Department of Labor-Grant to New York Workers' Compensation Board, B-303927, June 7, 2005

B-303927 Jun 07, 2005 Jump To VIEW DECISION DOWNLOADS RELATED PAGES GAO CONTACTS Highlights The appropriation to the Department of Labor "for payment to" New York Workers' Compensation Board for "processing of claims" was not available for the Workers' Compensation Board to make payments to other New York State entities. The Department should seek recovery of $44 million improperly transferred unless the Secretary seeks and obtains congressional ratification of the grant expenditures to date. Also, the Department of Labor's grant to New York Workers' Compensation Board imposed a responsibility on the Department to ensure proper performance of that grant, even though it was outside the Department's normal sphere of operations. View Decision B-303927, Department of Labor-Grant to New York Workers' Compensation Board, June 7, 2005 Decision Matter of: Department of Labor-Grant to New York Workers' Compensation Board File: B-303927 Date: June 7, 2005 DIGEST 1. Appropriation to the Department of Labor "for payment to" New York Workers' Compensation Board for 'processing of claims' was not available for the Workers' Compensation Board to make payments to other New York State entities. The Department should seek recovery of 44 million improperly transferred unless the Secretary seeks and obtains congressional ratification of the grant expenditures to date. 2. Department of Labor's grant to New York Workers' Compensation Board imposed a responsibility on the Department to ensure proper performance of that grant, even though it was outside the Department's normal sphere of operations. DECISION On September 8, 2004, the Government Accountability Office (GAO) testified before the Subcommittee on National Security of the House Committee on Government Reform about the New York Workers' Compensation Board's use of federal grant funds to meet expenses related to the September 11, 2001, terrorist attack on the World Trade Center.[1] At that time, we indicated a need for further review of grant expenditures totaling 44 million that the Board made to reimburse state entities other than the Workers' Compensation Board, because those expenditures may have been in conflict with the appropriation act that made funds available for the grant.[2] We have since received additional information from the Department of Labor (Department)[3] and the New York Workers' Compensation Board (Board),[4] and, for the reasons explained below, we conclude that the appropriation used was not available for the reimbursements to other entities and that the Department did not meet its responsibilitties to ensure the funds were properly applied. [5] Both the Department and the Board seem to have contributed to the misunderstandings that resulted in the payments to the Crime Victims Board and the State Insurance Fund. Nevertheless, the Department should seek to recover the 44 million improperly transferred to the Crime Victims Board and the State Insurance Fund. If the Secretary wishes to forego recovery of the improperly expended funds, she should seek and obtain congressional ratification of the grant expenditures to date and permission to authorize use of the remaining grant funds appropriated by Public Law 107-117 for other World Trade Center-related claims and benefits. If such authority is forthcoming, the Department should modify the grant agreement accordingly. Until then, the Board should refrain from further reimbursements to other entities and the Department should monitor grant performance to ensure adherence to the purposes of administration and mitigation consistent with the statute. Background In the aftermath of the September 11 attacks on the United States, Congress in Public Law 107-38 quickly appropriated 40 billion to assist in response and recovery. [6] Among other purposes, Congress made these funds available to provide " Federal, State, and local preparedness for mitigating and responding to the attacks ." [7] Of the total amount appropriated,20 billion were reserved to be made available in future emergency supplemental appropriation acts. Public Law 107-117, approved on January 23, 2002, was such an enactment. Under the heading, "Workers Compensation Programs," Congress appropriated $175 million to the Department of Labor Employment and Training Administration to be obligated from amounts previously made available in Public Law 107-38.