Oakland's unemployment rate is far above the state and national average -- around 13 percent. It's much higher in heavily African-American neighborhoods. In other words, there are a lot of desperate people looking for gainful employment.
Because there are so many people in such dire straits, Oakland was able to get a $725,462 National Emergency Grant in 2010 for on-the-job training for the unemployed. Yet the city was forced to return $644,000 of it because city officials failed to take the required actions necessary to comply with the federal guidelines. So, the state Employment Development Department, which administers the grants for the federal government, demanded the money back.
And back it went. First, $400,000 on Dec. 27, 2011. Another $125,462 on May 7, 2012. Then a final installment of $119,150.72 on Nov. 2, 2012.
Poof, a $644,000 gift of free money out the window.
The bad news only became public when Vice Mayor Larry Reid raised the issue at a Jan. 29 meeting of the City Council's Community and Economic Development Committee. Reid asked Fred Blackwell, assistant city administrator, to prepare a report on what job training funds had been returned to the state and federal governments due to the city's failure to use them.
City Council President Pat Kernighan, who is a member of the Workforce Investment Board (WIB) which is supposed to provide oversight for the city's federally funded job training and employment programs, says she only recently became aware that the funds had been sent back.
"I don't know enough of the details to draw a clear conclusion about what went wrong," Kernighan says. "But I think that the city does owe the WIB members and the general public a clear explanation of what's been going on and why this money was returned."
This fiasco is merely the latest in a long-running saga of political infighting, bureaucratic dysfunction and incompetence in the city's workforce investment programs.
At stake are millions of dollars in federal funds that have flowed to Oakland under the Workforce Investment Act, a pie which everyone wants a piece of.
The Workforce Investment Board itself is merely a pass-through agency that contracts out to providers who do the actual job training and recruit employers. The 41-person board is made up of mayoral appointees from business and labor, as well as representatives from nonprofits and other agencies with WIB contracts.
Up until January 2011, the board contracted with the nonprofit Oakland Private Industry Council to oversee how the funds were spent. But in late 2010, then-Mayor Ron Dellums recommended that the city assume oversight of the federal dollars. This came after some state and local officials' criticism of the Private Industry Council's performance. Yet city officials apparently were ill-prepared to assume the administrative functions that they had taken away from the Private Industry Council.
The $725,462 grant received in June of 2010 was a major casualty.
There were two big barriers to spending the money.
First, Oakland could only award the funds to agencies that would both provide on-the-job training and could connect people with jobs. The two agencies that Oakland had selected to implement the grant -- Volunteers of America and Youth Employment Partnership -- did not fulfill both requirements. Then, state officials said that Oakland had failed to hold public bids in selecting the agencies -- a grant requirement. In order to spend the money, Oakland would have to hold a public bidding process to select grant providers.
"We originally thought the contract arrangements were in compliance," says John Bailey, the former CEO at Volunteers of America, who took over as executive director of the Workforce Investment Board in January of 2011. "But then these issues started surfacing at different times."
The federal government required the funds to be spent by June of 2012.
The clock was ticking. It finally ran out.
Out of the total $725,000, Oakland was only able to spend about $80,000 on an already existing contract with the Oakland Private Industry Council to provide on-the-job training.
That was possible only because the state extended the deadline.
To be fair, Bailey inherited the mess. But he still had nearly a year to come up with a corrective plan of action before the state started asking for its money back. My question is, where was the oversight?
Mayor Jean Quan announced last week that Bank of America had donated $50,000 for the Mayor's Summer Jobs Program.
The shame is, Oakland lost 13 times that amount because the city couldn't get its act together.