Poor planning, serious financial weaknesses caused Job Corps enrollment shutdown, official says

Posted Feb. 28, 2013, at 12:27 p.m.
Last modified Feb. 28, 2013, at 1:39 p.m.

BANGOR, Maine — Poor fiscal management and slow reactions led to the Job Corps enrollment freeze that will stretch past June 30, according to an official who said she takes “full responsibility for our failure to manage these issues more aggressively.”

Jane Oates, assistant secretary for the Employment and Training Administration, which oversees the Job Corps program for the U.S. Department of Labor, responded Feb. 21 to a letter in which Maine’s congressional delegates questioned the decision to halt enrollment as a cost-saving measure.

“The decision to temporarily freeze Job Corps enrollment nationwide was extremely difficult,” Oates wrote. “It came after we implemented many alternative cost-savings measures, albeit insufficient ones.”

In response to the letter, Sen. Susan Collins blasted the Job Corps’ fiscal management, saying she would work with colleagues on the Senate Appropriations Committee to “see what can be done to hold those responsible for this fiasco accountable.”

“These enrollment suspensions are enormous setbacks for hundreds of students who are being denied access to critical education and training programs that they need to advance in life,” Collins said Thursday. “These suspensions are occurring, not because of external factors or unforeseen circumstances, but because of sloppy financial management by the federal government.”

Job Corps has 125 training centers across the country, including two in Maine — Penobscot Job Corps in Bangor and Loring Job Corps in Limestone. The centers provide free job training in manufacturing, construction and other career paths, as well as transportation and temporary housing for those who need it. Training can take eight months to two years, according to the Job Corps website.

Without an enrollment freeze, which was announced in late January, the program was projected to exceed its operating budget by about $61.5 million, according to Department of Labor officials. The Job Corps’ requested operating budget for 2013 was about $1.5 billion, a decrease of about $24 million from 2012. The program also faced a $39 million shortfall in program year 2011.

Oates explains in her letter that several factors contributed to financial problems in program year 2011, including growing expenditures after the delayed openings of three new centers in program years 2010 and 2011, and “serious weaknesses in ETA’s and Job Corps’ financial management processes that led to a failure to identify and adjust to rising costs in a timely manner.”

In response to the projected shortfall, Job Corps received approval in 2012 from Congress to transfer more than $26 million from a construction account into its operations account and began the process of trying to identify cuts to get its budget under control.

“Given our strong interest in not reducing student services and minimizing disruption to the Job Corps program, we proceeded cautiously in evaluating and implementing cost-saving measures in program year 2012,” Oates wrote. “In retrospect, it’s clear that we did not act as quickly or decisively as circumstances required.”

In attempts to cut costs, the ETA reduced its national media buy by $4 million, increased the program’s student-teacher ratio from 15-to-1 to 18-to-1, reduced student transportation costs and negotiated across-the-board cost-savings targets with each center, among other measures, Oates said.

In early February, Sens. Collins and Angus King joined Reps. Mike Michaud and Chellie Pingree in drafting a letter to the Department of Labor expressing “deep concerns” that the move might cripple the program in the long term.

“I personally take responsibility for not acting more quickly to ensure that the program was operating within its appropriated levels,” Oates said. “The decision to temporarily suspend enrollment at all centers is the most balanced, efficient way to achieve the savings now in order to avoid a shortfall.”

She said the program would need to undergo a comprehensive review to ensure it does continue to battle budget gaps.

Sen. Angus King on Wednesday thanked the department for its “thoughtful and detailed” response, but said he still doubts that an enrollment freeze is the best method of contending with the program’s financial shortcomings.

“I continue to believe that within the Department, there must be sufficient funds which would make suspending enrollments unnecessary,” King said. “I would be happy to work within the Congress to assist the Department if additional authority is necessary to make the transfers which would forestall the cuts.”

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