report No. 18-11001-03-001 
 

 

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

Appendix C 

Acronyms and Abbreviations 

ARRA American Recovery and Reinvestment Act 

DOL Department of Labor 

ETA Employment and Training Administration 

GED General Education Development 

GAO General Accountability Office 

HUD Housing and Urban Development 

IT Information Technology 

NIOSH National Institute for Occupational Safety and Health 

OIG Office of Inspector General 

PY Program Year 

QPR Quarterly Performance Report 

SGA Solicitation for Grant Application 

Transfer Act YouthBuild Transfer Act of 2006 

ULBC Urban League of Broward County 

WIA Workforce Investment Act of 1998 

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41 Report No. 18-11001-03-001 
 

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Management Controls Need to be Strengthened 

42 Report No. 18-11001-03-001 
 

U.S. Department of Labor 

MEMORANDUM FOR: 

FROM: 

SUBJECT: 

Assistant Secretary lor 

Employmtml and TrainIng 

Washington 0 C 20210 

ELLIOT P. LEWIS 

Assistant Inspector General for Audit 

Office of Inspector General 

JANE OATES 

Assistant Secretary for 

Employment and Training Administration 

Response to Draft Report No. 18-11-001-03-001 

"Recovery Act: ETA Needs to Strengthen Management Controls to 

Meet YouthBuild Program Objectives" 

Thank you fo r the opponunity to comment on the draft audit report referenced above. As you 

know, the Employment and Training Administration (ETA) assumed responsibility for the 

administration of the YouthBuild program from U.S. Department of Housing and Urban 

Dcvelopment (HUD) in 2006. Since then, ETA has hldd three grant competitions and awarded # 

gf<tnts. The first cohort of ETA YouthBuild grants. which \las awarded in 2007, has recently 

ended. The 2009 cohon of YouthBuiJd grants was awarded in July 2009 and is about mid-way 

through its period of performance. The 2010 cohort of YoulhBuild grants was awarded on 

March 15,2011. 

The Oftice of Inspector General's (010) audit report of Youth Build provides ETA with valuable 

information that we will use to continuously improve the YouthBuild program. However, ETA 

would like to use this opponunity to provide information and correct some characterizations of 

the findings included in the audit report that lead 10 what we believe is a misrepresentation of 

ETA's management of the YouthBuild program. 

ETA supports continuous improvement of the stewardship of its discretionary grants with respect 

to supervisory reviews and documen!ation of grantee monitoring activities and our managemen! 

of discretionary granls reflect this principle. We continue to build on ETA's quality assurance 

procedures. training and guidance to statfthrough the devclopment of internal agency 

management procedures and annual performance expectations. These include the consistent use 

of Grants Electronic Management System (GEMS) by all Federal Project Officers and a 

quartcrly review by management ofrepons in GEMS that vcrify the completion of critic III steps 

in the monitoring process, including completion of Desk ReViews, Risk Assessments, and reports 

ofon-si!~ visits. 

ETA includes the following responses 10 the recommendations contained in the OIG Audit 

Report: 

Re(:OInmendation I: Determine how 10 besl serve yQlllh agl'S 16/0 17, who (Ire excluded/rom 

thl' )"ullthBllild program. 

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

Appendix D 

ETA Response to Draft Report 

Management Controls Need to be Strengthened 

43 Report No. 18-11001-03-001 
 

YouthBuild provides an opportunity for low-income young people ages 16 - 24 to acquire high 

school diplomas or GEDs, learn construction related occupational skills, and help their 

communities by building affordable housing. Youth ages 16 and 17 can and are being served by 

many YOUlhBuild grantees; the DIG audit report states that among eligible youth ages 17 

through 24, about "25 percent of youth served by the sampled grantees were between the ages of 

16 and 17". Local grantees have flexibility under the YouthBuild Transfer Act (P .L.l 09-28\) 

and the Solicitation for Grant Application (SGA) to determine which ages among eligible youth 

they will serve in the local program. These grantee decisions are based upon locally detennined 

factors, including safety concerns related to National Institute for Occupational Safety and 

Health (NIOSH) recommendations that restrict the work of)outh unde r the age of 18 on 

construction sites, and State compulsory education laws which require students to remain in high 

school until 18 years of age. For these reasons, a grantee may not allow 16 to 17 year olds 

access to Youth Build for safety or other considerations; however, these low-income youth may 

choose to access Workforce Investment Act (WIA) youth formula. program services through the 

One-Stop Career Center network in their local areas. 

Recommendation 2: Develop and implement conlrols 10 ensure Ihal program eligibility and 

reponing requiremenls are mel. 

ETA agrees. Similar to other grantees, YouthBuild grantees must be thorough in determining 

whcther a YOUlh is eligible to enroll in the program and in collecting and retaining sufficient 

documentation of eligibility. ETA's grant management process includes a number of 

components in both the National Office and Regional Ollices which provide oversee individual 

grants, including YouthBuild. Regional grant oversight includes risk assessment at the start of 

each YouthBui ld grant. grant review which is comprised of desk and onsite reviews as well as 

linancial report reviews; and technical assistance to help grantees correct performance or 

compliance problems. ETA will use the OIG's information and information from its grant 

reviews to detennine what technical assistance may be requi red to improve YouthBuild grantees' 

eligibilily detennination and documentalion procedures. 

On Site Monituring 

The O[G audit report notes thaI on-site moniloring is not occurring consislently. There 

are established cdteria for conducting on-site visits to grantees, which includes one onsite visit 

during Ihe period of performance. (See Attachment A.) The expectation articulated in the 

Regional Administrator's standards is Ihat each granl receives a desk review every quarter, and 

Ihat onsite program and perfonnance review takes place during the mid-point of a grant's period 

of performance based upon the availability of resources. Federal Projecl Officers review grantee 

perf0l111anCe outcomes, financial infonnation, and program narratives during quarterly desk 

reviews. You!hBuild grants are three-year grants with onsite reviews generally scheduled during 

the second year depending upon sllch factors as travel funds. workload, and agency priorities. 

However. grants Ihal are designated "at risk" by the Regional Office - for exanlple, a grantee 

that has been awarded its first federal grant - may receive un initial onsite visit early in the grant 

period. Due to increased grant oversight workloads and funding constraints, ETA is developing 

an enhanced, more in-depth approach to quarterly desk and financial reviews to strengthen 

regional grant oversight. 

, 

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

Management Controls Need to be Strengthened 

44 Report No. 18-11001-03-001 
 

Selective Service 

The DIG report noted that some YouthBuild grantees were unaware o r the selective selVice 

requirement, and that others did not ensure that all program candidates were registered for 

selective service prior to enrollment. ETA notes that selective service registration for 18 year old 

males is part of the formal YouthBuild enrollment process. All YouthBuild participants are 

entered into the Web-based Case Management and Performance Management Information 

System by grantees. The Web-based Case Management and Perfonnance MIS contains an error 

message (shown below) that is displayed whenever a grantee attempts to enroll an 18 year-old 

male and does not check the "yes" box indicating that the program candidate is registered for 

Selective Service. 

Error 

Participant cannot continue with assessment (final step of enrollment] until Selective 

Service registration has been completed. 

The assessment screen contains a hyperlink to the Selective Service registration site which 

allows grantees to check the young man's status and ifnot registered, to do so immediately. 

ETA will issue guidance to remind YouthBuild grantees about this requirement and the type of 

documentation that is required to positively affirm a participant's Selective Service registration. 

In addition, ETA also will include this information in the YouthBuild " Book of Knowledge", 

which includes all YouthBuild MIS and reporting requirements. 

Regula/iom· 

ETA believes that substantial progress has been made to establish regulations for the YouthBuild 

program. The DIG audit report states thaI "DOL has nOi issued regulations for the program." 

However, the Notice of Proposed Rulemaking (NPRM) for the You thBuild program was 

published for public comment in the Federal Register on August 27, 20 I O. ETA staff are 

drafting the Final Rule while continuing to analyze some of the more complex comments 

received in response to the NPRM. The fina l rule will be published once the rulemaking process 

is complcte. 

Recommendmion 3: Recover (he $214,124 in questioned CUS( associated with ineligible 

participllnn. 

ETA plans to review each grantee's participants identified by the OIG during the audit as 

·'missing eligibility documentation". As part of the standard process, grantees will have an 

opportunity to provide the missing documentation. Any costs associated with participants who 

are deemed ineligible after ETA review will be recovered through standard ETA procedures. 

Recommendation oJ: Develup and implemenl control.j· fO en.'lIre that grantees are meeting 

program goal.j· through the oversighf u/s/(I/ed goals in grantee agreements. 

ETA has a " three tiered approach" for developing and meOisuring program goals. The first tier is 

based upon each grantee's Statement of Work which cOlllllins the activities and performance 

J 

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

Management Controls Need to be Strengthened 

45 Report No. 18-11001-03-001 
 

information for which the grantee is held accountable. If perionnance outcomes are not 

specified in the grant application, they are negotiated after the grant award. 

The second tier is that of the Government Perfonnance Results Act (GPRA) goals. The GPRA 

goals for the YouthBuild program, along with the actual results from the 2007 cohort of grantees, 

are listed in the following chart: 

Actual Results for 2007 grantees 

Performance Measure GPRAGoal asofDcccmber3 1 2010 

Placement in Education & Em 10 ment 38% 42.70% 

Credential Attainment .,,, 60.71 % 

Literac fNumcrac Gains 

"" 50.25% 

The third tier is the program performance goals set for the overall YouthBuild program and 

repl\'sent aggregate perfornlance goals -- not individual granlee goals. The YouthBuild goals 

since its transfer to DOL to the present are: 

• Placemenl in Education & Employment 70% 

• Credential Attainment 50% 

LiteracyfNumeracy Gains 50% 

• Recidivism 20% 

• Retention in Education & Employment 75% 

ETA believes that these ambitious aggregate goals have, and will continue, to motivate 

YouthBuild grantees to strive for greater performance outcomes. ETA staff and the YouthBuild 

technical assistance contractor provide ongoing technical assistance to grantees to help them 

achieve these goals. 

To track grantee perfonnance, ETA developed and implemented a Case Management 

Information and Perfonnance System to ensure that rel iable perfonnance data are available for 

the Youthl3uild program. ETA also provides technical assist:mce when perfonnance issues are 

identified. To that end, ETA has (I) provided 17 MIS training sessions, (2) created a data pilot 

program which helped grantees focus on the use of the real-ti me participant data for decision 

making and program improvement, (3) produced a monthly newsletter focused on how to use 

program data, and (4) offered several data management Webinars. In addition, through its 

technical assistance contract, ETA provides a help-desk to answer all data related and MIS 

questions. 

Recommendation 5: Del!elop and implement controls to ensure performance measures are 

accuralely reported. 

ETA agrees with the OIG on the need for strong accountability. However, ETA believes that it 

has a system in place through its grant management process to detennine whether perfonnance is 

accurately reported. Documentation is examined during on-site monitoring visits and questioned 

when there is insufficient documentation. See Appendix A. In addition to on-site monitoring 

visits where case files are examined, quarterly perfonnance reports are routinely monitored by 

both ETA FPOs and National staff in order to detect data anomalies or data entry errors. 

4 

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

Management Controls Need to be Strengthened 

46 Report No. 18-11001-03-001 
 

Recommendation 6 __ Develop and implement comrols to ensure participants receNe industryrecognized cert!flcales afier compleling occllpalion skills tr(lining. 

ETA believes that the necessary controls, as outlined in Appendix A, are in place to ensure that 

participants receive industry-recognized credentials. As a result of these controls, ETA had 

identified prior to the OIG audit the two grantees cited in the OIG audit report for failing to 

ensure YouthBuild participants acquired industry-recognized credentials and initiated technical 

assistance to each grantee to improve participant outcomes. This includes upgrading the skills of 

YouthBuild construction trainers. For example, since 2008, ETA has provided 16 training 

opportunities for YouthBuild grantee construction trainers to acquire certification, which enables 

the trainers to help participants complete training programs and acquire the necessary skills and 

levels that result in the award of industry recognized credentials. 

Recommendation 7: Develop a process 10 measure the increased nllmber of affordable 

permanent housing IInits as a resulf 0/ the program. 

ETA agrees with this recommendation and has modified the YOUlhBuild quarterly narrative 

report 10 include information on the number of affordable houses or apartments built or 

renovated. To galhe r baseline data, we are col!ecting this information fo r the cohort of2007 

grantees that completed their grant period of perf om lance. 

Necommendalion 8: Ensure grantees are appropriolely meeling Ihe program 25 percent 

ma/ching/und requiremen/s. 

ETA and the OIG agree that meeting matching requirements is an important requirement for 

grantees; it also brings additional resources and commitment to the local YoulhBuild program. 

ETA specifies matching requirements in each YouthBuild grant agreement; it has provided 

cxlensive training to YouthBuild grantees during grantee orientation sessions and webinars and 

through written materials 011 malch requirements and Ihe proper documentation and val uation of 

match costs Ihroughout the life of Ihe grant. ETA infonned grantees about these training 

resources in Training and Employment Notice (TEN) 49-08 and 39-09. ETA reviews grantee 

progress toward meeting Ihe match requirement after the review of the ETA 9130 financial 

reports and also, during on-sile reviews. YouthBuild grantees that are slow to report or are not 

reporting match receive technical assistance. [I is important to point out, that grantee compliance 

with match requirements is not measured until the period of performance has ended. ETA has 

standard operating procedures for YouthBuild gmntee closeout, and compliance with the match 

req uirements is addressed during closeout. If the grantee has failed to meet the required match, 

COSIS are disallowed as specified in the grant agreement. ETA will review current guidance on 

match and as necessary, issue a new TEN to remind grantees or their responsibility to track and 

repol1 match on an ongoing basis inform them about the consequences offailure to comply. 

Recommendation 9: Make afinal determination concerning Ihe 1768,626 in questianed costs 

ooUociafed with undocumen/ed mo/chingfimding and recover amounlS undocumenied. 

We appreciate the OIG auditors identification of several YoulhBuild grantees with potential COSt 

concerns; we reviewed these grants, and note that they do not expire until lune 30, 2012. 

5 

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

Management Controls Need to be Strengthened 

47 Report No. 18-11001-03-001 
 

Consistent with ETA's policy to review costs when the period of perfommnce has ended, ETA 

bdieves that the S768,356 the OIG auditors have stated as unreported or unsupported is an 

estim(Jte ofwhal areporentiaJ disallowed costs if the grantees do not fully comply with the match 

requirements. Thus, ETA requests that this recommendation be deleted or restructured to 

Ilccurately describe the potential issue. ETA plans to revit:w the identified grantees with 

questioned costs and provide additional technical assistance to help the grantees properly report 

mmch and apprise them of the potential for disallowed COStS related to match requirements. ETA 

will determine any costs that are disallowed during closeout should the grantee fail to meet the 

required match levels. 

We believe that this response addresses the OIG audit report findings and responds to the 

recomlnendations. 

cc: Edward C. I-/ugler 

6 

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

Management Controls Need to be Strengthened 

48 Report No. 18-11001-03-001 
 

APPENDIX A - ETA Monitoring Procedures 

National Office A ctivities 

In response to a GAO Repon (GAO-07-82, dated February 28, 2007) titled "YouthBuild 

Program: Analysis of Outcome Data Needed to Detennine Long-Term Benefits", ETA has, in 

addition to the established ETA grant oversight structure that exists to monitor all grantees, taken 

numerous steps to improve the management, oversight, perfonnance, and administration of the 

YouthBuild program. These steps have included the development ofa Web-based Case 

Management and Performance Management Information System, a multifaceted approach to 

technical assistance which includes the use ofWebinars, conferences, and a Web·based 

Community of Practice. In addition, since January 2010, ETA has provided each grantee with a 

contracted technical assistance coach, who provides both phone and on-site technical assistance 

that. is designed to improve program performance. 

The National Office Program stafTworks closely with the Federal Proj ect Officers (FPOs) in the 

ETA regional offices to coordinate all technical assistance and grantee support. The National 

Oflice hosts a new grantee orientation for each new cohort of grantees, which 

reinforces expectations, goals and objectives of the grant award. In order to help determine 

national technical assistance focus areas, ETA developed a YouthBuild Program Assessment 

Tool that guides national and regional staff in conducting on-site monitoring reviews and in 

determining individual grantee technical assistance needs. The tool contains guidance and 

e)(pcctation~ for the Youth Build participant enrollment processes, including the collection of 

documentation to support eligibility requirements. Grantees are provided with this guide prior to 

their on-site monitoring review so that they can complete self·assessment in preparation for their 

FPO·s review. 

Negiol1(ll OffiCI! Activities 

Rcgional Federal Project Officers (FPOs) are responsible for conducting both on-site and desk 

reviews of grantees. Once the grantee has received the grant award package, the FPO makes 

contact with the grantee to provide an overview/discussion of all the requirements contained in 

Ihe award package and other YouthBuild specific guidance. The grant requirements are 

discussed in detail in order 10 ensure that grantees understand their administrative and 

programmatic responsibilities. This also provides the opportunity for grantees 10 ask questions 

about ETA's expectations. 

Employment and Training Order 1·03 (ETO 1-03) on grants management and the UnifOl·m 

Administrative Requirements establish protocols to be followed from award to close out. An 

established ETA Core Monitoring Guide is used by the FPOs 10 guide all on·site monitoring of 

ETA grant programs. The Core Monitoring Guide provides a consistent framework and staning 

poinl for all on-site grant monitoring responsibilities by ETA and was developed based on the 

premise that there are essential core functions that must be in place in order for any grantee to 

operate an ETA grant within the boundaries of acceptable practices that are established primarily 

7 

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

Management Controls Need to be Strengthened 

49 Report No. 18-11001-03-001 
 

by law, regulation, and/or govemment-wide rule.' On a quanerly basis, FPOs in the regional 

offi ces conduct a desk review to examine all aspects of the grant award. Grantees determined to 

be "at risk" are identified in the Grants Electronic Management System (GEMS) and a "visit~ is 

required (on site, phone contact or expanded "desk review/audit".) Before going on 

site, FPOs monitor the required quarterly progress narrative updates and perfonnance reports and 

are in contact with grantees as necessary. Documentation requirements are examined during onsile monitoring visits and questioned when they are insufficiently met. In addition, the 

contracted technical assistance coaches that are assigned to each gran lee provide the FPOs with 

monthly reports that summarize phone and on-site coaching and highlight any grantee issues. 

I Page 51 of the Core Monitoring Guide outlines specifics with regard to documentation on participant eligibility 

and examining participant eligibility and monitor documentation on of the primary responsibilities included in the 

guide. 

8 

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

Management Controls Need to be Strengthened 

50 Report No. 18-11001-03-001 
 

 

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

Appendix E 

Acknowledgements 

Key contributors to this report were: 

 Michael Yarbrough, Audit Director 

Dwight Gates, Audit Manager 

Freddie Hall, Auditor-in-Charge 

Team Leaders / Staff: 

Mark Sanderson / Daniel Rhodes 

Velma Ivey / Sheila Lay / Charmane Miller 

 Laura Brockway / Nicholas Cumby / Gloria Scotland 

 Sharon Newby / Lorenzo Thornton / Travis Williams 

Report Reviewer 

 Alvin Edwards 

Statistician 

Ajit Buttar 

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51 Report No. 18-11001-03-001 
 

 

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Management Controls Need to be Strengthened 

52 Report No. 18-11001-03-001 
 

 

TO REPORT FRAUD, WASTE OR ABUSE, PLEASE CONTACT: 

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

Email: hotline@oig.dol.gov 

Telephone: 202-693-6999 

1-800-347-3756 

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