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The San Diego Workforce Partnership will have to pay back $1.1 million to the U.S. Department of Labor, as part of a settlement with the federal agency that grew out of a years-long probe of the partnership’s mismanagement of grant dollars.

And because the non-profit jobs agency is ultimately governed by a joint powers authority of the city and county of San Diego, the governments will likely have to pay the majority of the settlement.

Since 2004, Labor Department investigators have been examining years of records that reveal how the jobs training agency has spent tens of millions of taxpayer dollars meant for the education and training of unemployed workers.

In their most recent report, issued in June and recently obtained by voiceofsandiego.org, investigators documented $750,000 in federal grant money that the partnership used for unneeded and unused building space and excessive rent for space it did occupy. They also found $6.6 million in unallowable employee salaries that were charged to federal grants.

For more details, check out our recent story on the investigation.

Founded in 1974, through a joint powers agreement by the city and county, the partnership has grown to be the principal job assistance agency in the county. It oversees more than two dozen smaller charities that provide job counseling and other services for 20,000 to 30,000 county residents each year. Its $30 million annual budget comes almost entirely from federal grants.

Partnership is governed by both a corporate and a policy board. The policy board includes Councilmen Tony Young and Ben Hueso and Supervisors Ron Roberts and Greg Cox. The joint powers agreement requires that the city and county assume the partnership’s liabilities.

The San Diego City Council approved the negotiated settlement Tuesday, which calls for the $1.1 million to be repaid over the next four years. The first payment of $235,487 is due Dec. 1. Partnership will pay $100,000 of the first payment; and the city and county will each pay $67,743. Over the next three years the city and county are scheduled to split annual payments of $300,000.

Partnership CEO Mark Cafferty said an insurance policy may cover a portion of the settlement, thereby reducing the amount the city and county have to pay.

DAVID WASHBURN

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