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Audit: Grants were mismanaged by Providence workforce program

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PROVIDENCE, R.I. (WPRI) — An independent audit conducted in the wake of a Providence official’s resignation found state and federal grants have been poorly managed by the city.

The audit was conducted by the firm BlumShapiro after the resignation of Brian Hull, who was the director of economic opportunity and the head of Workforce Solutions of Providence/Cranston.

The state’s Department of Labor and Training also halted both state and federal funds to Providence over the summer pending its own review, which spokesperson Angelika Pellegrino says did not find any fraudulent spending.

Hull had pushed a multimillion-dollar no-bid lease deal that was later scrapped. He was briefly placed on leave, then returned to work before resigning on May 31. The deal raised questions about how federal funds were being utilized within the department.

Workforce Solutions received about $3 million last year from the U.S. Labor Department through the Workforce Innovation & Opportunity Act (WIOA), which aims to help young people and those with “significant barriers to employment” get high-quality jobs.

BlumShapiro audited Workforce Solutions, which receives both federal and state grants, and concluded there were issues with tracking the time employees were spending specifically on grant activity, making it difficult to determine if they were properly paid.

“Instead of users actually identifying amount of time worked on a grant, pre-populated timesheets were created to associate users with a standard amount of time applied to a specific line item within a grant,” the audit says.

The audit says there is a “lack of oversight and management” of grants, which makes it hard to measure grant requirements.

The audit also points out “cross-contamination” in personnel costs between the the city’s Office of Economic Opportunity and Workforce Solutions staff.

The City Council eliminated the position of director of economic opportunity after Hull’s resignation.

In response to BlumShapiro’s findings, Mayor Jorge Elorza’s chief of policy Diana Perdomo said the city has already stopped using the pre-populated timesheets.

Perdomo also disputed the audit’s finding that the city is not “overseeing and/or tracking grants at a detailed level.”

“All federal and state grants have extensive reporting program and fiscal requirements to which WSPC adheres,” Perdomo wrote.

She also said Workforce Solutions staff has now been separated from the Office of Economic Opportunity, to avoid cross-contaminations of funds.

Jim Glover has been named interim director of Workforce Solutions, and a search is underway for a permanent director.

Pellegrino said the state DLT did its own “financial monitoring” of the grants following Hull’s resignation, and suspended all grants to Providence and Workforce Solutions from June 14 to Aug. 6.

She said the state “found that no funds were inappropriately spent,” and the $750,000 that had been withheld was released.

The U.S. Labor Department’s Office of Inspector General is also conducting an investigation into Hull’s actions, including the lease deal.

A city spokesperson previously called the federal probe an “audit review,” but emails obtained by Target 12 show a federal special agent described it as an investigation.

Special Agent Gregory Michigan sent an email in May requesting any information the city had to assist him, including disciplinary action taken against Hull. An emailed reply from a city employee shows Michigan was provided with an attached document entitled “Brian Hull overview final,” but the city refused to release the document to Target 12.

Hull signed a letter of intent in October 2018 for a 10-year, $2.5 million lease deal to relocate the Workforce Solutions “one-stop” job center from 1 Reservoir Ave. to a building at 530 Broadway, even though the project hadn’t gone out to bid as required by law.

In messages obtained by Target 12 earlier this year, Hull referred to the “antiquated ‘procurement issue'” as a barrier to getting the deal done, which he called “SUPER urgent.”

The plan was yanked amid questions about the lease deal.

The current status of the federal investigation into Hull is unclear. A spokesperson for the U.S. Labor Department did not respond to requests for comment.

Steph Machado (smachado@wpri.com) covers Providence, politics and more for WPRI 12. Follow her on Twitter and on Facebook

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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