Texas Workforce Commission spent 64% more per WIOA participant

The Texas Workforce Commission (TWC) — the state agency that runs Texas's share of the federal Workforce Innovation and Opportunity Act (WIOA), the country's main public job-training system — spent $6,556 per participant on its three largest WIOA grants from 2019 through 2021, 64% more than the $3,977 national average for the same period⧉, according to a U.S. Department of Labor Office of Inspector General (OIG) audit released June 10, 2026.▸ Applying that gap to the 84,538 Texans TWC served, OIG calculated the agency could put as much as $218,046,201 in future WIOA funding to better use⧉ — enough, at the national average cost, to have served roughly 54,800 more people without spending another dollar. The same audit separately questioned $1,036,822 that TWC and a grant subrecipient spent outside WIOA's rules⧉ altogether, including office construction that never got the federal sign-off it needed.

WIOA funds states to provide career counseling, job training, and support services — like childcare and transportation — to people with barriers to employment, through grant recipients (usually a state workforce agency) that pass funds down to local boards and their contracted "subrecipients," the organizations that actually serve participants.▸ OIG, DOL's independent watchdog, is required to audit how that money gets spent and to report what it finds to Congress and the public.

Nationally, from Program Year 2017 through Program Year 2023, OIG found the average WIOA cost per participant rose 174% — from $1,786 to $4,899 — while cumulative inflation over the same seven years ran 22.8%⧉.▸ Had costs merely tracked inflation, that 2023 figure would be about $2,229, not $4,899. Meanwhile the number of participants served nationally fell 57%, from 1.3 million to 596,000, even as overall grant funding rose 16.7%⧉ — the same public investment reaching a shrinking population at a rapidly rising per-person price, a trend OIG found ETA does not monitor as part of its oversight.

This audit is the third in an OIG series drilling into that national trend state by state, following prior reports on New Jersey (2023) and New York (2025)⧉; OIG picked Texas because it received the second-highest WIOA formula-grant total of any state.▸ Auditors reviewed three statutory grants to TWC and one discretionary grant, together worth $584,563,870 — over half of the roughly $1 billion in WIOA money Texas received⧉ from October 2018 through September 2021.

What should the gap between Texas and the national average look like?▸ OIG doesn't set a target number, but its own math turns the 64% cost premium into a scale a reader can picture: the $218 million gap between what Texas spent and what the national average would predict is, by OIG's own calculation method⧉, enough to have put roughly 54,800 more Texans — about 65% more than the 84,538 TWC actually served — through the same programs at the national per-person rate. ETA did not dispute the underlying cost-per-participant figures in this Texas audit. OIG notes that ETA has previously resisted the idea of a cost ceiling — in response to the 2023 New Jersey audit in this same report series, ETA said setting a maximum cost per participant would work against serving people with the most complex needs, who legitimately cost more to help. OIG's ask here is narrower than a ceiling: it wants ETA simply tracking the trend, something it currently does not do at all.

WIOA caps how much of a grant can go to administration — no more than 5% at the state level, no more than 10% per local workforce board — precisely so federal money goes mostly to serving people, not overhead.▸ TWC reported $45.3 million in administrative spending statewide during the audit period, comfortably inside both caps⧉. But OIG found a loophole: WIOA's own rules let subrecipients who directly serve participants report their administrative costs as ordinary "program costs" instead, exempting that spending from the administrative caps entirely.

In just one local area, OIG found $9.9 million in spending that fit the definition of administrative work — about 22% of the state's entire reported administrative total — booked instead as program costs⧉, and TWC has 27 more local areas where the same reporting pattern could be hiding.▸ Nobody — not ETA, not Congress, not the public — can currently see how much of Texas's WIOA money actually goes to running the program rather than serving people in it, because the accounting itself is built not to show it.

Separate from the efficiency gap, OIG found specific spending that broke WIOA or federal grant regulations outright — what auditors call "questioned costs," money a grantee may ultimately have to repay.▸ The largest: a TWC subrecipient budgeted $5,569,370 to remodel seven leased office locations⧉ — new conference rooms, restrooms, security wiring, vocational-rehabilitation space — and by September 2022 had incurred $4,637,552 in construction costs, of which $998,253 was charged directly to WIOA grants without the prior written ETA approval federal rules require for capital improvements⧉. TWC told auditors it didn't believe the work counted as a capital expenditure; OIG disagreed, noting the scale of the spending and that the work added permanent features like offices and restrooms.

Two smaller findings round out the total: the same subrecipient overcharged $23,718 in indirect costs⧉ by billing at a provisional rate it never reconciled to the final negotiated rate, and TWC charged $14,581 of its State Workforce Development Board Executive Director's salary directly to the WIOA Youth program⧉ instead of booking it as the administrative cost WIOA requires — TWC agreed the charge was miscategorized.

Auditors also tested whether the services TWC reported actually happened.▸ Sampling 60 participant files across six subrecipients under TWC's largest local board, OIG found 23 cases where TWC had told ETA a participant received a career service — job search help, an employment plan, a skills assessment — with no supporting documentation in the file showing it was actually provided⧉. ETA's own guidance let a bare checkbox in a case-management system count as proof for basic services, which OIG found contradicted ETA's separate Core Monitoring Guide requiring actual records like assessments or employment plans. Without that documentation, there's no way to confirm the training and career help WIOA is designed to deliver was delivered at all — the gap sits between what the program reports and what it can prove.