A state board composed of Maryland’s top elected officials failed to monitor $200,000 in grant money given to an unnamed recipient and did not produce legally required procurement reports to state lawmakers for at least seven straight years, according to a new audit. The report by the Maryland Office of Legislative Audits shows that the state’s Board of Public Works — made up of Gov. Martin O’Malley, Comptroller Peter Franchot and Treasurer Nancy Kopp — doled out $5.1 million to an individual grantee during fiscal 2009. Yet the financial statement for the transaction reflected only $4.9 million in grant money, leaving $200,000 unaccounted for.
“BPW did not adequately monitor a grantee’s financial activity to ensure state funds were accounted for and used in accordance with related grant agreements,” the report states. It does not name the recipient of the $5.1 million in taxpayer money.
Maryland investigators say the discrepancy went unnoticed until they pointed out the error to the board. Auditors found that the missing money was mislabeled by the grant recipient, which failed to group the funding with the rest of the multimillion-dollar state award.
The board did not review independent audits provided by the award recipient as required, according to auditors. That was a critical lapse, given “concerns with the financial viability of the grantee,” the audit said.
Between 2004 and 2010, the board also failed to submit an annual report on the state’s procurement system to the Maryland General Assembly, the report showed. The board is required to produce an update that showcases improvements made in bolstering competition within the procurement process.
Officials with the Board of Public Works did not dispute the audit’s findings.
“Apparently, as the auditor uncovered, the grantee’s auditor erred in listing the amount of state grant funding in that audited financial statement,” said Sheila McDonald, executive secretary of the Board of Public Works. “This office will comply with the auditor’s recommendation.”
The board is hugely influential, as it must sign off on most state expenditures, including statutorily mandated projects and general obligation bonds. In fiscal 2010, the board’s expenditures totaled $6.9 million.
