International Labor Grants: Labor Should Improve Management of Key Award Documentation
Published: 2014-05-15T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Recent incidents, including the collapse of a factory building in Bangladesh, have highlighted poor working conditions overseas. According to the International Labour Organization, millions of children worldwide are engaged in labor that hinders their development. ILAB provides technical assistance mainly through international and nongovernmental organizations to improve working conditions by supporting worker rights and combating child labor. You asked us to review issues related to ILAB's international technical assistance. This report examines (1) how ILAB develops its technical assistance projects, (2) how ILAB selects recipients of its funding, and (3) how Labor manages its grant award documentation.
To address these objectives, GAO reviewed Labor guidance on procurement, ILAB project manager manuals, and grant solicitations. GAO examined a nongeneralizable sample of 26 award files that were active in calendar years 2011-2013. GAO selected this sample based on several factors, including dollar value and geographic location. GAO also interviewed officials from ILAB and the Labor procurement office as well as ILAB grantees in Washington, D.C.
section_title: What GAO Found
paragraphs: The Department of Labor's (Labor) Bureau of International Labor Affairs (ILAB) has guidance and criteria for developing projects covering trade and labor and child labor. In fiscal year 2013, the child labor office obligated about $56 million and the trade and labor office obligated about $13.5 million for technical assistance projects. Officials from both offices said they consider many factors in deciding where to provide technical assistance, including the nature and extent of the problem, U.S. government priorities, and host government commitment. Each office uses a variety of information sources to develop project ideas. Once ILAB has decided to develop a project, the draft grant solicitation must go through Labor's agency-wide clearance process.
Labor has established procedures to select recipients of its funding, including processes for evaluating applications for grants, such as assessing applicants' past performance and capacity to manage grant funds. Officials said they have difficulty attracting a large number of applicants because the pool is potentially constrained by the specialized nature of the work, challenging location of the grants, and size and complexity of the grants. According to officials, ILAB takes steps to maximize competition, such as publishing Notices of Intent to give applicants more time to develop proposals.
Incomplete documentation makes it difficult to determine if Labor is following its grant award procedures, including conducting due diligence on financial viability and past performance of applicants. Based on GAO's review of 26 grant award files, over half of the files were missing some documentation, and 4 were missing all pre-award documents (see figure). Officials said that the procurement office has been trying to improve the organization of the files so that it is easier to follow the steps of the award process. For example, procurement officials said they are trying to more consistently use a checklist to record the documents the office receives, such as past performance information. However, use of this checklist is not required, and Labor guidance does not clearly state what documents must be retained in award files. According to Standards for Internal Control in the Federal Government , internal control, all transactions, and other significant events need to be clearly documented, and the documentation should be readily available. Further, the standards state that all documentation and records should be properly managed and maintained. Without such assurance that Labor is following its grant award procedures, ILAB is at increased risk of not meeting the goals of its programs.
section_title: What GAO Recommends
paragraphs: To ensure the integrity of the procurement process for ILAB grants, the Secretary of Labor should provide guidance about documents required in grant award files and ensure that the guidance is implemented. Labor agreed with the recommendations.

section_title: Letter
paragraphs: Recent incidents, including the collapse of a garment factory building in  Bangladesh, have highlighted poor working conditions overseas. In  addition, according to the International Labour Organization (ILO),  millions of children worldwide are engaged in labor that hinders their  education, development, and future livelihoods. In response to concerns  about working conditions for children and adults, the U.S. government, in  part through the Department of Labor’s (Labor) Bureau of International  Labor Affairs (ILAB), provides technical assistance mainly through  international and nongovernmental organizations to improve working  conditions by supporting worker rights and combating child labor.
You asked us to review issues related to ILAB’s international technical  assistance. This report examines (1) how ILAB develops its technical  assistance projects, (2) how ILAB selects recipients of its funding, and (3)  how Labor manages its grant award documentation. We will be issuing an  additional report at a later date that addresses financial and performance  monitoring and evaluation.
To address these objectives, we reviewed relevant documents, including  Labor guidance on procurement, ILAB project manager manuals, and  grant solicitations. In addition, we developed a data collection instrument  that we used to review a sample of award files for ILAB projects. We  selected a nongeneralizable sample of 26 projects out of a total of 98  projects that were active in calendar years 2011, 2012, and 2013. We  selected the sample based on several factors, such as dollar value and  geographic location. The sample represents about 44 percent of ILAB  funding over these years and includes 7 of the 9 grants with the highest  dollar value ($10 million or above). Our sample includes projects that are  single-country; multicountry; completed; ongoing; direct services; capacity  building; and in most geographic regions. We also discussed ILAB’s  processes for developing project ideas and awarding grants with officials  from ILAB and the procurement office in Labor’s Office of the Assistant  Secretary for Administration and Management. In addition, we discussed  these processes with ILAB grantees in Washington, D.C., and during field  work in Cambodia, Ecuador, Peru, and Thailand. We selected these  locations based on, among other factors, size of grant, geographic  location, and phase of the project. Appendix I provides more information  about our scope and methodology.
We conducted this performance audit from June 2013 to May 2014 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.
subsections: section_title: Background
paragraphs: The mission of ILAB involves improving working conditions, promoting  workers’ rights, and addressing the workplace exploitation of children and  other vulnerable populations overseas. This work is carried out by its  Office of Child Labor, Forced Labor, and Human Trafficking (OCFT,  referred to here as the child labor office) and its Office of Trade and Labor  Affairs (OTLA, referred to here as the trade and labor office), through  projects developed and funded by the offices and generally implemented  by international or nongovernmental organizations. Figure 1 shows the  structure of the ILAB office. In fiscal year 2013, Congress appropriated  about $66.5 million to ILAB for international technical assistance provided  that “$40 million shall be for programs to combat exploitative child labor  internationally” and “not less than $6.5 million shall be used to implement  model programs that address worker rights issues.” Of that amount, the  child labor office obligated about $56 million, and the trade and labor  office obligated about $6.5 million for technical assistance projects. From  fiscal year 2011 through fiscal year 2013, ILAB obligated about $225  million. During that time the child labor office obligated about $176 million  and the trade and labor office obligated about $49 million.
The child labor office’s technical assistance includes direct educational  services, capacity building, and supporting research on international child  labor, forced labor, and human trafficking. Among other responsibilities,  the office funds and oversees cooperative agreements and contracts to  organizations engaged in efforts to eliminate exploitative child labor  around the world. It funded 40 projects between fiscal years 2011 and  2013. For example, in fiscal year 2011, the office funded a $13 million  project to combat rural exploitative child labor in Peru that included  education services, livelihoods assistance, and research on child labor.
The trade and labor office’s technical assistance focuses on projects to  improve worker rights. It funded 34 projects between fiscal years 2011  and 2013. For example, in fiscal year 2011 the office provided $1 million  to improve labor compliance in the footwear industry in Cambodia and to  improve the capacity of labor law enforcement.
section_title: Labor Has Guidance for Developing ILAB Grant Solicitations
paragraphs: ILAB has guidance and criteria for developing project ideas. Officials from  both the trade and labor office and child labor office told us the criteria are  not formally weighted and that they consider many factors in deciding  where to provide technical assistance, including the nature and extent of  the problem, U.S. government priorities, and host government  commitment. Before ILAB can publish a grant solicitation, it must go  through Labor’s agency-wide clearance process.
subsections: section_title: ILAB Has Guidance and Several Criteria for Developing Project Ideas
paragraphs: The child labor and trade and labor offices each have general guidance  for developing project ideas, including guidance on stakeholder  involvement and identifying targets of opportunity. In addition, the trade  and labor office guidance includes templates for assessing initial project  ideas. Both offices have several high-level criteria for project  development, including sustainability and host government commitment.  (See appendix II for the full list of criteria.)
section_title: Project Decision Factors Are Not Weighted and Priorities Can Change Over Time
paragraphs: According to ILAB officials, they can consider additional factors when  developing projects, including leadership priorities. They told us that  ILAB’s formal leadership priorities are outlined in its annual operation plan  and 5-year strategic plan. ILAB officials said that office directors from both  the trade and labor office and child labor office meet every week with the  office of the deputy undersecretary for international affairs to discuss  issues. For example, trade and labor office officials told us a current  priority is building the capacity of other governments to enforce their labor  laws by, for instance, improving the capacity and skills of labor inspectors.  Officials also said that if there is a significant event, such as the garment  factory fires and factory collapse in Bangladesh, their priorities can adjust  to reflect new situations. In addition, officials from the child labor office  said that in the 1990s, they funded projects targeting child soldiers and  commercial sexual exploitation. However, they found that to have greater  impact, they needed to develop projects that intervene earlier, before  children become soldiers or sex workers. Officials told us they have  increased their focus on prevention in addition to removing children from  child labor.
ILAB officials said the criteria they use for project development and  selection are not formally weighted and the importance of individual  criteria can vary depending on the situation. For example, ILAB officials  told us that regardless of the severity of a problem, they generally do not  provide assistance in a country where the government does not welcome  an ILAB project. ILAB officials told us they look for opportunities for  discernible impact and likelihood of success. They define success as not  only meeting the goals of the project, but also developing strategies that  could be applied more widely. Officials from the child labor office told us  that their main criterion is the nature and extent of exploitative child  labor, but other factors can take precedence in determining where to  provide technical assistance. For example, they do not necessarily target  their assistance to the countries with the highest incidences of child labor  or with the worst forms of child labor. The projects we reviewed, for  instance, include countries where the percentage of children working  varies from about 7 percent in Panama to 50 percent in Ethiopia,  according to recent statistics in ILAB’s Findings on the Worst Forms of  Child Labor. However, child labor officials said that, even taking into  account other factors, their projects generally result in a focus on the  worst forms of child labor or hazardous work. For example, of the six  solicitations for direct services in our sample that were posted in 2011  and 2012, half explicitly mention children engaged in the “worst form of  child labor” or “hazardous work” as the target population. Although the  other half of solicitations did not explicitly use these terms, the  solicitations described working conditions that fall under the definition of  hazardous work.
section_title: Labor Has an Agency- wide Clearance Process for Grant Solicitations
paragraphs: ILAB has a review process for developing and approving potential  projects and grant solicitations. According to ILAB officials, project  managers on both trade and labor and child labor grants develop a list of  potential projects using the criteria and information discussed above. The  office division chiefs review and refine the list and provide project  recommendations to the directors of each of the offices. The office  directors further refine the list of recommended projects, which they give  to the deputy undersecretary for international affairs for final selection. In  2013, officials estimated that child labor project managers developed  around 20 project proposals (including country-specific projects, research  projects, and monitoring and evaluation projects), 15 of which were  submitted to the deputy undersecretary, and 12 of those are under  consideration. Officials estimated that trade and labor project managers  developed around 20 project ideas, 8 of which were forwarded to the  deputy undersecretary, and 6 of those are under consideration.
According to ILAB guidance, once a potential project is approved, project  managers conduct a needs assessment to further develop the project  idea and write the scope of work for the grant solicitation. The needs  assessment can be comprised of different efforts depending on the  situation; for example, it could involve desk research and a visit to the  target country to help determine the scope of each project. ILAB guidance  also states that they will consult with stakeholders, including other U.S.  government agencies and the U.S. embassy in the target country, and  obtain written approval from the host country government to implement  the project. According to ILAB guidance, Labor publishes a Notice of  Intent on the grants.gov web portal to notify the public and potential  bidders that ILAB intends to issue a solicitation. According to ILAB  officials, project managers then write the scope of work for the solicitation,  which they send to the child labor and trade and labor office directors for  approval. According to officials, the scope of work identifies the problem  to be addressed, while the applicant should propose the way to address  the problem. After the ILAB office directors approve the solicitation,  according to officials, it is sent to the deputy undersecretary for  international affairs for clearance, then to all agencies in Labor for review  and comment, and clearance by the office of the executive secretary.  Finally, the solicitation for grant applications is published on grants.gov.
section_title: Labor Has Established Procedures to Select ILAB Grantees but Has Faced Challenges in Maximizing Competition
paragraphs: Labor has established procedures to evaluate competitive and  noncompetitive applications for cooperative agreements. In addition,  noncompetitive grants need approval from the Labor Procurement  Review Board. ILAB has faced challenges in maximizing competition,  broadening the pool of organizations that apply for grants, because that  pool is potentially constrained by the specialized nature of the work,  challenging location of grants, and size and complexity of the grants.  ILAB officials told us they take steps to maximize competition, including  writing scopes of work that are broad enough for an applicant to develop  its own strategy and publishing Notices of Intent to give applicants more  time to develop proposals.
subsections: section_title: Labor Has Procedures for Awarding Competitive and NonCompetitive Grants
paragraphs: For competitive solicitations, once the application deadline has passed, a  grant officer in Labor’s procurement office conducts a review of the  applications to determine whether applicants have met all requirements to  be eligible for award consideration. According to Labor officials, in 2011,  the procurement office began using a responsiveness review checklist to  determine whether documents required in the solicitation are included in  the application file. For example, the checklist contains fields for whether  the applicant submitted technical and cost proposals; past performance  information; an audit opinion letter and summary of findings; and whether  the applicant is registered in the System for Award Management, which  includes information on excluded parties. Applications found eligible by  the procurement office are provided to a technical evaluation panel for  review and evaluation.
ILAB selects and identifies the technical evaluation panel members and  chair. According to ILAB officials, the panel chair is often the project  manager who developed the solicitation. The panel chair is responsible  for, among other things, ensuring compliance with proceedings,  applicable regulations, and solicitation requirements; keeping a record of  panel proceedings; and submitting a record of the proceedings of the  panel to the procurement office. The individual panelists are each  responsible for reading and completing evaluations for all applications.  ILAB officials said that influence of the panel chair is moderated by the  other panel members, and that the chair’s role is to facilitate and organize  the process, not to dictate the review. ILAB panels generally include three  to four people, including the chair. ILAB officials said that the other  panelists can be people from within the agency who have expertise on  the sector or country, as well as people from outside of Labor, such as  academics or the State desk officer for the country. Labor officials said  the procurement office provides training to panelists. The most recent  training document, from July 2013, includes an integrity overview,  including confidentiality and conflict of interest provisions, and explains  the process the panel follows during the evaluation of the applications.
Each panelist evaluates all applications using a rating form developed for  each solicitation based on criteria and point values outlined in the   Each panelist’s individual evaluations are summarized in the  solicitation.panel consensus report, which provides an award recommendation to the  procurement office. The panel uses a competitive range, established prior  to the review of the applications, in its evaluation process to screen out  applicants that do not achieve a minimum point value. According to ILAB  officials, the main criteria they use to evaluate applications are (1) project  design and budget, (2) organizational capacity, and (3) personnel and  project management. The point value assigned to each criterion varies  across solicitations depending on the type of project; for example, a  global project may assign more points to organizational capacity than a  single country project. Applicants’ past performance is assessed under  the organizational capacity criterion. The procurement office asks the  panel chair for questions to send to the applicants’ references and then  provides the references’ answers on past performance to the evaluation  panel. Officials also said that they assess the management systems and  capacity of applicants to manage grant funds during the panel evaluation  by examining the audit submitted by the applicant, budget narrative and  outputs-based budget, past performance, management structure for the  project, and organizational capacity. The procurement office makes the  final award decision and notifies the grantee. Of the eight competitive  solicitations we reviewed that received more than one applicant, the  highest rated applicant always received the grant award. The two  competitive solicitations in our sample with only one applicant met the  minimum point value for awarding the grant.
For noncompetitive awards—grant awards made using less than full and  open competition—ILAB needs approval from the procurement office and  the Labor Procurement Review Board. Of the 26 award files we reviewed,  ILAB awarded 12 grants noncompetitively. Nine of the noncompetitive grants were child labor grants, and three focused on trade and labor.According to ILAB officials, if ILAB determines that there is only one  organization that can implement a project, the first step is an internal ILAB  review followed by reviews conducted by the deputy undersecretary for  international affairs and the procurement office. The request for a  noncompetitive or limited competition award is then sent to the Labor  Procurement Review Board which is composed of representatives from  various Labor offices. The board evaluates the request against the  Department of Labor Management Series criteria for exclusions and  exceptions to competitive procedures for grants and cooperative  agreements, and it has to meet at least one of the criteria—for example,  that a noncompetitive award is authorized or required by the statute  funding the program. The board makes a recommendation to the chief  acquisition officer, who has the final determination. Labor posts a Notice  of Intent to sole source on grants.gov. ILAB then provides the scope of  award to the grantee, obtains the budget and work plans from the  grantees, and finally notifies the grantee of the award decision. Officials  said that when ILAB received congressionally directed funding for the  ILO, it still was required to follow this process.
section_title: ILAB Has Faced Challenges in Maximizing Competition for Its Grants, but Has Taken Steps to Increase Competition
paragraphs: ILAB officials stated that they face challenges in maximizing competition  but have taken steps to address them. Of the 26 award files we reviewed,  ILAB awarded 14 grants competitively. Of these 14 competitive  solicitations, we found evidence that 7 solicitations received 3 or more  applications, and 1 solicitation received 2 applications, while 2  solicitations received only 1 application each.
According to ILAB officials, they face challenges in maximizing  competition, as their pool of applicants is potentially constrained by the  nature of the work, location of grants, and size of grants. Officials from the  trade and labor office said that the work ILAB does is specialized, and  there are not many organizations that have the experience or the capacity  to, for example, train labor inspectors. In addition, child labor grants, have  many different components, such as direct services, research, and  capacity building. In addition, the difficult implementing environment for  some projects decreases the pool of applicants. For example, it can be  difficult to find organizations that are willing to work in environments that  are remote, contain security concerns, or lack basic infrastructure.  Furthermore, according to ILAB officials, the size and complexity of grants  are based on several factors, including ensuring that the grant has  sufficient resources to address the problems identified in the solicitation.  Moreover, according to ILAB officials, large grants are generally the same  amount of work and involve the same procedures to develop and oversee  as small grants. ILAB officials said that some potential grantees stated  that ILAB’s grants were too large for their organization. Those grantees  said they had the capacity to manage a $100,000 grant but not a $10  million grant, which generally has a large multifaceted scope that will be  implemented in multiple locations. The size and complexity of these types  of grants can be difficult for some organizations to manage.
ILAB officials told us they take a variety of steps to try to maximize  competition, including increasing the period of time that the solicitation is  open; holding webinars to answer questions while the solicitation is open;  and writing scopes of work that are broad enough for applicants to design  their own strategy.
Officials said that giving applicants more time to develop proposals can  increase competition. For example, the Notice of Intent gives potential  applicants an advance announcement that a solicitation is likely to follow.  In addition, ILAB officials said that they try to keep the solicitation open as  long as possible, a minimum of 30 days, to allow more time for applicants  to develop proposals. Several grantee officials we spoke with noted the  importance of having enough time to develop their applications because it  allows them to produce better proposals. One grantee official told us that  the Notices of Intent that ILAB has been posting before the official  solicitation have been very helpful. Another grantee official told us that the  rules for submitting proposals are very clear, but the process is expensive  and rigorous, so having experience with the issues, contacts, and a  relationship with the host country government is useful in quickly figuring  out where to focus the proposal.
After the solicitation is issued, ILAB holds a webinar to answer questions.  A grantee official we spoke with noted that ILAB has improved the  question and answer process.
Finally, ILAB officials told us they try to write the solicitation scope of work  broadly enough to describe the problem the project is trying to address  but leave room for applicants to design their own strategy. Labor’s  solicitor’s office provides comments on whether the solicitation is too  narrow.
section_title: Incomplete Award File Documentation Causes Uncertainty about Whether Labor Followed Its Procedures
paragraphs: Incomplete documentation makes it difficult to determine if Labor has  established internal controls over, and is following, its grant award  procedures, including ensuring that Labor does not award grants to  organizations that have been debarred from doing business with the  federal government. Our review of 26 grant award files showed that some  key pre-award documentation was missing in over half of the files and 4  files were missing all pre-award documents. According to officials, all  awards are required to go through these steps, regardless of the number  of applications received or whether the grant was awarded  noncompetitively. Similarly, a March 2012 Labor Inspector General report  found Labor contract files were missing key documents. Lack of readily  available documentation causes uncertainty about whether Labor  followed all of its procedures. Without such assurance, achieved through  sufficient internal controls, that Labor is following its grant award  procedures, ILAB is at increased risk of not meeting the goals of its  programs. Figure 2 shows the prevalence of key documents in 26 award  files.
Key documents that would provide evidence that required procedures  were being followed, but which were missing in some or all of the grant  award files we reviewed, include:  Individual evaluation sheets: for competitive awards, document the  rating and assessment of applicants by each panelist.
Of the 14 competitive award files we reviewed, 8 files were  missing all individual evaluation sheets; 1 file was missing 1  individual evaluation sheet; and 5 files contained all individual  evaluation sheets.
Conflict of interest forms: for competitive awards, provide support  that the individual panelist does not have a conflict or appearance of  conflict with the applicants.
Of the 14 competitive award files we reviewed, 9 contained  documentation stating that the panelists evaluating the  applications did not have a conflict of interest, and 5 files were  missing this documentation.
Labor Procurement Review Board approval: required for  noncompetitive awards.
Of the 12 noncompetitive award files we reviewed, 11 contained  documentation of the Labor Procurement Review Board approval  in the individual or umbrella project files. For 1 file, the  Procurement Review Board approval was for a no-cost extension  of the project but not for the original agreement.
Excluded parties list: for competitive and noncompetitive awards,  indicates whether an applicant is suspended or debarred.
Of the 14 competitive award files we reviewed, 4 files had  evidence that Labor searched the excluded parties list; 8 files  were missing that evidence; and 2 files had results for the  excluded parties list search for some but not all applicants.
Of the 12 noncompetitive awards, 10 files had evidence in the  individual or umbrella project file that Labor searched the excluded  parties list and 2 files were missing that evidence.
Past performance: for competitive and noncompetitive awards, can  provide information on whether the applicant has a history of poor  performance.
Of the 14 competitive solicitation files we reviewed, 6 files had  evidence Labor had checked past performance; 7 were missing  evidence of past performance checks; and 1 had evidence for only  one of the applicants.
Of the 12 noncompetitive solicitation files we reviewed, 3 were  missing evidence of a past performance check. Two files  specifically referred to the past good performance of the  implementer in the memo to the Procurement Review Board.  Seven files listed past projects implemented by the organization in  the memo to the Procurement Review Board. We accepted these  as evidence of checking past performance.
According to Labor officials, the procurement office keeps all documents  for the winning grantee, including the consensus report from the grant  evaluation panel. However, after the debriefing period has ended, it  does not keep the individual panelist’s review sheets from the grant  evaluation panel or the unsuccessful applications. According to Labor  officials, they follow Labor’s record retention regulation, which pertains  to documents related to grantees and sub-grantees. Specifically, the  regulation applies to “all financial and programmatic records, supporting  documents, statistical records, and other records of grantees or  subgrantees which are (i) required to be maintained by the terms of this  part, program regulations or the grant agreement, or (ii) otherwise  reasonably considered as pertinent to program regulations or the grant  agreement.” However, the regulation does not specifically name  documents such as the excluded parties list or past performance  documentation. While Labor does have more specific guidance for  retaining documents for contract awards, it does not have guidance on  retaining specific documents for the grant award process. For example, a  2013 procurement memo requires, as a best practice, that contract  specialists and officers maintain excluded parties verification results in  award files. Because the procurement office handles both contracts and  grants, officials said they try to apply similar principles to both contracts  and grants. According to officials, they keep documents related to the  award itself, such as the solicitation, the successful submitted application,  and its related evaluation consensus report.
Labor officials acknowledged that many grant award files were missing  documents, and the office has been trying to improve the organization of  the files so that it is easier to follow the sequence of the award process.  For example, the procurement office is now trying to more consistently  use the responsiveness review checklist to record the documents it  receives from applicants as well as another checklist to record the  documents in the award files. However, neither of these checklists is an  official requirement. According to Standards for Internal Control in the  Federal Government, internal control and all transactions and other  significant events need to be clearly documented, and the documentation  should be readily available for examination. Further, the standards state  that all documentation and records should be properly managed and  maintained. Internal control helps the government effectively manage  and safeguard resources.
section_title: Conclusions
paragraphs: Congress funds the child labor and trade and labor offices to, among  other things, address the conditions that could lead to disasters such as  the factory collapse in Bangladesh and the tragedy of millions of children  around the world facing harsh employment conditions and missing out on  educational opportunities. To implement one of Labor’s aims of improving  working conditions overseas by supporting worker rights and combating  child labor, it is important that they select grantees that have the financial  and technical capacity to carry out these projects, ensuring that  applicants are qualified to participate in the grant award process. While  Labor has processes for developing projects and selecting grantees,  incomplete documentation in award files makes it unclear if Labor  followed those processes. Labor has issued guidance for retaining  specific documents for awarding contracts but does not have guidance on  retaining specific documents for grant awards. Labor is therefore not able  to demonstrate that the grant award process has been conducted  according to procedures. Internal control, which is synonymous with  management control, helps government program managers achieve  desired results through effective stewardship of public resources. Internal  control serves as the first line of defense in safeguarding assets and  preventing and detecting errors and fraud, including ensuring that Labor  does not award grants to organizations that have been debarred from  doing business with the federal government. Without such assurance that  Labor is following its grant award procedures, these programs are at  increased risk of not meeting the goals of improving working conditions,  protecting workers’ ability to exercise their rights, and addressing the  workplace exploitation of children and other vulnerable populations.
section_title: Recommendations for Executive Action
paragraphs: To ensure the integrity of the procurement process for ILAB grants, the  Secretary of Labor should:  1.  provide guidance as to what documents should be in the grant award  files to show that all grant award requirements were met; and  2.  establish a mechanism to ensure that the guidance is implemented.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to Labor for comment. We also provided  relevant text to State for technical comments.
In its written comments, which are reproduced in appendix III, Labor  agreed with the recommendations and stated that it will continue to work  to improve its grant making process. Labor also described steps that it  has taken to address concerns similar to those reflected in the report,  including the creation of a responsiveness review checklist and  application package checklist. We recognize that these are steps that  may improve the documentation of Labor’s grant award process.  However, as noted in our report, neither of these checklists is an official  requirement codified in the agency’s polices. Moreover, Labor does not  have guidance on retaining specific documents for the grant award  process and therefore cannot demonstrate that the grant award process  has been conducted according to procedures.
Labor also provided technical comments that we incorporated as  appropriate. State did not provide any technical comments.
We are sending copies of this report to interested congressional  committees. We are also sending copies of this report to the Secretary of  Labor. In addition, the report is available at no charge on the GAO  website at http://www.gao.gov.
If you or your staff have any questions about this report, please contact  me at (202) 512-9601 or melitot@gao.gov. Contact points for our Offices  of Congressional Relations and Public Affairs may be found on the last  page of this report. GAO staff who made key contributions to this report  are listed in appendix IV.
section_title: Appendix I: Objectives, Scope, and Methodology
paragraphs: This report reviews issues related to the Department of Labor’s (Labor)  Bureau of International Labor Affairs (ILAB) international technical  assistance. The objectives of this report examined (1) how ILAB develops  its technical assistance projects; (2) how ILAB selects recipients of its  funding; and (3) how Labor manages its grant award documentation.
To describe how ILAB develops its technical assistance projects, we  reviewed operations manuals of the Office of Child Labor, Forced Labor,  and Human Trafficking (OCFT, referred to here as the child labor office)  and the Office of Trade and Labor Affairs (OTLA, referred to here as the  trade and labor office). These manuals contain chapters on project  selection criteria, planning, and design. In addition, we reviewed ILAB’s  three annual reports on international child labor and forced labor:  Findings on the Worst Forms of Child Labor; the List of Goods Produced  by Child Labor or Forced Labor; and the List of Products Produced by  Forced or Indentured Child Labor. We met with knowledgeable officials  from the child labor and trade and labor offices to understand how they  develop project ideas.
We also selected a nongeneralizable sample of 26 projects out of a total  of 98 projects that were active in calendar years 2011, 2012, and 2013.  To select this sample, we used lists of projects from fiscal years 2003  through 2012. These project lists are maintained by the child labor and  trade and labor offices in ILAB. To determine the reliability of these lists,  we met with the responsible officials and discussed how the lists are  updated and maintained. We determined that these data were sufficiently  reliable for the purposes of reporting ILAB’s funding and selecting our  sample of awards to review. We selected the sample based on several  factors, such as dollar value and geographic location. The sample  represents about 44 percent of ILAB funding over these years and  includes 7 of the 9 grants with the highest dollar value ($10 million or  above). Our sample includes projects that are single-country;  multicountry; completed; ongoing; direct services; capacity building; and  in most geographic regions. Because our sample is nongeneralizable, it  cannot be used to make inferences about the population of ILAB grants.
To describe how ILAB selects recipients of its funding, we reviewed Labor  guidance for the evaluation panels that review and assess the grant  applications and the procurement office checklist for determining that  applicants responded to the solicitation. We also met with knowledgeable  officials from ILAB to discuss procedures for reviewing solicitations and  evaluating applicants, the process for awards made using less than full  and open competition, and steps ILAB takes to maximize competition. In  addition, we met with grantees at their headquarters in Washington, D.C.,  and in Ecuador, Peru, Cambodia, and Thailand, to obtain their  perspectives on the grant application process. We selected these  locations based on, among other factors, size of grant, geographic  location, and phase of the project.
To examine ILAB’s management of grant award records, we developed a  data collection instrument that we used to review the grant award files in  our sample for key documents, including excluded parties list results,  Labor Procurement Review Board approval for less than full and open  competition, panel evaluation worksheets for assessing competitive grant  applications, and past performance information. We identified these  documents based on ILAB policy documents such as guidance for the  solicitation evaluation panels, the applicant evaluation worksheet  template, and the solicitation for cooperative agreement template; OMB  circular A-110; and interviews with Labor officials. In addition to the file  review, we obtained and reviewed relevant documents such as Office of  Procurement Service memos; the Department of Labor Management  Series chapter on grant and procurement management; the procurement  office file checklist; and Retention and Access Requirements for Records,  29 C.F.R. § 97.42. We met with officials from ILAB and the Labor  procurement office to discuss issues related to award file documentation.  We used GAO’s Standards for Internal Control in the Federal  Government to assess Labor’s grant award process including  management of the award file documentation.
We conducted this performance audit from June 2013 to May 2014 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.
section_title: Appendix II: ILAB Criteria for Developing New Projects
paragraphs: The Office of Trade and Labor Affairs (trade and labor office) has several  criteria for project development, including:
Support for the broader foreign policy goals of the U.S. government as  reflected in various trade legislation and other policy initiatives.
Commitment by the stakeholders, including the government and  workers' and employers' organizations, to protect the basic rights of  workers and to the proposed project itself.
Demonstrated need for technical assistance.
Feasibility.
Sustainability.
Ability of the host government to absorb project resources.
Ability to leverage additional support.
Identification of a unique opportunity to provide resources that  generate synergy and complement a national program or programs of  other donor agencies.
Anticipated risk.
The Office of Child Labor, Forced Labor, and Human Trafficking (child  labor office) also has several criteria for project development, including:
Nature and extent of exploitative child labor in a country.
Contribution of proposed project to advancing the U.S. government’s  foreign policy objectives.
Extent of a foreign government’s acknowledgement of and  commitment to eliminating the worst forms of child labor.
Past performance of Labor-funded child labor projects in a given  country.
Presence and support of U.S. government field operations (i.e., U.S.  embassies and the U.S. Agency for International Development).
Likelihood that project interventions will have long-term and  sustainable impact in reducing the incidence of exploitative child labor  in the country.
section_title: Appendix III: Comments from the Department of Labor
section_title: Appendix IV: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact:
section_title: Staff Acknowledgements:
paragraphs: In addition to the contact named above, Leslie Holen (Assistant Director),  Rachel Girshick, Jeff Isaacs, Jill Lacey, Grace Lui, Seyda Wentworth, and  Christina Werth made key contributions to this report. Karen Deans and  Etana Finkler provided technical assistance.