Obama apprenticeship program misspent $155M of $175M: Labor Dept. watchdog

Administrators failed to align trainees with occupations targeted to reduce need for foreign workers under H-1B visas, inspector general audit found.

Updated: October 16, 2021 - 10:55pm

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This week's Golden Horseshoe is awarded to the Department of Labor for $175 million in grants through the Obama administration's American Apprenticeship Initiative — $155 million of which could have been put to better use, according to a recent audit by the department's Office of Inspector General. 

The AAI was touted by President Obama as a way to, among other things, reduce the need for foreign workers under H-1B visas by training more than 34,000 Americans with expanded apprenticeships in growing industries such as health care, IT and advanced manufacturing. 

The OIG found that DOL's Employment and Training Administration failed to align apprenticeships with the program's occupational targets and the initiative failed as a result to achieve its intended goals.

"Most apprenticeships (88.5%) did not meet the specialty occupation criteria for H-1B visas, and, often, they were not in occupations using H-1B visas," the audit found. "As a result, ETA will have difficulty demonstrating the program has helped reduce the U.S. need for foreign workers under the H-1B visa program.

"Instead, ETA could have put more than $155 million in funds to better use by having grantees create apprenticeships that either start in H-1B occupations or have career pathways leading to H-1B occupations at the end of the apprenticeship." 

The "ETA did not sufficiently plan the program goals, metrics, and the reporting system," the watchdog found. 

In addition, the audit determined that ETA violated federal law and neglected to maintain accurate data.

"It violated the Paperwork Reduction Act, and the data quality issues negatively impacted aspects of a $6.6 million contractor evaluation of the AAI grant program," according to the report

The watchdog also found the award process "had significant weaknesses, such as incorrect award amounts, incorrect timing of compliance reviews, incorrect scoring of grantee proposals, and inaccurate public report." 

A review of the Obama archives shows AAI grant recipients included the International Brotherhood of Teamsters, which received $5 million; the United Way of Buffalo and Erie County, which received $2.9 million; the UAW-Labor Employment and Training Corporation, which received $5 million; and the city and county of San Francisco, which was awarded $2.9 million.

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