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Employment training contracts worth nearly $24 million approved by state board


by Sean Whaley, Nevada News Bureau: The state Board of Examiners today approved contracts worth nearly $24 million in federal funds to provide employment and training services to job seekers as Nevada continues to lead the nation in unemployment.

The contracts were approved by Gov. Brian Sandoval and Secretary of State Ross Miller after Sandoval received assurances that the two contracts for Nevadaworks in northern Nevada would be managed consistent with any findings in an audit of the workforce investment board now under way.

Cindy Jones, administrator of the state Employment Security Division, assured Sandoval that the money would be expended by Nevadaworks in compliance with federal and state rules.

The three Nevadaworks contracts approved by the board are worth $6.8 million. The three contracts with Workforce Connections in southern Nevada are worth $16.9 million.

After the meeting, Jones said there is an audit under way of Nevadaworks as part of the Department of Employment, Training and Rehabilitation’s normal oversight of the contracts. The review is being performed by the state Division of Internal Audits. The audit is not complete and no findings are yet publicly available for review.

The funds are used to train jobless Nevadans for new types of work where there is demand, as well as provide everything from work boots to child care subsidies to assist people in securing a job.

The approval of the contracts comes as Nevada continues to borrow money from the federal government to pay unemployment benefits.

Jones said the state has borrowed $775 million from the federal government to date to pay benefits. The first interest payment of $29.1 million on that borrowed money is due in September. The state has allocated $64 million to make the interest payments over the two years of the current budget.

The state will not be able to repay the federal loans in the near term, she said. Nevada, like more than 30 other states, is continuing to borrow from the federal government to pay benefits, Jones said.

The agency this fall will review the status of the state’s unemployment trust fund, which is funded with a tax on employer payrolls, to assess what the tax rate for calendar year 2012 will be, Jones said.

Nevada employers this year are paying on average a tax rate of 2 percent on the first $26,600 of each employee’s wages. The 2010 rate was 1.33 percent. But the $410 million in revenue projected from the higher tax rate this year is still not enough to pay benefits and begin repaying the federal loan.

And while the federal loans were interest free for the first two years, those payments must be made beginning this year unless Congress takes some action to extend the grace period, Jones said.

Jones said she does not yet know what course the Employment Security Council will take with regard to the 2012 tax rate when it meets in October.

Nevada’s jobless rate was 12.1 percent in May, down from its peak of 14.9 percent but still highest in the nation.

Audio clips:

Cindy Jones, administrator of the state Employment Security Division, says the audits are a regular part of the agency’s oversight of the funds:

072011Jones1 :24 to our constituents.”

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