Report 2005-108 Summary - September 2006
Department of Industrial Relations:
Its Division of Apprenticeship Standards Inadequately Oversees Apprenticeship Programs
Our review of the Department of Industrial Relations' Division of Apprenticeship Standards' (division) oversight of apprenticeship programs (programs) found that:
- The division suspended program audits in 2004 and did not follow up on corrective action related to audits it had started.
- The division has not resolved apprentice complaints in a timely manner, taking over four years in some cases to investigate the facts of complaints.
- The division has not adequately monitored the apprentice recruitment and selection process. In particular, it has not conducted Cal Plan reviews since 1998.
- Division consultants did not consistently provide oversight through attendance at committee meetings.
- The division's staffing levels have not increased in step with legal obligations, and it has failed to document priorities for meeting these obligations for existing staff.
- The division did not report annually to the Legislature for calendar years 2003 through 2005, and the annual reports contain grossly inaccurate information about program completion.
- The department is slow to distribute apprenticeship training contribution funds. Only $1.1 million of the roughly $15.1 million that had been deposited into the training fund by June 30, 2005, has been distributed as grants.
- The division does not properly maintain its data on the status of apprentices.
RESULTS IN BRIEF
Apprenticeship programs (programs) help prepare individuals for careers in the skilled crafts and trades by providing access to classroom instruction and on the-job training. Classroom instruction gives apprentices an understanding of the theoretical aspects of their crafts or trades; on-the-job training affords them the opportunity to put into practice what they learn under the supervision of an experienced journeyman. The Division of Apprenticeship Standards (division) under the Department of Industrial Relations (department) has primary responsibility for the oversight of programs. State law requires the division to foster, promote, and develop the welfare of the apprentice and industry; to improve the working conditions of apprentices and advance their opportunities for profitable employment; to ensure that selection procedures are impartially administered to all applicants for apprenticeship; and to cooperate in the development of programs and randomly audit them.
The division suspended program audits in 2004. Further, it did not follow up on corrective action related to audits it had started. Program audits are the means by which the division can ensure that the apprenticeship committees (committees), which sponsor the programs, are following their state-approved standards and also by which it can measure their success. A comprehensive audit plan that subjects all programs to possible random audits, gives priority to auditing programs with known deficiencies, and targets programs with a high-risk profile would maximize the use of the division's limited audit resources. Until the division resumes its audits and ensures that the committees correct any weaknesses in their programs, it will have difficulty measuring the success of the programs and the quality of the training apprentices receive.
The division has not resolved apprentice complaints in a timely manner. Apprentices or other interested parties may file a complaint with the department director when they believe a decision, order, or action of a committee is unfair or unreasonable or that the committee has violated related apprenticeship codes, regulations, standards, agreements, or policies. Although there is no regulatory or statutory time limit for the division to investigate and resolve apprentice complaints, a time period of more than two years—and more than four years in some cases—to investigate the facts of a complaint seems excessive. Most of the complaints we reviewed that remained open in June 2006 related to allegations of unfair cancellation or suspension of an apprentice from a program. In these situations, a timely determination is critical because apprentices who are unfairly canceled are unable to become journeymen in their chosen field.
The division has not conducted adequate oversight of the committees' recruitment and apprentice selection procedures to ensure that they promote equality of opportunity in state-approved apprenticeship programs. State regulations require committees to submit their apprenticeship selection standards to the division for approval. Among other things, the standards must include provisions for determining the qualifications of apprentice applicants and must specify a fair and impartial means of selecting applicants through uniform procedures. State regulations require the State of California Plan for Equal Opportunity in Apprenticeship (Cal Plan) to be incorporated into the standards the division approves for the committees. However, the division exercises limited oversight over the implementation of the committees' selection procedures. Its chief stated that the division has not conducted systematic reviews of apprenticeship programs, also known as Cal Plan reviews, since 1998.
Consequently, the division cannot determine the extent to which committees comply with their Cal Plans. The division's failure to monitor the recruitment and selection processes makes it nearly impossible to determine whether committees are adhering to equal opportunity requirements or to identify potential barriers for women and minorities.
In addition, division field offices can improve their oversight of the committees. A key role of the division's consultants, each of whom advises and oversees an assigned group of committees, is to attend committee meetings, especially if an apprentice is to appear before the committee. Despite the stated importance of the consultants' attendance at committee meetings, our review of files at six field offices found that they did not consistently attend these meetings. The field offices also lack a formal, centralized process for tracking the resolution of issues or questions that may arise at committee meetings or during the normal course of business, which may lead to inefficiencies. Further, although state regulations allow the division's chief to cancel programs that have had no active apprentices for two years, until recently the consultants had not consistently identified inactive programs. Maintaining an up-to-date list of apprenticeship programs is important because the division can use it to more evenly prioritize and distribute committees to its consultants, improving their ability to monitor and advise their committees.
Although the division's legal obligations have increased, its staffing levels have not increased commensurately, and the division has failed to document priorities that would help existing staff to meet these obligations. The division's chief indicated that a lack of staff prevents the division from completing its monitoring requirements. His priorities for 2006 are to focus on customer service and to improve the division's processes to enable staff to meet requirements in a timely and accurate manner; his priorities for 2007 are to focus on promotion and expansion of apprenticeship into trades not typically associated with apprenticeship, such as the health care field, and to ensure the quality of programs through consistent implementation of oversight activities. We agree that these priorities may help the division to better meet its legislative requirements, but it should also take the next step to document specific priorities and goals for its staff, both to maximize the use of existing staff and to identify additional staffing needs.
The division does not adequately track and disseminate information to the Legislature as mandated by state law. State law requires the division's chief and the California Apprenticeship Council (council) to report annually to the Legislature and the public on their activities. According to the chief, the division did not do so for calendar years 2003, 2004, and 2005, thus missing the opportunity to make the Legislature aware of the apprenticeship programs and gain valuable feedback on the direction of the programs. The annual reports that have been prepared also contain grossly inaccurate information about program completion, due to a programming error.
The department has been slow to distribute funds intended for apprenticeship training grants and has used more funds for division operations than for grants. These funds are collected from some contractors who employ apprentices on public works projects. Although the department has been authorized to award $1.2 million in grants in each year of the last three fiscal years and state law required the department to begin distributing grants to programs from the apprenticeship training contribution fund (training fund) in 2003, it did not award its first grants until May 2006. Employer contributions to the training fund have increased significantly since the original authorization, and in fiscal year 2004-05, these contributions were four times greater than the allotted $1.2 million.
Although the department has distributed $1.1 million in grants, it has spent significantly more on division operations. As of June 30, 2005, about $15.1 million had been deposited into the training fund. During fiscal years 2001-02 through 2004-05, the division used a total of $4 million from this fund to pay for salaries, benefits, and other costs. Additionally, during fiscal years 2002-03 and 2003-04, a total of $2.8 million was transferred from the training fund to the State's General Fund. The department's expenditure projections for fiscal year 2006-07 call for the division to use $4.3 million of the projected $4.8 million it expects to receive. If it continues its approach of allotting only $1.2 million for grants, the remaining $3.1 million will be used for general division expenses. As a result of the department failing to revise its estimate, a smaller portion of the employer contributions than originally intended have been or will be used for training unless the department revises the amount to be distributed as grants.
If better maintained, the information on apprentices in the division's database could be used to manage the programs. However, the division does not have a standardized process for updating the database and for reconciling the apprentice data it contains with information maintained by the committees. As a result, data on the current status of apprentices are not reliable. Without accurate status data, the division cannot measure actual program performance, such as the rate at which apprentices cancel or complete their apprenticeships. It could use this information, if accurate, to set performance goals, pinpoint program successes and failures, and focus its monitoring efforts. In addition, it could examine such issues as why completion rates for women are lower than for men in certain occupations such as carpentry and why apprentices in trades such as firefighting have higher completion rates than others such as roofing.
To better manage the State's apprenticeship system, the division should do the following:
- Follow through on its planned resumption of audits, and ensure that recommendations are implemented and that audits are closed in a timely manner.
- Establish time frames for resolving complaints and develop a method for ensuring that complaints are resolved within these time frames.
- Conduct systematic audits and reviews of apprenticeship recruitment and selection to ensure compliance with Cal Plan requirements and state law.
- Ensure that it submits annual reports to the Legislature that are accurate, timely, and consistent with state law.
- Request increased budgetary authority as necessary to distribute apprenticeship training contribution fund money received each fiscal year first to the division for its estimated expenses to administer the grants program for the year the distribution is made and then as grants to applicable programs.
- Establish a process for regularly reconciling information on the current status of apprentices in the division's database with information maintained by committees.
The Labor and Workforce Development Agency, the Department of Industrial Relations, and the Division of Apprenticeship Standards accept and support the recommendations with the exception of some portions of those recommendations related to training contribution funds.