City of Oakland

Oakland’s Workforce Development Board Blasted By City Auditor In New Report

Author note: this is a press release sent to Zennie62Media from the Oakland Office of The City Auditor, Brenda Roberts.

OAKLAND, CA — Oakland’s Workforce Development Board (WDB) currently receives over $3 million each year in Workforce Innovation and Opportunity Act (WIOA) federal funds. They oversee employment and training programs and the delivery of these services to Oakland residents through six contracted Service Providers. These programs and services help struggling job seekers succeed in the labor market by providing access to employment, education, and training, as well as matching businesses with skilled workers. The Workforce Development Board, assisted by City staff, is also responsible for awarding and allocating these funds to contracted Service Providers and conducting regular monitoring of the Service Providers.

Oakland’s Workforce Development Service Providers are required to undergo federal and state audits and monitoring of their programs and financial statements to ensure they are following all laws, regulations and policies, and make certain their financial management and internal control systems are sound and effective.

Roberts noted, “over the years, monitoring reviews of Workforce Development programs, conducted by the Federal Department of Labor and California Employment Development Department, have resulted in findings, many of which have never been fully resolved. Not only did I want to investigate the reasons behind these unresolved findings, but this Office has never audited Workforce Development. At the time, there was also a complete change in Board Members and leadership, so this was a prime opportunity to assess their internal controls, review their practices and recommend more effective internal procedures and policies to the new leadership.”

The City Auditor’s objectives were to (1) determine if prompt steps were taken to resolve all findings from oversight audits, (2) ensure appropriate monitoring and oversight was applied to grantees awarded with Service Provider contracts, and (3) administrative fees charged by City staff were appropriate and compliant with federal requirements.

Some of the audit’s findings were startling. The investigation uncovered that a Service Provider did not remove inactive participants from active lists for federal reporting. Federal regulations require individuals no longer receiving access to services be removed from active lists. This Service Provider reported over a thousand inactive clients as ‘active’ over a nine-year period. In fact, one participant was deceased, but was retained as ‘active’ every ninety days for nearly four years. City staff claimed they were unaware of inactive participants because a thorough review of participant lists was not a part of their monitoring process. This finding was brought to staff’s attention in 2010, but resolution was delayed until May 2018.

Additionally, Workforce Development Boards may not allocate more than 10% of funding to administrative costs to ensure 90% of funds are spent on program costs to accomplish WIOA goals. City staff could not re-perform the calculations or provide supporting data to show administrative costs did not exceed limits, making it impossible for the City auditors to confirm administrative cost calculations met federal requirements each year.

Roberts noted, “it is uncommon for federal funding to cease if nonfederal agencies are out of compliance once or twice, but there is always a risk funding could be reduced or pulled if audit findings continue unresolved, putting job training programs in jeopardy. Better oversight and stricter protocols are needed to ensure Oakland’s Workforce Development is more effective and has stronger internal control processes in place.”

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