State economic development officials are taking issue with an auditor’s report that says Vermont isn't doing enough to make sure employers are meeting the requirements of a grant program.
The Vermont Training Program awards state grants to employers and those who provide training to employees to cover a portion of training costs. The annual budget for the program is $1.3 million, but according to State Auditor Doug Hoffer, the state doesn’t really know what it gets for the money.
“These are taxpayer dollars and taxpayers have the right to know that they’re being used in compliance with the statute and that they’re achieving the goals intended,” he says.
In Hoffer’s view the state relies too much on the word of employers and is not following best practices by verifying on its own that companies receiving the grants are doing what’s required.
“The program administrators for their part need to take seriously the guidance on internal control and start verifying and validating some of the information submitted,” Hoffer says.
There are a number of criteria companies have to meet. There are certain wage requirements, and the grants must be used for training that a company wouldn’t typically do on its own.
Hoffer says there are reasons to question whether recipients are meeting those requirements.
"These are taxpayer dollars and taxpayers have the right to know that they're being used in compliance with the statute and that they're achieving the goals intended." - Doug Hoffer, State Auditor
For example, he says, a significant share of the grant money has gone to hire new employees at large Vermont companies that have been growing, including Keurig Green Mountain, GE and Dealer.com. Hoffer says it's routine for companies to train new employees and it shouldn’t involve state money.
But the Agency of Commerce and Community Development, which administers the program, has a different view. Deputy Director Lucy Leriche says the decision about whether to hire new people could be based partly on whether there’s grant money available to train them.
Leriche takes issue with Hoffer’s claim that her agency doesn’t do enough to verify companies are meeting the requirements of the grant. She says the oversight has been beefed up last summer to include a review committee.
“The review process that we put in place we feel really good about. Not only do we ask employers to self-certify that the training would not have happened, we also do in-person, one-on-one interviews with the employer to really try and get at this question,” Leriche says.
"The review process that we put in place we feel really good about. Not only do we ask employers to self-certify that the training would not have happened, we also do in-person, one-on-one interviews." - Lucy Leriche, Agency of Commerce and Community Development
Hoffer isn’t convinced that’s an improvement.
“Speaking with the applicant, who, by definition is self-interested, is not the same as independent verification,” he says.
At the core of the tension between Hoffer and those who administer the program is how much verification is enough. Hoffer says best practices dictate that the agency do more to make sure the money is well-spent.
Lucy Leriche says she agrees, but there are limits to what can be done.
“The fine line is how much of the resources do we use in really documenting every single thing and insuring 100 percent accountability and how much do we put into training Vermonters and growing business and that’s where the tension is,” she says.
More than 260 businesses have received training grants from the state in the past decade.
This story was revised on 9/16/15 at 9:30 AM to reflect corrected information provide by the Agency of Commercen and Community Development. Program changes were made in summer of 2014, not this summer.
