Audit: Labor Dep't. Spent Hundreds of Thousands on ‘Conferences’ Not Reported to IG

By Brittany M. Hughes | April 21, 2015 | 8:39 PM EDT

U.S. Department of Labor (Wikimedia Commons photo)

(CNSNews.com) – The Department of Labor (DOL) failed to report hundreds of thousands of dollars in conference costs from Fiscal Year 2013 as federal law requires, a recent audit by the department’s Office of Inspector General (OIG) revealed.

According to Section 3003 of the Consolidated and Further Continuing Appropriations Act of 2013, a federal department is required to submit a detailed report to its Inspector General whenever it spends more than $100,000 on a conference, including the purpose, number of participants, cost and contracting procedures for the event.

In its audit report released on March 31, the OIG stated that DOL held six conferences costing more than $100,000 each in FY2013, but failed to submit a report to OIG for two of them as federal law mandates. The department is also required by law to report these conferences on its website; however, according to the OIG, the Department of Labor only listed one of the six online.

Under the 2013 law, a federal department must also inform the OIG of the date, location and number of participants for any conferences costing more than $20,000 within 15 days of the event’s ending.

The DOL failed to report eight conferences costing between $20,000 and $100,000 within the 15-day timeframe in FY2013, the Inspector General’s Office stated. These unreported DOL conferences totaled $419,105, according to the audit.

Labor Department officials tried to justify not reporting certain conferences by saying the events were for “training” and were therefore exempt from reporting regulations, the report explained.

“According to OCFO [Office of the Chief Financial Officer] officials, the remaining five conferences were not reported on the website because they were considered training, which OCFO interpreted to be excluded from the reporting requirement,” the Inspector General. “However, OMB M-12-12 does not exclude training conferences from the reporting requirement and specifically states that conferences include training activities.”

“OMB M-12-12” refers to an executive memorandum issued under President Barack Obama on May 11, 2012, which in its footnotes defined the term “conference” as also applying to “training activities.”

“Similar to the conferences not reported on the Labor Department’s website, OCFO officials stated the two conferences were not reported to OIG because they were also considered training, which OCFO interpreted to be excluded from the reporting requirement. However, the Consolidated and Further Continuing Appropriations Act, 2013 and OMB M-12-12 do not exclude training conferences from the reporting requirement and OCFO’s own policy states conferences include training,” the report continued.

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On top of not reporting all their expenses to the Office of the Inspector General or online, the department also failed to get the required approval for hundreds of thousands in conference costs, the Inspector General’s Office noted in its report.

“Our review of all DOL-sponsored conferences exceeding $100,000 determined that reported costs were in accordance with DOL guidance … However, one of the six conferences did not obtain the Deputy Secretary’s approval in accordance with federal requirements,” the Inspector General stated.

That conference, held between July 15 and Aug. 2, 2013, was a “Basic II Training” conference for 61 people that cost taxpayers $237,740, the report showed.

The OIG report stated DOL officials again used the excuse that the conference was for “training,” and was exempt from needing the deputy secretary’s approval.

“Although other similar Wage and Hour conference packages had been submitted to the then-Deputy Secretary, the then-CFO subsequently determined training conferences were exempt from this requirement,” the Inspector General noted. 

“However, OMB M-12-12 does not exclude training conferences from the requirement to approve the spending for all proposed new conferences to be sponsored or hosted by an agency (or by other federal or non-federal entities) where the net conference expenses by the agency will be in excess of $100,000,” it continued.

The Office of the Inspector General found the department’s failure to comply with regulations before spending thousands on conferences continued in FY2014, when the department spent nearly $140,000 over budget on a conference without getting the required approval.

“Although the scope of our review was FY 2013 conference activity, it came to our attention that in FY 2014, the Wage and Hour Division conducted a conference that reported final costs at least 10 percent higher than the original cost estimate. According to Office of the Chief Financial Officer, Wage and Hour officials did not seek approval for the increased costs as required.

The approved cost of the conference was $241,598; however, Wage and Hour officials reported to OCFO the final cost of the conference was $380,382. The difference between the estimated and actual cost was $138,784, an increase of 57 percent over the estimated conference costs,” the OIG noted.

“Wage and Hour officials should have requested approval for the higher costs, as soon as they realized actual costs were going to exceed the approved amount by more than 10 percent,” the report continued.

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