The city released its internal report today in response to the U.S. Dept. of Health and Human Services Office of Inspector General's July 2013 report regarding Community Services Block Grant dollars provided to the city under the federal stimulus Recovery Act. The report alleged the city misspent $298,671.84. City Administrator, Jim Ryan, agreed with the Inspector General's report and says the city has agreed to pay back the money.
Ryan says of that money, $205,296 were "unallowable costs" according to applicable federal requirements. It included $123,530 in grant funds that were inadequately documented, $72,669 in costs that were incurred outside the budget period, and $9,097 in entertainment costs were also not allowable according federal grant guidelines.
To make sure an incident like this doesn't happen again, Ryan recommended to Mayor Larry Morrissey that the city should establish a grant program within the Rockford Finance Department with direct support from the Legal Department. Also, the internal report suggested consolidating the city's Human Services Dept. with the Community and Economic Development Dept.
Ryan says looking back in 2009-2010 when the stimulus monies was distributed, it was a time when the city was in a severe economic crisis and had to layoff workers, thus hindering the city's ability to properly manage the money.