Miscellaneous Grant Fund Deficit Elimination Plan

One thing that was brought before the city council at the last ccm on November 23 2010. Well it was the elimination plan to eliminate the grant fund deficit.

The city of Dearborn Heights submitted the plan to the State Of Michigan Department of Treasury.

As of June 30, 2010 the City of Dearborn Heights has a deficit of $548,070 in the Miscellaneous Grant governmental Fund. This is the result of not receiving out grant reimbursement within the 60 days of year end. This deficit will be eliminated by June 30 2011 once the grant reimbursement is received from the State of Michigan.

Donald S. Barrow

Comptroller

City of Dearborn Heights

So where did this deficit come from could it be NSP? Maybe it is, a large amount of money to my knowledge we have spent around 800,00.00 out of the general fund for NSP. The city has bought 20 homes 13 of them for demolition and the rest go for rehab. We have been buying homes since 2009, yet we have not gotten reimburse for one home. Now we are told that this deficit will be eliminated by June of 2011. I do not know of one city participating in the NSP Grant that has not been getting their money back in a timely fashion.

At the same city council meeting another action plan was laid out by the Comptroller’s Office. Title of this plan is,

City of Dearborn Heights Federal Awards Corrective Action Plan

For U.S. Department of Housing and Urban Development-Neighborhood Stabilization Program-14.218, finding number 2010-1 reporting significant deficiency in internal control over monitoring the activities of its grant administrator.

Our auditors Plante & Moran recommended that controls be in place to ensure that the grant administrator is in compliance with federal guidelines for the Neighborhood Stabilization Program. The City concurs with this recommendation and has already been in contact with their third party administrator to correct this matter going forward. The City has implemented a process that requires the third party administrator to submit monthly reports on or before the first of each month that includes progress on the grant activity, timeline for reimbursement of funds, and an update on any outstanding issues identified by HUD, MSHDA, or the City, along with detailed remedies to address these matters. The City has requested that their third party administrator provide an Action Plan to the City by November 12, 2010 on the current status of the above matter, with monthly progress reports to be provided as outlined above.

I just want to understand something here. Is our assistant mayor the Grant Administrator or not? That is what it says on the city web site. So when this plan says they (the city) have been in contact with their third party administrator for what reason? Third party consultants can not administer the grant. They can help with the administration of the grant. As the representatives from Plant & Moran pointed out to the city council during the study session before the City Council Meeting. A council member did point out that third party consultants can not administer the grant. Plant & Moran said that is correct, and pointed out that this was not their Action Plan this was the plan coming from the Administration.

How much of the $548,070 deficit is from the NSP grant?  Is any of this deficit coming    from the Fire Department, or the Police Department. Maybe from grants that they have not received yet. I would like to see a brake down of just what is outstanding from the state. Is the State of Michigan leaving other municipalities with the same deficits?

Hassan Oselie asked the council why they are still paying for rehabbing these homes when the city has yet to get any money back from the state. The Mayor reassured us, and guaranteed that the city would get all the money back from the state. Councilwoman Van Houten said “we will have to take the mayor at his word. He promised us that we are going to get all the money. The mayor and his assistant are responsible for this program.”

So we will wait, and see that is all we can do I hope we get all the money back it would be a devastating hit to the budget one that this city could not handle.

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