The city auditor says Tulsa overlooked some areas of proper reporting and record-keeping when distributing American Rescue Plan Act funds, resulting in "significant" audit findings.
According to a new report discussed on Thursday at city hall by an audit committee, Tulsa city officials who were charged with funding decisions for approximately $87.8 million in pandemic relief funds made some missteps.
In one award program, 200 local nonprofits dedicated to addressing issues like food insecurity and community development applied for ARPA funds. 70 applicants were ultimately selected.
The auditor sampled 17 of 74 files active between March 2021 and August 2022, finding that 64% of awardees hadn’t submitted required monthly reports on expenditures. 82% did not have documentation on monitoring activities that should’ve been conducted by city officials.
Alisa Dougless, grants and contracts manager, continually emphasized the uniqueness of the pandemic and the changing circumstances around ARPA funds. She said her team met with U.S. Treasury officials who often warned “the plane was being built as it was being flown."
Dougless said another reason accountability was not within guidelines was because 50 of the 70 nonprofits initially selected had never received federal funds. Supporting organizations that may not have had funding opportunities before was part of the purpose of ARPA, said Dougless, but federal grant paperwork can be burdensome.
“If you have ever bought a house and you think they couldn’t possibly ask for another piece of documentation, that what’s working with federal funds is like,” said Dougless.
In the way of enforcing accountability guidelines, Dougless said she has tried to take a “customer service approach” and that her office has mostly been successful getting organizations into compliance. When asked if anyone out of compliance declined to return money, Dougless said, “not exactly.” She said she’s still trying to work with outfits in arrears, also noting sometimes the city doesn’t have resources to go after “small amounts of money.”
“It might affect their future funding opportunities with the city. We don’t ever let it go unnoticed,” said Dougless.
City Auditor Cathy Carter also emphasized the smallness of Dougless’ staff, referring to her as “an island.”
In her report, Carter suggested that Dougless’ staff be increased. Dougless said that has happened, pointing to four compliance managers put in place in March 2023.
Carter’s office also found that Tulsa city councilors who made funding decisions did not report potential conflicts of interest to the feds, although they did disclose the conflicts to other city officials and recused themselves from decision-making.
“The thing that convinced me that everyone was recusing like they should was the council minutes,” said Carter.
A conflict of interest statement documenting any “real or perceived conflict” has been developed, as well, Carter noted in her report.
Other findings of the report include:
Tulsa did not carry out risk assessments for those receiving the funds until after money was awarded. Dougless said risk assessments were always done, but they may not have been up to federal standards because the city initially considered awarding nonprofits from state or local funds.
The city did not include plans about how the grants would be used in reports submitted to U.S. Treasury in 2021 and 2022. Dougless said information on how to write reports was initially unavailable.
The city incorrectly categorized some expenses as “premium pay,” which is reserved for essential workers. Dougless said errors were made in initial reporting but they’ve been corrected.
- A policy for interest earned on relief funds in city accounts needs to be established. Dougless said a plan is in the works.
