Jackson's decentralized, disorganized approach to managing millions in state and federal grants over the years has created a system where top city administrators are unable to track spending or hold anyone responsible for poor accounting.

When a grant manager leaves for another job, often no one knows which grants are active, where the files are located or what the passwords are on the federal grant Web sites, Assistant Chief Administrative Officer Valerie Nevels told City Council members Monday.

"The city stopped doing financial audits some time ago," Nevels said. "Everybody knows that nobody is minding the store."

Nevels, who spent the past year locating and investigating 35 grants spread throughout the city bureaucracy, delivered the withering assessment Monday to the Jackson City Council Budget Committee. Nevels said the city needs to implement a centralized grant-writing and monitoring program to properly manage the money and hold city departments accountable.

"Grants are not necessarily handled the same way from department to department," she said. "There is a general lack of accountability."

Council members greeted the report with a combination of concern and stunned appreciation both for Nevels' work and her blunt delivery.

"There is no way that we could be in compliance with such a hit-and-miss approach to this," Ward 7 Councilwoman Margaret Barrett-Simon said. "There is way too much to fix here without the responsibility designated to one person."

Nevels may be that person. She told the council she is hoping to be named to the new post of city auditor. If so, her new job will keep her busy.

The city has wrestled for months with demands from the federal government to repay misspent money from grants, some of which date back a decade. In its meeting this morning, the city council will be asked to approve payment of $45,000 to the U.S. Treasury Department for misspent law enforcement grant money awarded in 2002 and 2004.

Nevels said it is hard to know who's to blame. Sometimes grants are managed by multiple people in a single department, she said.

The confusion has meant that some grant money has been improperly spent while other grants have not been touched.

For example, in 2003 the city received a $1.3 million U.S. Justice Department grant for its network of surveillance cameras touted by Mayor Frank Melton last summer. According to Nevels' report, the city has spent $261,852 on the system but has drawn down just $4,365 from the grant. In other cases, Nevels said she was not able to determine when grants were applied for or how much had been spent or received.

The city, already in a financially tight position, depends on grants for everything from police equipment to summer jobs programs for young people. In fiscal 2007, the city received $17 million in grants, down from $20 million in fiscal 2006.

Ward 1 Councilman Jeff Weill said the way the city manages its grants gives the impression of financial "disorder" that could hurt Jackson in other arenas. Poor fiscal controls create concerns for state lawmakers whom the city depends on for money for transportation and infrastructure improvements, he said.

"That's a huge concern of mine," he said.

Nevels proposed a series of solutions, including:

Requiring all grant proposals to go through the department director, the chief administrative officer and the internal audit division before being submitted.
Setting up a centralized system to track grants and remind department officials of deadlines and required reports.
Requiring departments to reconcile their grant accounts on a monthly basis.
Requiring purchase of equipment and supplies earlier in the life of the grant to reduce federal audits.
Thoroughly debriefing grant administrators when they leave city service.
Training employees in grant procedures.
Disciplining employees whose grants are not in compliance with government rules.

Chief Administrative Officer Robert Walker said the Melton administration inherited many of the problems from previous administrations and has been "preoccupied" in trying to sort them out.

"A lot of problems you inherited," Ward 6 Councilman Marshand Crisler said. "But they are continuing under this administration."

To comment on this story, call Chris Joyner at (601) 360-4619.