Audit: Atlanta should scrap poorly run jobs program

A report by the city of Atlanta’s internal auditor asserts widespread problems at the city agency charged with matching low-income or laid-off workers with local companies and recommends that the mayor consider shutting down the office.

The Atlanta Workforce Development Agency does a poor job tracking workers and employers, reports incomplete information to the state of Georgia, keeps loose watch over sensitive personal information and relies too much on a small group of partners to provide training — an arrangement that could lead to accusations of cronyism, according to the stinging audit.

The audit also says there are “indications of potential fraud and/or abuse” that were referred to an external investigative agency. The audit and city officials did not disclose specifics.

Raising questions about how the agency spends millions of dollars in federal grants, the report asked a provocative question: Should the agency be shut down altogether?

The 52-page report from City Auditor Leslie Ward recommended that Mayor Kasim Reed and the City Council consider that option, since about 57 percent of the agency’s clients live outside the city and similar services are provided by workforce development agencies in Fulton and DeKalb counties and by the Atlanta Regional Commission.

Deborah Lum, the agency’s executive director, could not be reached for comment Monday. But the idea of closing the AWDA provoked a blistering response from Reed’s office in the form of a letter to Ward from Duriya Farooqui, the city’s chief operating officer.

“I expected to receive recommendations to improve the operations and performance of AWDA,” Farooqui wrote. “It is perplexing that the audit asks the Mayor and City Council to discontinue an agency with over 40 years of service which, according to your report, served over 25,310 clients in less than a two-year period.”

The audit — which focused on the period of July 1, 2010, through May 15, 2012 — indicated the AWDA sends incomplete data to the state, leaving thousands of clients out of the reports.

The failure to keep track of all the clients doesn’t allow regulators to get a complete picture of the agency’s effectiveness. Furthermore, the agency does a poor job of linking its expenditures to particular clients.

Meanwhile, the agency does not keep up with whether employers that participate in job fairs sponsored by AWDA or in on-the-job training subsidized by the agency actually hire AWDA clients. The agency paid about $1.6 million over two years to subsidize that training.

Among the audit’s findings:

At least $1 million was spent on training for clients who did not meet eligibility requirements. Specifically, the money was supposed to be spent on job training, primarily construction training, within the Atlantic Station district. But the retail and residential complex was already completed by the time the cash was spent, according to the audit. The city’s finance staff said it planned to work with AWDA to replace the funds.

In Farooqui's letter, dated Monday, she said the agency offers a variety of free services — including job training for people who have been in prison, drug testing, clothing for job interviews and interview training. The agency helped more than 130 residents find jobs as firefighters, and more than 600 youth find summer work or occupational training in fiscal year 2012, according to a fact sheet Farooqui attached to her letter. The agency helped another 50 youth earn their GEDs.

“The loss of AWDA would have an immediate detrimental impact on the city’s economic development and hinder the city’s competitiveness,” Farooqui wrote. “In a time when the economy has displaced so many workers, it does not make any sense to remove a workforce development function from the city when it continues to serve so many disadvantaged residents.”

Metro Atlanta’s unemployment rate jumped to 8.4 percent in December, up from 8.0 percent in November, according to Georgia’s labor department.

The AWDA is technically a bureau in the executive offices of Atlanta’s mayor, although it received about 80 percent of its annual budget from federal Workforce Investment Act grants. The agency spent $11.7 million in 2011. It receives some funding from outside groups such as the United Way for programs for chronically homeless people.

It’s not the first time the AWDA has been criticized. In 2008, the U.S. Labor Department issued a blistering audit that accused it of improperly spending $11.3 million intended to help people find jobs. The federal government said the AWDA spent the money issuing contracts without competitive bids, making questionable expenditures and supplying services to ineligible recipients.

The city and agency disputed those findings, but a resolution has not been announced.

The audit says there are serious problems with the AWDA’s delivery of services. Many of the problems stem from slipshod record-keeping that prevent anyone from generating reliable reports. In one review of the agency’s database of clients and their employers, Walmart was spelled 13 different ways. McDonald’s was spelled 15 different ways, meaning auditors could not get the correct information when they tried to call it up.

If Reed does not close the agency, the audit recommended that Farooqui tighten oversight of the AWDA by including it in the city’s “ATLStat” program, which crunches data to determine whether programs are effective. The auditors also urged the city to oversee the AWDA’s responses to state and federal monitors and said the agency should also hire a consultant who could help clean up its processes. The audit said personal information of clients should also be protected, a step that the city’s information technology department says it has already done.