When a high-ranking O'Malley administration official was fired after allegedly steering about $774,000 in federal grant money to a company to which the official had close ties, no announcement was made. Only this week was the dismissal two years ago made public by legislative auditors.

Auditors revealed that an inspector general had completed a report in 2013 that found misuse of government funds and a "serious conflict of interest" on the part of the top official of the Department of Labor, Licensing and Regulation's Division of Workforce Development. The matter was referred to the criminal division of the attorney general's office.

A copy of the report provided to The Baltimore Sun does not disclose the name of the fired official.

Reports by Maryland's four inspectors general are issued without notice to the public or the news media. The practice is unlike that of Baltimore's watchdog agency, which routinely informs the public when a report is complete.

Jennifer Bevan-Dangel, executive director of Common Cause Maryland, said the failure to publicize a report by an internal watchdog investigating misuse of taxpayers' money is an example of the "cloak of secrecy" over Maryland government.

"If it's about public officials and public funds, it needs to be in the public eye," she said.

The report by the inspector general of the Department of Health and Mental Hygiene details how the official approved the award of grant funds to a company with which she had an undisclosed prior business relationship and the firm with which it later merged. According to the report, she awarded the work without competitive bidding and bypassed approval by the Board of Public Works.

The report also found that the official had exceeded her authority and put pressure on the Maryland Workforce Corp., a "quasi-state" agency that received department grants, to use the company with which she had been affiliated for "grant writing and technical assistance." The report says the official also leaned on the agency to speed up payments to the contractor.

According to the inspector general, the questionable relationship was uncovered when the head of the workforce agency brought the matter to the attention of Scott Jensen, then acting secretary of the DLLR, in April 2012. Jensen, now deputy secretary, fired the official three months later.

The month after the official was fired, a deputy chief of staff to O'Malley asked health department inspector general Thomas Russell to investigate the questionable payments.

No charges have been brought in the case. The attorney general's office would not comment on whether there is an active investigation.

Russell said his agency does not alert the public when it files its reports, as legislative auditors do as a matter of routine. He said he provided copies to the DLLR, the governor's office and the Office of Legislative Audits in addition to the attorney general.

The report couldn't be released until the attorney general's office reviewed it and blacked out sensitive information, Russell said.

Nina Smith, a spokeswoman for O'Malley, said inspector generals' reports are typically treated as confidential because they involve personnel issues. Under state law, she said, the administration is barred from disclosing personnel actions, including terminations of high-ranking political appointees for serious misconduct. She said that policy was in place before O'Malley took office in 2007.

David Paulson, a spokesman for Attorney General Douglas F. Gansler, confirmed that the restrictions on disclosure protect high-ranking officials as well as civil servants.

"Both federal and state personnel privacy laws apply equally to all merit and political appointees in Maryland government," he said.

Bevan-Dangel said Maryland's use of the personnel exemption is far too broad and should be re-examined by the General Assembly. She said Common Cause is working on a proposed overhaul of the state's public-records laws to give the public more information about such cases.

"We don't see that that should be covered by any exemption, especially since it's such a high-level official," she said.

michael.dresser@baltsun.com