The County and Worldwide Educational Services, Inc., entered into contracts for fiscal years 1998/1999, 1999/2000 and 2000/2001 (collectively, “the contracts”). Under those contracts, Worldwide Educational Services (“Worldwide”) provided employment- related services for County clients enrolled in the following federally funded programs: the Job Training Program Act; the Workforce Investment Act; and Welfare to Work. A contractual dispute arose between the parties regarding unpaid demands and close-out costs from each of the fiscal years.
On October 18, 2005, the Board of Supervisors approved a Settlement Agreement and Mutual Release that required the parties to submit this contractual dispute to a binding audit. The objective of the audit was to verify and validate the nature and extent of all costs and charges under the contracts. The results of the audit would be binding on both parties. Further, under the Settlement Agreement and Mutual Release neither party had the ability to challenge the results of the audit.
On October 31, 2013, the department received the final report from R.J. Riccardi, Inc., Certified Public Accountants. The report determined that the County owed Worldwide $584,867 for all three fiscal years.
The Employment and Human Services Department does not have sufficient funding to cover the costs of the amount owed under the Settlement Agreement and Mutual Release. Further, no state or federal revenue is available to cover any of these costs. Therefore, it is recommended that the Board of Supervisors approve the requested appropriation adjustment, transferring funding of $584,867 from the General Fund Reserve for Audit/Litigation to the Employment and Human Services Department.