Workforce Board Asked Where Money’s Going

It seemed like an routine board meeting called to approve a worker retraining agency’s $16.7 million budget for the new fiscal year.

Then some members started asking for details — and the debate was on, about how transparent the agency is not just with the public, but with its own board.

The debate took place last week at a meeting, at a North Haven Best Western Hotel, of the New Haven-based Regional Workforce Alliance, which gets state and federal money to help the unemployed and underemployed people train for and find new jobs.

Board member John Cirello, a New Haven attorney, objected to a motion to approve the budget. He’d been asking since last year for more details on actual expenditures versus budgeted expenditures, to no avail, he said.

“[This] is a budget that doesn’t have any actual dollars that we spent this year,” Cirello said. ​“How am I supposed to approve a budget when I don’t know what we spent last year? That’s my question,” Cirello said.

Another board member, New Haven deputy economic development chief Michael Piscitelli, pointed out that the information provided by staff lacked concrete information about the agency’s programs.

Robin Golden of Westville, another board member, responded, ​“What I’ve been told is that this is an enormously complicated issue. …What you’re looking for would cost an enormous amount of staff time. My recommendation would be to join the Finance Committee.”

The budget was approved shortly thereafter, with Cirello casting the only no vote. But the debate continued.

The Alliance relies on money from the federal and state departments of labor. The biggest share, around $7 million, comes from new Federal Workforce Innovation and Opportunity Act (WIOA), which took effect July 1st, replacing the Workforce Innovation Act (WIA).

“We have this big tub of money to put into an organization” to help job-seekers, Cirello said after the meeting. ​“That’s great. But I will never see 16 million dollars in my entire lifetime. We discussed [spending that money] for half an hour without answering basic questions.”

“The reason why I’m so frustrated is that I presented these same concerns in December,” Cirello said. ​“I had asked for more detailed budgetary numbers. That wasn’t included in this budget.”

Piscitelli told agency CEO WIlliam Villano at the meeting that the board had agreed that the Board’s Finance Committee would review the budget in advance of the budget approval meeting.

“You were very emphatic … the Finance Committee is the budget watchdog … and they are the committee that would be presenting this [budget] report,” Piscitelli said.

Cirello complained that updated spending figures were missing, that the grant-by-grant spending breakdown was not thorough and comprehensible enough, and that the board did not receive details on numbers of people served by programs.

Robyn Jay-Bage, chair of the Finance Committee, acknowledged that it ​“did not meet to discuss budget.” Rather, she later noted, the committee reviewed and approved the budget ​“with the knowledge that this organization is on track with our expenses.”

Debate on the budget was cut off before some of the board members were satisfied.

“The mayors were coming in at 9 o’clock,” Cirello said. ​“I think we should have continued to discuss the budget but we weren’t afforded that time.” The ​“Mayors” he was referring to are the organization’s Executive Committee, comprised of the municipal executives of cities where its programs operate. Their approval is also required for the Alliance’s budget. They did approve the budget at last Thursday’s meeting, Villano confirms.

Workforce Alliance’s controller had been on leave for five weeks, CEO Villano said in a subsequent interview. That delayed preparation of the budget, and required the board to act quickly to approve it. ​“Generally, the board and mayors want us to have a budget – which is basically just a spending plan – before July 1,” he said. ​“We’re already running behind.”

Other board members agreed that it was necessary to pass the budget despite some gaps in information. Jay-Bage runs her own not-for-profit, The Women and Families Center, which she used it as an example. ​“This is a very common process at non-profits,” she said. ​“With my non-profit, I present my board with a budget in March that really needs to be approved. It may or may not be exactly what happens come the next fiscal year, and the board may have to – if it’s a wide variance – reapprove that budget .… Organizations are depending on me to have an approved budget in March.” In other words, non-profit Boards often have to approve budgets before all the reporting is complete in order to keep core programs running. 

Some board members said the organization’s track record in government reporting and audits justified passing the budget despite information gaps. ​“We’ve never had any problems with government agencies,” one member said at the meeting. ​“We’ve never had any problems with government audits.”

Chris Reardon, vice-president of strategic development and business services of Workforce Alliance,reinforced the point in an interview after the meeting. ​“The feds would not continue to be funding us if we didn’t have the highest integrity,” she said.

Cirello disagreed. ​“There’s significant oversight on some of these grants by government agencies,” he said at the meeting. ​“So I don’t understand how we can be given this budget that has no actual dollars that we spent and what we budgeted.” He later added, ​“You’re abrogating your responsibility as a trustee on the board of directors if they say, ​‘Just trust us’.”

Villano was later asked if the combination of the speed of the review process and the lack of clarity in the budget might provide an obstacle to board members exercising their fiduciary duty.

“I sit on a number of boards myself and I’m a treasurer on some,” he said. ​“It’s always a struggle to try to find out how much information is sufficient for a board member to understand.”

Villano cited two reasons for the lack of clarity of the budget. The first is its design. A former member of the executive committee, Former New Haven Mayor John DeStefano, designed the budget to mirror municipal budgets. ​“He’s a policy guy,” Villano said of DeStefano in an interview. “[The budget formulated by former Mayor DeStefano] – which is now this 96-page document – the way it has been structured is difficult to understand.” This is something he said he plans to address.

“The format created a few years ago might be confusing and as we move forward,” he said, ​“we will try to develop a format that is easier to understand.”

Villano also cited the complicated set of funding streams administered by the Workforce Alliance. The agency has multi-year funds with carry-over as well as shorter-term grants, which makes reporting complex. ​“We have to manage millions of dollars of funds with different target groups, different eligibility [guidelines] and different reporting formats.”

“We’re not an organization that gets a set amount of money [for] one year, 12 months, you spend it, and you can compare that year to year,” he said at the meeting.

Reardon compared the budgetary process to preparing a Thanksgiving dinner. You have different dishes with different times in the oven, she explains. ​“You want it all to be as perfect as it can be,” she says, ​“but it’s very complex.”

“The Workforce Alliance does important needed work in our community,” Cirello said , ​“and that’s why I care about this. They do a good job and there are good people working for it. So I think it’s too important to shirk my responsibility.”