Homelessness and Housing
City reserves $7 million to repay mismanaged federal homeless grant
A year after a critical audit report, HUD is pressing for a large repayment of funds earmarked for homeless services
Above: Bernadette and other homeless adults gather near the Harry and Jeanette Weinberg shelter on the Fallsway.
The Rawlings-Blake administration has signaled that the city may have to reimburse $7 million in federal funds used for homeless programs between 2009 and 2012.
The administration has set aside $7 million as a “calculated risk” that it will have to return the funds due to mismanagement of a Homeless Prevention and Rapid Re-Housing grant awarded to the city under President Obama’s 2009 stimulus act.
Budget Director Andrew Kleine made that admission during a presentation before the City Council’s Budget and Appropriations Committee last week. There was no elaboration about the anticipated repayment of the grant, which was cited in passing by Kleine as part of a laundry list of changed budget items.
The Brew has sent messages to Kleine and the mayor’s spokesman, Kevin R. Harris, asking for further information.
We will publish their statements when we receive them.
Lack of Financial Controls
A year ago, the Mayor’s Office of Homeless Services said it would “prove” that “no waste, fraud or abuse was conducted during the course of administering” the $9.5 million homeless grant.
This followed a highly critical audit report by the Inspector General of the U.S. Department of Housing and Urban Development (HUD), which handled the funds.
Unlike any other major city that participated in the program, the Inspector General found that Baltimore did not monitor the expenditures of its subgrantees, could not justify the fees they charged to the program and drew down grant money based on a preset formula rather than actual costs.
The report said that 100% of Baltimore’s expenditures were “unsupported” at the time of the audit, compared to 0.6% of the funds spent by New York City and 0.48% by Houston.
Read the full HUD Inspector General Audit Report HERE.
Outside of Baltimore, the worst offender in the audit process was Newark, with 8.5% “unsupported” documentation, according to a survey by The Brew. (Details.)
In her rebuttal to the audit, Kate Briddell, director of Baltimore’s homeless services, attributed the program’s shortcomings to minor administrative glitches, such as “paperwork [that] was not completed or kept in a standard we would like.”
Over the last year, the city and HUD’s Baltimore Field Office have been reviewing the city’s documentation of its expenditures and sparring over possible repayment requirements. The Rawlings-Blake administration has concluded that it may have to reimburse up to $7 million of the $9.5 million grant.
The bulk of the original grant was administered by the United Way of Maryland under a contract approved by the Board of Estimates – whose terms were faulted as lacking proper oversight by the Inspector General.
United Way appropriated the money to 12 groups, including Associated Catholic Charities, Health Care for the Homeless, Prisoners Aid Association, Public Justice Center, Baltimore Healthcare Access, People Encouraging People and St. Vincent de Paul of Baltimore.
After the director of Prisoners Aid accused its former director of double-billing HUD, the organization was terminated from the homeless grant. HUD reported that between $270,000 and $463,000 in funds to Prisoners Aid could not be accounted for. The organization has since shut down amid bitter infighting and lawsuits.
Still Under Review
Briddell’s Homeless Services directly administered $431,000 in federal funds going to Jobs Housing and Recovery (JHR) and Marian House, and for “utility assistance.”
The Inspector General criticized the the agency’s oversight of these programs – as well as the $112,000 that Homeless Services charged the federal government for employee salaries and $49,000 for “data collection and evaluation.”
Carol Payne, director of HUD’s Baltimore office, said she could not comment on the status of the negotiations or repayment requirements. Niki Edwards, a spokesman for HUD’s Office of Field Policy and Management, issued this statement to The Brew late yesterday:
“HUD’s Office of Community Planning and Development is currently reviewing financial and beneficiary documentation at the various sites where the grant program was administered (in response to the recommendations outlined in the HUD Office of Inspector General’s Audit Report).
“The documentation demonstrates whether the grant funds were used only for eligible services for eligible participants. Since HUD is in the fact-finding and review stage, it would be premature to discuss repayment requirements.”