Commentary

No Reason to Celebrate: AmeriCorps Turns Five

By Derrick A. Max
October 25, 1999
Would you voluntarily donate your hard-earned money to a charitable organization that spends millions of dollars to send its high-level staff members to national conferences at places like Caesar’s Palace? Would you voluntarily donate to an organization that paid stipends and gave scholarships to students for their work as baby sitters or as line workers at fast food restaurants? Would you donate to an organization that had failed, for the last five years, to maintain auditable financial statements? Of course you wouldn’t. Unfortunately, you have no choice but to “donate” to such organizations through your federal taxes that are used to fund AmeriCorps—President Clinton’s failed national service program.

The President and the First Lady celebrated your forced donation to this organization last Wednesday at the fifth anniversary party for the Corporation for National Service. This corporation oversees the paid-volunteer program known as AmeriCorps (is there such a thing as a “paid volunteer”?). Over the last five years, this bureaucracy (it’s not really a corporation—despite its name) has distinguished itself more by its disservice to the nation’s pocketbook than for its good deeds around the country. But facts, like a drunken uncle at the proverbial wedding reception, will be hidden by the President and the First Lady to keep them from marring the joyous celebration being planned for AmeriCorps’ anniversary.

As the lead investigator for the Congressional Committee with oversight of AmeriCorps for three of the five years of this program, I was repeatedly astounded by the gross mismanagement uncovered in this ill-designed, if well-intentioned, program. Our investigation of AmeriCorps uncovered high costs ($26,000 per AmeriCorps participant), high dropout rates (almost 30 percent), questionable training (sex education, video presentation skills, diversity), poor accounting and management oversight (unauditable accounts), wasteful spending ($400,000 to the AFL-CIO for “training and technical assistance”), and questionable partisan political activities (raising money, handing out fliers, voter registration, etc.). Unfortunately, on the eve of its fifth anniversary, after spending over $3 billion in taxpayer money, matters at the President’s pet program appear to have only gotten worse.

In June of this year, the Corporation for National Service sent 115 of its highest-paid employees and 27 consultants to a four day “community service conference” at Caesar’s Palace in Las Vegas. The corporation employees were joined by more than 760 employees of various grantees of the corporation. It is important to note that these grantees receive substantial taxpayer funds from the Corporation for National Service. In all, this “conference” is estimated to have cost taxpayers several million dollars.

What did taxpayers get in return for their hard-earned money spent on this Las Vegas junket? According to the agenda, conference participants heard scintillating discussions with titles like “Making Joyful Noises: Community Building through Humor and Song,” and “Teaching Your Children Values Can Be Fun for the Whole Family.” In light of the financial and management problems, which are rampant in AmeriCorps and its grantees, one would have expected to find classes on how to adequately manage taxpayer and donor money, “accounting for idiots,” or “employee time cards made easy.” Unfortunately, no such classes were on the agenda. While employees of the Corporation for National Service gallivant around the country at taxpayer expense, holding conferences on feel-good topics, taxpayer money continues to be abused.

A case in point is the AmeriCorps program in Terre Haute, Indiana. In June of this year, at about the same time AmeriCorps staff was living it up in Las Vegas, it was learned that two AmeriCorps programs operated at Ivy Tech State College in Terre Haute had been suspended. An audit of those programs showed that they had almost $300,000 in questionable costs. Shockingly, over half of these costs were attributable to the fact that no record was kept of any work being performed by AmeriCorps members. Two of the AmeriCorps members who lacked any record of their work, and who had received substantial stipends and scholarships, just happened to be related to the former director of the local AmeriCorps program. Can you spell nepotism?

The remainder of the questionable costs in the Terre Haute AmeriCorps program included service credit that AmeriCorps participants got for time spent on their jobs as baby sitters and lifeguards. Those AmeriCorps members were told that if their regular jobs paid less than $9,000, their work could be counted as “community service.” Other members in these programs were receiving service credit for going to church or attending team practice for sports they played. This, they were told, benefited the community and thus could also be considered “community service.” In short, AmeriCorps members were getting stipends and scholarships for doing what they had been doing before joining AmeriCorps—participating in school sports and working part time for minimum-wage salaries.

While the President and his political appointees at AmeriCorps would like us to believe that such problems are rare and isolated, that is simply not the case. The inspector general of AmeriCorps warned our committee in 1998 that reporting and record keeping was a high-risk area that made taxpayer funds susceptible to “errors of irregularities, including fraud, in the reporting of AmeriCorps service hours.” In fact, the inspector general noted that almost half of all audited AmeriCorps grantees had errors in their reporting of member and staff hours. Thus, while the President likes to quote stratospheric statistics on the amount of good work being performed by AmeriCorps participants around the country, there is no way to adequately verify if this work has actually been performed or what that work actually entailed.

The President and the First Lady celebrate this glorious anniversary, surrounded by young men and women in AmeriCorps uniforms bearing heart-warming stories on how AmeriCorps has changed their lives, but don’t be fooled. We need to make sure that this anniversary is AmeriCorps’ last—before the drunken uncle embarrasses us all.

Derrick Max is director of government relations at the Cato Institute and the former lead investigator on the committee with congressional oversight responsibility for AmeriCorps.