The American Recovery and Reinvestment Act of 2009 (Recovery Act) provides $787 billion in funding as a stimulus to the economy. Of that funding, the Department received $4 billion for grant funding to enhance state, local, and tribal law enforcement; to combat violence against women; and to fight Internet crimes against children.
The OIG is conducting aggressive Recovery Act oversight involving the coordinated efforts of auditors, investigators, and inspectors. Through this multidisciplinary effort, the OIG has provided advice to Department granting agencies regarding best practices in the awarding and monitoring of grants, trained Department grant managers on fraud risks, reached out to state and local agency Recovery Act recipients of Department grant funds, audited and evaluated the Department’s use of Recovery Act funding, and conducted investigations of allegations of misuse of Recovery Act funds by Department grant recipients.
In particular, since the enactment of the Recovery Act in February 2009, the OIG has trained 5,838 federal, state, and local program managers and participants on Recovery Act fraud awareness, conducted 106 outreach sessions with state and local agencies, and initiated 41 audits and reviews of Recovery Act funds. In addition, the OIG is conducting nine investigations of allegations pertaining to the Department’s Recovery Act programs. During this semiannual reporting period, the OIG issued four reports on the Recovery Act grant management activities of the Department as well as state and local entities.
From enactment of the Recovery Act in February 2009 through September 30, 2011, the Department has obligated more than 99 percent of its $4 billion in Recovery Act funds. Moreover, as of September 30, 2011, the Department had expended about 72 percent of its Recovery Act funds. The Department has handled this increased workload without any significant increase in staff.
We provide a summary below of our findings from our audit work during this review period that related to Recovery Act funds.
During this reporting period, the OIG audited Recovery Act grants awarded by Department grant-awarding agencies to state and local recipients. Below are examples of our audit findings:
- The OIG audited $1,246,494 in Recovery Act and non-Recovery Act grants awarded to the City of Suisun City, California (Suisun City), to fund criminal justice operations in both county and city jurisdictions. The audit found that Suisun City generally complied with essential grant requirements but that some expenditure information reported to the awarding agency did not match Suisun City’s official accounting records. In addition, even though the grants were technically for 4 years, one sub-recipient had yet to purchase and install security cameras that were funded by both the Recovery Act and non-Recovery Act grants. The OIG made two recommendations to ensure consistent reporting and accomplish grant objectives. OJP agreed with both recommendations.
- The OIG audited over $5 million in Edward Byrne Memorial Justice Assistance Grants, including a Recovery Act grant, awarded to the City of Birmingham, Alabama (Birmingham). The audit identified several deficiencies regarding compliance with the grants’ requirements, including that Birmingham did not maintain adequate property records indicating the source of the funds used to acquire the items; did not provide sufficient information in grant progress reports; could not show that it had met grant goals and objectives; and did not monitor and had no procedures for monitoring sub-recipients. The audit identified $2,513 in unallowable costs and found that $55,825 in grant funds were spent on property items that were being kept in storage until needed by the police department. The OIG made eight recommendations to OJP to ensure that Birmingham implements appropriate processes and procedures to satisfy grant requirements, including an adequate property records system, detailed progress reports, and identifying and tracking measurable goals for each grant. OJP agreed with our recommendations.
- During this reporting period, the OIG audited an $837,721 Recovery Act Rural Law Enforcement Assistance grant awarded to the City of Aberdeen, Washington (Aberdeen). Aberdeen used the grant to retain four corrections officers and hire two new corrections officers for 2 years to continue operations at its 18-bed jail facility during the economic downturn. The OIG found that Aberdeen made a reasonable effort to accomplish grant objectives. However, the audit found that Aberdeen comingled grant-related payroll expenditures with non-grant related transactions, and questioned $9,563 of some corrections officer salaries that were not adequately supported with properly approved timecards. The OIG made four recommendations to OJP to help ensure that Aberdeen adhere to grant requirements, including submitting accurate financial reports. OJP agreed with our recommendations and indicated it would coordinate with Aberdeen to remedy questioned costs and ensure compliance.
- On August 23, 2011, the mayor of Kinloch, Missouri, Keith Conway, was arrested and pled guilty to charges of wire fraud and theft of funds from a federal program. Kinloch received $90,000 in Recovery Act funds from a COPS grant. In entering his guilty plea, the mayor admitted that he used city funds to pay for several luxury items.
- On September 27, 2011, an individual was arrested on federal charges of theft of government property and bank fraud. The investigation by the OIG’s Atlanta Area Office resulted in charges that the individual allegedly used a stolen identity and fraudulent documents to open a bank account to deposit a stolen check. The check was issued by OJP pursuant to a grant of funds from the Recovery Act.