The Texas Workforce Commission needs to strengthen controls to prevent overpayment after finding billing errors at two community colleges that participate in the Skills Development Fund Program, according to state auditors.

And the billing error issue could be much more far-reaching than just the two college systems, officials suggested.

Auditors conducted site visits to Austin Community College and Alamo Colleges District, finding that the former overbilled the commission $25,575 in total costs and the latter overbilled by $690 in training costs.

The Skills Development Fund program is designed to increase the skills level and wages of the Texas workforce by providing grants to community colleges for customized training for local businesses. Auditors examined program grants awarded between Sept. 1, 2014, and Dec. 23, 2016 — a total of 150 grants worth nearly $49 million.

The overpayment issue could be much more widespread.

A representative of the state auditor’s office, who spoke to The Texas Monitor on background, said these two colleges were just two sampled of dozens of local colleges that receive the funds. Austin Community College and Alamo Colleges District collectively received about $7.6 million of the Skills Development Fund grants awarded during the audit period or about 15 percent of the total.

One issue, auditors found, is that the commission’s participant performance report isn’t formatted to identify people who complete some, but not all, of the training outlined in the grants. The program allows for a proportionate reduction when participants only complete part of the training. Because of the formatting issue, the commission has paid grantees more than it should.

In its response to the auditor’s report, the workforce commission said it would review its internal controls for identifying participants that complete less than course-approved training hours.

“Additionally, TWC is reviewing instances where it may be acceptable for a participant to not complete all training hours of a course; e.g., using a competency-based system, the participant is hired based on their mastery of skills despite not completing the entire coursework, but they completed enough of the coursework to perform successfully on the job,” the commission wrote. “Any necessary conforming adjustment to grant agreements will be made accordingly.”

Auditors also found cases of under-billing. At Alamo Colleges District, they found that in two training courses in a grant for Rackspace Hosting, Inc., discrepancies resulted in the underreporting of 24 training hours (while another two training courses in that grant saw the over reporting of 16 training hours).

Another training course in that grant resulted in the grantee billing the commission $3,680 for 16 participants, although just 13 people attended the course.

During the review of Austin Community College financial records related to its Advanced Technologies and Manufacturing Consortium grant, auditors found instances in which the college requested and received $25,575 for costs it hadn’t incurred primarily due to erroneous entries in the records.

The commission didn’t identify those errors because its cash draw and expenditure reporting system processes reimbursement requests without requiring grantees to submit supporting documentation, such as invoices, for reported costs incurred.

The workforce commission said its development and finance divisions would work together with its sub-recipient monitoring department “to develop an efficient and effective control process to ensure that amounts paid to grantees are for actual, allowable, adequately supported grant costs, and implement changes where appropriate.”