Read and comment on this story from Newsday on Americorps, one of the sister organizations to the Peace Corps under the USA Freedom Corps, and the problems that contributed to the enrollment freeze at the national service program last year. The Corporation for National and Community Service violated its own rules by approving more AmeriCorps volunteers than it could provide with education grants, said the agency's inspector general, J. Russell George. He complained that senior management had known about potential enrollment problems in July but did not inform the committee until four months later. "It's like Enron's gone nonprofit," said Sen. Barbara Mikulski, D-Md., threatening to disband the agency if its management does not improve soon.
The agency's chief executive officer, Leslie Lenkowski, said management and budget improvements are under way, including a shuffling of senior positions but he added his team has "a lot more to do" and said the inspector general and GAO reports could produce more changes.
The Peace Corps is an independent organization and, unlike Americorps, it draws most of its management expertise from returned volunteers who understand the agency so that problems like this are unlikely to occur. It is because of this that Congress is increasing funding for the Peace Corps while other agencies like Americorps are being frozen or cut. Read the story at:
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Mismanaging Led to Americorps Job Freeze
By ELIZABETH WOLFE Associated Press Writer
April 10, 2003, 8:26 PM EDT
WASHINGTON -- Poor management in the agency that oversees AmeriCorps contributed to the enrollment freeze at the national service program last year, investigators told a Senate subcommittee Thursday.
The Corporation for National and Community Service violated its own rules by approving more AmeriCorps volunteers than it could provide with education grants, said the agency's inspector general, J. Russell George.
Congress this year voted to cap AmeriCorps enrollment at 50,000 in 2003. Bush has requested an increase of more than $150 million for the program next year, raising its budget to $554 million, enough to finance an enrollment of 75,000.
The enrollment freeze from November to March put in limbo thousands of potential volunteers and hundreds of service projects across the country. Although there was enough money to pay current volunteers, the National Service Trust that hands out educational stipends after two years of AmeriCorps service was running dry.
While praising the program itself, senators chastised corporation management.
Sen. Kit Bond, R-Mo., chairman of the Senate Appropriations subcommittee that oversees AmeriCorps funding, compared its parent agency to a creaky house built on shaky ground: "Despite its occupants' efforts to correct the problems, the foundation continues to crack and sag."
He complained that senior management had known about potential enrollment problems in July but did not inform the committee until four months later.for some four months.
"It's like Enron's gone nonprofit," said Sen. Barbara Mikulski, D-Md., threatening to disband the agency if its management does not improve soon.
The agency's chief executive officer, Leslie Lenkowski, said management and budget improvements are under way, including a shuffling of some senior positions. But he added his team has "a lot more to do" and said the inspector general and GAO reports could produce more changes.
Lenkowski attributed problems in the educational trust partly to miscommunication at the top and failure to properly track enrollment in relation to available funds.
"They've been living life on the edge," said Tom Armstrong, an assistant general counsel at the GAO. "They've been tracking based on projections instead of real amounts."
The AmeriCorps program originated 1993 as a domestic Peace Corps for mostly college-age volunteers who work with nonprofits on projects like mentoring children and environmental cleanups. They receive stipends during their service and educational awards afterward.
Senator Mikulski's Opening Statement for Corporation for National and Community Service
Welcome Dr. Lenkowsky and Russell George, who is testifying for the first time as the Corporation's Inspector General. As the Godmother of national service, I have fought to uphold the original principles that our national service programs were founded upon.
These principles are: to provide qualitative and quantifiable service to communities while we create "habits of the heart", and reduce student loan debt. The idea behind National Service was to link our values to public policy. And to provide young Americans with an opportunity to serve their communities while helping to pay for college.
I supported these principles even when they were not popular while being mindful of the need for responsible stewardship and of taxpayer dollars. I support the President's call to service. But I cannot support a bureaucracy that breaks the law, mismanages taxpayer dollars, and creates uncertainty for our communities and our volunteers. The Corporation for National Service needs to get its house in order, or it will be unable to take national service into the new century equipped to meet new challenges.
Priorities
I am pleased that the President embraced national service, and I want to work with him in a bipartisan way to take national service into the next century. But I am really concerned that management problems call into question the Corporation's ability to grow while standing sentry over taxpayer dollars.
So my goals for this budget hearing are two-fold: First, I hope the Corporation can restore the confidence of our communities, non-profits, and graduates of national service programs. The VA-HUD Subcommittee is on their side; promises made must be promises kept, both to volunteers and to communities. Second, I hope the Corporation can begin to restore the Subcommittee's confidence that appropriate steps are being taken to prevent mismanagement and uncertainty.
Over-Enrollment of Volunteers
I was deeply troubled when the Corporation revealed that its standard operating procedure was to enroll more volunteers than the Corporation had funds to support. Last year, the Corporation budgeted for 50,000 volunteers, but it enrolled over 70,000. This created a critical shortfall in the National Service Trust which pays for volunteers' education awards.
The Corporation broke the law. The law requires for every volunteer enrolled, there must be a deposit into the Trust to pay for that volunteer's education award. This concept is simple, straightforward, and is spelled out in the Corporation's statute.
The Corporation's mismanagement of the AmeriCorps program has jeopardized the very principles upon which National Service was founded to provide young Americans with opportunities to serve their communities while helping to pay for college.
The Corporation had to "freeze" volunteer enrollments. This created uncertainty for volunteers, who were waiting for assignments; for communities, who were ready to put the volunteers to work; and for graduates of the Corporation's programs, who were concerned about the status of their education awards. This happened at a time when the public's interest in volunteering is very high, and many organizations have experienced a large increase in applications.
The consequences of the Corporation's mismanagement were grave. When the House and Senate met to conference for 2003, the House had $0 for National Service, and the White House did not weigh-in that National Service was a priority.
We struggled to just level-fund National Service, but we had to increase the Trust to $100 million, to fix the Corporation's mistakes. This meant that there is about 30 percent less funding for programs in 2003. I was very disappointed that we could not support the President's call to service. I was especially puzzled when public statements by Corporations officials seemed to blame Congress for the "freeze" because the government was operating under a Continuing Resolution.
For the record, I want to be perfectly clear: the VA-HUD Subcommittee has always provided all the resources that the Corporation has requested for education awards. I want to acknowledge Congress had rescinded funds from the Trust in the past. These rescissions were taken with the Corporation's advice and assurance that the Trust would be able to fulfill all education awards.
So the Subcommittee has relied on the Corporation, the Board, the IG, and OMB to be the accountants for the Trust. Unfortunately, the accountants failed the Subcommittee, failed our communities, and failed our volunteers.
OMB's Accounting Rules for the Trust
To make matters more complicated, OMB recently decided to change the rules of the game for the Trust. The Corporation has always been able to count both appropriations and interest when calculating Trust funding.
Now, OMB says that the Corporation can no longer count interest earnings in future budgeting for the Trust. So VA-HUD has included $64 million for the Trust in the Supplemental—this is the amount that the President requested. Moving forward, I want to know what steps the Corporation is taking to ensure that budgeting for AmeriCorps programs, and education awards is accurate. I also want to know what the Board and the IG will do to ensure proper oversight of the Corporation.
Budget Overview
The 2004 budget request is $598 million for all National Service programs under the VA-HUD Subcommittee's jurisdiction. This is $167 million above 2003 – a 40 percent increase. This is in addition to $365 million requested under the Labor-HHS Subcommittee. For a grand total request of almost $1 billion for National Service in 2004. The budget requests a $140 million increase for the AmeriCorps program to increase the number of volunteers from 50,000 to 75,000.
Again, I want to support the President's call to service. But I really question whether the Corporation can grow until we are sure that its financial house is in order.
Other areas of the budget are status quo. There is a small $2 million increase for the National Civilian Conservation Corps to open a new "satellite campus" this year, and the Learn and Serve program remains level-funded at $43 million.
Earmarks and Challenge Grants
The budget request includes three earmarks. Two of the earmarks are authorized and were funded last year: $10 million for Points of Light, and $7.5 million for America's Promise. There is a new earmark in the budget: $3 million for Teach for America. These are good organizations that are worthy of our support.
But I am disappointed that the budget does not fund Challenge Grants. Last year, Challenge Grants were our "policy solution" to earmarks. VA-HUD funded Challenge Grants for the first time. Grants will go to nationally recognized organizations that raise private funding. Grants require a 2 to 1 match.
Last year, VA-HUD received almost $40 million in earmark requests from groups that deserve our support. But we couldn't fund them all, and we didn't want to pick winners and losers. I would like to know why the budget eliminates Challenge Grants. I would like to see Challenge Grants continued as a policy solution to earmarks.
Conclusion
Volunteerism is our nation's trademark; it highlights what is best about America. Volunteer programs are the backbone of our communities. They help preserve the safety net for seniors, keep our communities clean, and get our kids ready to learn. This is an important time in the history of national service. National service is at a crossroads, and so is our nation. So I hope the VA-HUD Subcommittee can count on the Corporation to get its house in order so we can take national service into the new century, equipped to meet new challenges. Click on a link below for more stories on PCOL
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