This might not surprise you at the very least, but a new financial audit of how Baltimore City manages millions of dollar in federal and state grants has found top senior officials cannot account for how those dollars were spent.
The Baltimore Sun reports city auditors have unearthed some very troubling mismanagement concerns when it comes to Baltimore’s finances: “Grant money coming into government coffers is not balancing out with what city agencies are spending.”
“The city is not able to establish accurate balances of grant accounts,” Deputy City Auditor Audrey Askew, CPA told Baltimore’s spending panel last week.
In a shocking response, Askew warned the spending panel: “The city could lose its much-needed [grant] funding,” because of its reckless accounting practices.
According to the Baltimore Sun, the city “receives nearly $448 million in grants or about 16 percent of its $2.8 billion budget.” In other words, Baltimore City risks losing almost a half-billion dollars in critical funding, during a turbulent environment for the city, as total population has hit a 100-year low and violent crime has surged to the highest levels in decades.
City Council President Bernard C. “Jack” Young expressed outrage over the findings, arguing that grant management problems should have been fixed a long time ago.
“I don’t understand how we can have a problem with grants,” said Young, a member of the spending board. “That has to really stop. If the grants don’t add up … the federal government is going to come and they’re going to want their money. We’re going to owe thousands, maybe millions of dollars.”
Finance Director Henry Raymond told the Board of Estimates that he has “appointed employees to oversee grant management and that the problem would not be repeated next year.”
Raymond said, “the unbalanced grant ledgers in the last fiscal year are an accounting issue — not the result of waste or abuse.”
“We’re training agencies on how to properly use budget account numbers,” Raymond added. “Staff at the agencies are using outdated or incorrect grant account numbers.”
Askew also told the spending panel her team’s audit discovered a “lack of communication” between organizations that receive grants and the city’s department of finance office.
“A lack of formal accounting processes made it impossible to confirm whether grants were being spent for their intended purposes,” Askew revealed to the spending panel.
Young said it does not “take a rocket scientist” to develop a new system of accountability in administering grant money to organizations throughout the city.
“This is serious business,” he told Raymond. “I do not take excuses.”
Young then uttered the unthinkable — dropping a bombshell that made the liberal leaders of the collapsing city cringe; he suggested “holding back money from city agencies until they get their grant accounting in order.”
Even Mayor Catherine Pugh told Raymond “there really does need to be a closer checking.”
Baltimore’s financial mismanagement problem of tracking grant money has existed for years. The Baltimore Sun adds,
“Several previous examinations have found that city officials have failed to properly account for millions of dollars in grant funds. Each time finance officials have pledged to fix the issues, as they did on Wednesday.”
In 2014, city auditors found local agencies could not account for $40 million in grants from federal, state, and other various sources. The financial audit “blamed poor budgeting and oversight, outdated policies and inconsistent accounting procedures,” said the Baltimore Sun.
Coincidentally, Mayor Catherine Pugh did not have an issue supplying more than 60 taxpayer-funded buses for 3,000 kids to the March For Our Lives rally in Washington, D.C last weekend. Here is what we said:
“Kevin Rector, a crime reporter for the Baltimore Sun Newspaper, recorded Baltimore Mayor Catherine Pugh on Tuesday outside City Hall, shouting through a bullhorn to several hundred zombified students, of how she wants to provide 60 taxpayer-funded buses – to send more than 3,000 students to the March For Our Lives rally in Washington, D.C., scheduled for March 24.”
Here is how social media reacted to the audit:
One Twitter user said, “Hmm, strange how Baltimore found the money to bus 1000s of students to a gun control march.”
Hmm, strange how Baltimore found the money to bus 1000s of students to a gun control march t.co/IEoJBzOxIJ
— Cameron Gray (@Cameron_Gray) March 22, 2018
Another said, “Lost millions… Bussed 1000’s of kids to DC protests…”
— ̤♰Donny⚔️ (@sixbennetts) March 22, 2018
“At least they found enough money to bus all of those kids to the gun control rally,” said a concerned American.
At least they found enough money to bus all of those kids to the gun control rally. #priorities
— GunDad (@gundad790) March 22, 2018
Investigative Reporter WBAL said, “Baltimore’s annual audit of city spending/revenue shows in plain view how public safety, mostly policing, dwarfs all other spending. It is that very tall column on the left.”
Baltimore's annual audit of city spending/revenue shows in plain view how public safety, mostly policing, dwarfs all other spending. It is that very tall column on the left pic.twitter.com/aF1ybHQOAk
— Jayne Miller (@jemillerwbal) March 21, 2018
We are going to leave you with a dialogue below from Ernest Hemingway’s 1926 novel, The Sun Also Rises; as it is an excellent description of the current environment in Baltimore City.
“How did you go bankrupt?” Bill asked.
“Two ways,” Mike said. “Gradually and then suddenly.”