Labor Dept. Rules $249,865 in County Job Funds Be Repaid

The U.S. Department of Labor is demanding that the state return $249,865 that a Ventura County job training agency allegedly misspent--a demand that could be passed on to Ventura County.

The Labor Department alleges in a ruling dated Dec. 17 that the county’s Job Training Policy Council improperly spent the money between 1985 and 1990. During that period, the ruling says, a former director of the agency improperly received salaries from two federally funded agencies simultaneously and awarded his own private company a government contract.

The ruling represents the final finding of federal officials, who in a preliminary report in August said at least $500,000 may have been misspent.

The 16-page ruling was sent to the state Employment Development Department, which oversees federal job training grants distributed to 50 local job councils throughout California.

The state now must return the funds--with interest if it takes longer than 30 days--or face a cutoff of federal funding for job training, according to the ruling. The state has until Jan. 7 to appeal the finding.

EDD Director Thomas P. Nagle was not available to comment, and a department spokesperson said no decision has been made on whether the state will appeal or charge the local office.

Labor Department spokesman Joe Kirkbride has said the state will probably “try to squeeze it out of the local contractor”--the Job Training Policy Council.

The local agency, which trains the unemployed and helps them find work, has no funding outside federal grants, which cannot be used to repay the money, said Jacqueline Richardson, chairwoman of the 19-member council.

“One possible resource would be through county government,” she said. “But I know Ventura County doesn’t have $249,000 to repay the state.” She said the state could also return the funds in service, rather than cash.

Richardson, an appointed volunteer on the nonprofit council board, said she expects the state will appeal and that the battle will drag on for months or years.

“My concern is that we’ve never had higher unemployment than we have now,” she said. “And I don’t want to see any of those funds jeopardized that could be used to help people get back to work.”

The ruling also states that the Job Training Policy Council of Ventura County should develop procedures that would preclude a recurrence of what the ruling called “fraudulent activities,” “misuse” of federal funds and “conflict of interest by the council.”

In addition, the county should review and approve the new policies and perform a detailed review of the activities of the office at least three times each year.

Richardson said the training council has revised its procedures since former Director John Chase was fired in 1990, when the allegations came to light.

“Because of what this agency has been through, we probably have one of the tightest ships in the JTPA,” she said, referring to the federal Job Training Partnership Act that created the job training councils.

The federal ruling caps three years of investigations by the Department of Labor and the state of California.

In February, 1990, a fired job council auditor disclosed that Chase was receiving at least two federal salaries and alleged other conflicts of interest. Chase was fired five months later.

In late 1990, federal investigators turned their case over to auditors in the state Employment Development Department and to the county grand jury. The grand jury found insufficient evidence to charge Chase with fraud.

State auditors tentatively found that $77,500 had been improperly spent and declared another $270,000 in spending questionable. But in March, 1993, after 19 months of review, the state concluded that only $4,300 had been misspent.

After speculating in August that at least $500,000 might have been improperly spent, the Department of Labor arrived at the $249,865 figure last week.