Report 2016-110 Recommendation 11 Responses

Report 2016-110: Trade Apprenticeship Programs: The State Needs to Better Oversee Apprenticeship Programs, Such as the Air Conditioning Trade Association's Sheet Metal Program (Release Date: November 2016)

Recommendation #11 To: Industrial Relations, Department of

To ensure that the apprenticeship division is overseeing apprenticeship programs adequately, it should consider periodically checking with U.S. Labor to determine what investigations it has recently conducted on apprenticeship programs. The apprenticeship division could use this information as a basis for conducting its own audit to ensure apprenticeship programs are using state funds appropriately.

1-Year Agency Response

The Division has continued in its effort to enter into an information sharing agreement with the U.S. Department of Labor's (DOL) Employee Benefits Security Administration (EBSA). Unfortunately, this effort has been unsuccessful. Even if it were successful, an information sharing agreement could be unilaterally terminated by EBSA, a result completely outside the Division's control. Thus, an information sharing agreement would not fully and permanently implement this recommendation.

Because there is no information sharing agreement, the Division has instead inserted language in its operations manual making apprenticeship consultants aware that they must ask apprenticeship programs whether they have been, or is currently being, audited by EBSA. The Division's Self-Assessment Review form, which apprenticeship programs must submit to the Division on an annual basis, has also been updated. In the updated Self-Assessment Review form, programs are also asked whether they have been subject to an EBSA audit. Once the Division is made aware that a program has been subject to an EBSA audit, the Division will, if appropriate, make Freedom of Information Act requests to obtain EBSA audit reports. Furthermore, the Department's Legal Unit will separately inquire with DOL and EBSA on an annual basis regarding EBSA's investigations of state-approved apprenticeship programs.

  • Completion Date: November 2017
  • Response Date: November 2017

California State Auditor's Assessment of 1-Year Status: Fully Implemented

Although the department was unsuccessful in its efforts to enter into an information sharing agreement with U.S. Labor, the actions it has taken will substantially achieve the same outcome.


6-Month Agency Response

The Division has continued to engage the U.S. Department of Labor (DOL) in clarifying the bases for an information sharing agreement with DOL's Employee Benefits Security Administration (EBSA) and defining the agreement's scope. The Division envisioned that the agreement would bolster audit capabilities by affording the Division full access to non-confidential records and information relating to EBSA's oversight of California apprenticeship programs. Unfortunately, the discussions have stalled, and it does not seem likely that an agreement will be entered into in the immediate future.

In the meantime, the Division has inserted language in its operations manual making apprenticeship consultants aware that they must ask apprenticeship programs whether they have been, or is currently being, audited by EBSA. The Division will then use that information, as appropriate, to make Freedom of Information Act requests to obtain EBSA audit reports.

  • Completion Date: February 2017
  • Response Date: May 2017

California State Auditor's Assessment of 6-Month Status: Partially Implemented

The apprenticeship division should continue it efforts to enter into an information sharing agreement with the U.S. Labor. However, if this effort is unsuccessful, the apprenticeship division should implement a process to periodically check with U.S. Labor to inquire about its investigations of apprenticeship programs.

  • Auditee did not substantiate its claim of full implementation

60-Day Agency Response

As stated in the previous response, shortly after learning that the Department of Labor's Employee Benefits Security Administration (EBSA) audited ACTA, the Division made a Freedom of Information Act (FOIA) request for a copy of the audit report, which the Division received on November 18, 2016. At that time, the Division also began the process of establishing an information sharing agreement with EBSA. That agreement is intended to afford the Division full access to non-confidential records and information relating to EBSA's oversight of California apprenticeship programs. It is anticipated that these records and information will bolster the Division's audit capabilities. The Division and EBSA are currently engaged in clarifying the bases for the agreement and defining its scope.

In the meantime, the Division will begin asking apprenticeship programs whether they have been audited by EBSA. The Division will then use that information, as appropriate, to make FOIA requests to obtain EBSA audit reports.

  • Completion Date: January 2017
  • Response Date: January 2017

California State Auditor's Assessment of 60-Day Status: Partially Implemented

We would expect Industrial Relations to memorialize this new process in its policies to ensure that going forward staff will be aware of how and when to follow-up with U.S. Labor. Furthermore, we would not consider this recommendation fully implemented until the agreement between Industrial Relations and U.S. Labor is finalized.

  • Auditee did not substantiate its claim of full implementation

All Recommendations in 2016-110

Agency responses received are posted verbatim.