State jobs agency faltering at its job

Two years after shift, thousands of disabled wait for training.

By Chris Joyner cjoyner@ajc.com

In dismantling much of the state Labor Department two years ago, Gov. Nathan Deal proposed a new agency to han dle one of Labor’s many tasks: job training for the unemployed and disabled.

The Labor Department had not done a stellar job of running the program but, even so, the proposal left the disabled community howling. Labor commissioners present and past warned that the new Georgia Vocational Rehabilitation Agency was not a good idea: one called it “an unforgivable sin.”

Supporters of the new agency dismissed the concerns, saying the change was a simple “lift and shift.”

“Nobody loses a job. Nobody loses services,” said Rep. Tom McCall, R-Elberton, who sponsored the bill in the state House.

Two years later, jobs have been lost and services curtailed.

Thousands of disabled Georgians wait months just to get an appointment so they can be evaluated for training services.

For a year the agency froze out new clients while it sorted out paperwork problems with the federal government and its own budget issues. It laid off 18 staff members and forced training contractors to let go some of their employees because it couldn’t get money to them.

Now leaders of nonprofits who do much of the training are trying to convince lawmakers to commit more money to the department to help plow through the backlog. Bill Woolf, senior vice president at the Center for the Visually Impaired, an Atlanta-based nonprofit that contracts with GVRA, called the transition “a disaster.”

“It never went as intended or explained,” he said. “It happened so quickly that many of the hairy details were not attended to.”

It’s just slow. That’s the way it is.’

Rebecca Smith of Roswell, who began losing her sight in middle school because of a genetic condition, is one of those thousands of Georgians who have been put off by the agency for months.

At first she could read small print by holding it close to her failing eyes. In her 20s her eyesight got much worse and now reading is “almost impossible,” she said.

Because of her impairment, Smith, 40, has been out of the workforce for seven years. She and her husband have three sons, two with visual impairments of their own. In 2012, her husband was medically disabled, and the family has been surviving on disability and Social Security payments ever since.

“It’s really hard. Basically we’ve maxed out our income,” Smith said. “I really needed to get out there and get a job to help support my family.”

Smith has been waiting for specialized training to help her cope with her limited vision since she was was evaluated by the GVRA shortly before Thanksgiving — in 2012. She finally got in to see a caseworker a few weeks ago and set up another evaluation.

“It’s just slow. That’s the way it is,” she said.

GVRA Executive Director Greg Schmieg, who has run the troubled agency since it was moved out of the Department of Labor more than 19 months ago, said he is aware of stories like Smith’s.

“I’m sure there are examples like that and I’m not happy about that,” he said.

The lift and shift wasn’t perfect

Schmieg has a lot to be unhappy about. The state’s job training efforts had problems even before the program moved out of the Labor Department. Over four years, including years before the new agency was created, the state left at least $82 million in federal training funds on the table — money that was taken back and distributed to other states.

In addition, the federal government penalized the state another $10.5 million for failing to maintain stable funding to the program over several fiscal years. The state portion of the budget for vocational rehabilitation fell 22 percent — from $16.6 million in 2009 to $12.8 million in 2012.

GVRA receives about $4 in federal funds for each $1 the state spends and distributes the money among private contractors who provide training. Schmieg says the state doesn’t put in enough money to max out its federal funding.

But while money is the root of GVRA’s problems, it is not the full story.

The agency came into being on July 1, 2012, as part of an overall gutting of the Labor Department. Deal had pushed the Legislature to shift more than $400 million in state and federal workforce money out from under Labor Commissioner Mark Butler, an independently elected statewide official, and into areas under the governor’s control.

As part of the move, the new agency was administratively assigned to the Department of Human Services. The governor nominated Schmieg, then the director of the Warm Springs Institute, to run it and asked the board he just appointed to approve him.

Dawn Randolph, a Capitol lobbyist for the Georgia Association of Training, Employment and Supports, a coalition of nonprofits that contract with GVRA to perform much of the workforce training for the disabled, said things didn’t go exactly as planned.

“The ‘lift and shift’ wasn’t perfect,” she said.

When the agency moved out of the Labor Department it lost important support positions that had been supplied by its former parent, including budget and personnel expertise. It also lost access to Labor Department funds which had been used as leverage to draw down millions more in federal matching dollars.

In September 2012, faced with a 3 percent budget cut ordered by the governor, Schmieg recommended to his board that about half of the agency’s 36 administrative employees be laid off.

Then things got worse.

‘A couple of hundred people writing checks

That same month, the U.S. Rehabilitation Services Administration notified state officials that the department had been classified as “high risk” over a series of inaccurate or incomplete reports filed over two years showing the state had put up matching funds for the federal dollars already spent.

At an Oct. 10, 2012, board meeting, Schmieg said the “best estimate” of the situation was that GVRA, while under the Labor Department, drew down $55 million in federal funding “without knowing if there were enough state matching funds to support these (federal) funds.”

In a recent interview, Schmieg said he was unaware the state’s federal funding was at risk until it was too late.

“All we knew was they couldn’t release money to us until they had accurate reporting by the prior agency,” he said.

Schmieg responded by freezing services to any new GVRA clients while they worked with Labor Department officials to get the required reports to the feds. But the situation got far worse in December when, Schmieg said, he discovered that his agency’s vocational rehabilitation division had spent 80 percent of its budget less than halfway through the state’s fiscal year.

“We had some providers that had gotten so many referrals that they had gone through their contractors’ budgets,” he said. “There was no centralized system to identify who was keeping record of that checkbook. You had a couple of hundred people in the field writing checks.”

The division was spending at a $90 million “pace,” Schmieg said, but it only had a budget of $70 million.

“I would say that pace of spending was a carryover from the Department of Labor,” he said.

By April 2013, GVRA had shifted about $2 million from its personnel budget to cover limited rehabilitation services, froze hiring and all employee travel, and informed its contractors that their contracts would be canceled “due to lack of funds.”

For a full year the agency continued to provide and pay for training for the people already in the GVRA system, but no new clients were allowed in. GVRA figures show the agency served 36,340 people in the 2013 fiscal year, which ended June 30, a 13 percent decrease over the prior year. The agency had shown modest increases in clients served the four prior fiscal years.

Things likely will get worse when the current year’s numbers are tallied, since thousands more clients have yet to begin training.

The agency counts more than 10,000 disabled Georgians who have yet to receive training they’ve applied for.

Laid off eight of the finest folks I know’

While GVRA complains that its budget is not large enough to maximize their potential federal grant, agency spreadsheets show contractors are getting referrals at such a slow pace that only about a third of their budget was expended by the end of the calendar year.

Schmieg said he thinks the pace will pick up in the final months of the state’s fiscal year, which ends June 30.

“Our goal is to spend every penny that has been allocated on services,” he said.

The problems have not only had an effect on the unemployed and disabled, but on the organizations that perform the very specialized training to get them back in the workforce.

“We’ve laid off eight of the finest folks I know,” said Woolf.

The layoffs are about half of the nonprofit’s rehabilitation staff. Even if GVRA were to return to pre-2012 operations, Woolf said it would take time to replace the lost workers, most of whom was certified for the specialized training.

“It took 18-24 months to find some of them,” he said. “It’s not like demand rises and you go hire folks. It’s real different.”

Things have gotten so much worse

The situation is much the same at Nobis Works in Marietta. The nonprofit, founded in 1977 with assistance of former Atlanta Falcons linebacker Tommy Nobis, helps all types of disabled people return to the workforce. When GVRA backed out of its contract with Nobis Works, the center laid off half of its rehabilitation staff and instituted furloughs for the rest.

“We kept trying to hold on to our core people because they are hard to replace because of their specialty,” longtime CEO and President Connie Kirk said.

The past year has been demoralizing, she said.

“There were so many Georgians who did not get served just because funding has been cut,” she said. “We are hoping the this message can get to the decision makers in the Legislature.”

Kirk said 69 percent of adults with disabilities in metro Atlanta are unemployed. The backlog created by funding problems at GVRA has exacerbated an already bad situation, she said.

“Things have gotten so much worse for Georgians with disabilities,” she said.

In the past year, Kirk said the Nobis center served about 700 people, about 30 percent fewer than in 2012.

“We’ve heard many, many times, ‘I’ve been waiting over a year,’” said Becky Ketts, No-bis Works rehabilitation services director. “I could challenge anyone to be told you’ve got to wait nine to 12 months to work and see if they make it.”

Freeze on new clients lifted Feb. 1

Schmieg told his board that he was reaching out to other state agencies to find partnerships that could help attract more federal money, including working training prisoners and using Department of Correction money as the state match.

Deal’s spokesman Brian Robinson said there are some signs that the worst is over for GVRA. For instance, the freeze on new clients officially ended Feb. 1.

“We’re working with our providers to expedite the backlog, so that these clients will receive services as quickly as possible,” Robinson said. “We’re looking at all areas the governor has purview over to maximize federal draw downs, in an appropriate fashion.”

Robinson said the change has not been all bad either. Personnel costs at GVRA are 37 percent of its budget instead of 55 percent when it was under the Labor Department, he said.

“Those savings go directly to client services,” he said.

However, Deal has not put more money directly in the GVRA budget for that purpose. Schmieg said he does not expect a larger budget. Instead he hopes to press his case with the Legislature for a larger state match in future budgets.

“We fully support the governor’s proposed budget, but part of this is educating the Legislature on the value of (vocational rehabilitation),” he said. “The cost of unemployment in this state — particularly for somebody with disabilities

— is pretty significant.”