An audit of a federal grant given to Baltimore for a youth mentoring program found that the funds were poorly managed and officials did not document how all of the $900,000 was spent.
The program, called Baltimore Rising, improperly hired and paid 30 workers without giving them contracts, failed to bring contracts to the Board of Estimates for approval, reported inconsistent data to the federal government and did not properly document expenses, according to the audit, which will be released Wednesday.
"Due to the significant deficiencies related to operating this program, we do not have reasonable assurance that the financial reports were free of material misstatement," according to the audit. Officials in Mayor Sheila Dixon's administration concurred with many of the findings and said they've taken steps to correct the problems. They pointed out that the audit covered a period from July 2004 to December 2007, and Dixon was in office only during the final year.
"None of this was on our watch," said Deputy Mayor Salima S. Marriott. "There was nothing in this audit that was administrated during the Dixon administration."
Marriott's staff noticed financial inconsistencies when reapplying for the grant. They filed a complaint with the city's inspector general's office, which turned the matter over to the city's independent auditors.
"The structural management was not handled the way it should have been," said Janie S. McCullough, an assistant deputy mayor for community and human development who first raised concerns about the program.
But she believes funds were spent properly, providing job shadowing, family skills training, mentoring for children of imprisoned parents and support to former prisoners.
The U.S. Department of Health and Human Services awarded the grant to the city in 2004, giving it $300,000 a year for three years.
Kenneth Wolfe, a spokesman for the DHHS, said the agency would not comment until it has reviewed the audit.
In the first two years of the program, managers told the federal government that they spent $35,400 more than they actually spent, auditors found. In the final year, they reported $66,000 less than they actually spent, auditors said.
Responding to that finding, Lorrie R. Davis, executive director of Baltimore Rising, said different city and federal reporting time periods might explain the discrepancies.
The audit also found that 30 "consultants" were hired without contracts between 2004 and 2007 for a total of $248,000.
Davis acknowledged in a written response that contracts were not "handled in accordance with the City's Administrative Manual," but said the program was "honoring the relationships that were already established" when Martin O'Malley was mayor.
Lawrence Jamaal Moses, who was director of the Mayor's Office for Children, Youth and Families during the O'Malley administration, disputed the audit's charge that consultants were paid without contracts.
"It is virtually impossible to spend that kind of money without a contract, as painstaking as that process is," Moses said.
The audit found that Baltimore Rising reported to the federal government that it received $20,000 in in-kind matching contributions without supporting documents.
In her written response to the audit, Davis wrote that in July 2007 the program became a "quasi-governmental entity" that was not required to follow all city requirements.
In an interview, Marriott said that Baltimore Rising is converting from a city-run program into a nonprofit, and after that is finalized it will not have to report contracts and other expenditures to the Board of Estimates.