Recently the Detroit News reported that the Ford Foundation has donated $127,000 to review the city of Detroit’s federal grant management and recommend how to improve the grant administration process.
Detroit’s Emergency Manager Kevyn Orr stated he didn’t believe that any of Detroit’s 71 Federal grants were in compliance with the federal regulations.
Goal Is Compliance
It is hoped that the recommendations will help bring the nearly $300 million in federal grants run through Detroit back into compliance with the Federal regulations
In the past Detroit has forfeited parts of their Federal awards due to a lack of proper oversight and monitoring.
Where to Start?
The Detroit News reported that “every grant-receiving department in the city has performance issues” according to an internal report released in June.
Three departments: Health, Human Services and Workforce Development accounted for over 50% of the questioned costs and audit findings.
These three departments are the focus of city officials.
2 Shocking Examples of Mismanagement
Here are two examples cited in the article:
“In November 2011, Detroit forfeited more than $9 million in weatherization funding because it didn’t spend it as quickly as other communities.”
(Read this as they didn’t spend the funds by the end of the award period)
“Another audit found a portion of an $11 million grant to provide clothes for 400 low-income job seekers helped only two people between October 2010 and September 2011.”
(Do you think the program objectives have been met?)
In addition to heightened federal review and outside consulting help, Detroit Mayor David Bing introduced a new grant management database.
He also recommended hiring 5 people to monitor the process.
Mayor Bing claimed that his administration “has made considerable progress in ensuring that grant funds are spent effectively and efficiently.”
He did welcome the additional outside resources to make sure grant funds are spent properly.
In our next post in the series we’ll look at three foundational suggestions for improving the conditions of grant management in this difficult situation.
Lucy Morgan CPA, MBA
CEO, Compliance Warrior
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