Is it OK to Party on the Federal Dime?

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Ho, ho, ho? Hell no.

That sums up the reaction that the U.S. Department of Labor’s Office of Inspector General (OIG) had when it found out that Education & Training Resources (ETR) had charged the National Office of Job Corps for a holiday party meant to reward employees at a job corps center, in Medina, N.Y.

In a recent audit, the OIG said it was “improper” for the ETR to have national foot the nearly $8,000 bill for the December 2008 party for staffers of the Iroquois Job Corps Center.

Among the charges:

* $5,877 for a banquet hall and food.

* $1,367 for party items and gift sets.

* $375 for a disc jockey.

* $338 for holiday envelopes, frames and personalized holders.

“Charging these items to Job Corps was unallowable because the party was a social activity and included specifically prohibited costs (banquet hall rental, meals, and entertainment),” the OIG wrote in the audit.

This is not the first time ETR has charged the feds for grooves, grub and holiday cheer.

Iroquois also improperly charged Job Corps for holiday parties in 2005 ($4,992) and 2006 ($4,458), the OIG alleges. The improper charges for the three years totaled $17,407.

The fact that Iroquois did not have a holiday party in 2007 shows why the holiday parties should have been allowable expenses, according to a letter to the OIG by Brian Fox, CEO of ETR.

The organization’s rationale is that the holiday parties weren’t just social functions or entertainment, but part of an incentive plan approved by the national office to reward employees when the center had a good performance year. Fox says 2007 wasn’t a good year, so there was no party.

Fox also took exception to the OIG and national office calling the 2008 holiday spread “excessive” in terms of its cost. He said the cost for each party ranged from $50 to $115 per employee, which he called “very reasonable.”

He the total amount for the three years “equates to approximately one-quarter of one percent of the center operating funds for the same period,” Fox wrote. “Staff of the Iroquois Job Corps Center earned the opportunity for this type of level of staff incentive.

“During the period since CY 2005, the Iroquois Center has improved from a historically underperforming center to a consistently ranked Top 25 performing center in the nation.”

Fox added that because the OIG is asking the National Office of Job Corps to clarify its policy regarding the inclusion of holiday parties in contractor incentive plans, the federal government should not try to recoup the costs now because the policy is unclear.

The national office plans to review how many of the costs from the holiday parties at Iroquois Job Corps Center over the years were improper.

The audit also turned up lack of monitoring and documentation regarding use of the center’s petty cash fund, failure to conduct regular monthly safety meetings, and a case where two students were listed as enrolled even though they never showed up at the center – a violation that may cost the center $5,193 in damages. ETR did not dispute those findings. It said the two students in question were “inadvertently” enrolled and that the center ultimately reconciled the books by not seeking cost reimbursement for them.


  • Lessa

    The Big Bounus are handed out to the “number fudgers”. Phantom students are just the tip of the iceburg. Mr. Fox knows full well what his puppet staff is doing … Not only are the students getting the education they should be, but they are pushed through and not give what they come to job corps for or what we the tax payer is paying for. The  stuff that goes on in testing and education is not only wrong, it shoud be punishable by jail.        

  • Patrick

    The interesting thing is that the Regional Job Corps office in Bosotn should have reviewed these charges long ago.  Obviously, they did not take issue with the charges. Each month, the Regional Office is supposed to receive a report from each center detailing expenditures, among other things. If these expenditures were allowed to slide by, then the Regional Office should be held accountable too. Is the OIG going to follow up with the 2009 holiday party?  How did Iroquois charge those expenses?

    The Iroquois Center Director and Brian Fox are well aware of the policy regarding party expenditures – this is just another example of fraudulent practices that abound at that center.

    As far as the center ranking in the top 25 centers goes, anyone can manipulate statistics and lie about vocational completions and on-line Mississippi “high school” completions.  How many students took and passed the GED test while they have been in the top 25 centers?

    The performance measurements used to “rank” centers are just a joke anyway. Another tax payer rip-off.

  • Bruno

    I would like to address the comments made by Brian Fox in this article. I was employed at the Iroquois Job Corps for several years. During this time, we always had Christmas parties whether it was a “good” year or not. 2005 and 2006 were just as bad as 2007 yet they held parties in those years.

    The reason that there was no party in 2007 was that the incentive money was used to dish out huge bonuses to upper management. These bonus checks were secretly delivered from the corporate office so the other staff would not know. If 2007 was, as Mr. Fox claims, not a “good” year, why were these bonuses handed out?

    The rationale for the excessive cost for the party in 2008 is the center’s high ranking. The center had an improbable and dramatic increase from #115 to #6 in a little over a year. This amazing statistic is something which should be investigated more thoroughly by OIG.

    Regarding the “phantom” students, they were “inadvertently enrolled” for at least a year. Does this mean there was no way to remove them from the roster for that period of time? At one point, there were also five Rochester students receiving student pay who never attended classes at the center.

    In addition to the lack of documentation for petty cash, many of the check requests submitted by staff had no backup documentation for the expenditures. In many cases, receipts were not obtained for the checks issued. Prior to the OIG audit , the finance manager was scrambling to get old receipts that were never submitted.


  • OJ

    Well written and truthfull article and excellant responses. OIG failed to take proper testimony form ETR employees past and present. Paperwork disappears , however, there are to many similar stories being told to be ignored. The atrocities carried on by this center are disturbing. Paychecks misssing, employees fired on family leave, materinity leave, make believe charges for termination ect. The list goes on. Is anyone that is supposed to be monitoring this system ever paying attentiion. Just because it looks good on paper doesn’t mean it is true. OIG is losing it’s crediabililty with the ridiculesly petty fines that just fuels the fire of these private contractors to continue to take advantage of the government systems and the youth employed there. The contractors use intimidation and threats to maniplate their positions. Staff and students exist in fear or retaliation. It is time for the $1.7 billion dollar truth to be told!!!   

  • Patrick

    Since when have staff Holiday parties and presents for staff been paid for out of taxpayer money? These expenses have always been borne by the contractors if they wanted to show their appreciation to their staff, which is the way it should be. In most cases, staff are not even permitted to eat Job Corps food unless they pay for it – that includes DOL staff too.

    Mr. Fox has an attitude of entitlement – that is, he is entitled to rip off the taxpayers in any way he can possibly fathom, so he can continue to line his pockets with ill-gotten gains. God forbid that he lay out corporate money for his staff. If the costs were as reasonable as he claims, couldn’t the corporation bear the cost in the spirit of holiday charity?  They certainly have the money to do so. His responses to the party issue as well as the safety and health findings are just disgusting – always looking for a way to come up with a fabrication to weasel out of doing the right thing and telling the truth.

    Speaking of charity, years ago, Job Corps contractors were expected to donate something to the operation of the contract in some way – for example, books or computers or software, etc.  What has ETR done for staff, students and center, other than harass and mistreat staff (excluding their favored few) and take money from taxpayers to run a sham workforce development program? Are we returning to CETA days?