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on workers by subsidizing firms to carry out an adjustment with its existing work force.
The importance of the role played by labor and management in enhancing adjustment and productivity has been further suggested by the comparative analysis of labormanagement relations in the United States and its major trading partners. Evidence regarding the general state of a nation's labor-management relations and its performance in international markets, although subject to numerous caveats, qualifications and problems of interpretation, does suggest a positive relationship between good labor-management relations and high productivity.
Comparative studies have also indicated the importance of learning from our own experience. Numerous successful, innovative programs have been introduced by U.S. firms to enhance productivity and to adjust more rapidly, including increased job security, improved training programs, quality improvement programs and shop-floor committees to handle worker problems. Improved relations between labor and management have also been a focus of many of these programs. These programs are a uniquely American response to the economic environment and, as such, may serve as a more relevant model for U.S. firms seeking to enhance productivity.
WOMEN'S BUREAU'S ROLE IN TRAINING PROGRAMS
Question: Does the Women's Bureau plan to capitalize on innovative local programs which have been successful in placing women in non-traditional high paying jobs at a relatively low cost?
Answer: The Women's Bureau has worked with most of these local programs over the years and, in fact, assisted some of them in getting established. The Bureau will continue to work with them and to use their experiences in developing new projects and/or in providing technical assistance to employers. Some of these projects, such New Directions for Women in Baltimore and New Jobs for Women in Philadelphia, are working with the Bureau to implement and follow through on the Women in Apprenticeship initiative. This initiative is bringing together employers, union officials, State and local employment and training officials, outreach program operators, women's organizations, and women at the State and local level for training on how to recruit, place, and retain women in skilled training positions.
Question: Will it be necessary to repeal the one-year project sponsored by the Women's Bureau to train employment and training personnel to increase recruitment, placement and retention of women in apprenticeship occupations?
Answer: The Bureau's Women in Apprenticeship initiative to train employers, union officials, State and local employment and training officials, outreach programs operators, women's organizations and women on how to recruit, place, and retain women will be presented in at least 40 local sites during FY 1982. It will reach between 2000 and 4000 people directly. In addition, an evaluation of the impact of these training
sessions on the skilled crafts training system will be launched. When the Bureau is cut by nine positions in FY 1983, this initiative will have to be eliminated since staff resources will not permit its continuation.
Question: What is the Women's Bureau role in linking training programs to employers' affirmative action requirements?
Answer: The Employment and Training Administration and the Office of Federal Contract Compliance Programs have been working together to develop a program to link training initiatives to affirmative action requirements. The linkage effort is being reviewed and revised within the Department. As it progresses, the Bureau expects to be involved in discussions on how best to implement the linkages. In addition, the Women's Bureau regional offices will work with both ETA and OFCCP to ensure that the training being received by women will address the needs of employers and that women trainees will be actively sought to respond to employers' affirmative action requirements.
AUDITS OF CETA PROGRAMS
Question: Can you provide the total amount for questioned costs, disallowed costs, and recovered costs relative to each contract or grant awarded by the Employment and Training Administration's Office of National Programs during Fiscal Years 1979, 1980, and 1981?
Answer: A breakdown of activity related to the Office of National Programs follows:
Funds awarded $718 million in 1979; $774 million in 1980; $764 millin in 1981.
Costs questioned $22 million in 1979; $ 15 million in 1980; $11 million in 1981.
Disallowed costs $33.7 million cumulative at 1981.
Recovered costs $843,264 cumulative at 1981. (Data not available by fiscal year.)
Question: What were the major reasons for the questioned or disallowed costs?
Answer: Major reasons for the questioned or disallowed costs fall into two categories: ineligible participants and poor grantee financial management systems.
Problems associated with ineligible participants have decreased in recent periods due to implementation of provisions contained in the 1978 CETA Reauthorization. Included in the 1978 Reauthorization was a requirement for the establishment of an eligibility determination and verification system at each grantee responsible for the intake of participants. These systems have helped to significantly reduce the number of ineligible participants found in the CETA program.
The most consistent problem encountered during audits of CETA programs administered by the Office of National Programs involves grantee financial management systems. Audits have identified (1) systems which permitted payment of funds for items for which there was no supporting documentation to indicate why the expenditures should have been charged to CETA, (2) systems that have allowed expenditures to be charged to CETA when grantee budgets could no longer legally absorb the expenditures, and (3) systems which permitted charges to be allocated to CETA when the expenditures should have been allocated to other programs.
One factor contributing to these conditions has been the large use in the past of sole source procurement for awards of grants and contracts. The lack of more competitive awards has resulted in organizations continuing to receive funds although audit reports have documented the poor financial management capability of the organization. Competitive awards subject the applicant and its management capacity to closer scrutiny and help to identify those applicants who do not have adequate systems, financial or otherwise, to perform the assigned tasks.
IMPROVED MANAGEMENT OF ETA OFFICE OF NATIONAL PROGRAMS
Question: What is labor doing to ensure that this situation does not recur?
Answer: The problems involving ineligible participants are being corrected with implementation of provisions which require establishment of eligibility determination and verification systems.
To address the remaining problems, the Employment and Training Administration has issued a Directive which establishes policies, standards and procedures in the management of procurements administered by the ETA National Office and directs ETA officials to:
a. Make maximum use of competitive award procedures when
issuing grants and contracts.
b. Issue grants and contracts to organizations whose fiscal
integrity and capabilities are established and
c. Issue Letter Contracts or authorize retroactive grants
and contracts only under stringent conditions.
d. Clearly specify the work to be performed by grantees and
e. Rigorously monitor and assess the performance of
grantees and contractors.
f. Maintain a complete record of all transactions in an
official grant/contract file substantiating ETA
Requirements and standards in this Directive are reflected in the performance standards of ETA individuals responsible for carrying out these functions and tasks.
A good example of implementation of provisions contained in this Directive is the conditions under which awards were made to Migrant and Seasonal Farmworkers grantees for Fiscal Year 1982. ETA requested the Office of Inspector General to conduct special systems reviews of 13 applicants for refunding. OIG reviewed 11 specific areas considered to have a significant bearing on the applicant's ability to successfully operate a program. These areas included procurement, cost allocation procedures, overall accounting and financial management systems, documentation retention, and organizational structure. The review rated six of the applicants as unacceptable in one or more of the 11 areas. Four of the six applicants were refunded contingent upon implementation of corrective action plans. The remaining two applicants were not refunded.
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 follow-up 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 ABDNOR. Our subcommittee is going to recess until 1:30 p.m. and will be meeting in this room to discuss funding for the Occupational Safety and Health Administration, the Mine Safety and Health Administration, and the Bureau of Labor Statistics.
I thank all our witnesses today.
[Whereupon, at 11:20 a.m., Thursday, April 22, the subcommittee was recessed, to reconvene at 1:30 p.m. the same day.)
(AFTERNOON SESSION, 1:45 P.M., THURSDAY, APRIL 22, 1982)
OCCUPATIONAL SAFETY AND HEALTH ADMINISTRATION
STATEMENT OF THORNE G. AUCHTER, ASSISTANT SECRETARY
SUBCOMMITTEE PROCEDURE Senator SCHMITT (presiding]. The subcommittee will come to order.
I apologize for being a little bit late. This session of our hearings on Labor Department budget requests deals with two mildly controversial agencies—the Occupational Safety and Health Administration, or OSHA, and the Mine Safety and Health Administration, or MSHA. We will also receive testimony from the Bureau of Labor Statistics.
We will begin with the Assistant Secretary, Thorne Auchter, who, for the last year, has been grappling to improve workplace safety and health, despite the negative image which the acronym OSHA often invokes.
Then we will hear testimony from Ford B. Ford, Assistant Secretary for MSHA. Following Mr. Ford's testimony, we will hear from Ms. Janet Norwood once again as Commissioner of the Bureau of Labor Statistics.
Mr. Auchter, would you please introduce your associates and proceed with your opening statement.
INTRODUCTION OF ASSOCIATES
Mr. AUCHTER. Yes, sir, Mr. Chairman. We appreciate the opportunity to be with you today. On my left is David Zeigler, who is Director of administrative programs. On my right is Michael Turner of our Office of Policy, Legislation, and Interagency Programs. And on my far right is Mary Ann Wyrsch, Director of the Departmental Office of Budget.
Mr. Chairman, I have a formal statement that I would like to submit for the record, and I will briefly summarize, if that's OK with you.
Senator SCHMITT. That's fine. Your entire statement will be in our record.
SUMMARY OF STATEMENT Mr. AUCHTER. All right, sir. Our budget request for fiscal 1983 is $206,256,000, which is an increase of $10,791,000 over the estimate for