OfficeofEconomicDevelopment:
DivisionofWorkforceDevelopment
Follow‐upReport
October2014
Office of the Auditor Audit Services Division City and County of Denver Dennis J. Gallagher Auditor The Auditor of the City and County of Denver is independently elected by the citizens of Denver. He is responsible for examining and evaluating the operations of City agencies for the purpose of ensuring the proper and efficient use of City resources and providing other audit services and information to City Council, the Mayor and the public to improve all aspects of Denver’s government. He also chairs the City’s Audit Committee. The Audit Committee is chaired by the Auditor and consists of seven members. The Audit Committee assists the Auditor in his oversight responsibilities of the integrity of the City’s finances and operations, including the integrity of the City’s financial statements. The Audit Committee is structured in a manner that ensures the independent oversight of City operations, thereby enhancing citizen confidence and avoiding any appearance of a conflict of interest. Audit Committee Dennis Gallagher, Chair Robert Bishop Maurice Goodgaine Jeffrey Hart Leslie Mitchell Timothy O’Brien, Vice‐Chair Rudolfo Payan Audit Staff Audrey Donovan, Deputy Director, CIA, CGAP, CRMA Dawn Wiseman, Audit Supervisor, CRMA Emily Owens, Senior Auditor, MPA You can obtain copies of this report by contacting us at: Office of the Auditor 201 West Colfax Avenue, Department 705  Denver CO, 80202 (720) 913‐5000  Fax (720) 913‐5247 Or download and view an electronic copy by visiting our website at: www.denvergov.org/auditor
______ _____________ City and County of Denver
201 West Colfax Avenue, Department 705  Denver, Colorado 80202  720-913-5000 
FAX 720-913-5247  www.denvergov.org/auditor
Dennis J. Gallagher
Auditor
October 16, 2014 Paul Washington; Director Office of Economic Development City and County of Denver Re: Audit Follow‐Up Report Dear Mr. Washington: In keeping with professional auditing standards and the Audit Services Division’s policy, as authorized by D.R.M.C. § 20‐276, our Division has a responsibility to monitor and follow‐up on audit recommendations to ensure audit findings are being addressed and to aid us in planning future audits. This report is to inform you that we have completed our follow‐up effort for the Office of Economic Development: Division of Workforce Development audit issued March 21, 2013. Our review determined that the Office of Economic Development (OED) has adequately implemented all five recommendations made in the audit report. For your reference, this report includes a Highlights page that provides background and summary information on the original audit and the completed follow‐up effort. Following the Highlights page is a detailed implementation status update for each recommendation. This concludes audit follow‐up work related to this audit. I would like to express our sincere appreciation to you and to Office of Economic Development personnel who assisted us throughout the audit and follow‐up process. If you have any questions, please feel free to contact me at 720‐913‐5029 or Dawn Wiseman, Internal Audit Supervisor, at 720‐913‐5069. Sincerely, Kip Memmott, MA, CGAP, CRMA Director of Audit Services KRM/leo cc: Honorable Michael Hancock, Mayor Honorable Members of City Council Members of Audit Committee Ms. Cary Kennedy, Deputy Mayor, Chief Financial Officer Ms. Janice Sinden, Chief of Staff To promote open, accountable, efficient and effective government by performing impartial reviews and other audit services
that provide objective and useful information to improve decision making by management and the people.
We will monitor and report on recommendations and progress towards their implementation.
Mr. David P. Edinger, Chief Performance Officer Ms. Beth Machann, Controller Mr. Scott Martinez, City Attorney Ms. Janna Young, City Council Executive Staff Director Mr. L. Michael Henry, Staff Director, Board of Ethics Ms. Denise Bryant, Director, Workforce Development Ms. Ledy Garcia‐Eckstein, OED Management Analyst To promote open, accountable, efficient and effective government by performing impartial reviews and other audit services
that provide objective and useful information to improve decision making by management and the people.
We will monitor and report on recommendations and progress towards their implementation.
City and County of Denver – Office of the Auditor Audit Services Division REPORT HIGHLIGHTS Office of Economic Development: Division of Workforce Development Follow‐up Report: October 2014 The Office of Economic Development has implemented all five recommendations made in the March 2013 audit report.
Background Highlights from Original Audit In 2004, Executive Order 28 created the new Office of Economic Development (OED) that combined several independent offices housed within the Mayor’s Office—Economic Development and International Trade, Workforce Development, Contract Compliance—with Housing and Neighborhood Development Services. This restructuring aimed to integrate dispersed economic development activities to facilitate economic growth. OED’s Division of Workforce Development (Division) assists job seekers and businesses through the work of four sections: Workforce Center Operations, Youth Services, Business Services, and the Temporary Assistance for Needy Families (TANF). The Division of Workforce Development Requires Sustained Leadership Several factors have impacted the consistency and impact of OED’s workforce development programs including the classification of the Division’s Director position and the continued use of Acting Directors to lead the Division. The Director has been an appointed position for more than ten years, which means the Division cannot benefit from consistent leadership due to the regular change of Division Director with each new Mayoral administration. Further, relying on an Acting Director to lead the Division suggests a disinterest in the Division’s work by City leadership. Purpose The purpose of the audit was to:  Assess the strategies that the Division has in place to foster effective partnerships and to maximize and increase funding; and  Determine how the Division measures the impacts of its programs and how it conducts outreach to potential funders, employers, and job seekers. OED Should Better Align its Economic and Workforce Development Strategies Poor integration of the Division’s workforce programs within OED’s strategic plan and other activities reduces the Division’s impact. Research suggests that increased alignment between economic development and workforce development creates more impactful and positive changes to local economies; this integration would promote economic development while reducing unemployment, thus decreasing the demand for unemployment and social services. Increased collaboration and partnerships with industry and community partners will also help the implementation of effective workforce development initiatives. The Division Needs a Comprehensive Plan for Data Analysis and Reporting Data analyses and reporting mechanisms do not allow the Division to measure program impacts or enhance outreach strategies to potential funders and partners. A comprehensive plan to guide OED’s workforce development analyses and reporting activities is needed. ●
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Findings at Follow‐up OED re‐classified the Workforce Development Director as a career position and hired a Director to lead the Division. OED also increased its integration of workforce development with other departments, utilized more partnerships with key industry sectors to benefit Denver’s workforce, and identified specific analyses that will facilitate evaluations of its program effectiveness. ●
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For a complete copy of this report, visit www.denvergov.org/auditor Audit Contact Person: Dawn Wiseman |720.913.5069 | [email protected] Recommendations: Status of Implementation Recommendation Auditee Action Status Finding 1: Sustained Leadership and Improved Strategic Planning Will Improve Workforce Development Program Effectiveness and Impact 1.1 1.2 1.3 The Mayor should conduct a search for and make a permanent appointment of a Director for the Division of Workforce Development as soon as possible. Ideally, the selected candidate will have experience in corporate and nonprofit relationship‐building and fundraising, in addition to a workforce development background.
The Mayor should consider making the position of Workforce Development Director a permanent career position to provide long‐term stability and sustainability within the Division.
The Director of OED should make a concerted effort to thread workforce development throughout department‐wide strategies to promote better integration of the Division into OED. The Office of Economic Development (OED) initially advertised the position of Director for the Division of Workforce Development in July 2013. After multiple job announcements and interview rounds, a new Director was hired and assumed leadership of the Division in July 2014. Implemented
The Workforce Development Director position, a Manager II, was designated as a permanent career position by the Mayor, effective July 1, 2013. Implemented
OED’s most recent strategic plan—
Jumpstart 2014—shows workforce development integrated with several of OED’s seven “pillars” of economic development. Through its Strategic Lending pillar, OED will require all OED‐funded businesses to list any entry‐level positions in the workforce job system “Connecting Colorado.” Also, OED is developing workforce training strategies for the manufacturing sector through its Key Strategic Projects pillar. Implemented
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Recommendations: Status of Implementation 1.4 1.5 Recommendation Auditee Action Status The Division Director should develop long‐term strategies to foster and maintain partnerships with influential and engaged industry and community organizations. Such a strategy should include cooperating with internal groups such as OED's Business Development organization and the Denver Office of Strategic Partnerships to develop long‐term partnerships. Such partnerships can assist workforce development in fundraising and relationship‐
building. The Division Director should create a plan to provide comprehensive data analysis and standardized impact reporting that will be useful to potential partners and funders and provide the Workforce Investment Board with information to make more informed decisions. OED has partnered with a variety of groups including the Community College of Denver and the City’s Development Services group to grow Denver’s skilled workforce and to facilitate business success. Additionally, OED management meets with Denver’s commercial property owners on an annual basis and designated staff participate in industry trade groups and local chambers of commerce to strengthen relationships and cultivate job opportunities. Implemented
In addition to hiring a new economist charged with carrying out extensive analyses, OED’s new Division Director identified program analysis goals and measures to be utilized over the coming year. For example, the Division will assess the effectiveness of various programs providing wraparound services as well as evaluate participant recidivism rates.1 In addition, Denver’s Workforce Investment Board developed a strategic action plan that highlights the importance of using performance data to drive solutions.2 Specific action items referenced in the plan include a survey of employers and a study of additional services needed for low literacy individuals and persons with additional needs. Implemented
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Wraparound services imply that the program user receives several forms of assistance aimed at achieving a certain goal. For example, workforce‐related wraparound services may include job readiness training, job counseling, as well as childcare and transportation services; recidivism refers to the repeated need for a service or program after an individual has finished a program or ceased needing services. 2
Denver’s Workforce Investment Board provides policy guidance and program oversight for all government‐funded workforce programs, including the City’s Workforce Centers. The Board consists of individuals from local businesses, economic development agencies, labor groups, educational agencies, and community‐based organizations. City and County of Denver
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Conclusion The Office of Economic Development (OED) has implemented all five recommendations made in the Office of Economic Development: Division of Workforce Development audit report. Although the department has taken the necessary steps to implement the audit recommendations, we encourage OED to continue integrating workforce development into the rest of the department’s strategies and priorities whenever possible to maximize the impact of OED’s workforce programs. On behalf of the citizens of the City and County of Denver, we thank staff and leadership from OED and the Division of Workforce Development for their cooperation during our follow‐up effort and their dedicated public service. Page 3
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