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California State Auditor Report Number : 2015-508

Follow-Up—Federal Workforce Investment Grants
The Employment Development Department Established Procedures for Seeking Discretionary Grants, but Needs to Strengthen Them



Summary

HIGHLIGHTS

Our follow-up audit of the Employment Development Department’s (EDD) progress in addressing an issue we raised in a 2012 report regarding the Federal Workforce Investment Act revealed the following:


Results in Brief

The Employment Development Department (EDD) updated the grant identification and analysis procedures (grant‑seeking procedures) it uses to pursue federal grant opportunities in response to a recommendation in our March 2012 report titled Federal Workforce Investment Act: More Effective State Planning and Oversight Is Necessary to Better Help California’s Job Seekers Find Employment , Report 2011‑111. Our follow‑up audit found that EDD created a system for identifying, reviewing, and choosing whether to apply for discretionary grants, meaning grants generally awarded on a competitive basis, related to workforce investment. Through this process EDD identified 34 potential grants between April 2012 and April 2015, which it listed on a Grant Research Tracking Sheet (tracking sheet). Of the 17 grants we reviewed, EDD’s Workforce Services Division (division) generally demonstrated that it evaluated its ability to pursue the 10 grants for which it was eligible to apply. Further, it ultimately pursued two of the 10 grants it evaluated and was awarded a total of $8.7 million for them. In the other eight cases, EDD declined to pursue grants for which it believed it was not well positioned. Its reasons for not pursuing these grants had merit.

However, EDD did not consistently follow its process for documenting the steps it took in determining whether to pursue some of the grant opportunities we reviewed. Specifically, EDD did not consistently prepare executive summaries to include the factors it considers, record its decisions as to whether to pursue or forgo grants, or retain supporting documentation, as required by its procedures. According to the division chief, staff that are responsible for documenting these steps do not have the knowledge and expertise to address some of the factors that management considers when determining whether or not to pursue a grant opportunity. He further stated that members of EDD’s senior management often discuss these factors during meetings but do not document the result of these discussions.

In addition to the 34 grants EDD identified through its process, we identified three grants related to workforce investment, available between April 2012 and April 2015, that EDD did not include on its tracking sheet. According to the division chief, EDD identified and considered these grants, though staff did not enter them on the tracking sheet. He also stated that either these grants were not in line with EDD’s core mission and services or EDD would not have been a competitive applicant. Our review of these grants found that EDD’s reasons for not pursuing them have merit. Nonetheless, by not consistently following its process, EDD lacks a historical record that could help it efficiently pursue future grant opportunities. In addition to the 34 grants EDD identified through its process, we identified three grants related to workforce investment, available between April 2012 and April 2015, that EDD did not include on its tracking sheet. According to the division chief, EDD identified and considered these grants, though staff did not enter them on the tracking sheet. He also stated that either these grants were not in line with EDD’s core mission and services or EDD would not have been a competitive applicant. Our review of these grants found that EDD’s reasons for not pursuing them have merit. Nonetheless, by not consistently following its process, EDD lacks a historical record that could help it efficiently pursue future grant opportunities. In addition, it risks missing grant opportunities or being unable to demonstrate that it has considered all available opportunities to maximize federal funding for workforce investment.

Like EDD, the California Workforce Investment Board (state board)1 researches potential grant funding for workforce investment. However, the state board lacks a formal process to track its efforts related to pursuing grant opportunities. As a result, the state board was not able to provide us documentation of its decisions to pursue or forgo two grant opportunities identified on EDD’s tracking sheet for which the state board was eligible to apply. Only after making inquiries of EDD were we able to obtain additional documentation supporting the state board’s decisions to forgo these two grant opportunities. Without a formal grant policy in place to track its efforts, the state board cannot demonstrate that it has evaluated the merits of pursuing workforce investment grant funding. According to the state board’s chief of operations, since June 2013 the state board has taken a more proactive and collaborative role with EDD in identifying, analyzing, and applying for federal grant opportunities. Additionally, the state board and EDD are in the process of formalizing new policies for their collaborative grant research activities. They anticipate finalizing these policies by the end of December 2015.

Recommendations

To ensure that its grant seeking process is effective in considering grant opportunities related to workforce investment, EDD should update its grant identification and analysis procedures by December 31, 2015, to include the following:

To ensure that the State maximizes federal funding opportunities related to workforce investment, EDD and the state board should formalize their collaborative grant seeking procedures by December 31, 2015.

To ensure that the state board assesses the merits of pursuing federal grant funding for workforce investment programs in California, it should establish procedures by December 31, 2015, that include, at a minimum, the following:

Agency Comments

EDD and the state board agreed with our recommendations and said they would implement them.




Footnotes

1 Effective January 1, 2016, the California Workforce Investment Board will become the California Workforce Development Board. Go back to text

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