Special Review: EWDD Selection and Monitoring of WorkSource Center Service Providers

For decades, the City of Los Angeles (City) has contracted with community-based organizations to operate WorkSource Centers (WSCs) that provide a wide range of assistance to job seekers and employers.

In June 2015 the Los Angeles County (County) District Attorney filed a felony complaint with the California Superior Court against three executives of the Chicana Service Action Center (CSAC), a WSC service provider, alleging conspiracy, embezzlement and misappropriation of public funds. The basis for these charges stems from an alleged misappropriation of funds received by CSAC from the County and the City to provide social services to the unemployed and domestic violence victims. Both the County and City had contracted with CSAC for services, including CSAC’s WSC services, for more than 25 years.

Although the Economic and Workforce Development Department (EWDD) and its predecessor, the Community Development Department, issued Requests for Proposals and conducted multiple Annual Performance Evaluations, Program Monitoring Reviews, and Fiscal Audits of WSC activities, improprieties related to CSAC’s business practices inexplicitly were not identified or adequately pursued by City staff. This raises questions regarding the adequacy of EWDD’s oversight of WSCs.

Accordingly, the Controller’s Office, with the support of EWDD management, initiated this Special Review to evaluate EWDD’s selection and monitoring of WSC contractors, focusing on controls intended to help prevent and detect waste, fraud and abuse, as well as to help identify unsuitable WSC contractors. It is our intent that this report will provide information to City management to assist with the early identification, prevention, and deterrence of the types of activities alleged to have occurred at CSAC.