Office of Inspector General—Office of Audit 

EMPLOYMENT AND TRAINING 

ADMINISTRATION 

JOB CORPS MUST STRENGTHEN CONTROLS TO 

ENSURE LOW-INCOME ELIGIBILITY OF 

APPLICANTS 

Date Issued: September 30, 2011

Report Number: 26-11-005-03-370
U.S. Department of Labor 

Office of Inspector General 

Office of Audit 

BRIEFLY... 

Highlights of Report Number 26-11-005-03-370, 

issued to the Assistant Secretary for Employment 

and Training Administration. 

WHY READ THE REPORT 

The Office of Inspector General (OIG) determined 

that Job Corps did not ensure contracted Outreach 

and Admissions (OA) service providers enrolled 

only eligible students because of systemic control 

weaknesses at both the contractor and Job Corps 

levels. As a result, ineligible students took 

enrollment slots intended for at-risk and 

low-income youth. 

In the report, we estimate the number of ineligible 

students enrolled in Job Corps and the potential 

costs to train these ineligible students. We also 

discuss specific control weaknesses that allowed 

the students to enroll and the changes Job Corps is 

making to strengthen its eligibility determination 

process. 

WHY OIG CONDUCTED THE AUDIT 

The Employment and Training Administration (ETA) 

found the intentional admission of ineligible 

students at a Job Corps center operated by a 

private contractor. As a result, Secretary Solis 

requested the audit to ensure the appropriate use of 

Federal taxpayer money and the fair enrollment 

opportunity for eligible students into Job Corps. 

In response to the request, we conducted this audit 

to answer the following question: 

Did Job Corps ensure outreach and admissions 

service providers enrolled only eligible students? 

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/2011/26-11-

005-03-370.pdf. 

 September 2011 

JOB CORPS MUST STRENGTHEN CONTROLS 

TO ENSURE LOW-INCOME ELIGIBILITY OF 

APPLICANTS 

WHAT OIG FOUND 

Job Corps policy allowing potential students to 

self-certify their family income levels was not 

effective. We estimated that 472 (10 percent) of the 

4,718 active students enrolled in the program 

during March 2011 were ineligible; and that $13.8 

million would be spent over time to train them. 

Assuming the ineligibility rate remained constant, 

then funds spent on ineligible students over a 

1-year period could total $164.6 million. 

Further testing showed that even when potential 

students self-certified income above the 

established thresholds, OA service providers still 

allowed ineligible students to enroll. We estimated 

that OA service providers did not comply with Job 

Corps enrollment requirements for as many as 

1,527 (2.7 percent) of the 57,392 students enrolled 

during calendar year 2010, and that as much as 

$45.4 million in DOL funds could be spent over time 

to train these students. 

The enrollment of ineligible students occurred 

because of systemic control weaknesses at both 

the contractor and Job Corps levels. For example, 

some OA service providers disregarded or were not 

aware of the appropriate income eligibility 

thresholds; and Job Corps had not provided 

adequate procedures, training, and oversight to 

ensure compliance. 

Job Corps has begun making changes to its 

student eligibility determination process, including 

modifying its automated system to no longer allow 

input of income amounts exceeding the established 

thresholds and requiring all potential students to 

provide income documentation. 

WHAT OIG RECOMMENDED 

The OIG recommended that the Assistant Secretary 

for ETA require Job Corps to determine the 

eligibility of all active students with recorded 

incomes over the established income thresholds 

and take appropriate action; recover from OA 

service providers the $2.27 million in program 

funds spent on ineligible students identified during 

our testing; and develop procedures and oversight 

to ensure student eligibility. ETA accepted our 

recommendations but disagreed with our 

methodology to estimate the cost to train ineligible 

students. 
 

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

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Job Corps Must Strengthen Controls 

Report No. 26-11-005-03-370 
 

 

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

Table of Contents 
 

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

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

Objective — Did Job Corps ensure outreach and admissions service providers
 

enrolled only eligible students? ............................................................. 3
 

Control weaknesses allowed ineligible students to enroll in Job Corps. ............... 3
 

Finding — Job Corps did not ensure OA service providers enrolled only 

eligible students.................................................................................. 3
 

Recommendations ...................................................................................................... 12
 

Exhibits

Exhibit 1 Projected and estimated training costs for CY 2011 ineligible 

enrolled students.................................................................................. 15
 

Exhibit 2 Projected trainings costs for CY 2010 ineligible enrolled students....... 17
 

Exhibit 3 March 2011 Income Verification Exceptions ........................................ 19
 

Appendices

Appendix A Background ..................................................................................... 23
 

Appendix B Objective, Scope, Methodology and Criteria ................................... 25
 

Appendix C Acronyms and Abbreviations .......................................................... 31
 

Appendix D ETA’s Response to Draft Report..................................................... 33
 

Appendix E Acknowledgements ......................................................................... 37
 

Job Corps Must Strengthen Controls 

Report No. 26-11-005-03-370 
 

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


 

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Job Corps Must Strengthen Controls 

Report No. 26-11-005-03-370 
 

 

 

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

U.S. Department of Labor Office of Inspector General 

Washington, D.C. 20210 

September 30, 2011 

Assistant Inspector General’s Report 

Jane Oates 

Assistant Secretary 

for Employment and Training 

U.S. Department of Labor 

200 Constitution Avenue, N.W. 

Washington, D.C. 20210 

Secretary Solis requested a nationwide audit of Job Corps’ outreach and admissions (OA) 

process after the Department of Labor’s (DOL) Employment and Training Administration 

(ETA) found the intentional admission of ineligible students at a Job Corps center operated 

by a private contractor. The Secretary requested the audit to ensure the appropriate use of 

Federal taxpayer money and the fair enrollment opportunity for eligible students into Job 

Corps, as well as to improve ETA’s policies and procedures to prevent the enrollment of 

ineligible students. 

In February 2011, ETA provided us with the results of two reviews it conducted of 

student eligibility. For the first review, ETA reported that nationally 2.9 percent (5,426) of 

the 180,904 students enrolled between calendar years (CY) 2008 and 2010 were 

income ineligible, and that the ineligibility rate improved to 2.3 percent in CY 2010.1 For 

the second review, ETA further analyzed active student enrollments and reported that 

follow up with centers and OA contractors determined nearly all entries for ineligible 

incomes were typographical errors, suggesting that OA contractors should improve 

quality control procedures for data entry. 

Our audit objective was to answer the following question: 

Did Job Corps ensure outreach and admissions service providers enroll only eligible 

students? 

Our scope encompassed the 86 contractors that provided OA services to the 57,392 

students who enrolled at Job Corps centers in CY 2010, as well as the 5,504 students 

who enrolled in March 2011. 

1 The family income thresholds are based on Poverty Guideline Limits established by the Department of Health and 

Human Services (HHS) and 70% of the Lower Living Standard Income Levels (LLSIL) established by the Department 

of Labor. Job Corps eligibility thresholds are set at the higher of the Poverty Guideline Limits and the LLSIL. 

Job Corps Must Strengthen Controls 

1 Report No. 26-11-005-03-370 
 

 

 

 

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

We used both statistical and judgmental sampling to assess the level of ineligible 

students that enrolled in Job Corps and the causes for improper enrollments. We used 

enrollment and cost information provided by Job Corps to calculate questioned costs 

and funds put to better use. See Appendix B for a detailed description of our audit 

scope and methodology. 

RESULTS IN BRIEF 

Job Corps did not ensure OA service providers enrolled only eligible students because of 

significant and systemic control weaknesses at both the contractor and Job Corps levels. 

Job Corps policy allowed potential students to self-certify their family income levels and 

neither the OA contractors nor Job Corps had sufficient procedures in place to ensure 

eligibility. As a result, ineligible students took enrollment slots intended for at-risk and 

low-income youth. Based on our statistical sample of the 4,718 active students enrolled in 

March 2011, we estimated that 472 (10 percent) ineligible students enrolled in the program 

during the month, and that $13.8 million in DOL funds could be spent to train them, 

assuming students remained in the program for the 9.1 months average length of stay. Job 

Corps will enroll nearly 56,000 students in CY 2011. If recent and planned changes to Job 

Corps’ student enrollment process are not effectively implemented, we expect that ineligible 

students would continue to be enrolled throughout the year. Assuming the ineligibility rate 

remained constant, then funds spent on ineligible students could total $164.6 million.2 

Further testing showed that even when potential students self-certified income above the 

established thresholds or did not meet other eligibility criteria, OA service providers did not 

consistently comply with Job Corps policy and still allowed ineligible students to enroll. 

Based on our statistical sample of records for students enrolled during CY 2010, we 

estimated that OA service providers did not comply with Job Corps’ OA eligibility 

requirements for 614 (1.1 percent) to as many as 1,527 (2.7 percent) of the 57,392 

students enrolled during the year. We further estimated that $18.2 million to as much as 

$45.4 million in DOL funds were spent to train these students.3 

The results of ETA’s 2011 review indicated that 2.3 percent of the students enrolled during 

CY 2010 were income ineligible. This ineligibility rate fell within our estimated range of 1.1 

percent to 2.7 percent. Our follow-up testing of source documents obtained by OA service 

providers at enrollment showed that the students’ self-certified incomes were consistent 

with the income levels recorded in Job Corps’s automated system for 125 (90.6 percent) of 

the 138 student files we judgmentally selected for testing; and that the 125 students were in 

fact ineligible. The ineligible enrollments occurred because some OA service providers 

disregarded or were not aware of the appropriate income eligibility thresholds; and Job 

Corps had not provided adequate procedures, training, and oversight to ensure 

compliance. 

2

 Our estimates are based on the assumption that students remained in the program for the 9.1 months average 

length of stay reported by Job Corps. See Exhibit 1 for our detailed cost calculations. 3

 See Exhibit 2 for our detailed cost calculations.
 

Job Corps Must Strengthen Controls 

2 Report No. 26-11-005-03-370 
 

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

Job Corps has begun making changes to its student enrollment process. For example, in 

April 2011 Job Corps modified its Outreach and Admissions Student Information System 

(OASIS) to include an enhanced low-income eligibility verification process that validates 

income-related data against current poverty and low-income guidelines. With these 

changes, the system will not allow the enrollment of an applicant who does not meet the 

low-income definition as stated in the Policy and Requirements Handbook (PRH), including 

being homeless, a foster child, or receiving public assistance. Also, in October 2011, Job 

Corps plans to implement policy eliminating self-certification of family income and begin 

requiring all potential students to provide income documentation. 

Our key recommendations to the Assistant Secretary for ETA include requiring Job Corps 

to determine the eligibility of all active students with recorded family incomes over the 

established income thresholds and take appropriate action; recover from OA service 

providers the program funds spent on ineligible students; and develop policies, procedures, 

training, and oversight to ensure OA service providers comply with established eligibility 

criteria and other Job Corps policy for enrollment in the program. 

ETA’s RESPONSE 

In its response, ETA accepted our five recommendations and stated it had already 

taken action to address three recommendations, and will take action on the remaining 

two. Based on ETA’s response, we made slight revisions to our estimate of the cost to 

train ineligible students. ETA also disagreed with our inclusion of administrative funding 

(e.g., national and regional office oversight) in our estimated cost to train ineligible 

students because Job Corps students did not benefit directly. ETA noted that other ETA 

training programs do not include administrative funding when calculating participant 

costs. Excluding these administrative costs would have reduced our $164.6 million 

estimate by $2.8 million. However, we retained the administration costs in our estimate 

because the costs incurred support the delivery of services to students and ultimately 

benefit each student. 

ETA’s response to the draft report is included in its entirety at Appendix D. 

RESULTS AND FINDINGS 

Objective — Did Job Corps ensure outreach and admissions service providers 

enroll only eligible students? 

 Control weaknesses allowed ineligible students to enroll in Job Corps. 

Finding — Job Corps did not ensure OA service providers enrolled only eligible 

students. 

Job Corps policy allowed potential Job Corps students to self-certify their family income 

levels and neither the OA contractors nor Job Corps had procedures in place to ensure 

eligibility. As a result, ineligible students took enrollment slots intended for at-risk and lowJob Corps Must Strengthen Controls 

3 Report No. 26-11-005-03-370 
 

 

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

income youth. Our testing showed that self-certification of income was not an effective 

means of determining student income eligibility. We estimated that 472 (10 percent) of the 

4,7184 active students that enrolled in the program during March 2011 were ineligible; and 

if the systemic control weaknesses were not corrected the potential funds spent on 

ineligible students during a 12-month period could total nearly $164.6 million.5 Furthermore, 

even when potential students self-certified income over the established thresholds or did 

not meet other eligibility criteria, OA service providers still allowed ineligible students to 

enroll. We estimated that OA service providers did not comply with Job Corps enrollment 

requirements for as many as 1,527 (2.7 percent) of the 57,392 students enrolled during CY 

2010, and that as much as $45.4 million in DOL funds were spent to train these students.6 

If the recent and planned changes to Job Corps’ student enrollment process are effectively 

implemented, then we estimate nearly $164.6 million in funds could be put to better use by 

ensuring only eligible students were enrolled. 

The enrollment of ineligible students occurred because of significant and systemic 

control weaknesses at both the contractor and Job Corps levels; and not due to 

typographical errors or other non-income based qualifying criteria. Specifically, some 

OA service providers disregarded or were not aware of the appropriate income eligibility 

thresholds; and Job Corps had not provided adequate procedures, training, and 

oversight to ensure compliance. Job Corps has begun making changes to its student 

enrollment process, including modifying its automated system to no longer allow input of 

income amounts exceeding the established thresholds and requiring all potential 

students to provide income documentation. 

Self-Certification Process 

Job Corps outreach and admission services are provided by contractors responsible for 

ensuring the Job Corps program maintains a pool of eligible and committed applicants 

and uses its full training capacity. There were 29 service providers operating under 86 

separate OA contracts.7 The number of contracts managed by a single OA service 

provider ranged from 1 to 10 contracts. The service providers employed admissions 

counselors who interviewed potential students to ascertain the potential benefit they 

could receive from the program, their commitment to program completion, and their 

eligibility. Students were required to meet several eligibility criteria, such as age (16-24 

years), legal U.S. residency, need for additional education to secure and hold 

employment, and low family income. An applicant’s low-income status was determined 

to be qualifying by family income below a certain threshold, receipt of public assistance, 

being in foster care or a ward of the court, or being homeless. The Workforce 

Investment Act (WIA) defined the low-income thresholds for Job Corps eligibility as 

4

 For statistical projection purposes, we statistically reduced the student universe from 5,504 to 4,718 to reflect the 

March 2011 enrollments that separated from the program and, as a result, could not be tested. See Methodology at 

Appendix B for further explanation and calculations. 

5

 See Exhibit 1 for cost calculations.
 6

 See Exhibit 2 for cost calculations.
 7

 Contracts were issued for specific metropolitan regions, portions of states, multi-state territories, as well as for 

specific student gender and on-center/off-center living accommodations. See Background in Appendix A for further 

information on contractor duties.
 

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4 Report No. 26-11-005-03-370 
 

 

 

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

income below the higher of the poverty line, as defined by Office of Management and 

Budget and updated annually by the Department of Health and Human Services (HHS), 

or 70% of Lower Living Standard Income Level (LLSIL) threshold. These thresholds are 

based on family size and geographic location. 

Under Job Corps policy, potential students self-certified their eligibility status in writing 

by signing a Primary Applicant ETA Form 652 (Form 652) prepared by the admission 

counselors. Job Corps policy required the admission counselors to obtain 

documentation from a potential student to demonstrate eligibility only if information 

provided by the student was questionable or the potential student’s social security 

number ended in one of five 2-digit sequences.8 Job Corps’ automated system 

identified accepted students as “Sample” or “Non-Sample.” Sample applicants were 

required to provide Job Corps documentation to demonstrate income eligibility. NonSample students were not required to submit income documentation. Acceptable 

documentation included income tax forms, paycheck stubs, letters from employers, 

court documents, proof of public assistance, or a written statement from the student 

indicating a situation where they did not have family income (e.g., Statement of Support 

indicating living with friends or re latives, homeless). 

Ineligible Students Were Allowed to Enroll in Job Corps 

Our testing showed that self-certification was not an effective means of determining 

eligibility and that OA service providers did not consistently comply with Job Corps 

criteria when enrolling students. As a result, ineligible students enrolled at Job Corps in 

spaces intended for at-risk and low-income youth. 

Self-Certification Was Not Effective 

We tested the effectiveness of the income self-certification process used by Job Corps 

for students who enrolled in March 2011.9 We statistically selected 189 of 5,229 “Non 

Sample” students who enrolled during the month for testing. We asked these students, 

all who previously self-certified their income, to provide the same type of eligibility 

documentation Job Corps accepted for “Sample” students. We received 120 responses 

that were applicable for testing. Of the 120 students we statistically selected and tested, 

108 (90 percent) provided documentation that supported their self-certified eligibility. 

Twelve (10 percent) of the 120 students tested did not support their low-income status 

as follows: 

•	 Eight students documented their income at amounts greater than what they 

self-certified on the Form 652 and at levels exceeding their respective 

low-income thresholds. The eight students exceeded their thresholds by 

$794; $4,470; $7,000; $10,399; $25,415; $29,023; $34,473; and $65,074. 

8

 Social security numbers ending in one of the five 2-digit sequences represented five percent of admissions that 

required documentation to certify reported income on Form 652.

9

 See Appendix B “Sampling Plan for Income Self-Certification Process” for additional information on our testing 

methodology.
 

Job Corps Must Strengthen Controls 

5 Report No. 26-11-005-03-370 
 

 

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

They also did not provide any documentation indicating they were eligible due 

to non-income based qualifying criteria (e.g., receiving public assistance, 

being a foster child). 

•	 Three students self-certified zero family income and informed us that income 

documentation would not be provided. The students did not provide any 

documentation describing how they survived without income (e.g., Statement 

of Support indicating living with friends or relatives, homeless). 

•	 One student self-certified family income of $4,320; stated they would 

document the income but did not do so despite follow-up assistance by Job 

Corps center personnel. The student also did not provide any documentation 

describing how they survived with limited income. 

Based on our statistical sample, we estimated that 47210 (10 percent)11 of the 4,718 active 

students enrolled during March 2011 were ineligible and that $13.8 million in DOL funds 

would be spent to train them, assuming students remained in the program for the 

9.1 months average length of stay. Job Corps will enroll nearly 56,000 students in CY 2011. 

We expect that ineligible students would continue to be enrolled throughout the year if 

recent and planned changes to Job Corps’ student enrollment process are not effectively 

implemented. Assuming the 10 percent ineligibility rate and the average length of stay rate 

remained constant, then potential funds spent on ineligible students would total 

$164.6 million. Since the WIA required income eligibility and the costs to train ineligible 

students are substantial, it is critical that all Job Corps students are eligible for the program. 

As such, we concluded that allowing students to self-certify family income was not an 

effective means of determining student income eligibility. 

OA Service Providers Did Not Consistently Comply with Job Corps Policy 

Further testing showed that even when potential students self-certified income over the 

established thresholds or did not meet other eligibility criteria, OA service providers did not 

consistently comply with Job Corps policy and still allowed ineligible students to enroll. We 

tested a statistical sample of 196 of the 57,392 student admission files12 maintained by OA 

service providers for CY 2010 to determine compliance with Job Corps eligibility criteria. As 

noted, these criteria included age, legal residency, ability to benefit from the Job Corps 

program, and low-income status.13 

10 We are 95 percent confident the range of exceptions was 221 (lower limit) to 723 (upper limit) students. 11 For statistical projection purposes, we statistically reduced the student universe to 4,718 to reflect the percent of 

March 2011 enrollments that separated from the program and, as a result, could not be tested. See Methodology at 

Appendix B for further explanation and calculations.

12 See Appendix B “Sampling Plan for CY 2010 Student Admissions Compliance” for additional information on our 

testing methodology.

13 Earned income criteria include total family income not in excess of the higher of: (a) the Poverty Guideline Limits 

established by the Department of Health and Human Services, (b) 70 percent of the Lower Living Standard Income 

Level established by DOL. 

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

We determined that 7 (3.6 percent) of the 196 students tested were not eligible for Job 

Corps. Specifically, the self-certified family incomes for six students exceeded the 

established thresholds and one student did not meet residency requirements. The six 

students exceeding the income eligibility thresholds also did not qualify for Job Corps 

based on receipt of public assistance, homeless or foster care status. Four OA service 

providers are responsible for the income exceptions.14 The admission file for the seventh 

ineligible student did not document legal entry and residency in the United States and 

contained a letter from the Social Security Administration (SSA) stating the name and 

social security number provided by Job Corps did not match the name assigned to the 

social security number by SSA. The income amounts that exceeded established thresholds 

ranged from $2,430 to $24,621, with three students in the $4,000 - $4,999 range. 

Based on statistical projection, we estimated with 95 percent confidence that OA service 

providers did not comply with Job Corps’ OA eligibility requirements for 614 (1.1 percent) of 

the 57,392 students enrolled during the year, and that $18.2 million was spent to train these 

students, (assuming they remained in the program for the average length of stay). 

Moreover, we are 97.5 percent confident that as many as 1,527 (2.7 percent) students 

were ineligible and as much as $45.4 million in DOL funds were spent to train these 

students.15 

Significant and Systemic Control Weaknesses Allowed Ineligible Enrollments 

ETA reported that nationally the recorded income for 2.9 percent (5,426) of the 180,904 

students enrolled during CY 2008 through 2010 exceeded the established family income 

thresholds allowed for enrollment, and that 2.3 percent of CY 2010 enrolled students had 

records exceeding the established low-income thresholds. The CY 2010 ineligibility rate fell 

within our estimated range of 1.1 percent to 2.7 percent. ETA further analyzed active 

student enrollments and reported that follow up with centers and OA contractors 

determined nearly all entries for ineligible incomes were typographical errors; suggesting 

that OA contractors should improve quality control procedures for data entry. ETA 

requested we examine this issue. 

Our follow-up testing16 of source documents obtained by OA service providers at 

enrollment showed that the students’ self-certified incomes were consistent with the income 

levels recorded in Job Corps’s automated system for 125 (90.6 percent) of the 138 student 

files we selected for testing; and that the 125 students were in fact ineligible.17 Table 1 

shows the amounts that income exceeded established thresholds ranged from $55 to 

$160,430.18 

14 Education & Training Resources (3), Adams & Associates (2), Allutiiq (1) and Jackson-Pierce (1).
 15 See Exhibit 2 for cost calculations.
 16 See Appendix B “Sampling Plan for Admissions Follow-up Compliance” for additional information on our testing 

methodology.

17 We judgmentally selected for testing eight OA service provider contracts based on our risk assessment using Job 

Corps’ 2011 report that identified income ineligible students, admission data for CY 2010, and any known program or 

contractor weaknesses.
 18 All service providers tested admitted income ineligible students among the 125 exceptions. The highest exception 

rates: Adams & Associates (49 or 39.2%), Education & Training Resources (23 or 18.4%), ResCare (16 or 12.8%) 

and MINACT (13 or 10.4%).
 

Job Corps Must Strengthen Controls 

7 Report No. 26-11-005-03-370 
 

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

Table 1: Results of follow up testing of income source documents
 

Income amount that exceeded limits Number of students 

$160,430 1 

$127,500 1 

$112,930 1 

$50,000 - $69,999 5 

$30,000 - $49,999 1 

$10,000 - $29,999 28 

$5,000 - $9,999 30 

$2,000 - $4,999 32 

$55 - $1,999 26 

Totals 	 125*
 

*The 125 students included 18 ineligible students who were intentionally admitted at a Job Corps center. Similar to 

the other 107, income amounts entered in OASIS for the 18 exceeded the established income thresholds for the 

students. 

The ineligible enrollments occurred because of significant and systemic control 

weakness at both the contractor and Job Corps levels. Specific control weaknesses we 

identified included: 

•	 OA service providers had not established effective policies, procedures, and 

oversight to ensure only eligible enrollments. Based on interviews with OA 

service providers and admissions counselors responsible for ineligible 

enrollments, we found that some admissions counselors either disregarded or 

were not aware of the appropriate income eligibility thresholds. 

•	 Job Corps did provide income eligibility criteria and guidance to OA service 

providers. However, the procedures, training, and oversight provided were not 

adequate to ensure compliance. For example, admissions counselors entered 

incomes exceeding the established thresholds into Job Corps’ automated 

system, yet Job Corps did not review the income data to identify the ineligible 

enrollments. Job Corps regional offices did not review documentation of 

self-certified incomes for eligibility during on-site assessments of OA service 

provider and center operations. 

•	 Job Corps did not conduct 100 percent income verification; rather potential 

students outside the “Sample” pool were allowed to self-certify their family 

income levels. Our testing showed that self-certification was not an effective 

means of determining student income eligibility. 

•	 Job Corps policy requiring admissions counselors to obtain income 

documentation from potential students with social security numbers ending in 

one of five 2-digit sequences was not an effective control. We selected 31 

students identified as “Sample” in Job Corps automated system and found 

Job Corps Must Strengthen Controls 

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

that the contents of the students’ admission files for 11 (35.5 percent) 

indicated that the required income documentation was not obtained. 

Moreover, the “Sample” process used by Job Corps would only determine 

whether five percent of the applying students were income eligible. Job Corps 

did not assess the overall reliability of the self-certification and sampling 

process because they did not request OA service providers forward sampling 

acceptance and rejection data to Job Corps for analysis. 

We conducted additional testwork based on a risk assessment that identified 10 OA 

service provider contracts with a high risk of enrolling ineligible students in CY 2010.19 

We performed this work to determine the extent of ineligible student enrollments by 

specific high-risk OA service provider contracts. We statistically selected 30 student 

enrollments from each service provider contract to test the extent of their ineligible 

enrollments.20 Three of the 10 showed zero ineligible enrollments. However, the 

percentage of students with records indicating ineligibility for the seven remaining OA 

service provider contracts tested ranged from 3.3 percent to 20 percent. Table 2 on the 

following page summarizes our test results for the 10 high-risk OA service provider 

contracts reviewed. 

19 We judgmentally selected 10 OA service provider contracts based on our risk assessment using Job Corps’ 2011 

report that identified income ineligible students, admission data for CY 2010, and any known program or contractor 

weaknesses. 

20 See Appendix B “Sampling Plan for High Risk Service Provider Compliance” for additional information on our 

testing methodology. 

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9 Report No. 26-11-005-03-370 
 

 

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

Table 2: Results of 10 high-risk OA service provider contracts 
 

OA Service 

Provider Contract 

Students 

Tested

Ineligible 

Students

Percent 

Ineligible

CY 2010 

Enrollments 

Projected 

Ineligible 

Students

Adams & 

Associates 1 30 6 20.0% 422 84 

Education & 

Training 

Resources 2 30 6 20.0% 421 84 

Adams & 

Associates 3 30 2 6.7% 165 11 

Adams & 

Associates 4 30 2 6.7% 207 14 

Adams & 

Associates 5 30 2 6.7% 157 10 

Odle 

Management 

Group 6 30 2 6.7% 338 23 

ResCare Inc. 7 30 1 3.3% 889 30 

Management 

& Training 

Corp 8 30 0 0.0% 280 0 

MINACT Inc. 9 30 0 0.0% 543 0 

ResCare Inc 10 30 0 0.0% 140 0 

 Totals 300 21 7% 3,562 256

Questioned Costs for Ineligible Students 

During the testing of our statistical and judgmental samples, we identified a total of 153 

ineligible students. We determined that $2.27 million of DOL funds were spent to train 

these students based on the number of days each student was enrolled and the related 

center cost per day. The $2.27 million represents questioned costs because the 

responsible OA service providers did not comply with Job Corps eligibility criteria and 

the funds were spent on students who were not eligible for the Job Corps program. OA 

service provider contracts allow for the recovery of unallowable costs in accordance 

with Federal Acquisition Regulations.21 Table 3 summarizes the number of ineligible 

students identified during each test and the related questioned costs. 

21 Federal Acquisition Regulation Subpart 31.2 Contracts With Commercial Organizations and Subpart 52.216-7 

Allowable Cost and Payment. 

Job Corps Must Strengthen Controls 

10 Report No. 26-11-005-03-370 
 

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

Table 3: Summary of ineligible students and related questioned costs
 

Test Ineligible Students Questioned Costs

OA Service provider 

compliance test 7 $166,980 

10 high-risk OA service 

provider compliance test 21 $272,945 

Follow-up compliance test 125 $1,834,378 

Totals 	 153 $2,274,303
 

Job Corps is Strengthening its Student Eligibility Determination Process 

Following the discovery of intentional admission of ineligible students at one of its 

centers, Job Corps has taken a variety of steps to transform its student enrollment 

process, including: 

•	 February 2011 - Job Corps modified the Center Information System to include 

the new Family Income Report. 

•	 March 2011 – Job Corps developed and released technical assistance tools 

to assist admissions counselors in determining low-income eligibility. 

•	 April 2011 - Job Corps modified its automated system (OASIS) to include an 

enhanced low-income eligibility verification process that validates 

income-related data against current poverty and low income guidelines. With 

these changes, the system will not allow the enrollment of an applicant who 

does not meet the low-income definition as stated in the PRH, including being 

homeless, a foster child, or receiving public assistance. 

•	 August 2011 – Job Corps provided regional staff access to OASIS to produce 

management reports with OA service provider and student enrollment data, 

including income eligibility statistics. 

•	 August and September 2011 – Job Corps provided in-person training to 

outreach and admissions contractors. 

•	 October 2011 - Job Corps released a revised policy, effective 

October 10, 2011, eliminating self-certification of family income and requiring 

100 percent of applicants to provide income documentation. 

Job Corps Must Strengthen Controls 

11 Report No. 26-11-005-03-370 
 

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

RECOMMENDATIONS 

We made five recommendations to the Assistant Secretary for ETA and the National 

Director, Office of Job Corps, related to improving Job Corps’ admission eligibility process: 

1. Job Corps should determine the eligibility of all active students with recorded 

family incomes above the established income thresholds and take appropriate 

action. 

2. Recover the estimated $2.27 million program funds spent on ineligible 

students from the OA service providers, as appropriate. 

3. Develop policies, procedures, training and oversight to ensure OA service 

providers comply with established eligibility criteria and other Job Corps policies 

for enrollment in the program. 

4. Direct OA service providers to develop policies, procedures and oversight to 

ensure compliance with established eligibility criteria and other Job Corps 

policies for enrollment in the program. 

5. Implement 100 percent applicant income verification procedures. 

We appreciate the cooperation and courtesies that Job Corps, outreach and admissions 

service provider, and Job Corps Center 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. 

Elliott P. Lewis 

Assistant Inspector General for Audit 

Job Corps Must Strengthen Controls 

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

Exhibits 

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13 Report No. 26-11-005-03-370 
 

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

Exhibit 1 
 

Projected and estimated training costs for CY 2011 ineligible enrolled students 
 

To determine Annual Cost Per Budgeted Slot we performed this calculation: 

Annual Cost Per 

22Job Corps Total 23Budgeted Slots for Budgeted Slot in 

Budget Authority ÷ ( CY 2011 X Capacity Utilization ) = CY 2011 

$1,694,577,795 45,058 97% $38,771.97 

To determine Daily Cost Per Budgeted Slot we performed this calculation: 

Annual Cost Per 

Budgeted Slot in CY Daily Cost Per Budgeted 

2011 ÷ Calendar Days = Slot CY 2011 

$38,771.97 365 $106.22 

To determine Cost to Train for Average Length Per Stay we performed this calculation: 

Daily Cost Per Average Length Per 
 

Budgeted Slot CY Stay (9.1 months or Cost to Train for Average 
 

2011 X 276.79 days) = Length Per Stay 
 

$106.22 276.79 $29,400.63 

To determine projected cost to train March 2011 ineligible students we performed this calculation: 

Mid-point (10%) of Projected Cost to Train 472 

Cost to Train for Projected Ineligible Students (March 2011 

Average Length Per Students Enrolled in only) for Average Length 

Stay X March 2011 = of Stay 

$29,400.63 472 $13,877,097.36 

To determine estimated cost to train ineligible students for 12 months we performed this calculation: 

Estimated Cost 

to Train 

Cost to Train for Ineligible 

Average Length Per 24Estimated CY 2011 Students for 12 

Stay X ( Student Arrivals X Mid-point Exception Rate ) = Months 

$29,400.63 56,000 10% $164,643,528 

22 We converted FY data to CY by calculating the CY 2011 budget authority from data provided by Job Corps.
 23 We converted Program Year (PY) data to CY by calculating the CY 2011 budgeted slots from data provided by Job 

Corps.

24 The estimated number of CY 2011 student arrivals (56,000) is greater than the number of budgeted slots (45,058) 

because the average length of stay is only 9.1 months, rather than 12 months. As a result, Job Corps can receive a 

larger number of student arrivals than budgeted slots in a 12-month period.
 

Job Corps Must Strengthen Controls 

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Job Corps Must Strengthen Controls 

16 Report No. 26-11-005-03-370 
 

=

 

 

 

 

 

 

 

 

 

 

 

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

Exhibit 2 

Projected trainings costs for CY 2010 ineligible enrolled students 

To determine Annual Cost Per Budgeted Slot for CY 2010 we performed this calculation: 

25Job Corps Annual Cost 

Total Budget 26Budgeted Slots Per Budgeted 

Authority ÷ ( for CY 2010 X Capacity Utilization ) Slot in CY 2010 

$1,696,071,500 44,538 97% $39,259.22 

To determine Daily Cost Per Budgeted Slot for CY 2010 we performed this 

calculation: 

Annual Cost 

Per Budgeted Daily Cost Per 

Slot in CY Budgeted Slot CY 

2010 ÷ Calendar Days = 2010 

$39,259.22 365 $107.56 

To determine Cost to Train for Average Length Per Stay we performed this 

calculation: 

Average Length 

Daily Cost Per Per Stay (9.1 Cost to Train for 

Budgeted Slot months or 276.79 Average Length Per 

CY 2010 X days) = Stay 

$107.56 276.79 $29,771.53 

To determine projected cost to train 614 ineligible students in CY 2010 we performed this calculation: 

Mid-point (1.07%) 

Cost to Train of Projected Projected Cost to 
 

for Average Ineligible Students Train 614 Students 
 

Length Per Enrolled in CY for Average Length of 
 

Stay X 2010 = Stay 

$29,771.53 614 $18,279,719.42 

To determine projected cost to train 1,527 ineligible students in CY 2010 we performed this calculation: 

Upper limit (2.66%) 

Cost to Train of Projected Projected Cost to 
 

for Average Ineligible Students Train 1,527 Students 
 

Length Per Enrolled in CY for Average Length of 
 

Stay X 2010 = Stay 

$29,771.53 1527 $45,461,126.31 

25 We converted FY data to CY by calculating the CY 2010 budget authority from data provided by Job Corps. 26 We converted PY data to CY by calculating the CY 2010 budgeted slots for students from data provided by Job 

Corps. 

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

Exhibit 3 

March 2011 Income Verification Exceptions 

Student 

Family 

Income 

in 

OASIS 

Annual 

income 

based 

on 

student 

data 

Family 

Size 

Income 

Threshold 

Amount 

income 

exceeding 

limit 

Testing Note 

Student 

1 13,000 24,240 2 13,841 LLSIL 10,399 

Supporting documentation provided was a June 2011 pay 

stub with Year-to-Date (YTD) gross wages at $12,120.22 

or $24,240 annualized ($12,120 x 2 semi-annual periods). 

2011 South Metro LLSIL (MIAMI). 

Student 

2 $0 1 

The student stated in handwritten letter that he had no 

documentation to provide; student provided no statement 

of support. 

Student 

3 4,320 0 

On June 29, center personnel stated student was asked 

by center counselor if she was able to provide the 

requested documents to which she replied that she could 

and she agreed to provide them. Records Manager from 

Job Corps center stated on July 27 that student was 

contacted on several occasions regarding OIG request of 

June 14; student did not provide any documentation or 

statement of support. Student separated from the program 

on July 25. 

Student 

4 $0 15,300 1 

10,830 

HHS 

Poverty 

Limit 

4,470 

Supporting documentation provided was Internal Revenue 

Service (IRS) Form 1040EZ income tax return. The 

reported income of $15,300 exceeded the 2010 HHS and 

West Metro LLSIL. 

Student 

5 $0 49,509 1 15,036 

LLSIL 34,473 

Supporting documentation provided was June 2011 pay 

stub that listed $24,754.65 (annualized rate $24,754.65 x 

2 semi-annual periods of 6 months = 49,509.30). 

Student 

6 $0 1 The student stated that she had no documentation to 

provide; student provided no statement of support. 

Student 

7 2,345 43,733 2 

14,710 

HHS 

Poverty 

Limit 

29,023 

Supporting documentation provided was May 

2011paystub that listed $14,469 in YTD Gross wages. 

Hourly rate of $22.4272 x 75 average hours per pay 

period x 26 pay periods = $43,733. 

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

Student 

Family 

Income 

in 

OASIS 

Annual 

income 

based 

on 

student 

data 

Family 

Size 

Income 

Threshold 

Amount 

income 

exceeding 

limit 

Testing Note 

Student 

8 $0 1 

Student responded in handwritten letter they were not 

prepared to provide any documents and stated they have 

nothing to provide. Student did not provide any statement 

of support. 

Student 

9 19,000 23,352 4 22,558 

LLSIL 794 

Supporting documentation provided was IRS Form 1040A 

(2010 income tax return). (2010 St Louis LLSIL and HHS 

Limits) 

Student 

10 0 41,076 2 15,661 LLSIL 25,415 Supporting documentation provided was 2010 IRS W2 Wage & Tax Statement listing $41,076 income. 

Student 

11 17,500 30,909 4 23,909 LLSIL 7,000 

Student's mother provided a statement of support 

indicating that she was the primary provider for the 

student. She also provided her 2010 Form W2 Wage & 

Tax Statement listing $30,522 and May 2011 pay stub 

listing $14,180 YTD Gross Wages. Pay stub on an 

annualized rate = 30,909 ($14.86 x 80 hours per pay 

period x 26 pay periods) 

Student 

12 900 88,202 3 23,128 LLSIL 65,074 

Supporting documentation was 2010 IRS Form 1040 

Income Tax Return. (2010 LLSIL Seattle-TacomaBremerton, WA) 

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Appendices 

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

Appendix A 

Background 

Secretary Solis requested a nationwide audit of Job Corps’ outreach and admissions 

process after ETA found intentional admission of ineligible students at the Gadsden Job 

Corps Center, operated in Alabama by a private contractor. An initial investigation by 

the center contractor indicated as many as 112 of 477 (or 23.4 percent) past and 

currently enrolled students exceeded the maximum family income level allowed for 

participation in the Job Corps program. The Secretary requested the audit to ensure the 

appropriate use of Federal taxpayer money and the fair enrollment opportunity for 

eligible students into Job Corps, as well as to improve ETA’s policies and procedures to 

prevent the enrollment of ineligible students. 

In February 2011, ETA provided us with the results of two reviews it conducted of 

student eligibility. For the first review, ETA reported that nationally 2.9 percent (5,426) of 

the 180,904 students enrolled between calendar years (CY) 2008 and 2010 were 

income ineligible, and that the ineligibility rate improved to 2.3 percent in CY 2010.27 For 

the second review, ETA further analyzed active student enrollments and reported that 

follow-up with centers and OA contractors determined nearly all entries for ineligible 

incomes were typographical errors; suggesting that OA contractors should improve 

quality control procedures for data entry. 

Job Corps is administered by the U.S. Department of Labor, Office of Job Corps (Job 

Corps), under the leadership of the National Director, supported by the National Office 

of Job Corps and a field network of six regional offices. Job Corps' mission is to attract 

eligible young people, teach them the skills they need to become employable and 

independent, and place them in meaningful jobs or further education. 

Job Corps offers a comprehensive array of career development services through a 

nationwide network of 124 campuses to at-risk young women and men, ages 16 to 24, 

to prepare them for successful careers. Job Corps centers are operated for DOL by 

private companies through competitive contracting processes, and by other Federal 

agencies through interagency agreements. Job Corps is a free education and training 

program with a $1.7 billion budget (fiscal year 2011). The Office of Job Corps is an 

office within ETA. 

Contractors, on behalf of DOL, operate Job Corps’ outreach and admissions program. 

These contractors, or service providers, ensure the Job Corps program maintains a 

positive public image, strong community and employer partnerships, a pool of eligible 

and committed applicants, and full utilization of Job Corps training opportunities. OA 

service providers assess, verify, and document applicant eligibility for the Job Corps 

program and enroll eligible individuals who can benefit from the Job Corps program. 

27 The family income thresholds are based on Poverty Guideline Limits established by the Department of Health and 

Human Services (HHS) and 70% of the Lower Living Standard Income Levels (LLSIL) established by the Department 

of Labor. Job Corps eligibility thresholds are set at the higher of the Poverty Guideline Limits and the LLSIL. 

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24 Report No. 26-11-005-03-370 
 

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

Appendix B 

Objective, Scope, Methodology and Criteria 

Objective 

Our audit objective was to answer the following question: 

Did Job Corps ensure outreach and admissions service providers enroll only eligible 

students? 

Scope 

Our scope encompassed the 86 contractors that provided OA services to the 57,392 

students who enrolled at Job Corps centers in CY 2010, as well as the 5,504 students 

who enrolled in March 2011. 

This report reflects the audit work conducted at 11 Job Corps centers, all six Job Corps 

regional offices (Atlanta, Boston, Chicago, Dallas, Philadelphia and San Francisco), and 

Job Corps’ national office in Washington, D.C. 

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. 

Methodology 

To accomplish our audit objective, we obtained an understanding of applicable laws, 

regulations, and Job Corps policies and procedures. At the Job Corps national office 

and Job Corps regional offices, we performed walkthroughs of national and regional 

offices processes, interviewed officials, reviewed regional office center assessments, 

and identified and evaluated internal controls over student eligibility oversight. At the 11 

Job Corps centers we visited (Exeter, Gadsden, Guthrie, IndyPendence, Inland Empire, 

Los Angeles, Miami, Pine Ridge, Shriver, St. Louis and Turner), we performed 

walkthroughs of center admission processes, and identified and evaluated internal 

controls over student eligibility oversight and reporting, as applicable. 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. 

We selected the 11 Job Corps centers based on the OA service provider that admitted 

students into the Job Corps center. We considered the number of students admitted in 

CY 2010 and any known program weaknesses in our selection process. The center 

Job Corps Must Strengthen Controls 

25 Report No. 26-11-005-03-370 
 

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

where the student enrolled maintained the official OA admission file and retained the file 

following a student’s separation from the program. 

We assessed the reliability of related data for the applicable audit period and 

determined that the data was sufficiently reliable to accomplish our audit objective. 

OA Service Providers 

Contractors, or service providers, provided Job Corps’ outreach and admission 

services. They were responsible for ensuring the Job Corps program maintained a pool 

of eligible and committed applicants, and full utilization of Job Corps’ training capacity. 

There were 29 service providers operating under 86 separate OA contracts. The 

number of contracts managed by a single OA service provider ranged from 1 to 10 

contracts. There were four expired OA contracts and three voluntary OA contracts 

among the 86 separate contracts. We included expired contracts in our scope because 

the contractor provided outreach and admission service to students who enrolled at a 

Job Corps center during CY 2010. 

We conducted four tests to accomplish our audit objective. For our testing, we used 

both statistical and judgmental sampling to assess the level of ineligible students that 

enrolled in Job Corps and the causes for improper enrollments. 

Sampling Plan for Income Self-Certification Process 

We tested for compliance with Job Corps’ income eligibility standards and the 

effectiveness of Job Corps’ income self-certification process. We used a statistical 

random sampling methodology with testing results projected to the universe. 

We selected a statistical random sample of 189 students from a universe of 5,229 

students for testing. Job Corps provided OIG with a list of 5,522 students admitted 

during March 2011. We eliminated 18 duplicate student names with the same 

respective identification number and 275 students that Job Corps previously 

documented their income as part of the admissions process (5,522 -18 - 275 = 5,229). 

We sent letters to the students’ mailing addresses as provided by Job Corps and to the 

Job Corps centers where they enrolled. We requested students to provide income 

eligibility documentation Job Corps accepted for students, and we requested center 

directors to assist students in meeting our request. We evaluated the documentation 

received to determine if the students met the low family income thresholds for Job 

Corps eligibility by using the higher of the HHS Poverty Guideline threshold or 70 

percent of the LLSIL threshold. We considered and accepted other documentation that 

qualified a student for Job Corps regardless of low-income eligibility such as, receipt of 

public assistance, being in foster care or a ward of the court, being homeless, or having 

a disability that presented a barrier to obtaining employment. 

Job Corps Must Strengthen Controls 

26 Report No. 26-11-005-03-370 
 

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

We received 133 (70.3 percent) responses from the letters sent. Thirteen (9.77 percent) 

of these responses stated the student already separated from Job Corps which resulted 

in 120 responses for testing. To maintain the statistical validity of our work, we reduced 

the student universe by 511 (9.77 percent) students from 5,229 to 4,718 to reflect 

students that already separated from the program. Using a 95 percent confidence level, 

we projected the testing results against the adjusted student universe of 4,718. 

Sampling Plan for CY 2010 Student Admissions Compliance 

We tested for compliance with Job Corps’ eligibility standards listed in the PRH, which 

included age (16-24), legal U.S. residency, ability to benefit from the Job Corps program 

by needing additional education to secure and hold employment, selective service 

registration for males and low family income. We determined an applicant’s low-income 

status by self-certification of family income below the higher of the HHS Poverty 

Guideline threshold or 70% of LLSIL threshold, receipt of public assistance, being in 

foster care or a ward of the court, being homeless, or having a disability that presented 

a barrier to obtaining employment. 

Testing Step 1: We statistically selected 28 service providers from one of four stratums. 

Job Corps provided a list of 86 OA service providers (active, expired and voluntary 

contractors). We stratified the OA service providers based on our risk assessment and 

placed each into one of four strata. In our risk assessment, we considered the number 

of student admissions in the calendar year for each contract, the contract status (active, 

expired or voluntary), and we considered any known program weaknesses. 

Testing Step 2: We randomly selected seven students from each of the 28 OA service 

providers, giving us 196 randomly selected students from among 18,327 students. We 

were then able to project our results with 95 percent confidence to our universe of 

57,392 students. Job Corps provided us with a database of 57,950 admitted students 

who arrived for enrollment at a Job Corps during CY 2010. We eliminated 558 duplicate 

and triplicate student names with the same respective identification number. As a result, 

we identified a student universe of 57,392 students (57,950 – 558 = 57,392). 

Sampling Plan for Admissions Follow-up Compliance 

We tested for compliance with Job Corps’ eligibility standards listed in the PRH. 

Testing Step 1 – We judgmentally selected eight OA service provider contracts based 

on our risk assessment using Job Corps’ 2011 income ineligibility report, admission 

data for CY 2010, and other known program weaknesses. 

Testing Step 2 – We judgmentally selected 138 of 372 students from the eight OA 

service providers using student identification numbers that accompanied Job Corps’ 

income ineligibility report. We selected students for representation across CY 2010 and 

representation when the OA contractor was not clearly identified, as well as other 

factors. We did not project our test results. 

Job Corps Must Strengthen Controls 

27 Report No. 26-11-005-03-370 
 

 

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

Sampling Plan for High Risk Service Provider Compliance 

We tested for compliance with Job Corps’ eligibility standards listed in the PRH. 

Testing Step 1 – We judgmentally selected 10 OA service provider contracts based on 

risk assessment using Job Corps’ 2011 income ineligibility report, admission data for 

CY 2010, and other known program weaknesses. 

Testing Step 2 – We randomly selected 30 students from each of the 10 OA service 

provider contracts giving us 300 randomly selected students from among the 3,562 

students. We did not project our test results. 

Calculation of Questioned Costs

During the testing of our statistical and judgmental samples, we identified ineligible 

students and the amount of DOL funds spent to train these students (see Table 3). The 

funds spent to train these students represent questioned costs because the responsible 

service providers did not comply with Job Corps’ eligibility criteria, and the funds were 

spent on actual students not eligible for the Job Corps program. We used enrollment 

and cost information provided by Job Corps to calculate questioned costs. 

To determine questioned costs we: 

•	 Calculated number of days a student was enrolled in Job Corps from day of 

arrival to day of separation. 

•	 Obtained from Job Corps the average budgeted-cost-per-day-per-student for the 

Job Corps center where the student was enrolled. 

• Multiplied average-budgeted-cost-per-day-per-student figure by the number of 

days enrolled for each ineligible student. 

• Average-budgeted-cost-per-student x Number Days Enrolled = Questioned Cost 

Funds Put To Better Use

To determine funds put to better use we calculated: 

•	 Annual Cost of a Budgeted Student Slot by using the FY 2010 Job Corps total 

budget authority28 divided by the budgeted student slots and multiplied by the 

capacity utilization rate29. 

•	 Daily Cost Per Budgeted Student Slot by dividing the Annual Cost of a Budgeted 

Student Slot by 365 calendar days. 

•	 Average Length Per Stay Cost by multiplying the Daily Cost Per Budgeted 

Student Slot by 9.1 months (Job Corps determined average length per stay). 

28 Total budget authority included operations, construction, and administration from the Congressional 

Budget Justifications.

29 The Capacity Utilization Rate is from a 5 year average of actual on-board strength (OBS) divided by the 

5-year average of budgeted OBS.
 

Job Corps Must Strengthen Controls 

28 Report No. 26-11-005-03-370 
 

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

Criteria 

Economic Opportunity Act of 1964 

Government Accountability Office Government Auditing Standards (July 2007Revision; 

GAO-07-731G) 

Government Accountability Office Standards for Internal Control in the Federal 

Government (November 1999; GAO/AIMD-00-21-3.1) 

Office of Job Corps Policy and Requirements Handbook 

Office of Job Corps Program Assessment Guide 

U.S. Department of Health and Human Services Poverty Guidelines 

Workforce Investment Act of 1998 

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Job Corps Must Strengthen Controls 

30 Report No. 26-11-005-03-370 
 

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

 Appendix C 

Acronyms and Abbreviations 

CY Calendar Year 

DOL U.S. Department of Labor 

ETA Employment and Training Administration 

Form 652 Primary Applicant ETA Form 652 

HHS U.S. Department of Health and Human Services 

Job Corps Office of Job Corps 

LLSIL Lower Living Standard Income Level 

OA Outreach & Admissions 

OASIS Outreach & Admissions Student Information System 

OBS On-board Strength 

OIG Office of Inspector General 

PRH Policy and Requirements Handbook 

PY Program Year 

SSA Social Security Administration 

WIA Workforce Investment Act 

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U.S. Department of Labor 

SEP 29 2011 

Assistant Secretary tor 

Employment and Training 

Washington. D.C. 20210 

MEMORANDUM FOR ELLIOT P. LEWIS 

Assistant Inspector General 

FROM: 

SUBJECT: 

JANE OATES tyu it'. L 

Assistant Secretary for v """"J 

Employment and Trainin 

OIG Audit of Job Corps Must Strengthen Controls to Ensure LowIncome Eligibility 

Draft Report #26- 11-005-03-370 

This memorandum responds to the subject draft audit report, dated September 23, 2011, Job 

Corps Must Strengthen Controls to Ensure Low-Income Eligibility. We appreciate the 

opportunity to provide input to this draft audit report as well as to the recent discussion draft 

report and "statement of facts." The Employment and Training Administration (ETA), which 

manages and administers the Office of Job Corps (OJe), appreciates the Office ofInspeclor 

General's (OIG's) efforts to identify areas in which the program's eligibility detennination 

policies and procedures can be improved. 

ETA is conunilted to ensuring that Job Corps is available to students who meet legislatively 

mandated eligibility criteria. This includes outreach and admissions contractors verifying the 

eligibility of 100010 of applicants to validate that the program is serving its target population, the 

nation's neediest youth. We take great pride in the work we do on behalf of youth and adults 

across the nation, and our efforts fully support the Department's priorities 10 achieve ''Good Jobs 

for Everyone." For over four decades, Job Corps has made a difference in young people's lives 

by helping them gain academic and career technical training credentials, complemented by 

placement in employment, education, the military, and apprenticeship, with defined career paths 

that will lead them to economic self-sufficiency. 

First, ETA takes responsibility for eligibility detenninations that were determined to be improper. 

As the OrG outlines in the report, ETA has swiftly taken steps over the last year to implement 

100% verification of income eligibility by contracted outreach and admissions providers and 

strengthen data collection and monitoring systems for federal oversight. ETA has also offered 

multiple online and in-person training sessions for outreach and admissions staff, and developed 

technical assistance tools. ETA is pleased that many of the OIG's recommendations have 

already been implemented or will be implemented in the faJl of2011. 

Funds Spent on Ineligible Students 

ETA disagrees with the methodology and outcomes of the OIG's calculation of funds spent on 

ineligible students. To begin, Exhibits 1 and 2 cite inaccurate budget authority figures. Working 

with the ETA Budget Office. Job Corps provided the OIG with the actual SF-1320MB 

apportionment supporting documentation. In addition, the OIG includes Administration costs in 

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

Appendix D 

ETA’s Response to Draft Report 

Job Corps Must Strengthen Controls 

33 Report No. 26-11-005-03-370 
 

its calculation. This methodology sets Job Corps apart from all other ETA programs, which do 

not include their administration funding in participant cost calculations. Administration funding 

impacts only the federal workforce that oversees and monitors the program, and does not affect 

the direct delivery of services to students. 

Further, as the OlG acknowledged in the report, the estimate 0[$165 million assumes that the 

ineligibility rate from the sample taken in March 2011 will remain constant through calendar 

year 2011 . This assumption does not account for the following steps taken by ETA: 

• February 2011 ~ Job Corps modified the Center Information System to include an Income 

Eligibility Data Integrity Report. 

• March 201 1 - Job Corps developed and released technical assistance tools to assist 

contracted admissions counselors in detennining low~income eligibility. 

• April 2011 ~ Job Corps modified its automated system (OASIS) to include an enhanced lowincome eligibility verification process that validates income-related data against current 

poverty and low-income guidelines. With these changes, the system will not allow the 

enrollment of an applicant who does not meet the low-income definition as slated in the PRH, 

including being homeless, a foster child, or receiving public assistance. 

• August 2011 - Job Corps provided regional staff access to OASIS to produce management 

reports with outreach and admissions service provider and student enrollment data, including 

income eligibility statistics. 

• August and Seplember 2011 - Job Corps provided training sessions to outreach and 

admissions contractors. 

• October 2011 - Job Corps has revised its policy to eliminate self-certification of family 

income and requirelOO percent of applicants to provide income documentation. 

To summarize, the SI65 million is a hypothetical projection, which, given the enhanced policies 

and procedures that have been implemented, will not occur. The OIG's inclusion of this figure 

in the draft report greatly overestimates the amount of potential funds spent on ineligible students. 

Recommendations 

ETA is committed to ensuring 100010 eligibility of applicants with federal staff providing 

continued oversight and training. 

Our responses to the draft report's recommendations follow: 

OIG R~commendatlon 1. Job Corps should determine the eligibility of all active students with 

recordedfamily incomes over the established income thresholds and take appropriate action. 

2 

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

Job Corps Must Strengthen Controls 

34 Report No. 26-11-005-03-370 
 

Response; Management accepts this recommendation. ETA, in coordination with the Office of 

the Solicitor, ETA Office of Contracts Management, and Office of the Sec:retary, will review the 

eligibility of affected students and take the appropriate action. 

Recommendlltion 1. Recover the estimaled $2.27 million program funds spent on ineligible 

students from the OA service providers. as appropriate. 

Response: Management accepts this recommendation. Job Corps, in coordination w ith the ETA 

Office of Contracts Management, will evaluate the questionable income thresholds, and seek 

documentation from the applicable outreach and admissions contractors. In the event that a 

contractor cannot support the questioned costs, the costs will be disallowed in accordance with 

the Federal Acquisition Regulation (FAR) and contract requirements. In the instances where a 

contractor has already been paid such funds, recoupment through set-offwill also be pursued, as 

appropriate. Appropriate infonnation to close this recommendation will be forwarded to the orO. 

We consider this recommendation resolved. 

Recommendation 3. Develop poliCies, procedures, training and oversight to ensure OA service 

providers comply with established eligibility criteria and other Job Corps policies for enrollment 

in the program. 

Response: Management accepts this recommendation. Job Corps has delivered extensive staff 

training on low-income eligibility requirements and revised eligibility policies and practices, and 

developed technical assistance tools for outreach and admissions contractors. Job Corps will 

continue to develop and deliver training and technical assistance as appropriate. 

Based on the current policies and procedures, during the I' L quaner ofFY 2012, the National 

Director of lob Corps will issue a memorandwn to Regional Offices to reiterate policies and 

procedures regarding oversight responsibilities, to include audit sampling during compliance 

assessments. 

The National Director of Job Corps will also issue a memorandum through the Regional Offices 

to direct outreach and admissions contractors to strengthen policies and procedures, including 

quality assurance, to ensure compliance with Job Corps' policies for detennining and validating 

income eligibility. 

We consider this recommendation resolved. 

Recommendation 4. Direct OA service providers to develop poliCies, procedures and oversight 

to ensure compliance with established eligibility criteria and other Job Corps policies for 

enrollment in the program. 

Response: Management accepts this recommendation. Please refer to the response in 

Recommendation NO.3. 

We consider this recommendation resolved. 

3 

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

Job Corps Must Strengthen Controls 

35 Report No. 26-11-005-03-370 
 

RecoMMendation 5. Implement /00 percent applicant income verification procedures. 

Rnponse: Management accepts this recommendation. Job Corps' policy to conduct 100 

percent income verification is effective on October to, 201 L 

We consider this recommendation resolved. 

Based on the foregoing responses, we anticipate that the audit report's recommendations will be 

resolved and can be closed upon completion of the corrective actions. 

cc: Roberta Gassman. ETA 

Edna Primrose, Job Corps 

4 

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

Job Corps Must Strengthen Controls 

36 Report No. 26-11-005-03-370 
 

 

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

Appendix E 

Acknowledgements 

Key contributors to this report were Ray Armada (Audit Director); Stephen Lawrence 

(Acting Audit Manager); Arijit Bandyopadhyay, Steven Johnson, Adams Kondeh, and 

Barry Weiss (Auditors); Steven Witherspoon (OIG Report Reviewer); and Ajit Buttar 

(OIG Statistician). 

Job Corps Must Strengthen Controls 

37 Report No. 26-11-005-03-370 
 

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


 

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Job Corps Must Strengthen Controls 

38 Report No. 26-11-005-03-370 
 

 

TO REPORT FRAUD, WASTE OR ABUSE, PLEASE CONTACT: 

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Email: hotline@oig.dol.gov 

Telephone: 1-800-347-3756 

202-693-6999 

Fax: 202-693-7020 

Address: Office of Inspector General 

U.S. Department of Labor 

200 Constitution Avenue, N.W. 

 Room S-5506 

Washington, D.C. 20210