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Job Training: Taxpayers Taken for $24 Bus Ride

How private contracts inflated cost of welfare-to-work programs.

By Andrew MacLeod 4 Sep 2008 |

Andrew MacLeod is The Tyee's Legislative Bureau Chief in Victoria. You can reach him here.

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FOIs reveal billing for services not provided.

At least one company that helps people on welfare find jobs was billing the government for services it never provided, billed more than once when it did provide services and charged an administration fee of as much as $18 to distribute a $6.40 bus ticket.

The details are included in audits of the contractors providing the B.C. Employment Program and were obtained by The Tyee through a freedom of information request. In most cases, the names of the companies and identifying information were removed from the audits prior to their release.

The companies delivering the program are WCG International Consultants Ltd., GT Hiring Solutions (2005) Inc. and the B.C. Society of Training for Health and Employment Opportunities. In August the provincial government cancelled an $8 million contract with WCG to provide services in the Interior, and awarded it to GT Hiring.

The government began auditing the employment programs after they were revamped in 2005. Previously, the government would pay the contractor as long as the client was no longer on welfare, leading critics to suggest the companies may have been paid for some people who left the province, disqualified for welfare or died.

As it was put in an October 2007 information note for Deputy Minister Cairine MacDonald, "The new programming has an increased emphasis on a post-review and audit function to maintain service quality and ensure financial accountability."

The government inspectors visited various offices throughout the province, starting in 2006. At each office they would review several files. In many cases they found the contractors or subcontractors were doing a good job and made only minor suggestions for improvement. At others they had more wide-ranging concerns.

Government billed, no service provided

A Dec 20, 2007 report, which was released without the contractors name being removed, found a JobWave office was billing for services it didn't provide. On the day a participant started, it said, JobWave billed the government for 18.5 hours of service. "These services were billed by the Service Provider but were never provided to the participant," it said.

The report also found JobWave was using identification codes that did not match the ministry's system, "making comparisons impossible."

JobWave was also having clients sign their "confirmation of employment," a form that would allow the company to collect from the government, even though the forms were blank. At one office, all five of the forms the inspectors looked at had been signed even though they were blank.

"The Confirmation of Employment is signed up front as it is sometimes impossible to have participants come back to sign the form once they become employed," the report explained. "I suggested form could be mailed out or [redacted] after hours service could contact participant during non working hours to confirm employment, however, no resolution was achieved."

Same service, several charges

A summary of monitoring made between October and December 2007, which does not name the contractors, said that when some contractors helped clients by providing things to aid their job search, they "charged for every individual support issued, even if multiple supports are being issued at same time." The fee was between $17.50 and $18, the summary said, often on top of a $40 base fee for the visit.

In some cases, the summary said, the administration fees were "near equal to or greater than [the] value of supports issued." For example, it said, the contractor was regularly billing the government $18 just to hand out a $6.40 bus ticket.

In other cases, it said, clients in remote locations had no access to the contractor's resource room with fax machines, phones and computers, but the contractor still billed the government as if the client had used the resources.

A November 2007 update for the ministry said that in some cases participants were using fax machines, phones and computers that belonged to the provincial government, in government offices, and yet the contractor "billed [the] ministry for such service."

There are also examples of contractors spending government money to send people to training that may not have been appropriate for them. In one case a contractor billed $11,000 for services to a single client, including $3,800 for a "workshop that appears unrelated to identified strengths and barriers." The client was later referred to another program where "persistent multiple barriers to employment" were identified.

High price, little help

In other cases, clients got little help. "BCEP Clients are left on there [sic] own to accomplish tasks without any assistance," said a Dec. 14, 2007 report. "One client was using the computer and phone on the second floor, there didn't appear to be any... staff around to provide assistance to the client who appeared to be struggling with his tasks."

For out-of-town clients, getting help via computer, there was even less assistance. "It really isn't clear what and how the service provider delivers service to virtual clients," the report said. "What is described in their service delivery model and what is documented on the client records doesn't match."

In at least some cases, the government employs a prime contractor, such as WCG International Consultants Ltd., which in turn hires subcontractors to provide services in smaller centres throughout the province. A January 2008 review said that in some cases the government was paying the prime contractors for as much as 5.7 per cent more services than what the subcontractors had invoiced.

A plan for future monitoring said there will be more inspections in the fall of 2008, and in the spring the government was going to begin more work verifying the accuracy of invoices from its contractors.

The documents obtained by The Tyee also included several records related to the Employment Program for Persons with Disabilities. Notes from a March 20, 2008 meeting said that WCG, which also holds contracts in that program, was over budget because the company had "misunderstood the budget year."

When WCG's chief operating officer, Darlene Bailey, said the company could stop serving clients to make up for the short fall, a government representative objected. Bailey, the minutes said, assured the official that "first and foremost concern for the client but when the bottom line comes the bottom line comes and we need to work within our means."

There was one item on the agenda they didn't get to: "WCG would like to work with ministry on positive press issues."

A government representative assured them, "We also like to get good news stories."

In August, the government took the $8-million contract to provide BCEP services in the Interior of the province away from WCG and awarded it to a competitor, GT Hiring Solutions (2005) Inc., which runs Destinations.

WCG disputing termination, says ministry

Housing and Social Development Ministry spokesperson Seumas Gordon said the government started doing compliance checks on contractors in the program in July 2006.

"WCG's performance did not meet our expectations in the Interior region and we have provided termination notice in accordance with the contract."

WCG is disputing the termination, he said, and the company and the government are following a dispute resolution process set out in the contract. The government is seeking legal advice, he added.

WCG remains a "valued partner," he said, and still holds eight contracts with the ministry. The company will stop delivering the BCEP in the Interior on Oct. 31, and will be replaced by another contractor November 1.

The Tyee previously reported that GT Hiring, which runs Destinations, is expected to take over the contract.

The ministry is working with WCG to ensure a smooth transition, Gordon said.

Related Tyee stories:


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