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Topic: Why Flint grants administration failed
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untanglingwebs
El Supremo

Study finds grant oversight problems in Detroit during financial crisis
https://www.freep.com/story/news/local/2015/03/20/detroit-grant-study/25095075/
Mar 20, 2015 - John Conyers, D-Detroit, and former U.S. Rep. Gary Peters now a U.S. senator requested the GAO study into how oversight of federal grants were affected during a fiscal crisis. Looking at the experiences of Detroit; Flint; Stockton, Calif.; and Camden, N.J., the authors found the cities' "diminished ...
Post Tue Apr 10, 2018 6:57 am 
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untanglingwebs
El Supremo

Detroit Free Press


During Detroit crisis, grant oversight suffered
Todd Spangler, Detroit Free Press Published 4:11 p.m. ET March 20, 2015 | Updated 5:27 p.m. ET March 20, 2015

Federal report looks at Detroit, Flint, Stockton, Camden
Report says personnel cuts, loss of experienced managers hurt oversight
Report looks at oversight of hundreds of millions in grants over eight programs

WASHINGTON A government report today concluded that inconsistent internal policies, outdated technology and massive layoffs during financial crises in Detroit, Flint and two other cities severely hampered their abilities to manage hundreds of millions of dollars in federal grants.

The study, released today by the U.S. Government Accountability Office, also urged the Obama administration to share lessons learned by its Detroit working group which was created as the city plunged into bankruptcy and remains in place with other agencies and governments in the future.

U.S. Rep. John Conyers, D-Detroit, and former U.S. Rep. Gary Peters now a U.S. senator requested the GAO study into how oversight of federal grants were affected during a fiscal crisis. Looking at the experiences of Detroit; Flint; Stockton, Calif.; and Camden, N.J., the authors found the cities' "diminished capacity ... hindered their ability to manage federal grants" in myriad ways.

They documented dozens of deficiencies in compliance reports among eight federal grant programs. For instance, Detroit had to have requests to spend funding under a transit award specially reviewed after city officials couldn't provide documentation for changes to contracts for $100,000 or more.

In another case, the U.S. Department of Housing and Urban Development, in 2012, felt forced to withhold millions to Detroit in Community Development Block Grants until the city "provided the agency with sufficient documentation to satisfy HUD ... the city could properly manage the funds." The funding was released in 2013.

Even when corrective actions were required, city officials did not always implement them, creating additional risks of unspent or misspent funds, though the study's authors said the "actual impact of these problems on proper use of federal funds is unclear."

In the case of one federal transit grant, for instance, officials decided not to cut off funding despite a continued lack of corrective action saying while it might lead local officials to change their behavior, "it would also deprive the city's residents of the benefit of services provided by the funds."

In total, the study looked at grant award programs under HUD, the U.S. Transportation Department, Homeland Security and Justice Department worth $474 million to Detroit between 2009 and 2013.

But while Detroit's problems in processing federal grants are well known it was one of the key reasons the White House sent a team to Detroit in 2013 to make sure the strapped city could use all the federal resources at its disposal the study also looked at why those problems occurred.

All of the cities studied suffered severe cutbacks in personnel from 2009-2013, for instance, with Detroit losing 34% of its full-time equivalent positions. That, in turn, "directly impacted city staff responsible for the management and oversight of federal grants," the authors said.

Detroit's Planning and Development Department, which administers HUD's grants, lost more than a third of its workforce, making it difficult for those who remained to meet compliance and oversight responsibilities. HUD even noticed the problem in a monitoring report, saying Detroit did not "have the capacity to improve its capacity."

As experienced managers left city government, it further hampered Detroit and the other cities' ability to manage grants or meet compliance requirements. Staff turnover and changing priorities also played a role, the study said, noting that not only did Detroit's Department of Transportation lose nearly half of its staff during the period, in one 3-year stretch it had four directors who had different priorities. In some cases, grant funds went unspent, though no total was offered.

Meanwhile, the study said, "knowledge management" the process by which grant management policies and practices could be preserved and transferred to other employees "had been a long-standing challenge for the city of Detroit" So had information technology systems which were "outdated and fragmented, making it difficult to capture reliable financial information."

"Senior city officials told us that they did not know the total amount of grant funds Detroit received from the federal government because their various IT systems did not communicate with one another. These IT inconsistencies made it impossible for Detroit to capture reliable financial information," the report said. Detroit and the others have largely consolidated grant management systems since.

In all tens of millions of dollars in grant awards and their processing were called into question. As late as last month, the report said, Detroit officials were still putting in place "written grant management policies ... as a part of the city's response to its fiscal crisis and bankruptcy."

But the only recommendation coming from the report was one suggesting the White House share the lessons learned from its intervention in Detroit.

"Senior officials at OMB (the Office of Management and Budget) and HUD told us that they knew of no formal plans to document and share such information, but that they saw value in doing so. In fact, these officials told us that there have been instances of this happening informally and they believed it would be a good idea to capture lessons learned more formally."

Peters, who had asked for the study, agreed.

"Cities under financial strain are more likely to risk losing out on critical federal resources that help support public services, including police and firefighters, education and health care, at the time when they need federal support the most," he said. "We should focus on taking the lessons learned in Detroit and implementing these best practices to help other cities facing financial strain."

Contact Todd Spangler at 703-854-8947 or at tspangler@freepress.com. Follow him on Twitter at @tsspangler.
Post Tue Apr 10, 2018 6:59 am 
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untanglingwebs
El Supremo

[PDF]PDF, 47 pages - GAO
https://www.gao.gov/assets/670/669134.pdf
Mar 20, 2015 - hampered municipalities' ability to oversee and report on federal grants. .... The Honorable John Conyers, Jr. ..... Source: GAO analysis of Fiscal Year 2013 Comprehensive Annual Financial Reports for Detroit, MI; Flint, MI; and Stockton, CA and Municipal State Aid Applications for Fiscal Years 2010/2011 ...
Post Tue Apr 10, 2018 7:00 am 
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untanglingwebs
El Supremo

The flint grants department was reduced from 22 employees to about 6 to 8 employees primarily because of budget cutbacks, layoffs and early retirement plans. With this loss of expertise became more compliance issues and a lack of grant oversight.

Flint was unable to apply for some grants because the city lacked the matching funds required for some grants. Flint could not apply for a Transportation Investment Generating Economic Recovery (TIGER) competitive grant program administrated by the DOT to support road projects as Flint could not prove the city had an adequate level of non-federal funds.

Grants cannot be adequately monitored when staff has too many grants to handle. Also when the grants department has many construction grants, there really is a need for a trained inspecto rto be assigned to the department.
Post Tue Apr 10, 2018 7:17 am 
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untanglingwebs
El Supremo

The City of Flint, MI, Lacked Adequate Controls Over Its ... - HUD OIG
https://www.hudoig.gov/reports.../audit-reports/city-of-flint-mi-lacked-adequate-controls...
Oct 13, 2010 - Audit Reports. Report Number: 2011-CH-1001. State: Michigan. Summary: The U.S. Department of Housing and Urban Development's (HUD) Office of Inspector General audited the City of Flint's (City) HOME Investment Partnerships Program (Program). The audit was part of the activities in our fiscal year ...
Post Tue Apr 10, 2018 7:19 am 
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untanglingwebs
El Supremo

An additional burden to staff occurred when their work came in opposition to their leadership. One director took all of the department to a Cool Cities meeting when there was no way to bill all of their hours except the general fund.

Then when Williamson was mayo, he called a "come to Jesus: type meeting and threatened staff over allegations of departmental wrongdoing. HUD was not happy that staff was confined to the city and not allowed to monitor. (HUD finding)

Council fought with the mayor over Flint West Village, Greater Eastside and Salem Housing. Kurtz had allocated large sums of money to agencies that were ineligible and council wanted them funded. One councilman told the mayor if th agency in his ward did not get funded, he would lose his election. Sadly he did not get his funding and he lost his election.

Council tried to give funding to the county only to have HUD tell them they couldn't.
Post Tue Apr 10, 2018 7:58 am 
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untanglingwebs
El Supremo

Council held hearings but accomplished little and all of the questioned employees had lawyers that the city had to pay for.

Then there was the possibly criminal element.

Case #10-94994 CD was one of three that involved grants staff against the city and Greg Eason. Four employees also filed a Whistleblower complaint and complaints with HUD and the Civil Rights office.

I was waiting to hear testimony in the Civil Rights hearing when they announced there was a Temporary Restraining Order signed by Judge Farah. Judge Yuille was the judge assigned to the case when Flint sued the Civil Rights office. Yuille had been absent that day the TRO was requested and had assigned 2 other judges that could sign in his absence. Those two had refused. When Yuille angrily asked the assistant city attorney why he had persisted, the response was that he had been ordered to get it signed.
Post Tue Apr 10, 2018 8:11 am 
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untanglingwebs
El Supremo

I saw Judge Farah at the White Horse the same day as the hearing and he was startled to find out he was not one of the two assigned judges in Yuilles absence.

The Civil Rights issue was ended as the Emergency Manager eliminated the Civil Rights office, the Human Relations office and the Ombudsman. Although the City Wide Advisory Committee and the Citizen District Councils had been established under a state law governing designated blight areas, the Emergency Manager also eliminated them essentially eliminating citizen input into federal grant funding.
Post Tue Apr 10, 2018 8:18 am 
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untanglingwebs
El Supremo

Allegations in the Whistleblower cases:
Violation of the MIchigan Whistleblowers' Protection Act, MCL 15.361 et.seq.

8. Starting in December 2009, Plaintiff began complaining about certain irregularities in the administration of federal grant programs and contracts by the City of Flint'.

9. Starting in January,2010,Defendant EASON began a pattern of threatening, abusive, unprofessional and counter productive communication and treatment in connection with Plaintiff.

10.On April 19,010,Plaintiff filed a workplace violence complaint with the City Attorney
directed toward abusive and threatening conduct by Defendant EASO, the current City Administrator.
Post Tue Apr 10, 2018 8:29 am 
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untanglingwebs
El Supremo

11. On May 26, 2010, Plaintiff filed a complaint with the US Department of Energy, regarding the contract administration practices of Defendant City .

12. After Plaintiff raised questions,complained, and filed formal complaints regarding the conduct of the City Administrator and other City officials,her treatment and her relations with the management of Defendant City,including Defendant City Administrator, changed for the worse.

13.On September 2, 2010 Defendants suspended Plaintiff from her work duties, without pay,for twenty eight (28 ) days.

The attorney was Mary Mahoney of the Schwartz Law Firm PC in Farmington Hills.
Post Tue Apr 10, 2018 8:40 am 
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untanglingwebs
El Supremo

The 2010 OIG audit was in part due to complaints made involving the City of Flint.

On January 10, 2012, Resolutions restoring lost pay,annual leave, attorney fees as well as reinstatement of the three plaintiffs positions were sent to counciland on January 20,2012 approved by the Emergency Manager, Uion complaints were also resolved. The discipline records were purged, employment discharges rescinded and all seniority,serviceservice credits and accruals from the date of reinstatement were restored.

A fourth employee decided to retire, despite having received high praise from HUD for awork product thet HUD said should be emulated.
Post Tue Apr 10, 2018 8:56 am 
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untanglingwebs
El Supremo

Some nonprofits have such prominents support that they rise to the level of "Shadow governments". I remember Flo McCormic and myself telling an employee that transferring the salaries of the Director of Flint NIPP were not allowable, especially without time sheets documenting the hours. With a new director, the salaries were entered anyway and the 2010 OIG audit required a payback. During layoffs,some employees were given bumping rights and brought employees in that may have had financial training, but no experience in grants. The loss of institutional knowledge and those with other agendas wrecked havoc on the department.

Some agencies ignored warnings of the department program managers to watch their spending, finish projects and to not start new projects without permission and created situation where they had overextended their capacity and put the city in a difficult situation.
Post Tue Apr 10, 2018 9:08 am 
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untanglingwebs
El Supremo

Inadequate department heads in Major Grants has the potential of creating dangerous situations. Peggy Cook received a communication from Major Grants staff warning of actions needed to prevent a potential loss to the city of up to $20 million. While staff had prepared documentation on December 15, 2004, they indicated the issues had not been taken to the Mayor and deadlines were looming.
"The failure to execute CDBG contract for the current fiscal year, honor pay requests,submitted on current contracts and carry on with required obligations associated with administering the CDBG grants since the beginning of the 2004-2005 fiscal year, has created a situation in which the City of Flint is in jeopardy of losing its entitlement CDBG, HOME, ESG and ADDI grants. HUD Detroit recently informed a number of City officials that it would not take action against the City until March. In March, if substantial progress has not been made,HUD shared that while it would not take money away from the City, it would choose another entity to administer the funds.This is definitely a possibility. Several cities around the country have federal programs that are administered by entities other than the local jurisdiction."
Post Tue Apr 10, 2018 12:14 pm 
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untanglingwebs
El Supremo

The staff detailed actions that needed to occur immediately. Among the listed items was the need for invoices not to languish in the Finance Department.They also noted the need for additional staff. Since the beginning of the fiscal year on July 1, 2004, the department had lost a Program Supervisor, a grants writer, a rehabilitation specialist and an administrative assistant. As a bare minimum, the staff asked for a clerical position to be added to assist with "the magnitude of work required. The budget for the next fiscal year did not include additional staff nor a Director's position.

"Maor Grants needs authorization to move forward aggressively on redevelopment areas again. Money from various sources is tied up in these projects and HUD will be evaluating progress on all projects in order to determine whether the city is making progress."
Post Tue Apr 10, 2018 12:30 pm 
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untanglingwebs
El Supremo

"Loss of HUD funds means much more than the annual entitlement grants. Without a city entity administering these programs, the City potentially stands to lose the following:
* $5.2 million in annual Community Development Block Grant funding;
*$1,2 million in annual HOME Investment Partnership funding;
* $192,000 in annual Emergency Shelter Grant funding;
* $115,000 in American Dream Downpayment Initiative funding;
* $1 million remaining FAEC/RC revolving loan funds;
* $900,000 remaining in HOZ funds;
* $780,000 in BEDI for Avalon;
* $700,000 in EFI for the City RLF;
* $1,000,000 for Uptown
---------------------------------------------
$16,287,000
Post Tue Apr 10, 2018 12:44 pm 
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