The following article by Plain Dealer Reporter of Cleveland.com about the Job Corps in Cleveland, Ohio illustrates how easy it is for federal money to be poorly spent and mismanaged. Applied Technology Systems Inc. who is paid by the Department of Labor to run and manage the Cleveland Job Corps Academy has been late on paying the bills, lax in providing medical services and uniforms to their students, and generally mismanaging a government-funded entity designed to vocationally train young men and women who are not usually cut out to attend a four year college.
Applied Technology Systems also over billed the government $1.8 million dollars for expenses and passed poorly performing students for the purposes of retention. The over billing is a form of white-collar crime that should be severely punished as Applied Technology Systems appears to be far more interested in turning a profit that positively transforming the lives of their students.
The concept of Job Corps which is to provide free high school diplomas and vocational training for kids coming from dysfunctional, poverty-stricken families is certainly to be commended. However, Applied Technology Systems should lose the contract for the improprieties they committed. A properly managed Job Corps can help to rectify income inequality and get kids off the streets and on a fast track to a respectable job and the hope of living independently!
Kudos to Plain Dealer Reporter for an excellent piece of investigative journalism!
The Cleveland Job Corps Academy opened in November 2007 with high expectations and a mission to educate, train, house and find jobs for troubled teens and young adults.
Championed by the late Congresswoman Stephanie Tubbs Jones as a crucial community resource, the academy drew praise from then-U.S. Secretary of Labor Elaine Chao, who toured the $35 million, 25-acre campus in Collinwood six months later and boasted it “will help so many young people find hope and opportunity.”
But a Plain Dealer investigation has found that the academy is in turmoil.
The investigation, begun last spring and based on interviews with current and former Job Corps workers, public records and internal documents obtained by the paper, (why weren’t students interviewed?)revealed:
Applied Technology Systems Inc., the Cleveland-based company that is paid millions of tax dollars a year to run the federal program, has failed to pay bills, at times leaving students without properly maintained fire alarms, medical services, uniforms and other supplies.
Unruly students have been accused of numerous crimes, including fighting with neighborhood gang members, assaulting other students, stealing, and possessing drugs and knives. The crimes and behavior problems have disrupted learning, promoted fear on campus led to low morale and staff turnover, according to former employees and documents.
ATSI often tolerated bad behavior and passed poorly performing students to meet contract and financial goals, former employees charge.
ATSI overcharged the government $1.8 million for overhead expenses related to its federal contracts, including Cleveland’s, a recent federal audit found.
Job Corps officials in Chicago, who are charged with monitoring the Cleveland program, have been lax in their oversight, the audit shows.
The head of ATSI acknowledged some billing mistakes were made but defended the academy, noting that it has received high marks for performance compared to other programs in the country and serves its students well.
Company struggles to pay bills for student services: The Cleveland Job Corps campus sits on land along Coit Rd. once occupied by the General Motors Fisher Body complex. The campus includes three dorms, a recreation building, cafeteria, construction trades shops, medical building and administrative offices separated by winding concrete sidewalks and green lawns.
Typically, about 400 teens and young adults are enrolled in the program. Most are black, from Ohio, and left or were kicked out of traditional schools.
ATSI manages nearly every aspect of their lives, from their meals, school work and internships to their clothes, travel, transportation, play and health and safety.
But ATSI has struggled at times to juggle these responsibilities.
ATSI sometimes fell behind on bills, which left the campus without services, from student uniforms and office and school supplies to more critical ones such as medical waste pick-up and fire-alarm maintenance.
Frank Frizell, owner of the Cleveland-based National Firesafety Systems Inc., says ATSI has missed monthly payments, delaying alarm maintenance.
“This is life safety,” Frizell said. “Unfortunately, they have waited a month or more to make their account current at times.”
The Greater Cleveland Regional Transit Authority cut off credit to ATSI in September 2009 after it racked up a $50,000 unpaid tab for bus passes for Job Corps students.
Judile Jefferies, a former secretary for five years at the academy health clinic, said other bills went unpaid.
After ATSI failed to pay its medical waste collection company in late 2009, she said she found collection boxes — including needles and soiled supplies used to conduct pap smears and other tests — in a closet stacked to the ceiling.
The health center delayed taking care of students seeking eye exams and glasses because ATSI failed to pay the eye-care provider, Jefferies says.
ATSI fired Jefferies in May 2010. Jefferies said she received a memo blaming her for failing to process medical invoices between 2006 and 2009. She said she opened mail, time-stamped invoices and passed them to a supervisor. She said she was not responsible for the unpaid bills.
Clark Hayes, owner and chief executive officer of ATSI, told The Plain Dealer in an interview Thursday that slow reimbursements from the government are to blame for his cash-flow problems. Federal documents show ATSI has received more than $55 million since 2005.
Hayes said he’s missed bills totaling about $200,000, a small amount compared to the bills he’s paid on time. He insisted that no students have gone without services.
“There is not a kid out there who needs eye glasses that doesn’t have them,” he said.
Federal audit flags questionable payments: The U.S. Department of Labor’s Office of Inspector General found in September that ATSI overcharged the government $1.8 million for overhead expenses related to its federal contracts for 2004 through 2007.
The audit does not address whether ATSI paid its vendors on time, but points to problems within ATSI’s finance department. The audit says the company failed to submit paperwork spelling out its proposed expenses.
Specifically, ATSI charged the government for payments Hayes made to buy out former owners of the company in 2005, the audit says. These payments, totaling about $430,000, were listed as “consulting services” that were never documented, the audit says.
Other flagged charges include:
Nearly $84,000 for company restructuring costs.
Tens of thousands of dollars in travel and meal expenses that weren’t documented or didn’t qualify for reimbursement.
Nearly $66,000 to lease a “luxury vehicle” for Hayes’ personal use.
Two weeks before the audit’s release, Hayes pleaded for more time to collect documents. In a letter, Hayes said he never intended to charge the government for his buyout payments and that his company faces numerous “resource problems” and turnover in the finance department.
Hayes told The Plain Dealer that he was “ignorant” at the time regarding the need to submit overhead cost proposals. He said he will repay the government but plans to produce more receipts to lower the figure cited in the audit.
Hayes, who drives a black Mercedes with the license plate “ATSI,” said his federal contract allows for a car expense, but he erred by failing to register the car in ATSI’s name.
ATSI has run the Cleveland Jobs Corps program since 2000. At that time, the program had operated from the Tudor Arms hotel on Carnegie Avenue and ranked low among the more than 100 Job Corps centers. ATSI earned positive performance reviews and won a second, five-year contract in 2005. To earn reimbursement, ATSI is required to hit benchmarks tied to the number of students who earn high school diplomas and find jobs.
Hayes said he’s befuddled about why ATSI lost its recent bid to keep the contract, noting that the program is ranked 24th in the country for overall performance and that he still earns good reviews.
In the last two years, ATSI lost Job Corps contracts in Detroit and Jacksonville. It will keep running the Cleveland academy through July while it appeals the federal decision to bring in Alutiiq Education and Training.
Job Corps officials in Chicago, who were criticized in the audit for lax oversight, declined to be interviewed. Public records requests The Plain submitted seeking information about ATSI and the Cleveland academy have languished, in part because of ATSI’s refusal to produce some records.
Labor department spokesman Scott Allen responded in writing to some questions and declined to answer others, citing procurement laws and Job Corps’ own investigation that is following the Inspector General’s.
Unruly students disrupt learning: Just after 10 p.m. on April 28, four Job Corps students began arguing with a larger group of non-students outside the fence along E. 140th Street that helps insulate the campus from the surrounding neighborhood, known for gang activity.
Several men hurled garbage, bottles and rocks at the students. Chased away by Job Corps staff, they returned moments later and tried to scale the fence.
Fighting broke out, a brick crashed through a window and the sound of gun shots rang out, according to Cleveland police.
The fighting had stopped when police arrived, and they couldn’t determine if shots had been fired. Officers witnessed academy staff cleaning up debris from the shattered window.
JobCorps documents obtained by The Plain Dealer say the event caused alarm among students.
“Some students were afraid to leave the dorm .. . Obviously some are genuinely scared and we need to be as supportive as possible during this time,” Jennifer Morrison, the academy’s career services director, wrote in an e-mail the next morning to staff.
ATSI’s Behavior Management Office fingered four students for helping incite the incident. Office reports said the students’ behavior resulted “in a riotous situation” that injured students and put staff at risk. The reports recommended that that the four students be expelled.
Student behavior is a dominant issue at the academy. The April 28 incident and others highlight the challenge any Job Corps operator faces: Balancing the program’s goal of helping troubled youth against the mandate that the program provide a safe and enriching environment for all students.
Job Corps students have been accused of assaults, stealing and possessing drugs and knives, Cleveland police reports show. In one case in 2008, two students were arrested after nine federal gas credit cards were reported stolen from the Job Corps offices and showed up in use at a gas station across from the academy.
ATSI e-mails and reports say some students have been caught fighting, bullying, testing positive for drug use, damaging academy property, conducting gang activity, skipping classes and being verbally abusive to teachers and staff. In many cases, the Behavior Management Office recommended that the students be expelled.
Federal Job Corps officials downplayed the April 28 incident and suggested that unruly behavior is not a major issue.
“The center’s investigation determined that a riotous situation never existed,” spokesman Allen said in an e-mail.
Allen said the author of the internal report was mistaken and “used the word riot within earshot of other students who in turn became concerned.”
The Job Corps has a zero-tolerance policy toward violence and drug offenses, and the Cleveland program has a “high disciplinary dismissal rate” compared to other programs in the region, Allen said, noting the program dismissed 368 students from January 2008 through June 2010.
Allen also highlighted a recent survey that shows that 98.7 percent of the students said they feel safe on the Cleveland campus.
“That would probably not be the case if students and staff were being bullied or abused,” he said.
Allen also said the Job Corps environment — which serves a wide range of students, from gifted students to those with significant cognitive dysfunction – can be challenging and suggested that this fuels staff discontent.
“For staff members who believe these students need strict discipline and harsh consequences, the program can be frustrating,” Allen said.
Hayes says he doesn’t tolerate violence or drug use among students but he will not dismiss someone for a few infractions involving smoking cigarettes or using cell phones in class.
“I’m willing to deal with every kid that comes in there and we will deal with the kid fairly,” he said.
He also rejects charges of tension between students and staff and that behavior problems are a dominant issue.
“I don’t see it permeating the environment and tone of the center,” he said. “I see a history of a Job Corps center and program in Cleveland that by all indications has been better than it’s ever been.”
But seven former and current ATSI employees tell a different story.
They say students routinely flouted basic rules at the expense of those who wanted to learn and verbally abused staff and teachers with few repercussions.
An assessment of the academic program — initiated by ATSI in 2008 in preparation for accreditation and conducted by education consultant AdvancED — supports the former employees’ claims.
While the report praised the program’s curriculum and teaching methods, it said the school’s greatest challenges “are maintaining staff morale and managing student behavior.”
“In the interest of presenting favorable statistics in the monthly comparison of Job Corps centers, which compete for federal funding, poor behavior is often tolerated rather than addressed,” the assessment said.
A risk consultant who visited the academy in 2009 for an insurance liability review wrote in an e-mail to an ATSI official: “Student violence or students acting out against staff members over the past year has been shown to be a major exposure to loss. Although the Detroit Center, which had the most cases, is no longer under ATSI control, each center should be assessed for its potential for violence and adequate methods to defuse or avoid confrontations between staff and students.”
Also in 2009, Cleveland Job Corps volunteer tutor David Atton wrote a six-page letter to Hayes blasting ATSI for, among other things, failing to check bad behavior.
“Incident reports of unacceptable student behavior by the academic staff were rarely, if ever, acted upon by the administration,” wrote Atton, a retired senior BP executive who had been tutoring at the academy for about nine months. “The academic staff I spoke with believed that the money-making objectives of the management company were better served by keeping the culprits in the program.”
Atton also suggested that the ATSI staff passed students through the program to qualify for reimbursement. ( This sounds a lot like the for profit online schools or degree mills: ITT Tech, Everest college, Carrington college, Brown Mackie college, Remington college, Brookline college, American InterContinental University, Devry University, and University of Phoenix) “When students were close to getting the credits needed for their high school diploma, tests were graded based on only completing, correctly, a small proportion of all the questions,” Atton wrote. “Students were allowed to undertake … computer learning in a rushed way to obtain scores required to graduate within a particular time frame.”
Hayes said he was never made aware of such charges and that Job Corps teachers have never passed students who didn’t deserve it. He said curriculum is built around individual students who received the attention and preparation they needed to pass.
Atton sent a copy of the letter to Ohio’s U.S. Senators Sherrod Brown and George Voinovich, who has since retired, Warrensville Heights Congresswoman Marcia Fudge and the Inspector General’s office. He also sent a follow-up letter to Hayes.
Atton told The Plain Dealer he expected someone to respond — but he never heard back from anyone.
Plain Dealer Reporter Gabriel Baird and news researcher JoEllen Corrigan contributed to this story.