DIRECT ASSISTANCE TO CONGRESS Mr. ANDREWS. On page 3 of your statement, in reference to the direct assistance to Congress and its committees, what is the extent of the assistance in the current year? Do you have a breakdown that you could insert, showing the composition of the nearly 400 man-years that you mentioned? As I understand your statement, there would be in addition the special activities in connection with the audit of the Office of Economic Opportunity. SPECIAL STUDY OF OEO PROGRAMS Mr. STAATS. That is not included in the figures you have mentioned. I indicated that at the moment we have about 200 of our professional staff assigned to a special study of the OEO programs. This would not be 200 man-years. This will be heavily concentrated over a period of about 3 or 4 months. Mr. ANDREWS. Have you actually started your investigation of the OEO? Mr. STAATS. Yes. Mr. ANDREWS. When? Mr. STAATS. We started it just as soon as we could plan it after we knew that this was to be in the statute. Mr. ANDREWS. You have a mandate from Congress in the legislative bill? Mr. STAATS. Yes, we have. Mr. ANDREWS. You started immediately thereafter? Mr. STAATS. It is a very major undertaking for us, because it calls for us to make a review. If I may just read this: (1) The efficiency of the administration of such programs and activities by the Office of Economic Opportunity and by local public and private agencies carrying out such programs and activities; and (2) The extent to which such programs and activities achieve the objectives set forth in the relevant part or title of the Economic Opportunity Act of 1964 authorizing such programs or activities. The provision also asks that we not only make an investigation in sufficient depth to make a determination on this, but that we make a report with a detailed statement of findings and conclusions, together with such recommendations, including recommendations for additional legislation, as we deem advisable. This is a very major undertaking. In addition to our own people, we have sought the advice and proposals of 13 different consulting organizations. We have now selected two to give us some help in this area, to supplement our own staff. Mr. ANDREWS. Just what will those outside agencies do? Mr. STAATS. One organization will be giving us advice on how do you go about testing the effectiveness with which a program of this type is carried out. We are talking about programs of education and job training, the development of community action programs, and things of this kind. Mr. ANDREWS. Are you concerned with the salaries of the officials of the OEO or the private organizations that are carrying on projects for OEO? Mr. STAATS. That would not be excluded. Mr. ANDREWS. You will report what the salaries are? Mr. ANDREWS. Just before Christmas, Mr. Giaimo, a Representative from Connecticut, made a one-man investigation of the program as it operated in and around his area. He was very critical. His comments are in the Congressional Record. Mr. STAATS. We did a special review for Senator Monroney of the overhead costs of the Rural Community Action program in Oklahoma last year because of some reports that the overhead was extremely high. Mr. ANDREWS. What did you find? Mr. STAATS. We found it was running about 25 percent. The new legislation, as a result of this, I believe puts a limitation of 15 percent. Mr. ANDREWS. Did you make a recommendation to the committee before they lowered the limitation for administrative expenses? Mr. STAATS. Yes. Our report was used largely in the discussions in fixing the lower limit. Mr. ANDREWS. Is your report lengthy? Mr. STAATS. On the overhead? Mr. ANDREWS. Yes. Mr. STAATS. I do not think it is too long. Mr. ANDREWS. Would you have someone digest that report and put the pithy part of it in the record at this point? (The information follows:) REPORT ON CERTAIN ASPECTS OF SELECTED COMMUNITY ACTION PROGRAMS IN THE STATE OF OKLAHOMA UNDER THE ECONOMIC OPPORTUNITY ACT (B-160616, DECEMBER 11, 1967) At the request of Senator A. S. (Mike) Monroney, we reviewed certain conditions relative to the community action programs (CAP's) being operated under grants made by the Office of Economic Opportunity in eight counties in the State of Oklahoma. Our review was directed to (1) the use of single-county agencies versus multicounty or regional community action agencies in rural areas, (2) the use of private versus local governmental organizations as community action agencies (CAA's) in rural areas, (3) the salary levels of top officials of community action agencies in relation to the salary levels of local officials, and (4) the ratio of overhead or indirect costs to total costs of community action programs. We concluded that because of various factors which bear on the effectiveness and economical operation of community action programs and because these factors are not necessarily the same for all communities, the subject of singlecounty or multicounty community action agencies for rural areas did not seem to lend itself to the establishment of workable standard criteria for all rural communities. From our review it appeared that, for rural areas, multicounty organizations generally would be able to provide more qualified and specialized direction of community action programs than small single-county organizations and to realize certain administrative efficiencies but that small single-county organizations had the advantages of closer association and identity with the population being served. A report dated September 1967 by a private consulting firm set forth a variety of factors to be considered in establishing such criteria. The most significant of these factors were (1) the population base with respect to developing a balanced set of program components and to providing leadership resources, (2) the role of existing county agencies in serving the poor, (3) the ease of mobility as affected by terrain and area, (4) the past experiences and attitudes of the local agencies and population regarding mergers with neighboring counties, and (5) the economic similarities and differences of neighboring counties. OEO advised us in November 1967 that, based on these factors, it was refining its criteria for use in determining when to use multicounty agencies. At the time of our fieldwork, all the CAA's in the eight counties were private organizations. County commissioners and other local public officials indicated that their agencies did not have the facilities and staff to administer the varied activities comprising community action programs; that private organizations could administer such programs better than the local public agencies; and that the programs might be subject to local political pressures if administered by public agencies. Moreover, the officials of these agencies expressed an indisposition either to expand their activities, which were generally concerned with only one activity such as education or health, or to establish a separate county government organization as a community action agency. However, officials of the agencies indicated a willingness and ability to assume the administration of individual program components as delegate agencies. Salaries of the CAA directors and assistant directors in the eight counties were not generally out of line with those paid to top public officials in the respective counties. Personnel files at the CAA's which we visited showed that a number of the directors and assistant directors had college educations and/or employment experience that appeared to qualify them for their positions. Of approximately $849,700 in total expenditures, $279,500 or about 33 percent was for indirect costs—such as administrative and clerical salaries, space rental, and travel-and for other costs not directly related to carrying out specific antipoverty programs. Ratios by individual counties ranged from 25 to 62 percent and were influenced largely by the number and size of programs funded in the respective counties. While the indirect costs included nonrepetitive startup costs and costs for developing programs which were not yet in operation, we believed that the amounts expended for indirect costs for certain counties could be justified only if the level of program activities increased. Subsequent to our review, the Economic Opportunity Act of 1964 was amended to include a provision which would limit the costs of developing and administering community action programs to 15 percent of the total costs and would require the Director of OEO, after consultation with the Director of the Bureau of the Budget, to establish, by regulation, criteria for determining (1) the costs of developing and administering such programs and (2) the total costs of such programs. Mr. WEITZEL. Mr. Chairman, our reviews of the economic opportunity programs go into such things as the number of staff members in the program receiving over $10,000 a year, and the number that received increases when they came on board the economic opportunity program. Those are some of the matters that we are covering in our reviews and reports. Mr. ANDREWS. How many reports have you completed, Mr. Weitzel, on the poverty program? Mr. WEITZEL. From inception of our work at the Office of Economic Opportunity early in 1965 we have to date issued three reports to the Congress and 30 reports to congressional committees and Members of the Congress in response to congressional requests. Two of the reports to the Congress related to Job Corps centers; the men's Job Corps center (Parks), Pleasanton, Calif., and the St. Petersburg Job Corps center for women, St. Petersburg, Fla. The third report to the Congress related to our review of the community action program in the Los Angeles area. In addition we have issued a report to the Congress on the need to increase effectiveness of the Neighborhood Youth Corps program for aiding students and unemployed youths in Cleveland, Ohio, which is a program administered by the Department of Labor. Mr. STAATS. There have been a large number of reports on specific locations and specific problems, Mr. Chairman. We can give you a complete list. Mr. ANDREWs. We are not so much interested in the list as we are in the content. If you could have one of your staff members give us a brief digest of each report and what you found, good or bad, you may put it in the record at this point. Mr. STAATS. Just a summary. (The information follows:) REVIEW OF SELECTED PROGRAM ACTIVITIES AT THE PARKS JOB CORPS CENTER, OFFICE OF ECONOMIC OPPORTUNITY (B-161076, NoVEMBER 8, 1967) Our review of the Parks Job Corps program revealed that corpsmen had completed various courses and that some had apparently obtained good employment. However, the program experienced certain operating problems which we believe hindered the effective achievement of the contract goals, and costs were considerably higher than originally anticipated. Total costs for the period January 20, 1965, through December 31, 1966. including the capital costs for rehabilitation of the center and purchased equipment, but excluding the value of donated surplus equipment; the depreciation of center facilities; and the OEO headquarters and regional support costsamounted to about $32.6 million. Direct operating costs for the last 12 months of the initial contract, computed in accordance with section 105 of the Economic Opportunity Amendments of 1966 which was not applicable during most of the period covered by our review, amounted to $9,672 per corpsman-year. The information which we developed during our work pinpoints the problems which the program experienced in those ares of operations to which we directed our review. These problems are as follows: During the period of the initial contract, the center did not have adequate records showing the progress of individual corpsmen and indicating the factors involved in their achievements or failures, nor were systematic procedures in effect for evaluating the effectiveness of the various vocational programs. Factors such as corpsmen's ages, training potential, absenteeism, terminations, and conduct and the length of the period of training influenced the overall effectiveness and cost of the program. Standards to govern entrance into various programs were not consistently applied, and an individual's lack of aptitude, as indicated by test scores, was not a controlling factor in considering him for entry into the more difficult programs. A large counseling force was needed to provide behaviorial control over the activities of corpsmen when they were not attending classes. The counseling records maintained for individual corpsmen varied as to completeness and it was often impossible to determine what steps had been taken by the counselors in regard to problems encountered. A program to provide continuous follow-up and evaluation of corpsmen who had terminated the program had not been required of the contractor by OEO under the initial contract. Although the contractor had a limited amount of information on placements of corpsmen who left the center, it was not sufficient at the time of our review for making a reasonable evaluation of the effectiveness of the program in terms of measuring the benefits obtained by the corpsmen. At the time of our review, the center had acquired an instructional TV station, which was not effectively integrated into the academic program, and had acquired training material costing about $347,000 which appeared to have been purchased without any specific planned use. According to OEO and the contractor, many of these problems have been mitigated since the completion of our fieldwork and actions are in progress to remedy other problems. With respect to certain matters on which the need for further consideration by the agency was indicated by our followup review in August 1967, we have recommended that OEO: Adopt a policy whereby an appropriate reduction in the corpsman's monthly salary and readjustment allowance are made in those instances where the corpsman's conduct and attendance is not satisfactory. Make a study to determine what a reasonable daily schedule of educational and/or vocational training should be and, on the basis of this study, institute a uniform time schedule for all men's centers. Review the implementation of the center's system for control over behavior problems to insure that the system is providing reasonably complete data in the counseling area. Thoroughly examine the cost-benefit relationship and the suitability of proposed purchases of certain training material and equipment prior to approval. REVIEW OF ESTABLISHMENT AND OPERATION OF ST. PETERSBURG JOB CORPS CENTER FOR WOMEN, ST. PETERSBURG, FLA., OFFICE OF ECONOMIC OPPORTUNITY (B-1305515, FEB. 5, 1968) The St. Petersburg Job Corps Center for women which was operated by the Pinellas County Board of Public Instruction under a cost-reimbursable contract with the Office of Economic Opportunity (OEO) was the first women's center opened under the Job Corps program. The contract was effective February 1, 1965, and the Center became operative early in April 1965. The Center was located in the downtown tourist area of St. Petersburg, and disturbance involving corpswomen early in the program generated local hostility to the Center. Although this hostility later subsided, the contractor decided that operations of the Center put too much of a burden on county school administrative employees and voted not to renew the contract when it expired in July 1966. A new suitable site in the St. Petersburg area to accommodate a larger number of corpswomen and place all facilities in one building for greater efficiency and economy could not be found, and OEO decided to discontinue operation in St. Petersburg. The Center terminated training in July 1966. Corpsmen who had not completed their training were transferred to other centers. Total costs paid to January 31, 1967, including $162,772 for facility rehabilitation and equipment purchased, amounted to $2,655,180 covering the period from February 1, 1965, to the termination of Center operations in July 1966. These costs are subject to adjustment that may result from the final accounting with the contractor. The average cost for a corpswoman, based on total costs, was $9,612 a year. Some areas of Center operations which we reviewed did not indicate a need for improvement. In other areas, we found certain conditions which, we believe, had increased costs unnecessarily and had hampered the effectiveness of operations. During the first year, 41 percent of the enrolled corpswomen left the Center without completing their prescribed training. The Center site was leased without the benefit of an independent appraisal. An appraisal obtained several months after the lease was negotiated indicated that the rental appeared to have been about $44,000 more than the fair rental value for the 18-month period of the lease. Various items of excess Government stocks were shipped to the Center although the items had not been ordered and were not used. We suggested that, inasmuch these conditions may exist at other centers, more intensive efforts should be made for: 1. Closer surveillance over the screening and recruiting of prospective corpswomen to reduce the number of terminations. 2. Greater use of independent appraisals in negotiating leases for center sites. 3. More effective control over the selection and use of excess property. The Director, Job Corps, advised us that positive steps had been taken on these matters. However, the opinions of educational experts and others, as a result of their visits to various Job Corps centers in April and May 1967, was that recruiting and screening of prospective corpswomen had not yet improved to an acceptable level. Other problems which confronted the Center, such as the distance of corpswomen's homes from the Center, discipline, and followup on Job Corps graduates, have been the subjects of remedial legislation enacted by the Congress. REVIEW OF THE COMMUNITY ACTION PROGRAM IN THE LOS ANGELES AREA UNDER THE ECONOMIC OPPORTUNITY ACT, OFFICE OF ECONOMIC OPPORTUNITY (B-162865, MAR. 11, 1968) To accomplish the objectives of title II of the Economic Opportunity Act in the Los Angeles area, the Office of Economic Opportunity (OEO) worked prin |