May 15,2014

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Hatch and Alexander Highlight GAO Report Showing Majority of International Grants at the Department of Labor are Missing Documentation

WASHINGTON – U.S. Senator Orrin Hatch (R-Utah), Ranking Member on the Senate Finance Committee, and Lamar Alexander (R-TN), Ranking Member on the HELP Committee, today highlighted a new Government Accountability Office (GAO) report entitled, International Labor Grants: Labor Should Improve Management of Key Award Documentation, which found that the Department of Labor’s Bureau of International Labor Affairs (ILAB) has failed to maintain proper documentation for awarded grants.  The report, which was requested by Senators Hatch and Alexander found that 62 percent of award grant files had either missing documentation or no documentation at all and, of those, 15 percent of grants had no documentation at all. ILAB awarded nearly $70 million in grants to projects in foreign countries in 2013. 

“Today’s report shows that the lack of internal controls at the Department of Labor means these grants, meant to improve labor standards and to combat child labor, could instead be funding organizations that have actually been banned from partnering with the federal government,” Hatch said.  “The lack of documentation on the awarding of these grants to foreign countries is both reckless and irresponsible, especially in the current environment of fiscal restraint and budget cuts.  The Department of Labor should not be dumping millions of dollars abroad without ensuring that the funds are used correctly and responsibly, and I urge the Secretary of Labor to heed GAO’s recommendations on implementing proper internal controls regarding these grants.” 

“Taxpayers should be doubly offended by GAO’s report—not only are millions of their hard-earned dollars being used to support labor unions in foreign countries, those dollars are also being mismanaged,” Alexander said. The pattern of negligence revealed by GAO demands immediate action from Secretary Perez.” 

The Department of Labor’s Bureau of International Labor Affairs (ILAB) awards grants for assisting foreign countries to improve workers’ rights and combat child labor.  In March 2012, the Labor Department’s independent Office of the Inspector General (OIG) issued a similar report saying that there were numerous cases of missing documentation within the agency.  

Key findings from the GAO report are below:

  • 62% of ILAB grants are missing award documentation: “Incomplete documentation makes it difficult to determine if Labor has established internal controls over, and is following, its grant award procedures.”
  • Lack of proper documentation increases the risk of project failure: “Internal control serves as the first line of defense in safeguarding assets and preventing and detecting errors and fraud, including ensuring that Labor does not award grants to organizations that have been debarred from doing business with the federal government.  Without such assurance that Labor is following its grant award procedures, these programs are at increased risk.”