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CareerSource of North Central Florida accused of improper use of funds, conflicts of interest

BY JENNIFER CABRERA / OCTOBER 28, 2019

CareerSource of North Central Florida (the “Board”), the regional workforce board for Alachua and Bradford Counties, received a letter on September 27, 2019, from Ken Lawson, the Executive Director of the Florida Department of Economic Opportunity (DEO). 

The letter documented “failures of the Board to provide services in an open and transparent matter and outline[d] how the Board has refused to comply with requests and failed to follow guidance issued at federal and state levels.”

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According to the letter, the Board provides its services using federal funds that are passed through DEO. Except for the Board’s Equal Opportunity Officer, all administrative functions of the Board are performed by a so-called Administrative Entity (AE). Since 1996, that entity was Focused Management Solutions (FMS), which was purchased by Public Consulting Group, Inc. (PCG) in December, 2017. The letter says that “Many of FMS’s leadership and staff have been retained after the purchase” and that the State “has questioned the nature of the relationship between the Board and the AE” since at least 2007.

The letter lays out a long-standing disagreement between the Board and the State over the nature of one of the agreements the Board has with PCG (for approximately $2 million/year). The Board has claimed that this is a contractor agreement, meaning that PCG does not have to open its books and records for audit, monitoring, and oversight activities.

DEO says that it has determined that PCG is a “subrecipient” (meaning that its records are subject to review, etc.) and says that “The Board cannot unilaterally disregard DEO’s determination in this instance.”

According to the letter, this has led to insufficient documentation of costs and inadequate oversight of PCG, including “incurred unallowable costs.”

The letter questioned the process for selecting PCG as the Administrative Entity in 2016, stating that the U.S. Department of Labor (USDOL) had told the former CEO of PCG to “work with the state” regarding how duties should be split between contracts versus subawards, but “the AE and ultimately the Board ignored the advice of USDOL.”

The letter alleges that the Board overspent unrestricted funds of over $12k and that “federal funds were used to cover this deficit,” that the Board allowed “actual or apparent conflicts of interest in public purchasing,” and that the Board “potentially violated anti-lobbying restrictions with respect to the expenditure of public funds.”

The letter also states that the Board received two Dislocated Worker Grant awards for Hurricanes Irma and Maria. Out of $639,348.94 in funds that had been drawn by the Board, the Board’s reports indicated that it had only served 42 people, for a total of $37,412.18 in wages.

During its investigation, according to DEO, “agents of the AE threatened employees of DEO of the public pushback DEO will receive if DEO tries to change the current structure,” and “DEO staff were not able to speak to any of the AE’s employees alone without another executive or employee of the AE present.”

The letter said the DEO would immediately stop providing funds in advance; instead funds will be provided on a cost reimbursement basis. The DEO requested detailed financial records from FMS and PCG from July 1, 2016 to the present. The letter set a deadline of 30 days from the letter (which would be today) for all of its conditions to be met. Failure to do these things could result in withholding federal funds, selecting another entity to manage the local program, removing members of the Board, or decertifying the Board.

Alachua County Commissioner Ken Cornell brought up the DEO letter at the October 24 County Commission meeting, resulting in a “chair letter” from the County Commission to the DEO, pledging their assistance with the investigation. After WCJB ran an article the next day, the Executive Director of the Board notified the other Board members (nearly a month after the initial letter) that the Board had been “engaged in a conversation” with the DEO over the past month and that they had commissioned a Tallahassee law firm to represent the Board.

Numerous local public figures sit on the Board, including Gainesville City Commissioner Adrian Hayes-Santos, Alachua County Commissioner Robert “Hutch” Hutchinson, and Santa Fe College President Jackson Sasser.

Multiple attempts to reach out to board members, CareerSource’s communications department, and the state DEO went unanswered.

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