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(Reuters) - A $500-million "green jobs" program to train U.S. workers for new jobs and help spark recovery from the great recession has fallen far short of its goals, according to a report from the Labor Department's internal watchdog released on Friday.

As of June 30, fewer than 31,000 people who went through training programs got green jobs, only 38 percent of what had been projected, the department's Inspector General said in the report.

Of those workers, less than 12,000 kept these jobs for more than six months, a mere 16 percent of what organizations that got grants had targeted when they were awarded the money.

"The impact of the Recovery Act Green Jobs training program has been limited in terms of reported employment outcomes," the report said.

The Labor Department said it disagreed with the conclusions. "This report does not take into account that nearly half of the grants are still active and thousands of workers are still participating in the program," a spokeswoman said in a statement.

The department said its own early analysis showed that most program participants who obtained jobs by December 31, 2010, had kept them. For 13,000 workers who completed training by June 30, 2011, 57 percent had obtained jobs, it said.

The department's $500-million training program was part of the $90 billion earmarked for clean-energy spending in the 2009 economic stimulus package.

The administration of President Barack Obama had aimed to create more than 700,000 jobs while spurring development of renewable power and making buildings more energy efficient.

The Obama administration's clean-energy spending has been pilloried as wasteful during the presidential campaign, with Republican challenger Mitt Romney often brandishing the example of bankrupt solar company Solyndra that received a government loan of more than $500 million.

The Inspector General's audit was requested by Darrell Issa, the Republican chairman of the House of Representatives Oversight Committee.
Issa, a frequent critic of Obama's green-energy spending, said in a statement that the report showed the program was "poorly thought-out, mismanaged and dysfunctional."

PROVIDE WORKERS WITH USEFUL SKILLS

The goal of the training program was to arm workers with new skills such as retrofitting buildings. Nearly $330 million of the program funds have been spent as of June 30, the report said.

Some 81,354 people had completed training programs by that date, most of which lasted five days or less.

The Inspector General took a closer look at eight organizations that received grants and said poor record keeping made it difficult for programs to substantiate how many workers got jobs as a results of the training.

"The inability to document program outcomes raises questions about what was achieved with the significant investment represented by this program," the report said.

Republican Senator Charles Grassley said the report shows the program did not work and wasted tax dollars.

"It's important to have this documentation of low success rates the next time someone advocates for an expensive federal stimulus program," Grassley said in a statement.

The Labor Department said it would conduct its own studies after the program officially ends in September using unemployment insurance and federal employment data.

"This program and other administration investments have supported hundreds of thousands of workers and helped to build new industries," the department's spokeswoman said, noting wind and solar power generation has doubled during the past four years.