It is at best perplexing that, after years of scandals and dreadful audits surrounding the Bluegrass Area Development District’s management of federal workforce training funds, some $11 million-plus has been awarded to the ADD by — guess who — the directors of the ADD.
As far as we can tell, this is legal and conforms with new regulations designed to ensure competition for the federal awards and greater transparency.
While the selection process did produce competition — three groups applied to manage the grant — it fell far short of true transparency.
This disturbing turn of events offers both a challenge and an opportunity for Hal Heiner, the former gubernatorial hopeful whom Gov. Matt Bevin recently named secretary of the Education and Workforce Development Cabinet, which oversees the flow of federal workforce money to the state’s regions.
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Here’s how the transparency aspect failed, even if it met the letter of the law.
The area development districts were formed decades ago to coordinate regional economic planning. Bluegrass represents 17 counties in Central Kentucky and has an annual budget of about $24 million, mostly from federal and state grants.
For years the federal workforce grants have been awarded, without competitive bidding, to the ADD. In light of a damning state auditor’s report on the Bluegrass ADD’s management of workforce funds, and a new federal law, the cabinet developed guidelines to improve the grant process.
Following the new process, nine reviewers ranked the three applicants in four areas. The Bluegrass ADD got the highest average ranking, 790.3 on a 1,000-point scale, beating out Community Action Kentucky, which scored 743. While this might all seem straightforward, the basis for those rankings is not at all clear.
How, for example, did the reviewers evaluate the Bluegrass ADD on “fiscal integrity” in light of its history? In a scathing March 2014 report then-state auditor Adam Edelen assailed it for noncompliance in management of federal grants, conflicts of interest, failure to report possible criminal activity, inadequate oversight of travel expenses and a lack of internal controls.
A subsequent state investigation found $2.8 million in questionable costs, many paid from workforce monies. The district’s response to that investigation is still being reviewed.
In its application for the current round of funds, the Bluegrass ADD offers a lengthy description of the financial management software it uses and the processes for budgeting, paying vendors, approving travel expenses, allocating costs among various grants and so forth.
But there’s no mention of the bad audit less than two years ago or the unresolved state investigation, or what actions the organization has taken to clean things up.
We don’t know if the reviewers took this history into account but the ADD got an average score of 226.5 out of 300 in this category, the only one in which Community Action scored better, with 238.
No wonder Lexington Mayor Jim Gray — the only one of the regional officials tasked with awarding the grant who voted against giving it to the Bluegrass ADD — wanted more information about the scoring process.
He was also outvoted on his request to interview the applicants in person before making the award. Gray’s concerns were echoed by people representing major private employers, including Toyota and Kentucky Utilities.
Heiner, like Gray, had a long and successful career in business before entering politics. Both know that this is not the way to build confidence in decision making or get the best results.
Heiner inherited this mess, but he must take it as his charge to assure the Bluegrass ADD makes good use of these precious federal dollars to help Central Kentucky workers prepare for better jobs. And he should send the cabinet back to the drawing board to design a more credible, accountable grant process.