Claiming that funds were improperly budgeted, the state Employment Security Department has “recaptured” $320,385 from the Pierce County job training and placement service WorkForce Central.
WorkForce Central CEO Linda Nguyen and members of her board - including Pierce County Executive Pat McCarthy and Tacoma Mayor Marilyn Strickland – have since begun a campaign urging Gov. Jay Inslee to review and revise the ESD decision.
“We are still trying to work through this,” Nguyen said in an interview Wednesday.
The controversy primarily concerns federal dislocated-worker funds WorkForce was required to spend or obligate before a deadline. The funds were not committed.
In a Feb. 23 letter to Nguyen, ESD Commissioner Dale Peinecke said the funds would be recaptured unless Nguyen could provide “verifiable evidence” that required actions had been taken.
The letter also demanded “evidence that you have made significant changes within the organization to prevent repeating a long established pattern of missing obligation thresholds, missing spending targets, spending twice as much per dislocated worker served … and inappropriately using federal funds.”
“This is the narrative that he has tried to create to put a black eye on Pierce County,” Nguyen said Wednesday. “He’s creating this narrative that confuses people.”
She admits the funds were not used before the deadline but said the decision to hesitate was responsible given turmoil in the federal budgeting process.
She and her board, she said, “were being fiscally responsible and fiscally conservative to ensure that we could stabilize services to our jobseekers and our businesses during a tumultuous federal political environment.”
In a Feb. 2 letter to Inslee, McCarthy and Strickland said Commissioner Peinecke’s decision “did not consider the local decisions that we, the Chief Local Elected Officials, had to make to manage the turbulent and uncertain political and fiscal environment.”
“We held back more funds in reserves than usual to ensure access to resources,” the officials wrote.
Janelle Guthrie, ESD spokeswoman, said this week, “Workforce Central did not use federal funds promptly to help unemployed people find jobs. Every other workforce development council uses these funds promptly. After two years of discussion, we have recaptured and redistributed those funds to the rest of the state to help the unemployed.”
Tim Probst, ESD Director of Workforce Initiatives, said Wednesday, “Many other workforce development councils also maintained services without missing their 80-percent thresholds. These funds are to help unemployed people get back to work. We need to make sure the funds are put into action so people can get jobs. In 11 councils across the state that is being done.”
Pierce County’s WorkForce Central is one of 12 such agencies in the state.
The commissioner was not legally obligated to recapture the funds. The decision, while not arbitrary, is discretionary.
“We can always decide not to enforce rules, but at some point it’s about whether the funding is being used to help people find jobs,” Probst said.
Neil Gorrell, employment system policy and unemployment insurance director at ESD, said Wednesday, “It’s always our goal to help all 12 areas succeed. We have to maintain some harmony and equity between areas.”
He said that there is no suggestion of legal impropriety within the controversy.
Probst emphasized that his agency has a strong fiduciary responsibility to the federal government, and that there could be circumstances where Washington D.C. itself could recapture funding allocated to Washington State.
Meanwhile, Nguyen’s campaign continues.
WorkForce Central has issued a statement outlining its position on putting the funds into reserve and asking that the governor take action.
The position paper says in part, “We call on the Governor Jay Inslee to reverse the decision to take back the funding and instead reassess WorkForce Central’s obligation after the end of the program year June 30, 2015, when complete data are available.”
“We try to do a good job and it smacks you in the head,” Nguyen said. “We would like the governor to reverse this decision and put the money back. For them to take these dollars is a crying shame.”