The Herald Bulletin

Morning Update

Local News

June 20, 2014

City has to repay federal funds

$145,000 due from 2009 grant

ANDERSON — The city of Anderson has 60 days to repay $145,000 to the federal government as a result of misused flood mitigation funds from 2009 to 2011.

The Indiana Department of Homeland Security and FEMA are requesting a repayment because the administration under former Mayor Kris Ockomon never spent matching funds, as authorized, to purchase homes that were in flood-prone areas of the city.

“There was a mismanagement of grant dollars,” Mayor Kevin Smith said Thursday. “We inherited the problem and have to clean up the mess.”

In 2009, Anderson was awarded a FEMA grant, administered through the Indiana Department of Homeland Security, for $544,620. The city provided $181,000 in matching funds, Anderson city controller Jason Fenwick said.

“The city took four draw downs of $544,620 over the two years to appraise and acquire the properties,” he said.

The repayment was decided by taking the matching fund and subtracting certain costs. Fenwick said the city will have to take the $145,000 from the general fund operating balance to repay FEMA.

“We believe we could have a difficult time obtaining other grants in the future,” he said.

FEMA is expected to closely inspect the paperwork submitted by the city and state, city officials said.

Smith said a change in procedure requires the controller’s office to be a part of the oversight for any grants for city operations.

“Oversight and continuity has been an organizational challenge,” he said.

Smith said this is the third problem his administration has discovered with grant funds during the Ockomon administration's term, including a COPS grant to hire police officers and a Housing and Urban Development grant.

“We self-reported the inappropriate use of funds to HUD,” he said. “We’re trying to restore the trust with HUD.”

Fenwick said the city will no longer accept grants where the funds are paid in advance and only approves grants that provide reimbursement for work done.

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