Delays, slipshod vetting, confusion and waste plagued Georgia's handling of $23 million in federal stimulus grants designed to put unemployed Georgians back to work, a state audit revealed Thursday.
Georgia's Department of Human Services didn't adequately vet nearly two-thirds of the companies that received money and nearly a quarter of the individuals who were hired through the Adult Subsidized Employment Program, the audit found. More than $400,000 went to buy computer equipment, much of which wasn't used.
The first workers weren't placed until a year after the money became available, and the program ended before Georgia had spent all its funds. Finally, DHS put more participants to work in its own operations than in any private company.
DHS Commissioner Clyde Reese, who joined the department in January as part of the Deal Administration, said he gave auditors unfettered access to conduct the investigation. He said he's already begun to make such changes as creating a chief financial officer within the organization to track funding, policy and procedure decisions and report the findings to him.
"I’m quite frankly surprised this was as loose as it seemed to have been," he said. "I’d like the public to know that this is not the way the state wants to administer its programs, and we want to be proper stewards of the public's money, whether it is a federal or state source. "
The investigation began in January when the auditing agency received a whistle-blower complaint about financial irregularities within the program. The auditing agency found that several of the companies that benefited from the program were under investigation by the DHS Inspector General's Office or the Georgia Bureau of Investigation.
That led to an in-depth review of the program, which operated in 2009 and 2010, paying 80 percent of the wages of workers hired under its auspices.
Funds first became available in February 2009, but the state didn't hire a program director until November 2009 and didn't start placing people in jobs in earnest until February 2010. Last fall, state officials acknowledged that the program had failed to meet its goal of providing jobs for 5,000 people, placing only 2,400.
According to the audit, the program had multiple problems, including:
- 62 percent of the employers participating in the program didn't demonstrate that they met all eligibility requirements. Despite the support staff noting missing criteria, the applications were approved by the project manager.
- DHS failed to obtain sufficient documentation for 23 percent of job seekers, including in some cases failure to verify U.S. citizenship, Georgia residency, or the absence of felony convictions.
- Some job seekers employed by the program may have continued to receive benefits such as food stamps and Medicaid in error.
- DHS may have placed some job seekers into state positions in which they could have accessed the state's databases and altered their own benefits package.
- The DHS charged $415,483.13 in "questionable" computer costs to the program. Roughly eight months later, investigators found 35 computers and 139 monitors had not been taken out of boxes.
- More than $4.5 million of the federal funds were unspent when the program ended.
Benita Dodd, vice president of conservative think tank Georgia Public Policy Foundation, called the program a "waste of tax dollars."
"It seems to me that a stimulus program that was supposed to create jobs in the private sector ended up creating more government jobs and more expense," she said. "I don’t see it as a failure on the state level. I see it more as a disconnect in the entire stimulus program."
But Clare Richie, senior policy analyst with the Georgia Budget and Policy Institute, said despite Georgia's mishandling, the program has merit. Nationally, more than 250,000 low-income Americans found work through the program, she said.
"I don’t want anyone to misinterpret this report as a comment on subsidized employment," she said. "We think a program should be correctly operated, but this is a program worth running."
Deidre Brown, head of Acsential -- a facilities management and construction firm in Atlanta -- was among the businesses that participated in the program.
"It was a great program for people. People who had not worked in a long time got an opportunity," said Brown, whose firm hired at least five people. "We found some pretty aggressive new employees."
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