Summary: GAO reviewed the Department of Labor and prime sponsor management of CETA funds. GAO found that several prime sponsors were paying training participants a basic hourly allowance instead of a weekly incentive allowance as required by Labor's regulations. Because the hourly payments were considerably more than the weekly allowance, a significant amount of CETA funds was spent inappropriately.
GAO interviewed representatives at four prime sponsors to determine why hourly allowances, rather than weekly incentive allowances, were made to participants who were receiving public assistance. In general, the cause of the problem is a lack of understanding by prime sponsors that, in addition to federally supported assistance payments, recipients of general assistance payments funded by State and local governments are eligible only for the weekly incentive allowance. In most cases, the prime sponsors' personnel thought that public assistance included only federally supported payments when determining eligibility for basic hourly allowances.
