Governor Rick Scott threatens to close Workforce Central Florida

The following article was published in The Sunshine State News on September 22, 2011:

Rick Scott threatens to close Workforce Central Florida 

 

By Kenric Ward

 

Citing “ongoing compliance deficiencies,” Gov. Rick Scott has put Workforce Central Florida on two weeks’ probation and threatened to shut the agency down if it did not remove its top executives.

“In recent years, the leadership of WCF has engaged in a series of activities that require this unprecedented, but necessary, action. Ongoing fiscal and compliance deficiencies have caused continuing concern about WCF’s internal controls and its management,” Scott wrote in a letter to Orange County Mayor Teresa Jacobs.

Jacobs sits on the Central Florida Area Workforce Investment Consortium, which appoints WCF board members, who direct local job initiatives.

Scott cited reports detailing that, since 2006, nearly $5.3 million in reviewed expenditures were out of compliance with federal requirements.

For the 2012 fiscal year, WCF received more than $30 million through Workforce Florida for employment-related initiatives in the five-county Central Florida region.

“My administration has zero tolerance for the misuse of taxpayer dollars, and under federal law the five counties represented by the consortium are liable for reimbursement of WCF’s misuse of any federal work force grant funds,” Scott wrote to Jacobs.

In a statement released Wednesday afternoon, the governor’s office said, “If, at the end of the probation, WCF has not met certain requirements, the state will begin the decertification process.”

To avoid decertification, Scott said WCF must “immediately relieve” the president and CEO, the vice president and chief financial officer, the vice president of public affairs and the vice president of communications.

Scott recommended that the chief operating officer be retained “for continuity purposes.”

Last April, amid a hail of public mockery, the Orlando-based board abruptly shut down a marketing campaign that used $14,000 in federal funds to buy and distribute 6,000 red capes to job seekers.

Scott noted several other questionable expenditures by WCF, including:

• $1,012,305 for building renovations that lacked prior approval.
• $739,605 to settle a lawsuit over termination of a property lease.
• $38,876 for 20 vehicles that had not been approved.

In 2006, WCF agreed to repay $3,483,664 in federal funds to resolve claims associated with the purchase and renovation of office space.

In June, a financial review of WCF’s operations alleged several violations of standard procedures, including a lack of contract administration policies and noncompliance with WCF’s cost-allocation plan.

Jacobs, in a statement issued late Wednesday, said, “Although I am not the chairman of the Workforce Central Florida Consortium, I completely agree with the governor that we need to get to the bottom of that agency’s activities.

“Like the governor, I am outraged by the lack of transparency and fiscal oversight of that organization, and believe the citizens of Florida deserve better,” Jacobs wrote. “I am calling upon the chairman of the consortium to convene a special meeting so we can discuss how to best move forward to implement the governor’s directed course of action.”

Larry Haber, chairman of the WCF board, said he was blindsided by the governor.

“The media were asking us about [Scott’s letter] before I even knew it existed,” said Haber. He also said he had received no prior communication from Scott’s office about the issues raised in the letter.

“I disagree with the letter and disagree with the conclusion. It cited things that have taken place, but from our perspective, we’ve dealt with those things. There was no allegation of malfeasance or that anything has been done wrong by anyone,” he said.

“We’re just a group of dedicated volunteers who are doing this for free,” said Haber, an entertainment law attorney.

An emergency executive committee has been called for 4 p.m. Thursday.

At the time of WCF’s cape episode, a state official who declined to be identified by name, generally described the regional workforce boards as “the worst form of government largess.”

“The people on these boards are local people, buddies with commissioners, people who are linked in various ways to political people, including members of the Legislature,” the official said.

Ostensibly created to generate jobs, the workforce boards receive federal employment grants, which flow through the state Agency for Workforce Innovation.

The U.S. Department of Labor reportedly is probing 24 of the state’s regional workforce agencies for alleged irregularities that include conflicts of interest by members of the governing boards.

The federal investigation follows an April 2010 memo by the state Agency for Workforce Innovation, which found that in 37 percent of contracts:

• The necessary two-thirds vote of the entire governing board was not obtained.
• Board members who could benefit from the contract did not abstain from voting.
• Governing board minutes did not document the required disclosures for potential conflicts of interest.

Many of the contracts in question involved community colleges whose top administrators sat on the regional workforce boards.

Though the Labor Department would not comment on the investigation, state Sen. Mike Fasano, R-New Port Richey, reported that workforce agencies awarded 574 contracts totaling more than $55 million between 2008 and 2010.

Fasano says tighter controls are needed. The senator told Sunshine State News earlier this year that he intends to refile legislation to prohibit the use of state or federal funds for purchasing food and other recreational items by regional workforce boards.

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