In addition, City Auditor Leslie Ward told Mayor Kasim Reed and the Atlanta City Council that some indications of "potential fraud and/or abuse" discovered during her office's probe of the Atlanta Workforce Development Agency were referred to "an external investigative agency."
The AWDA, which is technically part of the city's executive branch, aims to help people gain entry into the workforce. Nearly 80 percent of its funding comes from federal grants. The remainder is mostly supported by various public and private funding sources, including contributions from the United Way and the Atlantic Station Tax Allocation District.
According to Ward's 52-page report, the agency holds no information on performance outcomes for almost 90 percent of the clients entered into its tracking database. In addition, more than half of the 25,310 clients the AWDA served between July 2010 and May 2012 lived outside the city's limits, the report said. The audit also says the agency also doesn't reliably track employers in its database, making it difficult to gauge how many workers are hired by firms that participate in job fairs or subsidized on-the-job training programs.
In a sharp response to Ward, Duriya Farooqui, the city's chief operating officer, called the recommendation to eliminate the program "perplexing."
"The loss of AWDA would have an immediate detrimental impact on the City's economic development and may hinder the City's competitiveness," Farooqui wrote in her letter. "In a time when the economy has displaced so many workers, it does not make any sense to remove a workforce development function from the city when it continues to serve so many disadvantaged residents."
Farooqui provided her own report highlighting the agency's accomplishments, including the fact that more than 34,000 clients received employment and training opportunities through AWDA from July 2011 through June 2012, among several others. The agency placed people in jobs with Atlanta Fire and Rescue, the Atlanta Housing Authority, and summer work, according to the report. It also partnered with Atlanta Public Schools to help 50 young people obtain their GED.
The initial letter from Ward and Audit Committee Chair Fred Williams sent to the mayor and City Councilmembers, and which was included in the report obtained by CL, reveals other issues:
* The agency registers only a small subset of its clients - 12 percent - into the system that allows the state to track employment outcomes.
* Neither the agency nor the state's system "tie clients to expenses or enable AWDA to reliably track employers."
* The agency holds unencrypted personal information in its system, including social security numbers and birth dates, "which poses significant risk."
"Because we found AWDA's data to be incomplete and partly unreliable, we conclude that long-term outcome evaluation of their current data is not feasible or cost effective," the report said.
In addition, the auditor "omitted specific information from this report related to indications of potential fraud and/or abuse so as not to interfere with potential investigation." The auditor has referred that information to an unnamed "external investigative agency." Farooqui said the agency has "withstood significant scrutiny by federal agencies" and has worked with city departments to improve its operations.
The audit recommends that, should the agency continue, the chief operating officer exercise greater oversight and hire a consultant to help the agency collect and maintain complete and accurate data.
Farooqui, however, said in her response letter that she had already directed Invest Atlanta, the city's economic development arm, to identify ways the city could "better match [Atlanta's] labor pool with job growth and emerging industries."
She plans to monitor the agency's operations more closely and establish a workforce strategy by the end of the year. In addition, City Council would perform an independent assessment of the agency's governance and organization structure.
The auditor's report, meanwhile, said the agency should also ensure that it protects clients' personal information. In the next four to six months, the AWDA's system will undergo review, the report said.
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