Payment records lagging for Louisville grant recipients, audit - WDRB 41 Louisville News

Payment records lagging for Louisville grant recipients, audit finds

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LOUISVILLE, Ky. (WDRB) – An audit of Metro government grants to Louisville arts groups, community ministries and social-services agencies found that, in most cases, the recipients failed to submit proof that the money was spent properly.

The audit, which looked at a small sample of grants overseen by the city's Department of Community Services and Revitalization, reviewed 1,285 expenditures among four unnamed grant recipients and discovered 674 instances in which "the grantee did not provide adequate documentation that expenditures were actually paid by the grantee."

Ingram Quick, the city's chief audit executive, told the Metro Council's government accountability and ethics committee this week that most of the issues noted in the audit happened during the 2012 fiscal year – before the department added tougher reporting measures.

"We did see vast improvement in fiscal year 2013 and that was due to policies and procedures being implemented during that point in time," Quick said at Tuesday's meeting.

The review concluded that "the grant funds reviewed were used as intended," and it didn't find any evidence of illegal activities or irregularities. Auditors did discover one instance in which a recipient failed to submit documentation showing how $2,207 was spent.

Overall, auditors couldn't determine if the grant recipients actually made payments as indicated in 52 percent of the expenditures reviewed.

Those included 197 instances in which a grant recipient provided payroll records but couldn't prove the money was disbursed; and 459 examples of recipients failing to submit receipts, canceled checks other records proving that a payment was made.

The audit had been scheduled and wasn't initiated to address a specific concern. It was the first such review of the department's external agency fund grants, which provided nearly $2.9 million in fiscal 2013 for 101 programs in areas ranging from employment training to youth services.

But some council members have questioned whether the audit should have been expanded to include more grant recipients.

"When you see errors at that level, I think it's time to take a broader, closer look," Kevin Kramer, chairman of the council's Republican caucus, said in an interview.

Jerry Miller, vice chairman of the government accountability committee, said he also wants information on the four recipients that were audited.

"I want to ask questions about who are these agencies and what is CSR (Community Services and Revitalization) doing about them," Miller said in an interview.

Metro Council President Jim King said he is concerned about the audit's scope, adding that more work needs to be done "drilling down" into other recipients of the funds.

At the same time, he said it appears that most grantees tried to show how they are spending their money.

"It wasn't like there was no documentation. On virtually every one there was documentation," King said in an interview. "He (Quick) just didn't agree that it was adequate documentation, so we're going to have to start looking at those standards as to what is adequate."

Community Services and Revitalization Department officials didn't attend Tuesday's meeting, but the government accountability panel's chairwoman, Tina Ward-Pugh, said she plans to invite a representative to its next meeting.

Virginia Peck, the department's director, said her agency now has "two sets of eyes" looking at each grant recipient's quarterly report and is working closely with the city's Office of Management & Budget. In addition, she said, grant recipients are now required to submit copies of canceled checks as proof of payment.

"I believe if they came back now and did that audit they would find a very difficult situation," Peck said.

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