Southern Nevada Workforce Board Cuts Staff, Spending After Audit Shows High Administrative Costs

CARSON CITYAn audit of the state’s two local workforce investment boards has found the Southern Nevada agency spent nearly twice as much on administration and monitoring of its programs than its northern counterpart.

If the southern board cut its local expenses to mirror those of the northern Nevada board, another $1.9 million would have been available to job seekers in fiscal year 2011, the review by the state Division of Internal Audits found. The audit showed the Southern Nevada board, called Workforce Connections, spent 21 percent on administration and monitoring compared to only 11.3 percent in the north.

The audit also noted that the southern board’s budget plans for fiscal year 2012 indicated it intends to use nearly 30 percent of available federal funding on administration, monitoring and other program services.

The U.S. Department of Labor provided about $29.5 million in fiscal year 2011 to Nevada for the programs that supported over 26,000 participants. The programs are intended to help improve the employability of participants.

The audit recommended that the state Department of Employment, Training and Rehabilitation (DETR) and the State Workforce Investment Board, which oversee the program, limit the amount of money the local boards could spend on such expenses.

The audit was reviewed today by the Executive Branch Audit Committee, made up of the six constitutional officers, including Gov. Brian Sandoval, and one public member.

At the meeting, Ardell Galbreth, interim executive director of Workforce Connections, told the committee that major changes have been implemented to reduce administrative and other costs. He took the position on April 5.

Galbreth told the panel that the 2012 budget has been revised to ensure that no more than 20 percent of the funding will go to program and administrative costs. The staff of 72 at the board is also being reduced to 34 by the end of the year if not before, he said. The six-figure salaries provided to five of eight staff have been cut, Galbreth said.

In addition to the savings from the budget cuts, the agency expects another $1.7 million will be added to provide direct employment assistance to those in need, he said.

“I have outlined a budget that has been approved by the southern board, Workforce Connections, where there would be no more than 10 percent for program cost and 10 percent for administrative cost,” Galbreth said. “This past program year we served just over 5,000 clients, 5,149; we’re anticipating that approximately 9,000; almost doubling the amount of clients to be served.

“All of the findings that were discussed or indicated in the report, they either have been addressed or are in the process of being addressed,” he said.

A document provided to the Nevada News Bureau shows that the northern Nevada board, Nevadaworks, employs 11 people at a cost of $823,000 in salary and benefits this year. Chief Executive Officer Tom Fitzgerald is making six figures with salary and benefits totaling $165,000. A second employee is making $102,466 with benefits.

The document showed 50 employees at Workforce Connections with a total salary of $3.2 million. It does not specify if benefits are included in the total.

Former Executive Director John Ball had an annual salary of $168,000. Seven other employees had salaries of $105,000. The document does not show revised salaries or eliminated positions.

The audit also noted that the state is considering seeking a waiver from the Department of Labor to allow for the creation of a single state board to control the funding rather than have the two local boards continue to operate.

Galbreth said local elected officials who serve on the board, as well as community members, are interested in maintaining local control of the program.

Lt. Gov. Brian Krolicki questioned why it took the audit to prompt the action by Workforce Connections to get its spending under control.

“It should be somewhat startling that it took this process to identify those surplus expenditures; really at a premium to other similar operations not only in the state but in the region,” he said. “I appreciate people wanting local control, usually my philosophical approach is ‘closer is better,’ but I think there is a very compelling story as to why a single state system makes some sense.”

-

Audio clips:

Ardell Galbreth of Workforce Connections says positions have been cut and administrative spending reduced:

050112Galbreth1 :26 for administrative cost.”

Galbreth says the spending reductions will mean more money for job seekers:

050112Galbreth2 :13 to be served.”

Galbreth says all the issues raised in the audit are being addressed:

050112Galbreth3 :08 of being addressed”

Lt. Gov. Brian Krolicki questions why it took the audit to focus on spending by the board:

050112Krolicki :27 makes some sense.”