The Labor Department, plagued by charges of widespread abuse of its $11 billion public service jobs and training program, announced yesterday a nationwide drive to prevent fraud and mismanagement in all departmental programs.
While asserting that the charges of abuse are "grossly exaggerated," Labor Secretary Ray Marshall said there are "enough legitimate examples to damage the program" through budget cuts by Congress.
These include 25 indictments and 14 convictions from a total of nearly 150 investigations undertaken since the department began a fraud probe into Comprehensive Employment and Training Act (CETA) and other programs earlier this year, officials said.
The investigations have touched at least some programs in as many as 50 cities, according to the department.
Congress made some cuts in CETA funding as it extended the program this year and amended it to include a number of antifraud provisions. CETA's future could be further clouded if the more conservative Congress elected last week seeks a major spending cutback next year.
In announcing the abuse-prevention drive Marshal took note of the budget pressures. "When federal resources are limited," he said, "it is imperative that we spend each other as effectively and honestly as possible."
The department will send three-member teams composed of an investigator, auditor and analyst to examine individual programs on a random basis - looking for management deficiencies or abuses that invite fraud. These could include inadequate record-keeping, lax indentification and verification systems, and employment of ineligible participants, Marshall said.
Existing efforts, launched earlier this year under a 200-member investigative staff, are aimed at finding fraud that has already occurred rather than preventing abuses that could lead to fraud, Marshall noted.
"Unless we find a mechanism to get at the causes of fraud and program abuse, and haphazard," said Marshall, adding that "cases of fraud generate the headlines, but program abuse is often a more serious problem."
Marshall said the first two teams will take off next week to begin investigating CETA programs run by Mobile, Ala., and the Cherokee Nation in Oklahoma. The secretary emphasized that these programs were chosen at random and have not been accused of wrongdoing. He said he hoped to conduct up to 12 surveys during the current fiscal year which ends Sept. 30, and 20 to 40 annually after that.
Although the first two surveys will be directed at CETA, others will look into other departmental programs, such as the oft-criticized Federal Employes Compensation Act, Marshall said.
He said he does not know the extent of fraud and abuse within CETA, the huge jobs-and-training program that was expanded to include 725,000 public service jobs as part of the administration's 1977 economic stimulus. While he would be surprised if abuse was as extensive as critics have charged, he said most of the 26,000 individual CETA programs could probably stand more administrative improvement.
In a summary of CETA-related prosecutions so far, the department said convictions have been obtained involving programs in Atlanta, Harlingen Tex., and the state of Oklahoma, with indictments pending in Miami, Indianapolis and Ohio, including the city of Steubenville. In addition, at least two cities, Chicago and Philadelphia, have been required to return misused funds, officials said.