WASHINGTON -- The Department of Labor has suspended new enrollment into one of the nation's largest job-training programs for low-income youths, citing cost overruns that critics have blamed on mismanagement.
The Job Corps enrollment freeze could close the door on as many as 30,000 young adults struggling in a troubled economy and could cost about 10,000 staff jobs, according to the association that represents private operators for the program.
More than 70 members of Congress from both parties have written to the department requesting explanations for the program's shortfall, which sources familiar with the budgeting process have pegged at $61.5 million. Two lawmakers have also complained to the White House.
The freeze comes as President Barack Obama began to promote his plans for job creation, job training and middle-class growth by taking his State of the Union address on the road last week.
"The timing of this freeze could not be worse," Rep. Elijah Cummings, D-Md., said Tuesday. "Though our economy is adding jobs, the number of unemployed remains high. If you add to that the fact that many of the unemployed do not possess the basic skills to fill even the few jobs that are available, what you have is a country standing at a crossroads."
Job Corps, which opened its first center in 1965, was a vanguard of President Lyndon Johnson's war on poverty. The free program gives young adults a chance to earn a high school diploma, receive vocational training or earn certifications in more than 100 specializations.
Democratic lawmakers following the program's budget issues say they are frustrated by the lack of a response from the Labor Department, which also halted enrollment briefly last summer and in December. Before 2011, the program had never halted enrollment.
"We need to know why it's happened and why they didn't consider other alternatives," said Sen. Robert Casey, D-Pa. "Maybe it has nothing to do with the program. Maybe it's a management failure."
Casey, the newly appointed chairman of a Senate subcommittee that oversees Job Corps, said he plans to schedule a hearing "within weeks" to determine the cause of the shortfall, and he has requested an audit of the budget, which Labor's inspector general's office expects to complete by May.
Rep. Ed Whitfield, R-Ky., whose district includes one of the largest Job Corps centers in the country, said he sees "evidence of mismanagement of money." He and Rep. Jim Matheson, D-Utah, wrote to the White House on Feb. 6 complaining that the Labor Department had declined a House subcommittee's request to justify the cost overruns.
"We are deeply troubled by the Department of Labor's disregard of our concerns over what we see as their gross mismanagement of the Job Corps program," the letter said.
Labor Department officials said they paused enrollment after other cost-cutting efforts fell short. They expect the freeze, which started in January, to last until June 30.
"The decision to suspend enrollment was not made lightly," said spokesman Carl Fillichio, who emphasized that those already enrolled in Job Corps will be able to complete their training.
"Job Corps is conducting an exhaustive review of its current operating costs in order to make changes to ensure that program costs are sustainable in the future," Fillichio said.
The unemployment rate for young adults ages 16 to 24 was 17.4 percent in January. It was 28 percent for African-Americans in that age group, a demographic that made up nearly 51 percent of Job Corps students during the 2011 program year.
Teryn McRae, 20, said he was approved for enrollment at Job Corps and was to begin training Feb. 5. The Washington, D.C., resident planned to study computer networking, a specialty he hoped could help him better provide for his 1-year-old daughter. Previously, he had worked minimum-wage jobs at chain restaurants.
McRae said the enrollment freeze "crushed me because all my avenues closed. I felt like all my windows and doors of opportunity closed."
McRae said he does not know what his immediate next step is, but he said he may try to enroll in Job Corps when the freeze is lifted.
The National Job Corps Association, the group that represents the contractors that operate the job centers, has been highly critical of the freeze. It said 44,928 people are enrolled at Job Corps centers. The association said about 10,000 people in the system are in the same position as McRae.
"I'm unaware that it's ever had a period that reflects such outright maladministration," said Earl Pomeroy, a member of the association's board of directors and a former
Democratic congressman from North Dakota. "Drifting through a fiscal year and then slamming the doors shut for new students disrupts the core mission of Job Corps."
All told, the association estimates that the suspension of new enrollment could result in nearly 30,000 lost training opportunities nationwide. That projection is based on the weekly rate at which slots for new students open up at each center. It also says the enrollment suspension could cost up to 10,000 center jobs.
The estimates, however, do not include the exceptions the Labor Department has agreed to make for the homeless, runaways and those in foster care.
In 2010, the Labor Department restructured how it handles Job Corps, removing the budgeting and procurement operations from the Office of Job Corps and placing them in separate divisions within the Employment and Training Administration.
Following that move, the Job Corps program incurred a budget shortfall of more than $30 million during its 2011 cycle, prompting contract modifications and two brief enrollment stoppages, in addition to other cost-saving measures such as curtailing TV advertising and cutting administrative costs.
The Labor Department told a Senate oversight committee in July 2012 that its restructuring plan would help avoid future budget problems, saying the moves would "help ensure that program obligations remain within the appropriation level."
Instead, a deficit nearly twice as large occurred during the current budget cycle, according to the National Job Corps Association.
The association wrote to Labor on Oct. 1 and Jan. 17 outlining alternatives to address the financial troubles. The association says the Labor Department should recoup the money from local job centers that spent less than their budget allocations because of cost-saving measures.
It also suggested shifting nearly $16 million from the Job Corps capital budget, which includes funds for construction and maintenance. Congress's last few spending bills have allowed the Labor Department to make such fund transfers, and the agency has taken advantage of that option for the past several years but did not for the latest cycle.
For 2013, Labor has asked Congress for $75 million to fund Job Corps construction. Of that money, $18 million would go toward "minor repair and replacement," while $28 million would finance "building rehabilitation and replacement projects."
Labor declined to comment on whether it considered the National Job Corps Association's recommendations before implementing the freeze.