Lax Oversight of State Apprenticeship Programs Results in Overpayments, Auditor Reports. Government agencies responsible for overseeing an apprenticeship program for air-conditioning workers have been so lax in their duties that more than one-third of the payments made to the program were for purposes that shouldn’t have been allowed, the state auditor reported November 15. The Air Conditioning Trade Association (ACTA) is a nonprofit organization that provides apprenticeship training and education in the use of sheet metal for heating, ventilation, and air conditioning systems. The state Division of Apprenticeship Standards, within the Department of Industrial Relations; the California Community Colleges Chancellor’s Office; and the Central Unified School District are among the entities responsible for oversight.
The auditor found:
- Because of inadequate oversight from the Chancellor’s Office and Central Unified, nearly $51,000 of the $142,000 that was provided to ACTA by the school district from fiscal years 2010-11 through 2014-15 was for unallowable activities. Central Unified does not verify whether the instructional hours that ACTA claims for reimbursement are for activities that state law allows.
- It is unclear whether transfers among ACTA’s funds were allowable, but a recent federal investigation found that ACTA improperly spent apprenticeship training funds. “ACTA is a nonprofit organization and therefore our access to its funds was limited to verifying its use of state funds,” the auditor stated. “As a result, we were unable to determine if the transfers ACTA made among its funds were allowable. However, the U.S. Department of Labor completed a civil investigation of ACTA in December 2014 and determined that between 2005 and 2012, ACTA misused $800,000 in apprenticeship training funds for activities that included legal fees and vacations for apprentices and instructors.”
- The apprenticeship division does not conduct audits consistently, and it is not using its audit authority to ensure that apprenticeship programs are spending state funds appropriately.
(Source: State Auditor Report 2016-110, November 15.)
November 29, 2016
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