Question: Do you disagree with the study conducted by the National Association of Retired Persons, which indicates that for every dollar invested, $1.15 is saved? Answer: We have not been provided a copy of the study for comment. Question: Have there been any critical evaluations concerning the effectiveness of this program, the extent of fraud and abuse, or excessive administrative costs? Answer: The Department has not conducted any studies of the Title V program over the past five years. Experiential knowledge of the program does not indicate significant fraud and abuse or excessive administrative costs. REDUCING PAPERWORK IN CETA PROGRAMS Question: What have you done to reduce the paperwork burden imposed on Employment and Training Administration grantees? Have you reduced the amount of regulation grantees must comply with? Answer: We have taken a very critical look at the present paperwork burden imposed upon prime sponsors by the CETA legislation, regulations, and Forms Preparation Handbook. Over the course of several years since the Reauthorization of 1978, we have substantially reduced the administrative requirements for the program. Some of the reductions were as a result of programs being eliminated (PSE-Titles IID and VI). Additionally, the Omnibus Reconciliation Act merged the Youth Community Conservation and Improvement Project (YCCIP) with the Youth Employment and Training Programs (YETP). Recently, one annual report and a major portion of another annual report were eliminated. The above represents a significant reduction in the paperwork burden imposed on prime sponsors. A further reduction in these administrative requirements would be very difficult in view of the necessity to conform to the legislative mandate for oversight by the Department. APPRENTICESHIP SERVICES Question: During Fiscal 1982, the Staff of the Bureau of Apprenticeship and Training was cut to 332 from 459 positions in Fiscal 1981. What has been the impact of these staff reductions upon the agency's ability to serve the private sector? If the functions of BAT can be reduced without undue harm to the training of apprentices and the provision of skilled craftsmen to the private sector, might one not make further economies by simply abolishing BAT entirely? Answer: When ETA's RIF plans were announced, Congress requested that the deep personnel cut which was planned for BAT be halted. The Department agreed to this request and allowed BAT to take a proportionate share of staff reductions. BAT's staff was reduced by 10.8% compared to 15% for the remainder of ETA. (The 459 positions mentioned are budgeted positions and should be distinguished from actual employment.) In addition, ETA as a whole has reduced its travel expenditures and BAT has taken its fair share of these reductions. In spite of the necessary staff and travel reductions, BAT has taken serious management actions to alleviate the impact on the private sector. We will continue to review and monitor BAT's efforts to insure maximum assistance to employers and labor in developing and maintaining apprenticeship programs. AUDITING EMPLOYMENT AND TRAINING PROGRAMS Question: Now that the Employment and Training Administration has eliminated its backlog of audits, what progress has the Department made in collecting disallowed expenditures? Answer: The audit backlog was eliminated by September 30, 1981. Between October 1, 1981 and March 31, 1982 (the first half of FY 1982) ETA recovered over $11 million in debts, approximately the same amount ETA recovered in all of FY 1981. This 100 percent increase in the level of collection activity indicates that ETA is making progress in collecting disallowed expenditures since the "big push" in audit resolution ended on September 30, 1981. Question: What percent of audit determinations have been appealed by the Employment and Training Administration grantees and what amount of money does this represent? Answer: The only data which we have available at this time to address this question was compiled for the period April 1, 1980 through April 30, 1981. The data indicates that approximately 20 percent of all audits resolved during that period were appealed. (An audit report is considered resolved when the grant or contracting officer issues to the grantee or contractor a final determination addressing all audit findings.) The existing automated tracking system currently does not contain complete data on debts now under appeal, although the system contains complete data on the results of appeals (e.g., the dollar amount or disallowances overruled or sustained). Complete data on debts under appeal should be available from the automated system by June 30, 1982. AUDIT RESOLUTION AND FOLLOWUP SYSTEM Question: What new auditing procedures have you installed or do you recommend to prevent future build-ups or unresolved audits? Answer: The Department of Labor has developed an audit resolution and followup system which is designed to maximize the use of audits as a management tool, identify major problems, ensure timely resolution and implementation of audit recommendations, and provide needed management, information. The Department is now resolving questioned costs in a timely manner. At September 30, 1981, there were only 8 unresolved audits over six-months old (containing $9.7 million in questioned costs). At March 31, 1982, there were only 10 unresolved audits in this category ($2.1 million in questioned costs). All of these audits missed the 180-day deadline because of legitimate extenuating circumstances, such as active investigations. The Office of Inspector General tracks the resolution process very closely and is quick to notify management when an audit begins to approach the deadline. SUBCOMMITTEE RECESS Senator RUDMAN. We appreciate your being here this morning, Mr. Angrisani. We probably will have many discussions with you and your colleagues over the next several months because there are many very difficult issues which we listened to this morning and don't necessarily agree with all of them. The subcommitte is going to stand in recess until tomorrow, when we will meet in this room to discuss funding for the Labor Management Services Administration, the Pension Benefit Guaranty Corporation, the Employment Standards Administration, and Departmental Manage ment. Mr. ANGRISANI. Thank you, Mr. Chairman. [Whereupon, at 11:50 a.m., Wednesday, April 21, the subcommittee was recessed, to reconvene at 10 a.m., Thursday, April 22.] DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND EDUCATION EDUCATION AND RELATED AGENCIES APPROPRIATIONS FOR FISCAL YEAR 1983 THURSDAY, APRIL 22, 1982 U.S. SENATE, SUBCOMMITTEE OF THE COMMITTEE ON APPROPRIATIONS, Washington, D.C. The subcommittee met at 10:04 a.m., in room 1114, Everett McKinley Dirksen Senate Office Building, Hon. James Abdnor presiding. Present: Senators Schmitt, Abdnor, Specter, and Burdick. DEPARTMENT OF LABOR LABOR MANAGEMENT SERVICES ADMINISTRATION STATEMENT OF DONALD L. DOTSON, ASSISTANT SECRETARY OF LABOR FOR LABOR-MANAGEMENT RELATIONS ACCOMPANIED BY: RONALD J. ST. CYR, DEPUTY ASSISTANT SECRETARY ERNEST J. GERMAN, DIRECTOR, OFFICE OF MANAGEMENT SUBCOMMITTEE PROCEDURE Senator ABDNOR. The subcommittee will come to order. This morning, we will hear testimony from the Labor-Management Services Administration, the Pension Benefit Guaranty Corporation, the Employment Standards Administration, and departmental management. We will begin with testimony from Assistant Secretary Donald Dotson, on appropriations requests for the Labor-Management Services Administration. We welcome you to the committee. You have a number of your colleagues with you, so if you will just kindly introduce your colleagues and then proceed with your opening statement. As I am sure you have heard a number of times before, your entire statement will be made a part of the record. You may proceed in any manner you care to. INTRODUCTION OF ASSOCIATES Mr. DOTSON. Good morning, Mr. Chairman. As you know, the Assistant Secretary for Labor-Management Relations is also the Administrator for Labor-Management Services, the Ad 16-039 ministration which administers and enforces a number of diverse statutes, unlike many of the Assistant Secretaries of the Department who have a one-subject sort of program. So I have more than the usual number of associates with me. To my left is Mr. St. Cyr who is my Deputy. To my right is Mr. Jerry German who is Director of our Office of Management, Labor-Management Services Administration. Also to his right is Mary Ann Wyrsch from the Department's Budget Office. Behind me, in case you have more specific questions about some of our programs, I have the Administrator of the Pension and Welfare Benefit programs, the ERISA program, Mr. Clayton; I have the Director of the Veterans' Reemployment Rights program, Mr. Gonzalez; Mr. Hunsucker, who is Director of the program that administers the Landrum-Griffin Act. I also have Mr. John Stepp, the Director of the Office of Labor-Management Relations Services. They are available in case you have more detailed questions. Senator ABDNOR. We can ask you any kind of questions we want to, then, today with that reinforcement. We welcome you all to the committee, and we are ready to hear from you. So you may proceed. Mr. DOTSON. With your permission, as you suggest, I will submit our written statement for the record and give you a very brief comment on each one of our programs, the problems that we identify with, and what we know about them. LANDRUM-GRIFFIN The labor-management standards enforcement program, which enforces the Landrum-Griffin Act or Labor-Management Reporting and Disclosure Act, which followed in the wake of the McClellan committee hearings, was in my opinion our most critical problem. There seemed to have been a tradition developed in enforcing that law. The public, union members, and Congress have become more and more concerned about the amount of embezzlement of funds, misuse of funds, that was taking place. I think it is fair to say that the priority responsibility under that law, is to administer and supervise the rerun of union elections. As a result of the court ordered remedies, our workload reached such proportions that virtually all of the resources of that program were wrapped up in supervising rerun elections. That left nothing for conducting audits, the main tool we have to discover the embezzlement of funds. We have taken steps to correct that problem. I don't have to tell you of all the complaints, and controversy, that surround the pension program. It is like any new, complex statute, and has been a great problem for a lot of people, adjusting to its complexities and some of its requirements. We are moving as quickly as we can, as I am sure you know from other hearings on this subject, to simplify as much as we can within the balance of the law the reporting requirements for those who are subject |