Mayor Pugh orders chief of staff to fix Baltimore's flawed grants process

Mayor Pugh orders chief of staff to fix Baltimore's flawed grants process
Baltimore, MD-3/12/18 - Mayor Catherine Pugh delivers the State of the City Address in the City Hall council chambers. Amy Davis/ Baltimore Sun Staff Photographer - #25627 (Amy Davis / Baltimore Sun)

Baltimore Mayor Catherine Pugh on Wednesday ordered her chief of staff to fix a flawed process for tracking grants that has put the city in jeopardy of losing much-needed state and federal money.

Last month, an audit of how the city manages millions of dollars in state and federal grants came to the same conclusion that previous examinations have: 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,” city Auditor Audrey Askew reported to the Board of Estimates. “The city could lose its much-needed [grant] funding.”

Pugh said this week she’s appointed her chief of staff, Kim Morton, to fix the process.

“We looked through the audit findings and some of them are duplicates, things have happened year after year,” Pugh told reporters at City Hall. “We don’t want to have these same kind of repeat findings next year.”

The city receives nearly $448 million annually in grants, or about 16 percent of its $2.8 billion budget. Pugh said Morton will ensure there are procedures in place to make sure all the money is accounted for.

“We are really going to take this seriously,” the mayor said.

Baltimore’s problem with tracking grant money has existed for years. 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.

In 2014, a finance department study found city agencies couldn’t account for as much as $40 million in grant money from state, federal and other sources. The report blamed poor budgeting and oversight, outdated policies and inconsistent accounting procedures.

Also that year, the U.S. Department of Housing and Urban Development ordered the city to repay $3.7 million from a grant awarded to serve homeless people. The city had dispersed the money to anti-poverty organizations that didn’t properly document how it was spent, federal officials said.

Finance Director Henry Raymond has said that he has appointed employees to oversee grant management and that the problem would not be repeated next year.

The improper tracking of grants was one of several negative findings included in recent audits of city government. Baltimore voters have mandated that city agencies must undergo 26 performance and financial audits every two years.

Recent audits also have shown that the city’s persistently inaccurate water billing system remains dysfunctional and have criticized the Department of Public Works for losing too much water.

Last week, Askew reported that the agency missed its goals for preventing water loss — when water goes missing from the city’s system without anyone being charged for its use. The city’s goal was to keep “unaccounted for water” under 25 percent, but city officials ended up losing more than 35 percent, the audit found.

“DPW has identified possible causes for the distribution system water loss such as leaks, inaccuracies of the customer billing system, and inaccuracies of the meters for supplying water,” Askew reported.

Public works officials said the problem is being addressed by an overhaul of the water meter system.