lars to offset the rising costs of general relief. Everything that I've heard here and other testimony and every statement that I read here indicates that, if I were sitting in your position, I would have no doubt about it. I would have no doubt whatsoever. The evidence to me here presented by the people themselves is overwhelming, that it was intended to do that. I don't know how you can sit there and still say that it wasn't or that it's not conclusive. Mr. GROSSENBACHER. I'm sorry. I did not mean to speak to their intent. I was speaking to what I believe is the actuality, which I believe we heard here today. Because of the large number of unanticipated general assistance recipients, they have not, in fact, been able to surplant their county costs. Mr. MARTINEZ. It's just simply because there was a cost overrun that they didn't anticipate, but the fact is that they were then allowed to continue on the attitude and the policy they've developed that they would then make the adjustments. Let me give you a better example of that. When they do the allocations of the $12 million, in percentages they include the youth in there which, at least by their own testimony, 50 percent of those youth were never eligible for welfare. So then why would they be included in that figure to reduce the number-excuse me― backward. That at least 50 percent of those youth were eligible for welfare and yet they're not included in that welfare percentage. They're excluded because they're included only in a youth percentage, 44 percent. But by their statement-Harry Hufford's statement here, 50 percent of that youth-that they term "youth" were welfare recipients. So that, if you took the appropriate number, whatever the number was, and add that number-that 50 percent that they're talking about to it, it would increase that moneyeven increase that money being used to subsidize the welfare from JTPA money. So that it would mean that their intent-even their figures in what they run short are not accurate. They have not done an accurate job in reporting their figures. In effect, that shortage that they have may not be as great as they claim it is. Now they're claiming that shortage in order to justify that they are, in effect, not using that money to subsidize that program is what you just stated. I think they are. We won't know that unless we know the figures-what number of that youth were because they say 50 percent of it. So, if we knew the numbers, then we could properly take that money and allocate it to that general recipient. Mr. GROSSENBACHER. We will be looking very closely at the first management information report from Los Angeles County which we have just received. They have been having some problems with the output side of their fiscal management information system. They have assured us that we will shortly get fiscal management reports. We are going to be looking very carefully at those reports to determine whether there are any inappropriate uses of ĴTPA funds, and to make sure that, at the bottom line, JTPA eligibles from all the required groups are being served and that the performance standards are, in fact, met. I think we have that same concern that the committee does in that regard. Mr. MARTINEZ. I would hope, when you look at the figures, you don't just take for word that every figure is where it should be and reflect what they want-what they're telling you it reflects. Mr. GROSSENBACHER. Because of concerns about issues such as that, we have had members of our fiscal management staff recently on site with the Los Angeles staff working on their fiscal management reporting system so that we can get the information we need. Mr. HAWKINS. Mr. Dymally. Mr. DYMALLY. Mr. Grossenbacher, I just have two quick questions. One, are there any Hispanics or blacks on the training council? Mr. GROSSENBACHER. On the State job training coordinating council? Mr. DYMALLY. Yes. Mr. GROSSENBACHER. Yes. Mr. DYMALLY. Was the Department influenced in its decision about the county's program by the fact that the three board members are personal friends of the Governor? Mr. GROSSENBACHER. I do not believe that to be the case. One of the key things that I think we have to keep in mind here is that there was an incredible time crunch when these plans came in and were being approved. We had as our major objective during that process getting JTPA up and running in California. The staff review on the plans was compressed. The council subcommittees that reviewed the plan worked several days at a crack on very tight time frames. Quite frankly, we did not have time to consider those kinds of political issues. It may be that we were saved from considering them by the time frames that we were under. Mr. DYMALLY. One final observation. Under Jerry Brown, small was beautiful. I think under this administration, new is not good. Under the old system, under CETA and SWETA, Compton had a job training program with the support of the private sector. Under this program, we don't even know who we should call. I mean we got wiped out completely. The Congress defunded CETA. The Governor vetoed SWETA. The private sector's response was, "If the government can't help you, we aren't in the job of totally funding groups," so they pulled out. Now with JTPA, we don't even know the phone number. So Compton, which is the most depressed city in the county, doesn't benefit from this program and that bothers me. Ms. PEARSON. May I answer that or partially answer that question? Compton applied to be an independent SDA. They were not large enough to qualify. I recall at our subcommittee hearings we discussed with the Compton representative more than once their option of joining with Torrance, Carson, and Lomita in a consortium, and then the county proposed that Compton be part of the county instead, as they did with another independent SDA that wanted to be proposed. It was their choice to go with the county. We had actually suggested that they join up with the other three cities- Mr. DYMALLY. Well, that was an incompatible marriage. MS. PEARSON. Yes; it's a terrible problem. Mr. DYMALLY. I listen to Mr. Shaw boasting about his plan in San Gabriel and I'm very happy for him, but that is a suburban population, and here the most depressed city in the county does not benefit from this program. That bothers me. Not only that, we have suffered a setback because the electronics industry has ceased to fund our program which was funded by CETA and CWETA. MS. PEARSON. That bothers us too. Mr. HERMAN. I thought you were bragging a few minutes ago of having so many members on the- Mr. DYMALLY. NO. I- Mr. HERMAN [continuing]. Council from your area, and now you are talking about them. Mr. DYMALLY. It took the steam out of me because I was about to attack them and then I see all my friends on this council. Ms. PEARSON. I might say that we do have blacks and Hispanics on the council. And, in fact, Ken Smith, whom I think you know, is quite outspoken, and so is Ernie Falger. I mean the people on there are not silent. We are a bunch of independent extroverts and the staff has trouble. Mr. DYMALLY. The point I made earlier is that-it took the steam. out of my question because I looked and I saw all of my friends there and yet we are suffering. I have to conclude that the system isn't working in our favor at all. Mr. HAWKINS. You'd better select better friends. [Laughter.] Mr. Grossenbacher, I would like to ask you about the results that have been obtained in the first quarter, which we are quite interested in, regarding the characteristics and the placements that you mentioned on a statewide basis. We'd like to get some indication of who has benefited, as well as the demographics of those who have benefited and the type of jobs. But I won't get into that this morning. I think it would just prolong the hearing. We have other witnesses. But I would hope that this type of information could be furnished to the committee, to the staff of the committee. It certainly should be part of our record, if you will. Mr. GROSSENBACHER. We will forward it to the staff. Mr. HAWKINS. Thank you. May I thank the witnesses for their testimony in response to our requests. MS. PEARSON. Thank you very much. Mr. GROSSENBACHER. Thank you. Mr. HAWKINS. The committee will take a 3-minute break at this time. By that, we mean a very limited break, so don't think we are adjourned by any means. [Recess.] Mr. HAWKINS. The committee is called back to order. The next and final panel this afternoon is the service providers and recipients. Would these witnesses kindly be seated at the table: Ms. Carmen Estrada, Western Center on Law & Poverty; Mr. Howard Boyle, chair of the Los Angeles Regional Coalition of Service Providers; Mr. Byron Gross, staff attorney, Legal Aid Foundation of Los Angeles; Mr. Jack Grubbs, project director, Westside Center for Independent Living, computer training project. We will take them in the order in which their names were called. First is Carmen Estrada, Western Center on Law & Poverty. Ms. Estrada, we look forward to your testimony, and we appreciate your contribution. [Prepared statement of Karl Grossenbacher follows:] Prepared Statement of Karl Grossenbacher, Chief, Job Training PartnERSHIP OFFICE, EMPLOyment Development Department, State of California Chairman Hawkins and members of the subcommittee, my name is Karl Grossenbacher, I am the Chief of the Job Training Partnership Office in the Employment Development Department which has been designated by the Governor as the agency to administer the Job Training Partnership Act. I have been asked here today to provide testimony with respect to the procedures utilized by the state to assure compliance with the Job Training Partnership Act and to address the findings of the Director with respect to the complaint by the Western Center on Law and Poverty. As background for my testimony I would like to emphasize that the Job Training Partnership Act has been operative for a period of only four months. The program in the State of California is off to a good start, and based on the data available is operating effectively even though we have experienced a few start-up problems that are typical in the start-up of programs of this scope. The Job Training Partnership Act represents a change of focus for employment and training funded by the federal government. It represents a dramatic change from its predecessor CETA in that it measures the success of the program based on performance. Performance is measured by standards involving placement of trained individuals which are determined by the Department of Labor and may be adjusted by the state. To specifically address the areas requested by the committee; the system established in California to assure compliance with the Act may be broken down into six major areas: 1. Plan review by EDD, the State Council and approved by the Governor. 2. Fiscal management system. 3. Management information system. 4. Field liaison staff. 5. Audit. 6. Director's independent investigation under state law. The purpose of the fiscal management system is to monitor the adherence to generally accepted accounting procedures including day-to-day cash management by the service delivery areas. The management information systems collects and collates fiscal and participant data submitted by SDA's and analyzed EDD staff quarterly. The field liaison staff provide face-to-face contact between the service delivery areas and EDD. Currently, we have ten individuals in this capacity. In addition to review of reports submitted by SDA's, the field liaison staff conduct on-site visits to the SDAs each quarter. Their on-site visits are performed in accordance with a Monitoring Guide which EDD has developed. The guide gives instructions on how to conduct a review of SDA's administrative systems and program operations. The audit system is composed of two components: (1) preawards surveys and (2) fiscal compliance audits. The preaward surveys have been completed on all 50 service delivery areas and the department is in the process of developing an audit plan and standards which will audit each service delivery area at least every 2 years. The state implementing legislation, the Family Economic Security Act, requires the Director of EDD to conduct an independent investigation whenever concerns about inappropriate program design or management are brought to his attention. In the first three months of operation the 50 California Service Areas enrolled a total of 18,574 individuals. A total of 4,414 have been terminated, of which 3,123 or 70.8 percent have found jobs. While a substantial portion of this accomplishment is due to the carry-over of individuals who were enrolled in CETA, it nevertheless represents a substantial achievement by California's Private Industry Councils and Service Delivery Area Administrators who have been responsible for the operation of this new program. The complaint filed by the Western Center on Law and Poverty came under the Director's independent investigation portion of this system. This complaint raised two issues with respect to the Los Angeles SDA; that the plan was improperly devel 32-647 0-84--7 oped and approved at the SDA level and that the plan improperly "targets" general relief recipients. The Director concluded that there were no violations of the Act and so advised the complainant. I understand that you wish me to address the specific approval process for the Los Angeles County SDA plan. EDD staff review identified the segments as required by JTPA. This brought to the attention of the Council Review Committee which identified four issues that had to be resolved before the plan could be approved: The narrative had to be rewritten to reflect service to groups other than General Assistance recipients. The Private Industry Council, Chief Elected Official Agreement had to be provided. The Plan had to describe the process for selection of service providers. The statistics in Table C III should be adjusted to reflect the new narrative. The requested changes were made and the Los Angeles County Plan was approved. JTPA is being implemented and administered in a manner consistent with the Congressional mandate for local level planning and administration. Within the limited authority afforded to the Governor by the Act, the state may not deny approval of plans that satisfy the basic requirements of the Act. Under the Act the state may only disapprove a plan when: (A) corrective measures for deficiencies found in audits or in meeting performance standards from previous years have not been taken or not acceptably underway; (B) the entity proposed to administer the program does not have the capacity to administer the funds; (C) there are inadequate safeguards for the protection of funds received; (D) the plan (or modification) does not comply with a particular provision or provisions of this Act or of regulations of the Secretary under this act; or (E) the plan (or modification) does not comply with the criteria under section 121(b) for coordinating activities under this Act with related program activities. The Los Angeles Plan was approved because it did not violate any of the statutory bases for disapproval. In closing I would like to emphasize that based on the data currently available from our management information system, the program is off to a very highly successful start. I would be more than happy to answer any questions you may have. STATEMENT OF CARMEN ESTRADA, WESTERN CENTER ON LAW & POVERTY, ATTORNEY Ms. ESTRADA. Thank you, gentlemen. It's a pleasure to be here. I'm Carmen Estrada with the Western Center on Law & Poverty. I'm an attorney there and one of cocounsel of the lawsuit against the county for what they have done and the attorney on two of the administrative complaints. I think that we have to look at the JTPA plan and program here in Los Angeles County in two ways. One is what they have proposed to do in their plan. Two is what we keep being told, and that is to wait until the end of the 9-month period and see what they do. We feel clearly at the beginning and now that what they propose to do in their JTPA program plan has various prima facie violations of JTPA as well as the State JTPA coordinating law, FESA. We are very displeased to have not been able to have gotten any favorable results from the State administrative mechanisms. I am going to summarize my testimony. I have two main points to make. First, the question about the adequacy of the targeting standards, that is targeting what significant segments get served under any JTPA program. |