ILAB Could Improve Its Processes for Financial Oversight

The child labor office and trade and labor office both have guidance for  the financial monitoring of projects, but could improve their financial  oversight. For example, we found that project managers completed their  acceptance or rejection of about 20 percent of quarterly financial reports  more than 90 days after receipt from the grantee, after the next quarter’s  report was due. ILAB does not have guidance that provides time frames  and criteria for accepting or rejecting quarterly financial reports. In  addition, although the child labor office supplements federal financial   of selected projects to,  requirements with attestation engagementsamong other things, assess the accuracy and reliability of grantee  financial and performance data, the trade and labor office has not yet  implemented its plan to conduct such attestation engagements of its  grants, although officials said they plan to do so by November 2014. Without addressing these gaps in financial oversight, it could be difficult  for ILAB to ensure federal resources are used efficiently and effectively to  achieve desired objectives. The Trade and Labor Office’s Performance Monitoring Efforts Need Improvement

While ILAB uses a number of tools to monitor its grants, the child labor  office requirements have generally been more comprehensive than those  of the trade and labor office. For example, in contrast to the child labor  office, the trade and labor office does not have common indicators that  are used across projects to assess overall progress in key areas. Without common indicators and attestation  engagements, it is difficult for the trade and labor office to assess  progress across projects and overall progress toward the office’s goals,  and whether its grantees are in compliance with relevant regulations. While the Child Labor Office Has More Comprehensive Performance Monitoring Requirements than the Trade and Labor Office, Both Offices Complied with Monitoring Requirements

			The Child Labor Office Has More Comprehensive Monitoring Requirements than the Trade and Labor Office, Which Lacks Common Indicators and Attestation Engagements

The child labor office has monitoring requirements that the trade and  labor office does not, including common indicators and attestation  engagements. Project evaluations, such as the  midterm and final evaluations, are assessments of performance against  goals and objectives. Child labor  office officials said they have drawn some lessons learned from the  evaluations that they have incorporated into subsequent projects,  including addressing monitoring and evaluation issues earlier in a project. Their purpose is to determine whether a  program has an impact and to quantify how large the impact is. So far, two impact evaluations have been completed. Recommendations for Executive Action

To improve ILAB’s financial and performance monitoring, we recommend  that the Secretary of Labor, in concert with ILAB management, take four  actions:  1.  to facilitate the effective financial oversight of its grants, establish  guidance specifying time frames in which project managers must  accept or reject quarterly financial reports and the criteria for  accepting or rejecting the reports;  2.  to better ensure accurate accounting of federal funds, revise ILAB  policies to specify that subgrantee inventories of equipment and real  property purchased with federal funds are included in inventory lists  submitted by the grantee;  3.  to improve financial and performance monitoring of trade and labor  grants, implement the trade and labor office’s plan to conduct  attestation engagements and develop guidance on the management  of these engagements; and  4.  to improve performance monitoring of trade and labor grants, ensure  that the trade and labor office implement its plan to develop common  indicators to track progress across projects. Appendix I: Objectives, Scope, and Methodology

This report reviews issues related to the Department of Labor’s (DOL)  Bureau of International Labor Affairs (ILAB) international technical  assistance. The objectives of this report examined how ILAB: (1) ensures  the financial accountability of its technical assistance funds, (2) monitors  the performance of its projects, and (3) evaluates its projects and uses  the results of the evaluations. 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.
Why GAO Did This Study

According to the International Labour Organization, millions of children worldwide are engaged in labor that hinders their development. Recent incidents, including a factory collapse in Bangladesh, have highlighted poor working conditions overseas. ILAB's child labor office and trade and labor office provide funding to improve working conditions by supporting worker rights and combating child labor, mainly through international and nongovernmental organizations. The child labor office obligated about $56 million and the trade and labor office obligated about $13.5 million in fiscal year 2013. You asked us to review issues related to ILAB's international technical assistance. This report examines how ILAB (1) ensures the financial accountability of its technical assistance funds, (2) monitors the performance of its projects, and (3) evaluates its projects and uses the results of the evaluations. To address these objectives, GAO reviewed ILAB documents on financial requirements, performance monitoring, and evaluation. GAO analyzed a nongeneralizable sample of 26 grants that were active in calendar years 2011-2013. GAO selected this sample based on several factors, including dollar value and geographic location.

What GAO Found

The Department of Labor's (DOL) Bureau of International Labor Affairs' (ILAB) child labor office and trade and labor office both have guidance for the financial monitoring of grants, but could improve their financial oversight. For example, we found that project managers completed their acceptance or rejection of about 20 percent of quarterly financial reports more than 90 days after receipt from the grantee, after the next quarter's report was due. ILAB does not have guidance that provides time frames and criteria for accepting or rejecting quarterly financial reports. In addition, although the child labor office supplements federal financial requirements with attestation engagements of selected projects to, among other things, assess the accuracy and reliability of grantee financial and performance data, the trade and labor office has not yet implemented its plan to conduct such attestation engagements of its grants, although officials said they plan to do so by November 2014. Without addressing these gaps in financial oversight, it could be difficult for ILAB to ensure federal resources are used efficiently and effectively to achieve desired objectives. The figure below outlines selected financial and performance monitoring tools and requirements from each office.
ILAB uses a number of tools to monitor the performance of its projects, but the trade and labor office's monitoring could be strengthened. Twenty-two of 26 grant files we reviewed included key monitoring documents, such as periodic performance progress reports. The child labor office requirements have generally been more comprehensive than those of the trade and labor office. For example, in contrast to the child labor office, the trade and labor office does not have common indicators that are used across projects and, as stated above, has not conducted attestation engagements of its grants. Without common indicators and attestation engagements, it is difficult for the trade and labor office to assess overall progress across projects and toward the office's goals, and whether its grantees are in compliance with relevant regulations.
ILAB conducts final evaluations for all projects to assess the performance of the project, including an assessment of performance against goals and objectives. Officials said they have drawn lessons learned from these evaluations that they have incorporated into subsequent projects, including addressing monitoring and evaluation issues earlier in a project. ILAB has also commissioned impact evaluations to determine whether a project has an effect and to quantify how large the effect is, and two have been completed to date.

What GAO Recommends

GAO recommends that the Secretary of Labor take actions such as establishing guidance on time frames and criteria for accepting or rejecting financial reports, and implementing the trade and labor office's plans to conduct attestation engagements and develop common indicators. DOL agreed with GAO's recommendations.