Lax D.C. Oversight Of Jobs Program Let Costs Skyrocket

By David Nakamura
Washington Post Staff Writer
Friday, October 17, 2008

Over 10 weeks this summer, 53 city youths in Mayor Adrian M. Fenty's jobs program worked for the D.C. Aerospace Academy. They had dream jobs, including trips to Kansas to take flying lessons in single-engine Cessnas, and each student was paid about $1,800.

The academy did even better. Robert Newkirk, who administered the flight school, took in more than half a million dollars from the District in administrative fees -- $9,755 for each student.

As District officials continue to review what went wrong with a jobs program that overspent its budget by $30 million, a Washington Post examination has found that the city's willingness to pay private organizations thousands of dollars in fees for each student contributed to the overspending.

Overwhelmed by 20,000 job-seekers, the D.C. Department of Employment Services agreed, sometimes frantically, to pay 35 vendors to work with them. City officials ignored a cost limit imposed in past years and failed to monitor how the money was spent, according to The Post's review.

Vendors took advantage of the lack of oversight; some charged more than their contracts allowed and others made changes to their service agreements. A dance company, for example, billed the city $4,150 per student to teach ballet and modern dance, four times the amount agreed upon in the contract. And a nonprofit group collected its full payment of $180,000 even though it fired several tutors and academic coaches.

In all, the District forked over $10 million to vendors to oversee one-third of the students in the summer program. (The rest were placed free of charge at District and federal agencies and nonprofit and community-based organizations.)

"This was absolutely appalling. This whole program was out of control," said D.C. Council member Carol Schwartz (R-At Large)."I want to have good experiences for the kids, but they do not have to be this expensive."

Fenty (D) fired Summer Spencer, the employment agency's director, in August and pledged to fix the problems. But the breakdown has been held up by council members and activists as an indictment of Fenty's management style, which they say emphasizes moving quickly at the expense of rigorous planning and oversight.

Last summer, enrollment soared beyond projections by 5,000 students after Fenty promised jobs to all comers. The agency lost track of their work schedules, and the mayor ordered that all students be paid maximum salaries, driving up costs.

The program has been the hard-charging administration's biggest embarrassment.

"We took an existing program and tried to double it and double it again in the last two years, and I don't think we took enough time . . . understanding what the foundation of this program was," City Administrator Dan Tangherlini said. "So many people showed up, the interest was so high, I think judgments were made that in retrospect were the wrong ones."

For years, the District has been paying vendors to give students a mix of office jobs, work-training programs and academic enrichment activities. The practice contrasts sharply with job programs in other cities, including Boston and Baltimore, which do not subsidize employers.

D.C. officials said the Washington business community has been reluctant to employ students. Although Fenty tried to prod business leaders to accept students in a campaign titled "Just Take One," only about 600 students were placed for free at area companies. Instead, the city has relied on the vendors. In a "request for proposals" in spring, the D.C. contracting office said vendors must provide a student-to-staff ratio of 25 to 1 and abide by a fee limit of $1,200 a student.

Shortly before the proposals were due, however, contract officials removed the cost limit. The agency's rationale, according to a source involved in the decision, was to discourage vendors from seeking the maximum by default.

"They said it should be a competitive process where you tell the government how much it costs to do the job," said Joseph Davis, director of Youth Engaged for Success, a community group that runs a peace-mediation program.

The decision backfired. Instead of cutting costs, 20 companies sought student fees above $1,200.

Youth Engaged for Success, whose program included filming a public service announcement, won a contract for $1,900 for each student. Howard University received $1,775 a person for a work-skills program and a sports camp. The High Tea Society, a mentoring program for at-risk girls, got $1,500 a student to teach acting, theatrical staging and costume design.

Among the expenses cited by vendors were hiring additional staff; renting space in schools and churches; buying supplies, including camcorders and computers; taking field trips; and providing incentives, including trophies, movie passes and cash.

Costs varied greatly.

D.C. Tutor for Kids, a tiny for-profit company, got $3,348 for each student for a program in which they built go-karts, produced T-shirts and had a poetry and art show at the Reeves Municipal Center. The proposal included three new part-time staff employees. By comparison, the Opportunities Industrialization Center of D.C., a nonprofit work-training organization, got $1,106 a student for a program that included trips to the Madame Tussauds wax museum in Northwest Washington, Baltimore's Inner Harbor and Delaware State University. The proposal included 15 new staff workers, including 12 full-timers.

The city "should set some expectations," said Eshauna Smith, executive director of the D.C. Alliance of Youth Advocates, which helped coordinate between nonprofit vendors and the city. "They need to look at the market and determine what the average is across various services. Cost-per-pupil is nothing new. It's not rocket science."

* * *

As the students continued to pour into the employment agency, other cost- and quality-control measures were ignored. Although the city had hired an independent company to rank the proposals, every vendor was awarded a contract.

Even after the city doled out the $7 million it had budgeted for contracts, employment officials persuaded Scott Kubly, a Tangherlini aide, to authorize more money, said two sources who asked for anonymity for fear of retribution. Several contracts were not in place until after the program began in June, leaving thousands of students with no place to go.

The most expensive program was Newkirk's D.C. Aerospace Academy. Newkirk, who has run a one-week aviation camp in Northern Virginia for five years, won his first District summer jobs contract in 2007.

In an interview, Newkirk said he warned the city that his program would be expensive. He said officials approved the contract "at the last minute" for 2007, when he received $274,000 and took 48 students.

This year, he won a deal three times as large: $658,000 for 100 students. Participants were drawn from high school Junior ROTC programs and housed at the University of the District of Columbia. The highlight was the 10-day trip to the aviation school at Kansas State University in Salina, where they attended classes, flew on a Cessna with an instructor and visited a bison ranch.

Newkirk said the dividends are clear: Four D.C. students enrolled at Kansas State in the fall. Newkirk awarded each of them scholarships, too, ranging from $1,000 to $5,000, paid with the summer jobs program's funds. Jeremiah Shaw, 17, who won the top prize, has made two solo flights.

"A lot of inner-city youth do not get to experience this," said Shaw, who intends to join the Air Force when he turns 18 in December. "It's a good opportunity."

Although 53 students rather than 100 enrolled, Newkirk billed the city $517,000 -- $9,755 per youth -- citing fixed costs, such as hiring staff for the 100 anticipated students.

The academy wasn't the only program whose costs exceeded the contract amount. The Dance Institute of Washington agreed to take 100 students for $1,000 apiece, but it later informed the employment agency that it could handle just 20. Even so, the company billed $83,000, four times the agreed-upon per-student rate.

Company spokesman Jared Fischer declined to itemize the expenses. "We abided by whatever they said," he said of the city. "They were excitedly backing us."

The employment agency had 18 site monitors, all college interns. Fenty spokeswoman Mafara Hobson said they spent most of their time "troubleshooting" and added that "no substantive evaluations on program quality were conducted."

The auditing effort was complicated by the agency's problems entering payroll and enrollment data into a new computer system. Vendors said the city did not provide enough students or sent people who were too old for the curriculum. Mariessa Terrell White, director of the High Tea Society, said she received boys even though her program is for girls.

Amid the chaos, vendors changed their contracts with no administration pushback.

For example, the nonprofit Neighbors of Seaton Place agreed to take 150 students for $180,000, of which $58,000 would pay three consultants to provide academic tutoring and job-skills training. But two consultants said in interviews that they were never hired; the third said his firm was fired after two weeks and paid $3,000.

In their place, nonprofit director Cleopatra Jones paid $30,000 for a pottery program, increased the travel budget by $14,000 and gave herself a $6,000 raise, according to invoices provided by the D.C. finance office.

In an interview, Jones said students filmed a public service announcement that was aired on CNN and BET and took trips to Ellis Island, the Goddard Space Center and the Library of Congress.

"I had to justify any changes in the budget," she said. "I outlined all of that" with the city.

Vendors will play a reduced role next year, said Tangherlini, who envisions assigning most students to a "green team" run by the city and focused on cleaning public property. In the meantime, his office is examining invoices and will seek to recoup money from vendors if evidence warrants.

But, he added, "there were so many mistakes that we made on our side that it's kind of hard for me to play hardball."

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