A pair of left-wing groups misused hundreds of thousands of dollars in stimulus grant funds, according to federal investigators, who questioned the validity of every dollar the two groups received.
In a report released Monday, Department of Housing and Urban Development’s inspector general raised concerns about $752,982 in stimulus disbursements to the now-defunct Prisoners Aid Association and the Baltimore-based Public Justice Center, citing shoddy accounting and violations of funding guidelines.
The two groups were sub-recipients of a stimulus grant designed to prevent homelessness and re-house the homeless. HUD gave more than $9.5 million to the city of Baltimore to administer the grant. The city contracted with United Way of Central Maryland, which selected the Public Justice Center and Prisoners Aid as sub-grantees.
Expense reports filed by Prisoners Aid showed it spent only $157,234 of the $270,550 it received from the city of Baltimore. That total was significantly less than the $392,982 in grant money Baltimore drew down for the Prisoners Aid grant.
What’s more, the group “could not produce participant files or records to support the $270,550 in grant funds it was paid,” according to the IG. The report questioned the entire $392,982 in grant funds.
Prisoners Aid recently folded in the midst of chronic financial problems. In July of last year, United Way terminated its relationship with the group. Frank Marchant, who took over as executive director in March of that year, said his predecessor had double-dipped in HUD grant money, billing expenses for the same participants to two different anti-homelessness programs, including the one examined in the most recent IG report.
The Public Justice Center, meanwhile, used stimulus money to pay the salaries of its staff attorneys in violation of HUD guidelines. The center drew down its $336,000 grant over 36 months to pay those salaries, “regardless of the amount of case output related to the grant,” according to the IG, which questioned the entire award.
HUD funding allocation guidelines required that “grant funds…be used only to pay for eligible benefits and costs to assist eligible participants” and that every employee paid by grant funds “certify at least semiannually that he or she worked only on this program during that period,” the report states.
Instead, the center prorated its grant over 36 months, requesting exactly $9,333 per month, without showing that the money was actually being spent on grant activities.
The expense reports it submitted to the City were not based on actual expenditures. The Center’s executive director stated that the attorneys did not charge time to the grant. Their hours were not charged to specific participants. Rather, the grant funding was used to pay the salaries of the legal staff, regardless of the amount of case output related to the grant.
The Public Justice Center also did not show that it had used grant funds to assist households that actually qualified for the program. “[W]e found that the files lacked documentation to demonstrate that assisted households’ annual income was at or below 50 percent of the area median income,” the IG report states. The Center did not return requests for comment by press time.
Read the full IG report: