City of Oakland, a Municipal Corporation v. Secretary Raymond Donovan, United States Department of Labor

The Secretary of Labor ordered the City of Oakland to repay $61,050 in costs that were incurred by a subgrantee, Vocational Innovation Project (VIP), under a Comprehensive Employment and Training Act (CETA) program. The costs were disallowed because Oakland had not performed an audit of VIP as directed by the Secretary. Oakland was unable to perform the audit but submitted other records concerning VIP’s expenditure of the funds. Oakland petitions for review of the Secretary’s order.

I.

Oakland entered into a grant agreement with the Department of Labor (DOL) to operate a CETA program. The agreement covered the period from July 1, 1974 to September 30, 1976. Oakland entered into a subcontract with VIP in November of 1974. VIP was required to achieve 33 training related job entries for Chinese speaking enrollees. During the course of the subcontract, Oakland paid VIP $61,050 based on monthly invoices submitted by VIP.

In its agreement with DOL, Oakland assured the agency that it would comply with CETA requirements. Under CETA, 29 U.S.C. § 801 et seq., and regulations promulgated thereunder, 29 C.F.R. § 98.1 et seq., detailed accounting requirements are imposed on a grantee. In…