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Audit finds 'widespread discrepancies' in Baltimore energy bill aid

Bernard C. "Jack" Young, Baltimore City Council president, shown speaking at the funeral for Frank M. Conaway, Sr.
Bernard C. "Jack" Young, Baltimore City Council president, shown speaking at the funeral for Frank M. Conaway, Sr.(Amy Davis / Baltimore Sun)

Baltimore has approved $6.2 million in questionable payments meant to help poor families pay their energy bills, including grants to three dozen households that aren't even in the city, according to a new audit.

The report by the city auditor's office, presented Wednesday to the Board of Estimates, finds "widespread discrepancies" in the handling of energy-assistance grants by the Department of Housing and Community Development. Auditors say the city could supply no documentation for one in five of the cases they sampled to review, and those files that were available often contained missing or incorrect information. In nearly three dozen cases, the housing agency signed off on paying the same energy bill twice.

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"It's kind of amazing, but not surprising that the city is so screwed up like this," said Sharon Black of the People's Power Assembly. "But at same time it's pretty frustrating and painful." Black's group has been pressing the city to stop shutting off water to low-income families with unpaid bills.

Two dozen of the 114 energy-assistance files that city auditors asked to review were missing, they reported. Housing officials told them the files had been destroyed by water damage when pipes burst in the office running the program.

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At the board meeting, Council President Bernard C. "Jack" Young pressed city staff to find out why people outside the city received the benefits, and if Baltimore would have to repay the federal government.

"I want to know how 36 households outside the city of Baltimore received help, because we have citizens right here who need help," he said. "If people got these funds that weren't residents of Baltimore City, how are we going to recoup that money?"

Young said he was also concerned the city would have to repay the U.S. Department of Health and Human Services, which funds the city's low-income home energy assistance program. He noted last year that the federal government had ordered the city to repay $3.7 million from a homeless services grant. The U.S. Department of Housing and Urban Development blamed the city and its subcontractors for not sufficiently accounting for how money from federal stimulus funds was spent.

"Is this going to be another one of those?" Young asked.

City auditor Robert L. McCarty told Young the city may owe the federal government money, but he wasn't sure whether it would be more or less than $6 million. McCarty said the auditors used a statistical estimate, and the Health and Human Services department may reach a different conclusion.

"It depends on what [Health and Human Services] would want to do," McCarty said.

The regional Health and Human Services manager of the low-income energy assistance program did not respond to requests for comment.

Kim Washington, chief of staff for Baltimore Housing, pledged an immediate review of the program. She said she would provide answers to city leaders within a couple of weeks.

The federal energy assistance funds are funneled through the state, which pays Baltimore Gas and Electric Co. or a heating oil supplier on behalf of households, after municipal officials have vetted residents' applications for help with utility bills. Payments range from nearly $100 to $1,710.

The program helped nearly 118,000 households statewide in the last fiscal year, according to a Health and Human Services web site. City officials did not respond to requests for a breakdown of payments made under the program, but in a written response to the audit noted they process more than 40,000 applications a year.

City housing officials wrote that their agency "strongly objects" to the audit findings. They contend all those receiving energy bill assistance were eligible for it, including those with addresses outside the city.

As for the duplicate payments, city housing officials said their "understanding" is that BGE automatically returns those to the state. But in an interview, McCarty said city auditors found no evidence that had occurred.

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Management of the program has been transferred to the mayor's Office of Human Services, the city response noted without explanation. Housing staff will help the new office in reconstructing files that are missing, the agency said.

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