News

May 19 2008

Report: City spends 20% of grant funds

"Chaotic" system sees money go unused amid budget crunch

Of $44 million in grant money awarded the city of Jackson [Mississippi] over the past five years, the city has spent one of every five dollars, a report shows.

The perennially cash-strapped city has left the rest - potentially millions of dollars - unspent, according to the report.

"That's unbelievable isn't it?" said Ward 4 Councilman Frank Bluntson.

Grants awarded to the city propose to pay for everything from computers to jobs for low-income senior citizens to emergency equipment for police and first responders. But a system that administrators described as "chaotic" and lacking in accountability has invited federal audits and required the city to repay money to the federal government.

For example, earlier this month, the council approved a repayment of $45,000 from a misspent law enforcement grant. So when the council received the city's internal grant report, Bluntson was among those expressing disbelief that the city had money in state and federal grants it had not yet spent.

The clock is ticking on some of the funds. The city has $22 million in grants that expire between now and the end of September, but only 15 percent of that money has been drawn down, according to the report.

Bluntson said he hopes the administration will get on top of the situation before time runs out to make use of the money. Assistant Chief Administrative Officer Valerie Nevels said she did not believe the city would fail to make use of the money. More likely, the city employees managing the grants would cram most of the spending in the weeks leading up to the end of the grant.

"Normally, even though it may be the last day, they find a way to spend that money," she said.

Nevels, a former investigator for the Internal Revenue Service, authored the report after spending the past year tracking down and compiling information on the city's various grants. Some of the unspent grant money likely is hung up as new grant managers inside the city bureaucracy attempt to redefine them.

"When new people come in, they want to change the direction of these grants," she said. "When they finally get it approved, they have maybe two or three months to spend all the money."

Such a rush does not result in wise spending, she said.

"Two project managers could spend money on identical equipment," she said.

Nevels has proposed a series of reforms to bring more standardization to managing the city's grants, including a prohibition against equipment purchases in the final 90 days of a grant and no supplies bought in the final 60 days. The time limit would require departments to plan more effectively how they spend the grant, she said.

Nevels also has proposed that city departments be required to draw on their grants on a monthly, or at least quarterly, basis to limit last-minute spending. That approach sounds right to Ward 1 Councilman Jeff Weill.

"Families have to plan a month-to-month budget and the city needs to do that, too," he said.

City departments also have been asked to come up with a master plan for equipment purchases, and a new policy has been put in place to require department directors to sign off on any new grants. Some directors are unaware their department is receiving grant money until the grants fall out of compliance, Nevels said.

Bluntson said he does not understand why there has not been more planning.

"Why submit an application for a grant application if you aren't ready to spend it?" he said.

Nevels said the facts in her report are only as good as the paperwork kept by the departments receiving the money. Most of the entries detailing $1.4 million in grants to the Office of Economic Development contain few details about how much has been drawn on the grant, where it went or when the grant ends.

One grant listed as Brownfield Economic Redevelopment is valued at $24,786, but there is no further information. Brownfield grants typically come from the Environmental Protection Agency and are meant to fund the cleaning and reuse of contaminated land.

"Division is currently researching," the report states.

Office Director Mike Davis, who has been in his post the past four years, said most of the grants in question were begun under a prior administration.

"We're trying to pull all the documentation together so we can verify the end date," he said of the Brownfield grant.

Another $1.3 million grant in the Office of Economic Development is "meant to provide a recreational experience to aid in the validity of the city of Jackson," according to the report. Davis said the grant is to place a clay cap on a portion of LeFleur's Bluff for a park.

The grant has been held up while the project is vetted by the state Department of Environmental Quality and the U.S. Army Corps of Engineers, but Davis said he expects work will be completed before the grant expires Sept. 15.

"We will meet that deadline," he said.

Nevels said part of the problem with the city's grant structure is there is no system of accountability. "Everybody knows no one is minding the store," she told the council.

Council President Leslie Burl McLemore said that is the fault of the city's current administration.

"It really boils down to leadership and management of the grant process," he said.

McLemore said Mayor Frank Melton has not set any milestones for achievement or penalties for failure.

"The time that he has engaged in this, he had the good sense to say, 'Nevels, work on this,' but he is not engaged beyond that," he said.

Melton did not return calls seeking comment, but city spokeswoman Goldia Revies said the mayor is not commenting on the grant controversy while the departments work on the problem.

When asked what is being done, Revies replied, "I don't want to get into a discussion about that."

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


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