Local Workforce Boards Awarded Funding Despite Ongoing Concerns Over Excessive Administrative Costs

CARSON CITY – More than $27 million in federal job training funds were awarded to two local workforce development boards by the Board of Examiners today despite ongoing concerns about how the money is being spent by the Southern Nevada board, called Workforce Connections.

The Southern Nevada board will get more than $19 million in funding over the next two years despite the findings in an audit released earlier this year that it was spending nearly twice as much on administration and monitoring of programs than its Northern Nevada counterpart, Nevadaworks.

Dennis Perea, deputy director of the Department of Employment, Training and Rehabilitation (DETR), told the Board of Examiners that the funds are being awarded to the two local boards until such time as the U.S. Department of Labor grants a waiver to the state to have the funds administered instead by one statewide board. That decision is expected within the month, he said.

Gov. Brian Sandoval, a member of the Board of Examiners, asked for assurances from Perea that the money would be spent on job training efforts and not excessive administrative expenses.

Sandoval and DETR are pushing for the new funding distribution plan that would replace the two local boards.

“There’s a lot of money involved here in these contracts, and are you confident that if these contracts were to be approved that the dollars would be spent wisely?” he asked Perea. “There was an audit, it didn’t go well. It sounds like there hasn’t been much improvement.”

Perea said the new management at Workforce Connections has made improvements, but there are still concerns about the amount of money being spent on administrative expenses.

“They are budgeting at about 20 percent of the funds being held at the board level for board expenses,” he said. “We’re in the process of talking about ways to limit that even further. But we do believe they are moving in the right direction, maybe not quick enough.”

The contracts were in front of the Board of Examiners because the two local boards are the vehicles to spend the job training funds at the current time, Perea said.

After the meeting, Perea said that if the waiver is approved by the U.S. Department of Labor, the grant funding would be redirected to a newly constituted state workforce board, possibly as early as January. The grant funds are paid out as they are spent by the local workforce boards, and so a transition would occur redirecting the funding to the new state board, he said.

The statewide and Northern Nevada workforce boards have approved the new proposal from DETR to administer the funds through one statewide board, but Workforce Connections has opposed the recommendation.

“As we sit here today we need to approve these contracts to get the money out because at the end of the day we need to help people,” Sandoval said. “But I just want, I’ve said this before, I want to make sure as many possible dollars get to the people that actually need it, than having it all eaten up with administration.”

DETR Director Frank Woodbeck has proposed the plan to consolidate the three separate boards that oversee workforce development into one, which is expected to result in $5 million more in federal funds directed annually to helping train job seekers to find employment.

The plan, “Moving Nevada Forward: A Plan For Excellence in Workforce Development,” was submitted to the Department of Labor last month.

Currently, funding is provided from the federal Department of Labor to the Governor’s Workforce Investment Board and funneled to the two local boards. These boards in turn contract with public and private organizations to offer workforce training programs to youth and adult and dislocated workers.

But a recent audit of this system by the state Division of Internal Audits revealed that too many federal dollars are lost to administrative and duplicative costs.

“This new plan will result in a significant amount of funds being spent directly for much-needed services, as we are essentially removing an administrative layer of expense,” Woodbeck said when the plan was released in May. “Administrative functions would be moved to DETR and community service providers will continue to deliver direct services to job seekers.”

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Audio clips:

Gov. Brian Sandoval asks for assurances the money will be spent appropriately:

081412Sandoval1 :20 be spent wisely?”

Sandoval says the money has to get into the hands of those people who actually need it:

081412Sandoval2 :17 up with administration.”

DETR Deputy Director Dennis Perea says too much money is still being spent on administration by the Southern Nevada board:

081412Perea :12 that even further.”