COVID-19: Delays In Providing Disaster Relief Jeopardize $366 Million Disaster Worker Grant Program

Summary

Report no. 19-22-002-03-391 to the Employment and Training Administration (ETA), issued January 28, 2022, prepared by The Lopez Group, LLP under contract to the U.S. Department of Labor Office of Inspector General, on the Disaster Worker Grant (DWG) program funded with $345 million under the CARES Act. It finds that ETA generally administered the program in line with federal regulations, but that grantees took from approximately 1 to 9 months to provide disaster relief employment and training. The report states that with 38 percent of grant periods elapsed and minimal spending, grantees are unlikely to use the funds effectively by the end of the grant period, and that 2 of the 15 sampled grantees exceeded the 60-day deadline.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Full text

REPORT TO THE EMPLOYMENT
AND TRAINING ADMINISTRATION

COVID-19: DELAYS IN PROVIDING
DISASTER RELIEF JEOPARDIZE $366
MILLION DISASTER WORKER GRANT
PROGRAM

This report was prepared by The Lopez Group, LLP, under contract
to the U.S. Department of Labor, Office of Inspector General, and
by acceptance, it becomes a report of the Office of Inspector
General.

U.S. Department of Labor
Assistant Inspector General for Audit

DATE ISSUED: JANUARY 28, 2022
REPORT NUMBER: 19-22-002-03-391
U.S. Department of Labor To answer this question, Lopez reviewed the
Office of Inspector General grant awarding process, analyzed performance
Audit data metrics, reviewed a judgmental sample of
grantee costs, and interviewed ETA and grantee
officials.

BRIEFLY… WHAT OIG FOUND

ETA generally administered the DWG program in
accordance with applicable federal regulations and
guidelines. However, there was a significant delay
COVID-19: DELAYS IN PROVIDING DISASTER
in the length of time for grantees to provide
RELIEF JEOPARDIZE $366 MILLION
DISASTER WORKER GRANT PROGRAM disaster relief employment and training from
approximately 1 to 9 months. With 38 percent of
the grant periods elapsed, and minimal grant
January 28, 2022
spending, it is unlikely that grantees will effectively
use the funds and deliver services by the end of
WHY OIG CONDUCTED THE AUDIT
the grant period. Moreover, there was a failure to
On March 27, 2020, the Coronavirus Aid, Relief, quickly roll out programs and achieve targets for
and Economic Security (CARES) Act stimulus bill providing training services and returning
was passed by the 116th U.S. Congress. The participants back to employment.
CARES Act provided additional funding in the
amount of $345 million to the Department of In addition, for the 15 sampled grants, 2 grantees
Labor (DOL) Employment and Training exceeded the 60-day deadline to provide the full
Administration (ETA) under Division B, Title VIII. application per Training and Employment
Guidance Letter 12-19. ETA’s delay in obtaining
This audit focused on funds allocated to the the full application while allowing grantees to draw
Disaster National Dislocated Worker Grants funding increases the risk of unallowable costs
(DWG) reserve. From April to August 2020, ETA being incurred and performance goals not being
awarded 57 grants totaling $366 million. ETA met.
used $248 million provided under the CARES
Act, along with $118 million from ETA’s regular Lopez determined DWG goals were clear,
National Dislocated Workers reserve funds for measurable, and linked to governing statutes.
training and employment services and other Lopez also found grantee expenditures were tied
necessary expenses directly related to the to disaster relief employment and training
consequences of the COVID-19 pandemic. requirements.

Prior Office of Inspector General audits have WHAT OIG RECOMMENDED
raised concerns about ETA's grant not achieving
performance goals and ETA needing to provide Lopez made four recommendations to ETA to
better oversight of DWGs. provide technical assistance to the states
regarding grantee performance, provide close
monitoring to ensure performance, establish
WHAT OIG DID
written timelines for disaster relief action, and
We contracted with the independent certified enforce existing procedures. ETA generally
public accounting firm of Lopez and Associates, agreed with these recommendations and stated it
LLP, DBA, The Lopez Group, LLP (Lopez) to has already taken corrective action.
conduct a performance audit to answer the
following question: READ THE FULL REPORT

https://www.oig.dol.gov/public/reports/oa/2022/19-
Did ETA administer the CARES Act-funded
22-002-03-391.pdf
DWG program in accordance with applicable
federal regulations and guidelines?
U.S. Department of Labor – Office of Inspector General

TABLE OF CONTENTS

INSPECTOR GENERAL’S REPORT .................................................................... 1

PERFORMANCE AUDIT REPORT ...................................................................... 3

RESULTS ............................................................................................................. 5

Grantees Experienced Significant Delays in Providing Disaster
Relief Employment ..................................................................................... 6

2 Of 15 Grant Applications Were Not In Compliance with the 60-
Day Requirement ....................................................................................... 9

DWG Goals Were Clear, Measurable, and Linked to Governing
Statutes .................................................................................................... 10

DWG Grantee Expenditures Were Tied to Disaster Relief
Employment and Training Requirements ................................................. 11

RECOMMENDATIONS ....................................................................................... 11

EXHIBIT 1: PERCENTAGE OF GRANTEE DRAWDOWNS AS OF DECEMBER
31, 2020 .............................................................................................................. 14

EXHIBIT 2: ACTUAL VS. PLANNED ENROLLMENT AS OF DECEMBER 31,
2020 .................................................................................................................... 15

EXHIBIT 3: ACTUAL VS. PLANNED EMPLOYMENT PLACEMENTS AS OF
DECEMBER 31, 2020......................................................................................... 16

APPENDIX A: SCOPE, METHODOLOGY, & CRITERIA .................................... 17

APPENDIX B: AGENCY’S RESPONSE TO THE REPORT ............................... 21

-i-
U.S. Department of Labor Office of Inspector General
Washington, DC 20210

INSPECTOR GENERAL’S REPORT

Angela Hanks
Acting Assistant Secretary
for Employment and Training
U.S. Department of Labor
200 Constitution Ave., NW
Washington, DC 20210

The United States Department of Labor (DOL) Office of Inspector General (OIG)
contracted with the independent certified public accounting firm of The Lopez
Group, LLP (Lopez) 1 to conduct a performance audit of the Employment and
Training Administration's (ETA) Disaster National Dislocated Worker Grant
(DWG) program.

The OIG monitored Lopez’s work to ensure it met professional standards and
contractual requirements. Lopez’s independent audit was conducted in
accordance with generally accepted government auditing standards.

Lopez was responsible for the auditors’ evaluation and the conclusions
expressed in the report while we reviewed Lopez’s report and supporting
documentation.

Purpose

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security
(CARES) Act stimulus bill was passed by the 116th U.S. Congress. The CARES
Act provided additional funding in the amount of $345 million to ETA under
Division B, Title VIII, to prevent, prepare for, and respond to the coronavirus,
domestically or internationally, and for necessary expenses for the dislocated
workers assistance national reserve. From April to August 2020, ETA awarded
57 grants totaling $366 million. ETA used $248 million provided under the
CARES Act, along with $118 million from ETA’s regular National Dislocated
Workers reserve funds. 2

1
Lopez & Associates, LLP DBA the Lopez Group, LLP
2
As of December 31, 2020, the 57 DWGs totaled $371 million (four grants had modifications to
increase grants by approximately $5 million), of which $253 million was funded under the CARES
Act, along with $118 million provided under ETA’s regular National Dislocated Workers reserve
funds.

COVID-19: ETA’S ADMINISTRATION OF DWG
-1- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

This audit covered funds claimed and reported performance from March 1, 2020,
through December 31, 2020. This audit also builds upon prior OIG audits that
raised concerns about ETA’s grant investments not achieving their intended
performance goals and ETA’s need to improve oversight of its disaster grants.
Given these concerns, Lopez conducted this performance audit to answer the
following question:

Did ETA administer the CARES Act-funded DWG program in
accordance with applicable federal regulations and guidelines?

To answer this question, Lopez reviewed the awarding process for 15 grants
awarded to 13 grantees; 3 analyzed performance data metrics, including the
comparison of performance reports to planned performance; reviewed a
judgmental sample of grantee costs; and interviewed ETA and grantee officials.

Results

Lopez concluded ETA generally administered CARES Act funding to the DWG
program in accordance with applicable federal regulations and guidelines.
However, Lopez noted there was a significant delay in grantees providing
disaster relief employment and training services. For the first 9 months of the
grants, DWG grantees did not perform at a rate that would enable them to meet
planned outcomes as DWGs are expected to be utilized over a 24-month period.
In addition, 2 of the 15 sampled grant applications were not fully executed within
the required 60-day deadline. ETA allowed grantees to draw funding without
obtaining the full application, which increased the risk of unallowable costs being
incurred and not meeting performance goals and planned outcomes.

Assistant Inspector General for Audit

3
The California Department of Employment Development and Washington State Department of
Employment Security each received two grants.

COVID-19: ETA’S ADMINISTRATION OF DWG
-2- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

PERFORMANCE AUDIT REPORT

Angela Hanks
Acting Assistant Secretary
for Employment and Training
U.S. Department of Labor
200 Constitution Ave., NW
Washington, DC 20210

This report presents the results of our independent performance audit of the
Department of Labor (DOL) Employment and Training Administration's (ETA)
Disaster National Dislocated Worker Grant (DWG) program.

The CARES Act required the OIG to perform oversight activities of DOL’s
response to the COVID-19 pandemic. This audit also builds upon prior OIG
audits that raised concerns about ETA’s grant investments not achieving their
intended performance goals and ETA needing to provide better oversight of its
disaster grants.

Our audit objective was to determine if ETA administered the CARES
Act-funded DWG program in accordance with applicable federal
regulations and guidelines.

To accomplish our audit, we reviewed the awarding process for 15 of the
57 grants representing 63 percent of the $366 million (as of August 2020)

COVID-19: ETA’S ADMINISTRATION OF DWG
-3- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

awarded and analyzed reported performance data as of December 31, 2020. 4
We also compared performance metrics reported by the selected grantees via
their performance reports to their planned performance through December 31,
2020. In addition, we interviewed ETA and grantee officials and reviewed a
judgmental sample of grantee costs.

Lopez conducted this performance audit in accordance with standards applicable
to performance audits contained in Government Auditing Standards issued by
the Comptroller General of the United States. 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 the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives. Our objectives, scope,
methodology, and criteria are detailed in Appendix A.

Based on the results of the audit work, we found ETA generally administered the
CARES Act-funded DWG program in accordance with applicable federal
regulations and guidelines. However, there were significant delays in grantees
providing disaster relief employment and training services. As of December 31,
2020, 38 percent of the grant periods elapsed and 8 percent (or $18.8 million) of
grants funds were spent. Therefore, there is a lack of evidence of to support that
grantees will effectively use the funds and deliver services by the end of the grant
periods.

Background

The COVID-19 pandemic has had a significant effect on employment in every
state, industry, and major demographic group in the United States. According to
a January 12, 2021, Congressional Research Service report, 5 the unemployment
rate peaked at an unprecedented level in April 2020 (14.8 percent)—a level not
seen since data collection started in 1948—before declining to a still-elevated
level in December 2020 (6.7 percent). See Figure 1.

4
See Exhibit I for detailed information from grantee quarterly reports submitted to ETA for the
period ended December 31, 2020. Award amounts for 15 grants totaled $230,516,516, which
represents 63 percent of $366 million total grants awarded.
5
Unemployment Rates During the COVID-19 Pandemic: In Brief, Congressional Research
Service Report No. R46554 (January 12, 2021),
https://crsreports.congress.gov/product/pdf/R/R46554/6.

COVID-19: ETA’S ADMINISTRATION OF DWG
-4- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

Figure 1: Historical Unemployment Rate 6
Seasonally-adjusted monthly data from January 1948 to December 2020

Note: Shaded regions in Figure 1 indicate recessionary periods as identified by the National
Bureau of Economic Research

ETA received funding for training and employment services for the dislocated
workers assistance national reserve for necessary expenses directly related to
the consequences of the COVID-19 pandemic. The DWG award process began
with the Federal Emergency Management Agency’s declaration of emergencies
and major disasters eligible for public assistance. These projects provided funds
for employment and training services where needed to help affected individuals
return to full employment as quickly as possible.

RESULTS

ETA generally administered the CARES Act funding to the DWG program in
accordance with applicable federal regulations and guidelines. We found DWG
goals were clear, measurable, and linked to governing statutes. However, as
previous DOL OIG audits have found, 7 there were significant delays in grantees

6
Unemployment Rates During the COVID-19 Pandemic: In Brief, Congressional Research
Service Report No. R46554 (January 12, 2021),
https://crsreports.congress.gov/product/pdf/R/R46554/6.
7
ETA Needs to Improve its Disaster National Dislocated Worker Program, OIG Report No. 02-21-
002-03-391 (January 29, 2021), https://www.oig.dol.gov/public/reports/oa/2021/02-21-002-03-
391.pdf.

COVID-19: ETA’S ADMINISTRATION OF DWG
-5- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

providing disaster relief employment and training services. As of December 31,
2020, 38 percent of the grant periods elapsed and 8 percent (or $18.8 million), of
grant funds were spent. Therefore, it is unlikely that grantees will effectively use
the funds and deliver services by the end of the grant period. Moreover, there
was a failure to quickly roll out programs and achieve targets for providing
training services and returning participants back to employment. As a result, the
ability of the $366 million DWG program to meet its goals is in jeopardy.

This occurred in part because ETA relied on existing DWG guidance and
measures and did not establish additional metrics or guidance to assist grantees
with the timely delivery of services to quickly assist dislocated workers with
disaster relief activities. Further, one state indicated the reason it had not spent
any of the funds allocated through the grant early on was due to confusion over
how the grant funds should be properly spent per provisions in the grant.

In addition, 2 of the 15 sampled grant applications were not fully executed within
the required 60-day deadline. Grantees for Guam and Oklahoma continued to
draw grant funds beyond the 60-day period without providing the final application.
The delay in obtaining the full application while allowing grantees to draw funding
increased the risk of unallowable costs being incurred and not meeting
performance goals and planned outcomes.

GRANTEES EXPERIENCED SIGNIFICANT
DELAYS IN PROVIDING DISASTER RELIEF
EMPLOYMENT

DWGs are expected to be utilized over a 24-month period, and for the first
9 months of the grants, DWG grantees were not performing at a rate that would
enable them to meet planned outcomes. This occurred in part because ETA
relied on existing DWG guidance and measures and did not establish additional
metrics or guidance to assist grantees with the timely delivery of services to
quickly assist dislocated workers with disaster relief activities. Further, one state
indicated the reason it had not spent any of the funds allocated through the grant
early on was due to confusion on how the grant funds should be properly spent
per provisions in the grant.

The CARES Act provided $345 million of additional funding for DWG training and
employment services for necessary expenses directly related to the
consequences of the COVID-19 pandemic. From April to August 2020, ETA
awarded 57 grants totaling $366 million. ETA used $248 million provided under
the CARES Act, along with $118 million from ETA’s regular National Dislocated
Workers reserve funds. We found the additional CARES Act funding did not

COVID-19: ETA’S ADMINISTRATION OF DWG
-6- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

effectively help unemployed individuals obtain temporary employment as
intended by the grants. With 38 percent of the grant periods elapsed and minimal
(8 percent) grant spending, there is a lack of evidence to support that grantees
will effectively use the funds and deliver services by the end of the grant periods.

ETA administered CARES Act funding in accordance with the Workforce
Innovation and Opportunity Act (WIOA), which states, in part:

The Secretary shall establish and publish additional requirements
related to eligibility for employment and training assistance under
the national dislocated worker grants to ensure effective use of the
funds available for this purpose. 8

In addition, ETA’s Training and Employment Guidance Letter (TEGL) No. 12-19
states, in part:

ETA expects states to allocate funds to affected areas and service
providers quickly in order to ensure funds can fulfill the purpose of
these grants and to ensure that workers receive assistance. 9

As stated in the TEGL, ETA expected grantees to allocate funding to affected
areas and service providers to quickly provide assistance to dislocated workers.
Some grantees partially achieved this. For example, California spent awarded
grant funds to provide employment services, training, work-based learning, and
support services to help participants return to work. Texas spent awarded grant
funds to provide participants with training and employment services including job
referrals and job placements in disease investigation and contact tracing
positions.

However, we determined grantees were not fully successful in restoring
communities in response to the COVID-19 pandemic and assisting out-of-work
participants most in need of disaster relief employment. Through December 31,
2020, with 9 months or 38 percent of the grant periods elapsed, grantees for the
15 sampled grants reported the following:

• Approximately 8 percent ($18.8 million) of grant funds were spent. For
nine grants, review of the drawdowns showed less than 10 percent of

8
Workforce Innovation and Opportunity Act, Public Law 113-128. Section 170, National
Dislocated Worker Grants – Employment and Training Assistance Requirements. July 22, 2014.
https://www.govinfo.gov/content/pkg/PLAW-113publ128/pdf/PLAW-113publ128.pdf.
9
National Dislocated Worker Grant Program Guidance. TEGL No. 12-19. March 18, 2020.
https://wdr.doleta.gov/directives/attach/TEGL/TEGL_12-19.pdf.

COVID-19: ETA’S ADMINISTRATION OF DWG
-7- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

grant funds were expended. This included New York and Nevada
reporting no expenditures (see Exhibit I).

• Approximately 19 percent (4,799) of planned participants were enrolled.
For four grants, review of the quarterly reports showed less than 10
percent of planned participants were enrolled, including Louisiana,
Nevada, Oklahoma, and New York, with New York reporting no enrolled
participants (see Exhibit II).

• Of the 4,799 enrolled participants, 811 of the participants were placed in
temporary employment positions. For seven grants, review of the quarterly
reports showed less than 10 percent of the planned temporary
employment placements were placed, including four grants (Florida,
Guam, Texas, and New York) that had no temporary employment
placements for participants (see Exhibit III).

ETA did not establish additional metrics or guidance to assist grantees in
meeting goals to quickly assist dislocated workers. We also found ETA did not
implement corrective actions to address a similar recommendation issued in a
previous DOL OIG performance audit report. 10

In addition, grantees New York, Nevada, and Louisiana each cited issues when
administering the funding. ETA is optimistic about the grantees’ ability to use
grant funds within the current period of performance. However, New York had not
spent any of its grant funds as of March 31, 2021, nor provided any services as
officials stated they were not sure how the grant funds should be spent per
provisions in the grant. Furthermore, Nevada and Louisiana commented in their
quarterly reports ended March 31, 2021, that enrolling participants had been a
challenge.

ETA and grantees reported limited spending and performance for enrolling
participants and placing them in temporary employment positions. With 38
percent of the grant periods elapsed, minimal grant spending, and businesses
reopening, there is a lack of evidence to support that grantees will effectively use
the funds and deliver services by the end of the grant period. The additional
funding for employment and training services did not effectively help unemployed
individuals obtain temporary employment as intended by the grants.

ETA provided updated grantee performance statistics through March 25, 2021, to
show their progress in meeting grant goals and spending funds. However, due to

10
ETA Needs to Improve its Disaster National Dislocated Worker Program, OIG Report No. 02-
21-002-03-391 (January 29, 2021), https://www.oig.dol.gov/public/reports/oa/2021/02-21-002-03-
391.pdf.

COVID-19: ETA’S ADMINISTRATION OF DWG
-8- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

the continued lack of progress, it is uncertain if the following four grants will use
their remaining $73.879 million in grant funds: Florida ($29.417 million), New
York ($12 million), Nevada ($10.153 million), and Louisiana ($22.309 million). In
addition, it is uncertain the other 11 sampled grants will use the remaining grant
funds of $122.207 million by the end of the grant periods.

2 OF 15 GRANT APPLICATIONS WERE NOT
IN COMPLIANCE WITH THE 60-DAY
REQUIREMENT

ETA generally complied with federal and agency guidelines when awarding the
COVID-19 DWGs. However, grantees were able to access funding without final
approved authorization. Specifically, 2 of the 15 sampled grant applications
(Guam and Oklahoma) were not fully executed within the required 60-day
deadline. This occurred because ETA technical assistance did not include
tracking and discussing the need to submit the full application within the required
timeframes. The delay in obtaining the full application while allowing grantees to
draw funds increased the risk of unallowable costs being incurred and
performance goals not being met. These two grantees cumulatively spent
approximately $1.6 million or 64 percent of their grant funds without a full
application.

Eligible applicants for DWGs are the state, outlying area, or Indian tribal
government. According to TEGL No. 12-19, these applicants may request DWGs
through an abbreviated emergency application to facilitate timely delivery of
DWG assistance in response to a disaster event. Applicants also have the option
to submit a full application containing a budget and plan in lieu of an emergency
application. In the event the applicant submits an abbreviated application, the
applicant would have 60 business days following an award of DWG funds
requested via an emergency application to provide a full application.

Grantees for Guam and Oklahoma did not adhere to this requirement and
continued to draw grant funds beyond the 60-day period without providing the
final updated application (see Table 1). These two grants accounted for
approximately $2.5 million or approximately 1 percent of the sampled DWGs
awarded.

COVID-19: ETA’S ADMINISTRATION OF DWG
-9- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

Table 1: Days Over Deadline for Obtaining the Full Application

ETA
Grant 60-Day Extension Date Days
Grantee Officer Due Deadline Received Over
Signature Date Due Date by ETA Deadline
Date
Government of
Guam
4/15/20 7/13/20 7/24/20 8/20/20 27 days
Department of
Administration
Oklahoma
Department of 5/11/20 8/6/20 N/A 8/13/20 7 days
Commerce
Source: Grant documentation provided by ETA and grantees

ETA did not ensure Guam and Oklahoma adhered to the 60-day requirement.
The delay in obtaining the full application while allowing grantees to draw funding
increases the risk of unallowable costs being incurred and performance goals not
being met. As of December 31, 2020, Guam had expenditures of approximately
$1.2 million (80 percent) of its total grant of $1.5 million and Oklahoma had spent
$411,484 (41 percent) of its total grant of $999,000 before they obtained
approval on their planned spending.

DWG GOALS WERE CLEAR, MEASURABLE,
AND LINKED TO GOVERNING STATUTES

DWG goals were clear, measurable, and linked to governing statutes. ETA
administers DWGs to allow grantees to quickly employ eligible individuals in
humanitarian relief employment, including COVID-19 screeners, program support
staff, food handlers, cleaners, inspectors, food delivery drivers, and contact-
tracing workers. The CARES Act did not create any additional regulations related
to DWGs. ETA tied DWG goals to the following federal regulations: WIOA and 2
Code of Federal Regulations (CFR) 200 (2013). ETA relied on pre-existing DWG
programs metrics to measure the program’s success. ETA’s primary
performance metrics are as follows:

• Employment Rate – 2nd Quarter After Exit
• Employment Rate – 4th Quarter After Exit
• Median Earnings – 2nd Quarter After Exit
• Credential Attainment

COVID-19: ETA’S ADMINISTRATION OF DWG
-10- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

• Measurable Skill Gains
• Effectiveness in Serving Employers

In addition, ETA provided the data that captured the total amount of participants
served as well as the number of participants employed in temporary disaster-
relief positions. After 9 months (38 percent of the time elapsed), the grantees had
collectively enrolled 18 percent of planned participants and placed 6 percent of
the planned participants in employment.

DWG GRANTEE EXPENDITURES WERE TIED
TO DISASTER RELIEF EMPLOYMENT AND
TRAINING REQUIREMENTS

We found DWG grantee expenditures were tied to disaster relief employment
and training in accordance with grant requirements. We selected a sample of
$3,008,482 (16 percent) of the total expenses reported of $18,787,605 as of
December 31, 2020. We judgmentally selected the largest dollar drawdown from
ETA’s drawdown schedule for each sampled grantee with drawdowns as of
October 13, 2020. For each selected drawdown, we examined documentation in
support of grant expenditures (including subrecipients) and performed tests for
allowability and noted that grantees properly expended funds for disaster relief
employment and training in accordance with grant requirements. We also found
ETA:

• Monitored expenditures that included participants’ salary and fringe
benefits, career services, education and training, supportive services, and
state and local administration costs;

• Performed steps to verify whether participant cost was allowable; and

• Provided technical assistance to DWG grantees and subrecipients.

RECOMMENDATIONS

We recommend the Assistant Secretary for Employment and Training:

1. Provide dedicated technical assistance to the states of Florida, New York,
Nevada, and Louisiana to assist them in attaining planned goals. If no
specific plan of action is provided or is not being met by grantees, ETA

COVID-19: ETA’S ADMINISTRATION OF DWG
-11- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

should recoup any DWG funding where the states cannot demonstrate
their ability to achieve their planned goals by the end of the grant period.

2. Continue to closely monitor the remaining COVID-19 DWG awards to
ensure attainment of performance goals and objectives and provide
technical assistance as needed throughout the grant lifecycle. To the
extent permitted by law, any of the remaining funds (determined as not
needed) should be returned to the Department of Treasury or recouped as
soon as practicable so that these funds would become available for other
allowable purposes.

3. Amend TEGL No. 12-19 to include timeline provisions for when disaster
relief grantees should begin providing relief to those impacted by a
disaster.

4. Amend TEGL No. 12-19 to include technical assistance provisions for
grantees that fail to meet the 60-day requirement for submitting full
applications.

SUMMARY OF ETA’S RESPONSE

ETA generally agreed with the four recommendations and is taking corrective
action. Nothing in ETA’s response changed our report. However, in its response
to the report, ETA was concerned that the report did not acknowledge the
challenges that the grantees faced in providing assistance during the COVID-19
pandemic, including the unprecedented need for unemployment insurance
benefits and participants’ understandable hesitancy to risk their health. In
addition, ETA stated it had awarded the first 26 DWGs within 20 days under
challenging conditions.

AUDITOR’S RESPONSE

ETA generally concurred with the recommendations. Though ETA believes that
COVID related challenges were not acknowledged in the report, the report does
state that the grantees indicated that there was confusion on grant provisions
and that there were challenges in enrolling participants. Also, the report states
that “the COVID-19 pandemic has had a significant effect on employment in
every state, industry, and major demographic group in the United States” and
outlines the unprecedented level of unemployment not seen since data collection
began in 1948.

COVID-19: ETA’S ADMINISTRATION OF DWG
-12- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

Management’s response to the draft report is included in its entirety in
Appendix B. We appreciate the cooperation and courtesies ETA extended us
during this audit.

The Lopez Group, LLP
Temecula, CA
January 25, 2022

COVID-19: ETA’S ADMINISTRATION OF DWG
-13- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

EXHIBIT 1: PERCENTAGE OF GRANTEE DRAWDOWNS AS OF
DECEMBER 31, 2020

Total Award Percentage
Grantee
Drawdowns Amount of Award

California Department of Employment
1,478,295 $12,000,000 12.32%
Development – Disaster Grant
New York State Department of Labor 0 $12,000,000 0.00%*

Texas Workforce Commission 3,828,737 $39,685,179 9.65%*

Technical College System of Georgia 1,118,683 $25,293,837 4.42%*
State of Florida, Department of Economic
5,106,129 $40,394,746 12.64%
Opportunity
Mississippi Department of Employment
1,019,550 $11,257,012 9.06%*
Security
Rhode Island Department of Labor and
1,152,812 $2,326,005 49.56%
Training
Government of Guam Department of
1,192,710 $1,500,000 79.51%
Administration
Louisiana Workforce Commission 155,361 $22,767,303 0.68%*
Washington State Department of
865,621 $12,000,000 7.21%*
Employment Security – Disaster Grant
Oklahoma Department of Commerce 411,484 $999,000 41.19%
Tennessee Department of Labor and
878,896 $14,815,295 5.93%*
Workforce Development
California Department of Employment
1,263,047 $12,502,750 10.10%
Development – Employment Grant
Washington State Department of
316,281 $12,000,000 2.64%*
Employment Security – Employment Grant
Nevada Department of Employment,
0 $10,975,389 0.00%*
Training & Rehabilitation
Total $18,787,605 $230,516,516 8.15%

Notes:
* Nine grants expended less than 10 percent of funds including New York and Nevada, which had
no expenditures.
Source: Grantee quarterly reports submitted to ETA

COVID-19: ETA’S ADMINISTRATION OF DWG
-14- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

EXHIBIT 2: ACTUAL VS. PLANNED ENROLLMENT AS OF
DECEMBER 31, 2020

Planned
Actual Number
Number of Percentage of
Grantee Participants
Participants Enrollment
Enrolled
Enrollment
California Department of Employment
214 619 34.57%
Development – Disaster Grant
New York State Department of Labor 0 2,185 0.00%*

Texas Workforce Commission 691 2,042 33.84%

Technical College System of Georgia 260 2,190 11.87%
State of Florida, Department of
978 5,500 17.78%
Economic Opportunity
Mississippi Department of
222 697 31.85%
Employment Security
Rhode Island Department of Labor
183 388 47.16%
and Training
Government of Guam Department of
179 210 85.24%
Administration
Louisiana Workforce Commission 89 3,100 2.87%*
Washington State Department of
Employment Security – Disaster 351 622 56.43%
Grant
Oklahoma Department of Commerce 43 945 4.55%*
Tennessee Department of Labor and
222 1,383 16.05%
Workforce Development
California Department of Employment
1,013 2,892 35.03%
Development – Employment Grant
Washington State Department of
Employment Security – Employment 176 915 19.23%
Grant
Nevada Department of Employment,
178 1,829 9.73%*
Training & Rehabilitation
Total 4,799 25,517 18.81%

Notes:
* Four grants enrolled less than 10 percent of planned participants including DWG grantee New
York, which reported zero participants.
Source: Grantee quarterly reports submitted to ETA

COVID-19: ETA’S ADMINISTRATION OF DWG
-15- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

EXHIBIT 3: ACTUAL VS. PLANNED EMPLOYMENT
PLACEMENTS AS OF DECEMBER 31, 2020

Actual Planned
Percentage of
Grantee Employment Employment
Employment
Placements Placements

California Department of
141 595 23.70%
Employment Development
New York State Department of
0 2,185 0.00%**
Labor
Texas Workforce Commission 0 1,918 0.00%**
Technical College System of
110 1,070 10.28%
Georgia
State of Florida, Department
0 4,200 0.00%**
of Economic Opportunity
Mississippi Department of
173 697 24.82%
Employment Security
Rhode Island Department of
183 250 73.20%
Labor and Training
Government of Guam
0 210 0.00%**
Department of Administration
Louisiana Workforce
69 2,309 2.99%*
Commission
Washington State Department
4 230 1.74%*
of Employment Security
Oklahoma Department of
1 45 2.22%*
Commerce
Tennessee Department of
Labor and Workforce 130 826 15.74%
Development
Total 811 14,535 5.58%

Notes:
* Seven grants had less than 10 percent of planned employment placements.
** Four grant had zero temporary employment.
Source: Grantee quarterly reports submitted to ETA

COVID-19: ETA’S ADMINISTRATION OF DWG
-16- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

APPENDIX A: SCOPE, METHODOLOGY, & CRITERIA

SCOPE

The audit scope encompassed 57 DWGs awarded by ETA as of August 2020 in
response to the COVID-19 pandemic totaling $366 million. The CARES Act
provided additional funding in the amount of $345 million to ETA to prevent,
prepare for, and respond to the coronavirus, domestically or internationally, and
for necessary expenses for the dislocated workers assistance national reserve.
Through August 2020, ETA only used $248 million provided under the CARES
Act, along with $118 million from ETA’s regular National Dislocated Workers
reserve funds (see Figure 2 and Figure 3). 11

On March 27, 2020, the Coronavirus Aid, Relief, and Economic Security
(CARES) Act stimulus bill was passed by the U.S. Congress.

Figure 2: Percentage of Sampled Grant Awards as of August 2020

Source: ETA Drawdown Report as of 10/13/2020

11
As of December 31, 2020, ETA reported 64 DWGs totaling $398 million, of which $255 million
was funded under the CARES Act, with $143 million provided under the regular National
Dislocated Workers reserve.

COVID-19: ETA’S ADMINISTRATION OF DWG
-17- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

Figure 3: Sampled Grant Awards by State as of August 2020

Note: California and Washington each had two grants; other states had only one.
Source: ETA Drawdown Report as of 10/13/2020

METHODOLOGY

To accomplish our audit objectives, we obtained an understanding of the grant’s
objectives by reviewing the grant agreements, solicitation for grant applications,
grant modifications, progress reports, financial reports, ETA monitoring reports,
and other correspondence and related documents. We identified criteria key to
the administration of the grant in the grant agreements and reviewed applicable
ETA policies and procedures. We conducted procedural walkthroughs with ETA
and grantees to obtain an understanding of administration and financial
procedures for reporting performance data and charging costs to the DOL grant.
We reviewed documentation supporting the grantees’ participant data reported to
DOL and documentation supporting expenses charged to the grants.

This performance audit was conducted remotely and covered 15 grants awarded
to 13 states and territories.

We conducted this performance audit in accordance with standards applicable to
performance audits contained in Government Auditing Standards issued by the
Comptroller General of the United States. Those standards require that we plan
and perform the audit to obtain sufficient, appropriate evidence to provide a

COVID-19: ETA’S ADMINISTRATION OF DWG
-18- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

reasonable basis for our findings and conclusions based on our audit objectives.
We believe the evidence obtained provides a reasonable basis for our findings
and conclusions based on our audit objectives.

We reviewed ETA’s award process, determined if grantees properly expended
grant funds, and compared the grantees’ actual participants as of December 31,
2020, to their planned participant goals. The DWGs were awarded to 57 states
and territories, and we judgmentally selected a sample of 15 grants. These 15
grants totaled approximately $231 million (or 63 percent) of the total grants funds
approved. Grantees for these 15 grants reported $18.8 million as expended.
During fieldwork, grants were active, with changes to the amount of funds
expended, participants enrolled, and periods of performance. In addition, we
interviewed grantee officials and selected some of their sub-recipients. We also
interviewed subrecipients’ officials and judgmentally tested a sampling of costs.

We assessed the reliability of performance and financial data. For the
performance data, we obtained an understanding of the systems and methods
used to collect and report expenditure and participant outcome data. We
concluded that data reported to ETA was complete and sufficiently reliable.

For financial and performance data we assessed the reliability of expenditures
and participant data reported to ETA. We reconciled information on ETA’s
website to grant agreements, ETA internal reports, grantees’ drawdown
documentation, and quarterly reports to ETA. Grantees’ internal reports and
quarterly reports to ETA were reconciled to grantee and subrecipient drawdown
documentation and participant data. We found no differences.

INTERNAL CONTROL

In performing the audit, we evaluated internal controls used by ETA and grantees
for reasonable assurance that the DOL grants were administrated in accordance
with federal and internal requirements. Our consideration of internal controls for
administering the DOL grants would not necessarily disclose all matters that
might be reportable conditions. Because of inherent limitations in internal
controls, misstatements, losses, or noncompliance may nevertheless occur and
not be detected.

Because this was a performance audit, our audit was not designed to provide an
opinion on the internal controls of ETA or to provide an opinion on the fair
presentation of expenditures provided by the grantees. Accordingly, we provide
no such opinions. We did not verify the total number of participants served.

COVID-19: ETA’S ADMINISTRATION OF DWG
-19- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

CRITERIA

• 2 Code of Federal Regulations 200 - Uniform Administrative
Requirements, Cost Principles, and Audit Requirements for Federal
Awards
• Coronavirus Aid, Relief, and Economic Security Act
• Training and Employment Guidance Letters
• Workforce Innovation and Opportunity Act

COVID-19: ETA’S ADMINISTRATION OF DWG
-20- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

APPENDIX B: AGENCY’S RESPONSE TO THE REPORT

COVID-19: ETA’S ADMINISTRATION OF DWG
-21- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

COVID-19: ETA’S ADMINISTRATION OF DWG
-22- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

COVID-19: ETA’S ADMINISTRATION OF DWG
-23- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

COVID-19: ETA’S ADMINISTRATION OF DWG
-24- NO. 19-22-002-03-391
U.S. Department of Labor – Office of Inspector General

COVID-19: ETA’S ADMINISTRATION OF DWG
-25- NO. 19-22-002-03-391
REPORT FRAUD, WASTE, OR ABUSE
TO THE DEPARTMENT OF LABOR

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

Telephone
(800) 347-3756 or (202) 693-6999

Fax
(202) 693-7020

Address
Office of Inspector General
U.S. Department of Labor
200 Constitution Avenue, NW
Washington, DC 20210

File and source

File: 19-22-002-03-391.pdf
Size: 895,639 bytes
SHA-256: 74832071b7c1dc7910723e8e7c33b6aaef3d83db8f70a9976878449a4e29e126
Our copy: 19-22-002-03-391.pdf
Original: www.oig.dol.gov