The Herald Bulletin

June 20, 2014

City has to repay federal funds

$145,000 due from 2009 grant

By Ken de la Bastide
The Herald Bulletin

---- — 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.

The flood mitigation grant ended on Nov. 25, 2011, and the account was never closed out by the state and federal officials, Fenwick said.

He said the city was contacted in October 2013 by Homeland Security officials concerning the grant funding.

“The account had been closed out for two years,” Fenwick said. “Frank Burrows found some files that appeared to have pertained to the grant. We had to recreate the grant expenditures from the existing paperwork.”

Fenwick said the city was reimbursed for the same house three times and there were to draw downs on the federal funds in one week. The property owner was not paid three times.

“Part of the problem was the city had a list of properties it wanted to acquire and asked for the federal money first,” he said. “The local matching funds were not identified.”

He said no local dollars were put into the flood mitigation program as required and the Ockomon administration used a city employee to oversee the program on a volunteer basis.

“We’re not sure of what department for the city was involved,” Fenwick said. “It should have been Emergency Management. We don’t know where the Ockomon administration was going to obligate the local matching funds.”

The Indiana Department of Homeland Security didn’t respond to a request for comment on the repayment of federal funds.

Follow Ken de la Bastide on Twitter @KendelaBastide, or call 640-4863.

The issue • Anderson has to repay Federal Emergency Management Agency $145,000 from flood mitigation grant. Funds have to be repaid within 60 days. • No local matching funds spent during 2009 and 2011 to remove flood prone properties. • City listed same property three times for reimbursement.