Audit of the Department of Labor"s technical assistance activities in Hungary

Department of Labor (DOL) to help implement labor market transition programs Hungary. The audit covers the period through 6/93. The DOL has provided a wide range of TA to address problems caused by mass layoffs and increasing unemployment. Major efforts have included the following. (1) Working with other donors such as the International Labor Organization, the DOL has helped the Government of Hungary (GOH) establish a "model" employment center in Baranya County, which was considered to be a crisis zone due to anticipated mass layoffs. (2) Through a contract with the AFL-CIO"s Free Trade Union Institute, a full-time employment and training advisor was provided to assist Hungary"s Ministry of Labor, municipal governments, and labor unions in addressing problems caused by mass layoffs. Government officials were satisfied with the advisor. In addition, Hungary"s Democratic Confederation of Free Trade Unions assigned one of its staff members to work as an interpreter for the advisor, and at the same time to learn the advisor"s training methods in order to make training sustainable after the advisor leaves. (3) Through an agreement with the National Women"s Economic Alliance Foundation (a U.S. PVO), the DOL sponsored the participation of three Hungarian women in an entrepreneurial- related internship program in the United States. One of the participants stated that the program provided her with practical information on how to choose employees, advertise, market, and organize a business. This participant has begun to serve as a mentor to three other Hungarian women, two of whom have their own small businesses. The DOL plans to significantly expand its TA activities for the period 4/93-3/94. However, certain aspects of the proposed program needs clarification to ensure that it is addressing critical problem areas; there is also some question whether all the proposed activities are necessary. Recommendations are to (1) develop specific guidance for the country-specific programs to be submitted by the DOL and (2) clarify the roles and responsibilities of the AID/Representative for Hungary and the Regional Mission for Europe regarding the DOL program.