Last fall, federal auditors sent the Dixon administration a letter demanding to know how the city spent money from its previous grants. The letter referenced the wrong grant numbers and years and misidentified one of the agencies affected.
Then, at the end of April, the Justice Department sent a more strongly worded letter, designating the city as "high-risk" because of outstanding problems with the grants. Until that status is lifted, the letter said, the city would be restricted from receiving new funding from certain Justice Department programs.
After digging through old receipts and reviewing Board of Estimates agendas, Goldstein said she found paperwork explaining all but $1,600 of the 1996 grant. The city wrote a check to the federal government for that amount and will soon submit an overview of how it used the grant.
In 2006, the city returned $146,750.66 from a 2000 grant that it could not properly document. The city still has to provide an overview of how it spent the 2000 grant money.
Goldstein said the city is still trying to account for how it spent $696,877 from a 1998 federal grant. She has accounted for more than $600,000, but the city might need to return at least some of the rest.
Most of the 1998 grant was used to establish a group of prosecutors dedicated to gun crimes, paying for prosecutor salaries and construction costs such as hanging drywall in the basement office used by the unit, called Firearms Investigation Violence Enforcement.
The problems with the grants were identified during Gov. Martin O'Malley's tenure as Baltimore mayor. Attorney Peter Saar led the Office of Criminal Justice in 2000 and 2001, although O'Malley replaced him in late 2001 after federal auditors strongly criticized the way he administered Justice Department grants.
Kristen Mahoney headed the office until 2007, when she left to direct the Governor's Office of Crime Control and Prevention, which also receives federal money.
Mahoney said she "inherited the problem" and sought to work with the Justice Department to resolve the paperwork issues. But she said turnover in the federal agency caused problems as well.
"We tried to do triage - get the ones we could done as quickly as possible and close out," she said. "Others, we had to keep chipping away at. It seemed like the level of proof [required by the federal government] ... was a moving target."
Since 2002, city auditors have flagged the use of that grant money as "not properly supported," but they do not have the power to withhold money. Based on that finding, the Justice Department made recommendations on how to resolve the outstanding grant problems, and Oliver, the department spokeswoman, said the city has been aware of what it needs to do for years.
"We are waiting on answers," Oliver said.
What's at stake
* $5.2 million in formula Justice Department grants, which are awarded based on population and violent crime
* $2 million in competitive Justice Department grants
* $1 million in Justice Department Violence Against Women grants
Source: Mayor Sheila Dixon's proposed 2010 budget
