June 20, 2006
SUBJECT: Authorization for NOVA to participate in a study of One-Stop Career Center operations
REPORT IN BRIEF
The California Workforce Investment Board (State Board), in partnership with the Employment Development Department (EDD) and an independent research team from California State University (CSU) Northridge are looking for Local Workforce Investment Areas (LWIA) such as NOVA (aka the Department of Employment Development) to participate in a study which will work to understand how California’s One-Stop Career Centers – such as our local CONNECT! Partnership – fund and produce the services they deliver. They will use the cost accounting concept of Activity Based Costing (ABC) to analyze the partners’ costs from the perspective of work activities so they can be viewed from a process perspective. Staff recommends that the Sunnyvale City Council, on behalf of the seven NOVA consortium cities, authorize NOVA/CONNECT! to participate as a study site for this grant. Participants in the study will receive a grant of $10,000.
BACKGROUND
One-Stop Career Centers are still a relatively new concept in workforce development. These institutions are complex, bringing together many workforce partners to serve a diverse client base in many different local contexts. Since their inception, many questions about how the centers operate, how they are funded and what they produce have gone unanswered at the local, state, and national levels, due to a lack of actual information about the system. Are the centers models of integrated efficiency or fragmented alliances of service providers? Answers to these questions are critical to enabling the State Board and local boards to make informed policy decisions concerning the cost benefit of the many options available to the workforce development system.
The State Board has contracted with an experienced team of researchers from CSU Northridge’s Management and Organization Development (MOD) Center to conduct a detailed study of the resources flowing into One-Stop Career Centers from all sources, the costs incurred, and the services produced. The goal of the study is to understand how a representative group of centers are financed and operated. From this analysis, the research team will create a series of benchmarks to help the entire workforce development system understand how these centers operate. The study will provide a set of objective facts from which informed policy discussions at the state and local levels may proceed.
The study will begin by conducting three or four in-depth case studies of One-Stop Career Centers. The case studies will identify all the resources – cash and in kind – that flow into the centers. It will enumerate all the services produced, and look at the cost of producing each service. Each of the partners in the case study sites will use “activity-based cost accounting” to reflect how centers spend financial resources and the quantity of services provided. This study will break through the administrative funding silos and look at the total costs and services delivered by all partners throughout the One-Stop structure.
Activity-Based Costing is not a financial accounting system whereby costs are collected and reported by element e.g. salaries, benefits, supplies, leases, etc. It is an approach that translates the financial data into the activities that are driving the incurrence of those costs which then allows management to compare costs of a process, job placement for example, with the results produced by that activity. ABC helps identify activities that are consuming too many resources relative to their strategic importance or value to the customer. It can also help achieve a cross-functional – or cross organizational- perspective on the costs of activities.
Based on the case studies, a series of questionnaires will be developed and a representative sample of 20-25 One-Stop Career Centers statewide will be surveyed. The data collected will be used to profile the range of costs and services delivered around the state.
Participants in the case studies will receive the following benefits:
A sophisticated cost and outcomes analysis of the One-Stop Career Center that will help to better understand and manage operations;
Financial assistance to cover study costs and participation that will help enhance services in their center;
Anonymity – the local area and center will not be identified in the reports so that participants can be entirely free to provide complete information to the study; and a chance to shape the future of California’s workforce development system.
Some of the challenges to these studies include: getting data from each partner that accurately depicts the resources contributed and the services provided; combining data from disparate sources into a coherent story; applying the data collected from three or four sites to the overall fifty-site system.
EXISTING POLICY
The proposed activities are consistent with the City of Sunnyvale's Socio-Economic Goal 5.1F: Provide job training and employment services within constraints of operative, federal regulations and available federal funding, to address the locally-determined employment and training needs of economically disadvantaged residents and others with special needs.
DISCUSSION
NOVA, the California State EDD, the County of Santa Clara, and the Sunnyvale Library are among the partners who provide job search services through the CONNECT! Partnership at the local One-Stop Career Center also known as the Job Seeker Center located in the EDD building at 420 Pastoria Ave – across the parking lot from the Sunnyvale Library.
Based on NOVA deploying the City of Sunnyvale’s outcome based management system and its strong organizational capacity, NOVA/CONNECT! is an ideal candidate for this study. Since NOVA operates in one of the higher cost areas of the state we believe it is important to include our cost structures as well as the productivity effectiveness of the current operations as part of the overall statewide data collection. In addition, it would be good to get our unique relationships: the State of California’s EDD - housing and helping staff the one-stop; the integration of NOVA’s Business Services and the one-stop; the supportive role of the Sunnyvale library; the County’s Employment Connection presence on campus, even our campus approach, to name but a few elements, included into the study’s data mix. This program will also provide NOVA and it’s partners with an objective, third party review of the One-Stop operations, which may provide useful recommendations for improvements. Working with the research team may teach NOVA and partner staff new approaches to model and review other programs’ costs and effectiveness.
FISCAL IMPACT
There will be no fiscal impact to the City because funds received will offset program expenditures.
CONCLUSION
The California Workforce Investment Board, in partnership with the Employment Development Department and an independent research team from California State University Northridge are looking for LWIA’s such as NOVA to participate in a study which will work to understand how California’s One-Stop Career Centers – such as our local CONNECT! Partnership – fund and produce the services they deliver. They will use the cost accounting concept of Activity Based Costing to analyze the partners’ costs from the perspective of work activities so they can be viewed from a process perspective. Participants in the study will receive a grant of $10,000 to cover costs.
PUBLIC CONTACT
Public contact was made through posting of the Council agenda on the City's official notice bulletin board, posting of the agenda and report on the City's web page and the availability of the report in the Library and City Clerk's Office.
ALTERNATIVES
1. Council approves NOVA’s participant in the study project and accepts the $10,000 grant offered to offset the costs.
2. Council rejects submission of the application.
3. Other action as determined by Council.
RECOMMENDATION
It is recommended by staff that the Sunnyvale City Council, on behalf of the NOVA seven-city consortium, adopt Alternative 1: Council authorizes NOVA to participate in the One-Stop Study and accept the $10,000 grant.
Reviewed by:
Michael J. Curran, Director
Department of Employment Development
Prepared by: Stephen E. Quick
Manager of Business Operations
Approved by:
Amy Chan