Letter to the Secretary of U.S. Department of Labor Hon. Elaine Chao
Letter to the Secretary of U.S. Department of Labor Hon. Elaine Chao
The Honorable Elaine Chao
Secretary
U.S. Department of Labor
Frances Perkins Building
200 Constitution Avenue, NW
Washington, D.C. 20210
Dear Secretary Chao:
On March 31, 2006, State of Iowa Auditor David Vaudt, released a report on a special investigation of programs administered by the Central Iowa Employment and Training Consortium (CIETC) and the Iowa Workforce Development (IWD). The auditor's report identified "unallowable uses of federal funds, including excessive compensation for CIETC executive employees, and improper allocation of salaries." Specifically, the investigation found that three executive administrative staff members at CIETC were collectively paid more than $1.8 million between July 1, 2003 and December 15, 2005.
A great deal of federal funds were provided to IWD through the Workforce Investment Act, and subsequently passed to CIETC as the service provider. As such, we believe the Department of Labor shares responsibility for ensuring that taxpayer dollars are used as wisely and effectively as possible by Regional Workforce Investment Boards. It's important that the Department of Labor clearly detail what Employment and Training Administration (ETA) staff knew about executive compensation at CIETC, when it was known, and what action was taken by ETA to prevent further abuses.
According to the Iowa Auditor of State, representatives from the Department of Labor conducted an onsite review of CIETC in December 2004. The "Financial & Administrative Monitoring Review Report" found "a handful of practices, all related to executive compensation, that raise concerns about the allowability of certain personnel costs."
Please provide a detailed summary and timeline of actions taken by DOL ETA following this review and report. What action did DOL ETA require of CIETC and IWD to address the concerns raised in this report?
Was the December 2004 report the first revelation by DOL of executive compensation concerns?
Were policies implemented by DOL ETA following the December 2004 report to prevent or prohibit further abuses of federal taxpayer dollars? If not, why not? If so, why were these policies insufficient in preventing further excessive executive compensation? What more could or should DOL ETA have done to prevent further unallowable or impermissible executive compensation? Were options available to ETA staff that were not exercised that could have prevented further abuse? If so, why were those options not exercised? Were subsequent onsite visits performed to ensure that policies in place to prevent excessive executive compensation were adequate?
Did DOL staff ever refer this incident to the DOL OIG for an independent audit or investigation? If so, when? If not, why not?
Please provide any other information relevant to the responsibilities of DOL and actions taken by DOL to ensure that WIA formula grant money provided to IWD and Regional Workforce Investment Boards is used in a fully accountable and effective manner. We look forward to receiving your response to my inquiry not later than April 21, 2006.
Thank you for your consideration.
Sincerely,
Charles E. Grassley Jim Nussle
U.S. Senator U.S. Congressman
http://www.house.gov/apps/list/speech/ia01_nussle/DoL_Letter.html