SUMMARY OF: Department of Labor and Workforce Development, Technical Vocational Education Program


Purpose of the Report

In response to concerns over the efficacy of TVEP, this audit was requested to make objective information available to lawmakers prior to reauthorizing the program. TVEP is set to expire June 30, 2024.

Report Conclusions

The audit concluded that $12.9 million of Technical Vocational Education Program (TVEP) funding was expended during FY 22. Thirty-two percent was spent to maintain and operate training facilities, 61 percent was spent to train participants, and seven percent was spent for administration. A total of 6,688 TVEP participants were trained during FY 22.

The audit concluded that TVEP is not structured to effectively meet Alaska’s technical and vocational education needs or to ensure training providers have a fair opportunity to participate in the program. Access to training, need for specific types of training, and training capacity do not drive the annual award process. Further, TVEP statutory performance metrics are not evaluated against stated objectives or goals and the Alaska Workforce Investment Board (AWIB) does not use the metrics to evaluate the program or to allocate funding. As required by AS 23.15.835(d), TVEP funds are awarded in set percentages to specific training providers without regard to regional/industry training needs or performance. Further, the audit found TVEP training providers were subject to limited accountability and oversight procedures.

Since the creation of TVEP through FY 22, a total of $204 million of Unemployment Insurance (UI) employee taxes has been diverted from the UI Compensation Fund (UI Fund) to the State’s TVEP account (a subfund of the general fund). The diversions reduced the UI Fund balance, which may have contributed to increased employer UI tax rates. Further, auditors noted the FY 22 TVEP fund balance of $2.4 million was swept into the Constitutional Budget Reserve Fund (CBRF), which effectively resulted in the use of employee taxes to repay the general fund’s CBRF liability.

Findings and Recommendations

  1. The legislature should consider repealing AS 23.15.835(d) and allowing TVEP funding to be awarded via a grant process guided by AWIB goals and priorities.
  2. The Department of Labor and Workforce Development’s commissioner should work with the Office of Management and Budget to resolve the underpayments for seven FY 22 TVEP training providers.