Wednesday, August 16, 2006

CEC Budget

A post concerning the City Manager's report on the CEC budget can be found here.

Let's talk about the "training" portion of the budget. Gordon Lafer wrote a book entitled "The Job Training Charade", and I found some gems in the pages.

Fraud and Abuse in On-The-Job Training

On-the-job training (OJT) programs have consistently reported the greatest success in raising the earnings of JTPA (Job Training Partnership Act) participants. But since they have also been the most common sites of program fraud, this success is suspect.

He goes on to list specific instances of fraud, including fictitious individuals as OJT participants. At times the OTJ acts as a subsidy to lure business, classifying people already employed as trainees just to get the subsidy. One company closed for a day just so they could reopen the next with subsidies.

"While it is impossible to know how common this type of fraud is, one GAO (General Accounting Office) survey found that half of the local governments surveyed had at least one OJT contract for workers who were already employed in the occupation for which they were being trained"

These programs constantly skim off the top, taking the most employable candidates that most likely would have been hired anyway. That way they can inflate their outcome statistics. Some even don't report prospects until they have been placed in a job.

"This suggests that the apparent success of on the job training may be almost entirely illusory, and the program may accomplish nothing more than subsidizing private sector employers, enriching poverty entrepreneurs, and offering local governments an easy way to claim paper success in combating unemployment."

The Aggregate Impact of Operation Problems

The lack of centralized date makes it impossible to conduct careful cost-benefit analyses of JTPA. However, using the studies cited above as a rough measure, it is clear that mismanagement accounts for a very substantial share of the program budget. Adding together the impact of only three of the problems discussed above, inflated claims of job placement, illegitimate costs charged to contracts, and OJT subsidies for individuals who would have been hired anyway--yields an estimate of up to 50% of the Title IIA funds that were wasted through fraud of mismanagement. While the total impact of the mismanagement is uncertain, it is clear the JTPA has suffered from more than minor implementation problems, indeed it has wasted money on a vast scale."

Look at the CEC budget expenditures again. 59% goes to administrative expenses. Three out of every five dollars that we pay never makes it out the god damned door. Of the money that did make it out, 90% went to programs that had no measurable economic impact. The most significant expenditure was for job training. How much of those dollars went to subsidize worker for Len Garrett’s company? How many other companies got subsidized labor. How many actual people learned a trade that they hadn’t known before? I would love to see some published outcome statistics for the success of the CEC’s job training program. Too bad they don’t publish outcome statistics. And if you have the balls to ask for them they tell you to fuck off. They City won’t cop to anything either. The money was spent, that is all they are going to tell you.

And I am telling you it is all a web of deceit and a pack of lies. Trust me on that one. The CEC spends millions per year and they have nothing to show for it. If they wanted to prove me wrong, they could start by pointing out their achievements. To date, I can’t find any.


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