City Seeks Funding Release

Old Accounting Problems Led U.s. To Freeze Baltimore Stimulus Money

In 2002, city auditors identified improper documentation of the grant from 1998 and forwarded their concerns to the Justice Department. Oliver said Justice officials have tried since October 2003 to have the city provide documents for that and other grants. She said the city submitted paperwork over the year but not enough to answer all of the federal auditors' questions.

However, the Justice Department never threatened to cut off funding until sending Dixon a letter in April.

Comptroller Joan M. Pratt, who oversees city audits, said the vast majority of city agencies take audits seriously and that improper documentation of grant money is not a widespread problem. City auditors are fact-finders and cannot enforce their recommendations. But their audits are passed along to grant-awarding bodies, such as the Justice Department, which can take action.

Pratt said city agencies know the stakes are high.

"They know that if something is improperly recorded, they might have to refund the money," she said. "And that's a major problem because usually the money's already been spent."

In this case, Pratt said, the Office of Criminal Justice likely asked Justice officials for extensions as it tried find the necessary documents. "Time passes quickly, one year rolls into the next," she said. "The grantor may give one extension after another."

But eventually, she said, most grantors give a final deadline.