Audit Report on the Human Resources Administration’s Employment Services and Placement Efforts for Public Assistance Recipients

AUDIT REPORT IN BRIEF

This audit determined the effectiveness of the Human Resources Administration’s (HRA’s) monitoring of its employment-service vendors. HRA is responsible for helping individuals and families achieve and sustain their maximum degree of self-sufficiency. To fulfill this mission, HRA provides a broad range of programs and services, including public assistance, food stamps, job training and employment services.

In March 1998, HRA began converting its welfare offices into job centers. Job centers are intended to meet emergency and temporary financial needs, while supporting the efforts of those applying for (or on) public assistance (PA) to obtain employment and achieve financial independence. The job centers refer PA clients to vendors who train them and help them search for employment. During Fiscal Year 2005, HRA had two types of employment vendors for PA clients: Skill Assessment and Job Placement (SAP) vendors and Employment Services and Placement (ESP) vendors. HRA budgeted approximately $22,243,000 for SAP contracts and approximately $24,341,000 for ESP contracts in Fiscal Year 2005.

Audit Findings and Conclusions

Although HRA’s monitoring of its employment-service vendors had some positive features, it also had several significant weaknesses. HRA had a system of vendor-performance evaluation and also had several computer systems to record and track information related to the employment services its vendors provided to participants. In addition, HRA properly approved ITA applications, and the Regional Education Center for Economic Development of the City University of New York (HRA’s contractor) generally implemented adequate controls in the processing of ITA claims from training providers.

However, HRA’s monitoring of the performance of its employment-service vendors was insufficient. Although HRA had a system of contract monitoring in place, it did not consistently follow its own procedures to ensure that vendors complied with the terms of their contracts. The Office of Contract Monitoring (OCM) did not conduct the required number of evaluation visits to vendors and did not require corrective-action plans for some deficiencies cited in its evaluation reports. Moreover, HRA often did not follow up in a timely manner to ensure that vendors implemented their corrective-action plans. Insufficient HRA monitoring of vendor performance contributed to the provision of substandard employment services to PA clients and limited the number of eligible clients placed and retained in jobs.

In addition, there were significant weaknesses in HRA’s efforts related to program eligibility, public assistance adjustments, and vendor payments. Our review of 73 assessment, engagement, placement, retention, and high-wage payments totaling $72,522 found that there was insufficient evidence to support 18 payments totaling $18,653 (26% of the amount paid). As a result of these weaknesses, HRA did not adequately ensure the protection of public assistance and employment service funds.

Audit Recommendation

To address these issues, the audit recommends, among other things, that HRA:

• Ensure that the Office of Contract Monitoring conduct the required number of evaluation visits to each vendor each year.

• Ensure that OCM requires corrective-action plans for all deficiencies found during visits to vendor sites.

• Ensure timely follow-up reviews of all deficiencies cited by OCM in its vendor-evaluation reports.

• Ensure that assessment and engagement claims submitted by vendors are reviewed and approved by HRA staff based on supporting documentation for each claim submitted.

• Ensure that employment verification forms submitted by employment-service vendors include the required employer’s seal or stamp, the client signature, and the hours worked per week.

Ensure that PA recipients meet the requirements for high wages before making bonus payments to vendors.

Agency Response

In its response, HRA agreed with many of the audit recommendations but disagreed with some of the audit findings.