2nd Jobs Agency Official Quits Over Audit : Ethics: The council’s decision to challenge critical state findings ‘in effect’ supports a fired executive’s expenditures, Director Jeri Miller says.

A second director of the embattled Job Training Policy Council of Ventura County has resigned, saying that the agency’s response to a critical state audit is unethical.

“I must say that a large part of the defense offends me morally and ethically,” said veteran council member Jeri Miller in a recent letter of resignation.

The jobs agency--faced with possible demands for repayment--decided last month to challenge preliminary state findings that a former agency executive had improperly spent $75,000 and approved another $276,000 in questionable expenditures during the 1980s.

Nearly all of the questioned costs resulted from the actions of former executive director John Chase, the council’s attorney has reported in a memo to the board.

Chase was fired last June amid allegations that he misused government money, awarded a contract to a company he owned, and had worked for two job-training agencies at the same time without telling his superiors.

But the council decided last month to fight repayment of the questioned $351,000. And it has, in effect, begun to defend Chase, Miller’s letter asserts.

Miller and Jim Compton, a county schools official, have now both resigned partly to protest the council’s response to the audit.

Miller, owner of a small Ventura bookkeeping firm, said that while past actions at the agency may be legal, the ethics of its staff sometimes “seem to be sadly lacking.”

“For example,” she wrote, “there have been many times in the past when I tried to reach John Chase in midmorning and have been told that he was yet to arrive. Therefore, when staff offers to swear that he served from eight to five, it does not ring true.”

Compton, who resigned a month ago, said Monday that he is familiar with Miller’s letter and agrees with her conclusions.

In an interview, Miller refused to elaborate on her allegations of unethical conduct. But she repeated assertions that the council for years had avoided hard questions about whether some council staff members had conflicts of interest when voting on contracts.

Nonetheless, she said the jobs council “is a good organization overall.”

“Most council members are just kind of shocked by the whole thing,” she said. “They just want to help and do the right thing, and suddenly we’re confronted with all this stuff.”

The resignations of Miller and Compton come more than a year into civil and criminal investigations of Chase’s conduct at the jobs agency.

Chase, 47, headed the job-training agency from 1983 until he was fired last June. The council, whose 19 members are from public agencies and private companies, distributes about $6 million in federal grants annually to companies that train poor people and help them find jobs.

In addition to the state audit by the Employment Development Department, a parallel U.S. Department of Labor criminal probe of Chase’s activities has been under way since February, 1990. A final audit report is expected within two weeks and a decision on criminal prosecution will then be made, officials said.

Chase has declined comment on the investigations. But his attorney, George C. Eskin, has maintained that his client is being made a scapegoat by the job-training council for its own confusion. The council knew Chase worked two full-time jobs and was aware of Chase’s activities that are now being questioned, Eskin said.

William Hewston, chairman of the jobs council, said Monday that he did not know of Chase’s dual employment and possible conflicts of interest, nor did many other council members.

But Hewston said the council believes it can justify virtually all of the expenditures challenged by the state and that Miller and Compton acted prematurely in resigning.

He also said that Chase, like many administrators, could have fulfilled his full-time obligations to the jobs council by working outside the office.

‘We don’t agree with some of the auditors’ findings,” Hewston said. “There is evidence that they counted the same dollar two, three and four times. . . . But the investigation is not complete. And the council has not made a final position statement.”

Hewston said state auditors took a year to report their preliminary findings, then gave the council 60 days to respond. And the council analysis is far from complete.

“It’s a tightrope right now,” said Hewston, president of an oil-well testing company in Ventura. “You don’t know what way anything will finally go. Once the evidence is all in, we’ll make any corrections necessary . . . to make sure this never happens again.”