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. Labor Has Guidance for Developing ILAB Grant Solicitations

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. 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. Applicants’ past performance is assessed under  the organizational capacity criterion. Incomplete Award File Documentation Causes Uncertainty about Whether Labor Followed Its Procedures

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. 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. 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. 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. Recommendations for Executive Action

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. Appendix I: Objectives, Scope, and Methodology

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. 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. We selected the sample based on several  factors, such as dollar value and geographic location. Past performance of Labor-funded child labor projects in a given  country.
Why GAO Did This Study

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.

What GAO Found

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.

What GAO Recommends

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.