Wednesday, March 3, 2010

County Workforce Agency Under Scrutiny

Citizen Voice Photos

The Citizen Voice ran an article by Michael Sisak yesterday concerning the continuing saga of the Luzerne County Workforce Investment Development Agency(LCWIDA).

Last year Luzerne County Human Resources Director Doug Richards was arrested by the F.B.I. for taking a kickback in connection with a contract involving the LCWIDA. Its director, Richard Ammon, signed the contract with Continental Consulting Group, Inc according to an article by Michael Buffer of the Citizen's Voice.

Ammon defended signing the Continental contract, a no-bid deal which cost more than $800,000 and was never approved by county commissioners. Ammon said he didn't know the human resources department planned to use the contract to pay various county retirees who continued to work for the county as Continental employees. It should be pointed out that Ammon was never charged with regards to this issue.

Eventually Richards pleaded guilty to the charges.

Now the LCWIDA is involved in an audit issue and poor bookkeeping practices alleged by officials with the Commonwealth of Pennsylvania.

The executive director of the Luzerne County Workforce Investment Development Agency is facing scrutiny from state labor officials for failing to correct critical lapses uncovered last year in the agency's record-keeping and accounting practices.

The lapses, detailed in a state Department of Labor & Industry performance audit last May, could force state officials to eliminate funding for the agency or shut it down if they are not remedied, according to records obtained by The Citizens' Voice.

The audit listed more than a dozen major lapses, including the agency's excessive reliance on state reimbursement accounts and the disappearance of dozens of employee timesheets required to obtain program grants and other state funding.

According to the audit, the agency withdrew $101,982 to pay a $28,253 health insurance bill in September 2007 and withdrew $142,822 to pay a $30,266 health insurance bill in January 2008. The inflated withdrawals gave the agency an extra $186,285, a violation of state rules that require agencies to maintain a "minimal amount of cash on hand."

The agency also had no documented procedures for a number of regular accounting tasks, including: payroll, cost allocation, bank account reconciliation, program income and credit card usage. Instead, the audit found, the agency relied on the institutional accounting knowledge of "three or four staff members," each with at least 20 years of experience with the agency.

Richard Ammon, the executive director of the Luzerne County Workforce Investment Development Agency, said Monday that all of the lapses in the audit have "been addressed or are being addressed," but a Feb. 18 letter to county officials indicated none had been corrected. Christine M. Enright, the director of the state Bureau of Workforce Development Partnership, chided Ammon for failing to follow through on a "corrective action plan" he submitted last July.

Field visits and interviews with agency officials since the audit was completed "have revealed that the corrective action plans have not been implemented," Enright said in the letter. "Therefore, the original practices and policies that amounted to a finding remain unresolved.

On the heels of that article Michael Buffer writes a follow-up article involving the Luzerne/Schuylkill Workforce Investment Board Inc. and LCWIDA.

The Luzerne/Schuylkill Workforce Investment Board Inc. is seeking proposals to administer Luzerne County's workforce programs, a task currently handled by an embattled county agency.

A state audit of LSWIB Inc. and the Luzerne County Workforce Investment Agency detected poor accounting and record-keeping last year, and deficiencies must be addressed by March 20, according to a Feb. 18 letter from Christine M. Enright, director of the state Bureau of Workforce Development Partnership. If deficiencies are not corrected, the state could cut off financial assistance to the counties, and the governor could shut down the local workforce investment board.

The audit - which covered finances from June 1, 2007, to May 15, 2008 - and subsequent follow-up field visits and interviews did not uncover any missing funds, said Christopher Manlove, spokesman for the Pennsylvania Department of Labor & Industry.

Commissioner Maryann Petrilla was quick to defend LCWIDA but in her response she did not address the veracity of the auditing findings and what type of oversight would occur to correct the deficiences.

Luzerne County Commissioner Chairwoman Maryanne Petrilla said the county agency can submit a proposal to continue administering the workforce programs.

"We are one of only a few counties in the state to not bid out this service," Petrilla said. "Every county in the state puts it out for RFP (request for proposals). I want to protect our employees. They are doing a good job. But we have to be in compliance with the state. รข€¦ They have to put together a solid proposal to provide the service at a low cost."

The county workforce agency has 41 employees on the county payroll, but the state reimburses Luzerne County for agency costs. The agency does not receive any funds from Luzerne County's budget and spent more than $8 million from July 2008 to June 2009, according to agency records.

Specific information about the request for proposals on administering Luzerne County's workforce programs could not be obtained Tuesday. Richard Ammon, the executive director of the Luzerne County Workforce Investment Development Agency and a member of the Hazleton City Authority, could not be reached for comment.

First and foremost should be an internal investigation as to if and why the audit issues were not corrected. There are serious allegations in the audit.

The deficiencies detected by the state audit include the disappearance of employee timesheets, inflated withdrawals of funds and undocumented procedures for payroll, income and costs. The Luzerne County workforce agency and ReDCo did not have operating budgets and proper legal agreements on operations, and LSWIB Inc. did not account for hours worked by a part-time solicitor, the audit said.

An interesting commentary about Doug Richards and the Luzerne County mess from Scott Sanfilippo can be found here.

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