Good Work, Bad Books
The Workforce Investment Board is doing, and has done, good work investing in the workforce.
However, it hasn’t been as good at handling money.
According to a Pennsylvania Department of Labor and Industry press release, the Final Determination of an audit of the WIB’s books, requires the member counties to repay $227,476.29 in disallowed costs run up by the WIB’s fiscal agent over four years. That number is a maximum and could be whittled down, according to Commissioner Stephen Vanco, Warren County’s representative to the body that appoints WIB members.
Whatever the final amount the WIB has to repay, Warren County will be on the hook for 8 percent, according to Vanco.
The Regional Center for Workforce Excellence (RCWE) is the WIB’s non-profit fiscal agent.
According to the audit released in August, RCWE misused funds. After looking over a total of $5.9 million, Labor and Industry approved the vast majority of expenditures, paring down to the $227,476.29 figure.
The Chief Local Elected Officers (CLEOs) who appoint members to the WIB have stepped in to reorganize the agency.
One county commissioner from each of five counties – Warren, Clarion, Crawford, Forest, and Venango – and the Erie County executive serve as the CLEOs.
Those CLEOs now make up the WIB.
Labor and Industry, which oversees the state’s WIBs, gave 90 days, and a 60-day extension, to get the house in order.
The change was not made because the organization was not doing its job, Vanco said. “On the program end of it, they were doing an excellent job,” he said on Friday. “They were getting results.”
“This happened so the CLEOs could get control of spending,” he said.
RCWE created a holding company. That company purchased an Erie County building and moved the Erie County CareerLink to it. That CareerLink – which is funded by Workforce Investment dollars handled by RCWE – paid more than the allowable rent for the space, Vanco said.
“The RCWE loaned the holding company $517,000,” Vanco said.
Labor and Industry wants that money back, but is not holding the counties responsible.
A WIB program that allows for training and retraining of workers already on the job at a funding break-down of 75 percent from WIB and 25 percent from the employer also contributed to the money problems.
RCWE was paying for 100 percent of the training and taking the 25 percent as a reimbursement from the employers, Vanco said. RCWE took those funds and spent them without restrictions.
The costs disallowed by Labor and Industry include:
$25,500 for 510 $50 tickets to Jefferson Educational Society Global Summit. The agency could not find evidence that the Northwest WIB had sent 50 youth to the program;
$21,254.47 paid to the RCWE grant writer as a percentage of grants received in addition to salary. Labor and Industry is willing to pay that employee through salary or percentage, but not both;
$18,269.04 in salary and benefits of employees working on the Destination Erie Project;
$35,762.95 in rent above the allowable limit;
and $112,000 in “business services” including a majority of $113,474 for “food meetings” over three years, about $4,000 for a “10-foot cherry conference table and 10 leather chairs in the Holding Company building,” and about $5,400 in “miscellaneous costs.”
Originally, the WIB’s bylaws allowed for representation based on population. Under that system, Erie County controlled the majority of the membership, according to Vanco.
The new bylaws give Erie County the most representation of any member county, but not more than half of the entire board.
Also RCWE will no longer be in charge of the money. It may continue to serve as the programmatic agent for WIB – working with Venango Training and Development Center – to deliver training services.
Vanco said the CLEOs would appoint a new WIB board in January, after the new Erie County Executive takes office. The total number of representatives will be reduced and Warren County’s representation will increase. There will be three Warren County members on the board, compared to two under the old bylaws.
No two board officers will be able to represent the same county.
Board members will serve four-year terms. To prevent a scenario in which the board will have to appoint or reappoint 100 percent of the board in four years, the initial terms will be for from one to four years. The CLEOs drew lots to see how long each new board member’s term would be.
“I drew three three-year terms for Warren County,” Vanco said. “We have three positions open and would like people who are interested to come forward.”
“We want people to step forward,” he said. “We’re going to have these positions filled after the first of the year.”
If the county does not fill its available seats, other counties can apply to appoint replacements.
He said the financial problems should not tarnish the organization as a whole. “Even through all of these financial misappropriations, the programs were still getting done and they still are. I will give credit to Venango Training and Development Center for providing these services.”
“Training is available,” Vanco said. “There is a push now for veterans. We would like to get more veterans involved in the program.”
“Apprenticeships are available for kids coming out of high school,” he said.
Vanco said the commissioners are looking for a smaller space for the Warren County CareerLink by July 1.
The number of employees in the office is not expected to change.