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Baltimore City

Annual audit finds fault, some serious and ongoing, in Baltimore’s handling of federal grants

An annual audit of Baltimore’s finances found instances of serious fault with how well the city adheres to rules governing federal contracts.

City Comptroller Bill Henry noted Monday that a company that contracts with the city to review city finances had found four “significant deficiencies” concerning contracts with the U.S. Department of Housing and Urban Development during fiscal year 2021.

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Managers overseeing a HUD program that offers housing and treatment to people with AIDS were “unable to provide evidence that … reporting requirements were met,” according to the report.

Auditors also found that at least 10 transactions concerning a HUD contract that offered health insurance to children in low-income families had occurred outside of the time frame for when the grant was awarded, and that the expenses had totaled more than $550,000.

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On two other occasions, the city Health Department was unable to provide expenditure information concerning a Medicaid and an HIV prevention program that matched details that were reported to the state.

Several agencies were also unable to provide payroll data, like employee timesheets between July 2020 and December 2020, that would have allowed auditors to “validate compliance and internal controls,” Henry said in a release of audit findings.

Some agencies failed to provide evidence of compliance with federal rules monitoring city grant “subrecipients.”

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In some instances, the city fulfilled reimbursement requests without confirming whether the recipient had spent the money, and for one grant program, 17 of 40 grant recipients did not perform the work on time that they received money for.

The report included concerns about previously disclosed problems, like ongoing issues with the municipality’s public utility billing systems, which date back years.

“The city’s water and wastewater utilities system is not able to establish accurate water and wastewater utilities revenue and accounts receivable balances without manually calculated adjustments,” the report says, noting that manual adjustments add a “greater risk of error.”

A separate audit from earlier this year revealed that the Department of Public Works had no process to collect fees from delinquent customers, and was not monitoring billing complaints from Baltimore County residents to ensure that they were being addressed in a timely manner.

In its response, the city pointed out that it in early 2021 it adopted Workday, an online program to oversee human resources and financial transactions, and is incorporating that as quickly as possible as an eventual solution.

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“The transition from numerous stand-alone systems and spreadsheets into one, unified system has and will continue to provide opportunities for increased accuracy, accountability and unprecedented communication and collaboration between City agencies,” the city’s response says.

“These corrective actions are our top priority,” City Finance Director Michael Moiseyev said. “Workday was long overdue, and I know that its implementation, along with our corrective action plan, will be positively reflected in the FY23 report.”


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