An audit found that the city misspent $189,936 in government grants because of a lack of oversight and internal controls
TRENTON -- The U.S. Justice Department last month notified Trenton that it was listing the city as a high-risk grantee of federal funds after it has been slow to address a recent audit's recommendations.
An October 2014 audit found that the city misspent $189,936 in government grants because of a lack of oversight and internal controls.
The audit focused on three programs totaling $2.7 million: YouthStat, ShotSpotter and Recovery-JAG funds that went toward getting better police technology.
The Justice Department said in a September letter that 13 recommendations about putting procedures in place to better manage grants remain open.
Business Administrator Terry McEwen on Friday said the city has been working to address the audit findings for the better part of the last 15 months. The questionable costs have either been accounted for or repaid and a corrective action plan has been submitted and is awaiting review.
"We're in close contact with DOJ and we have good communication with them now," he said. "We have to continue to show them that we're moving things in the right direction."
The city also failed to address recommendations cited in two other audit reports, the letter said.
Until the "high-risk grantee" label is removed, new awards from DOJ will be subject to special conditions and additional oversight as necessary, the letter said. The city would be restricted from obligating, expending or drawing down funds under DOJ awards and could be subject to on-site reviews.
A large number of problems uncovered by the audit revolved around YouthStat, an anti-gang program that targets at-risk youth as young as 9 or 10 years old and works with schools, social services and the city's police department to determine what services individual children needed.
The audit zeroed in on three YouthStat grants that were awarded for three different phases. The city received $460,589 in 2008, $600,000 in 2009 and $310,000 in 2010.
The latter two grants expired in June 2014, but the city received an extension through the end of this year and asked for another one for next year.
Of the nearly $1.4 million that was awarded, only $403,421 was spent, the audit shows.
Critics often questioned YouthStat's ineffectiveness and revolving door of coordinators.
Just last month, former coordinator Barry Colicelli filed a whistleblower lawsuit against the city.
MORE: Trenton's former 'gang czar' files whistleblower suit against city
The program began under Colicelli, a retired Newark police captain who was contracted in December 2004 as former Mayor Doug Palmer's special assistant for anti-gang initiatives and youth development.
His firm, On Target Law Enforcement and Security Consultants, received three annual contracts with the city. City Council then declined to renew his contract in February 2008 after he came under criticism for his pay and job perks, but was brought back that November to only oversee YouthStat after the city received the Phase 1 grant.
Colicelli's annual contract budgeted $66,000 for his consultant fee and $1,870 for mileage reimbursement, but the audit found that he received $36,986 more than what was approved.
A $27,000 contract was also approved to annually evaluate the program for three years, but the contractor received the full amount despite only submitting one evaluation.
File photo of Lois Krause, Trenton's former YouthStat coordinator In 2010, City Council again declined to renew Colicelli's contract. The position was briefly filled by Dan Toto, then-Mayor Tony Mack's former campaign manager, before Lois Krause was hired as a part-time coordinator in March 2011.
When Krause's contract ended the following March, the program languished until city officials re-launched YouthStat in October 2013. Krause and Ayana Abdul-Raheem were hired by Mack to serve as part-time coordinators.
Krause and Colicelli, who was rehired during Councilman George Muschal's brief stint as mayor, were both fired in September 2014 because Mayor Eric Jackson wanted to take the program in a different direction.
MORE: Ex-city employee defends record criticized in whistleblower suit
In the audit, A Better Way, one of the nonprofits that provided mentors to the YouthStat teens in the first phase, was singled out for $24,911 worth of questionable costs.
The federal Office of Justice Programs had only approved payments for mentors, but the audit found $8,616 in expenses for non-mentoring staff, t-shirts, trip transportation and food. Another $13,021 was not supported by the group's invoices, requisitions and time sheets.
In another case, mentor training appeared as a single 20-hour day, costing $3,274. An official from A Better Way told the auditors that the training was held over four days, but there were no documents to support that.
Other questionable YouthStat costs ranged from a $560 note-taking service to $2,228 worth of data charges for wireless cards, the audit found.
In addition, many of the federal financial reports were either never filed or filed late for the five grants audited. Of the total reports, 71 percent fit into those two categories and the late reports ranged from one to 492 days.
Of the 19 progress reports, two had missing information, four were inaccurate and 13 were not submitted.
The audit attributed some of the lax internal controls to the city's layoffs and high turnover. Between 2008 and 2014, the audit said there were 10 different business administrators, three finance directors and eight police directors.
"We found Trenton had inadequate segregation of duties, a lack of adequate supervision, and failed to establish and adhere to written policies and procedures for all aspects of grant administration," the audit said.
But now, the city is working to turn the program around and has a plan in place to make sure that everything is done by the books, McEwen said.
"The program has been going in the right direction since we came in and re-energized it and re-engineered it," he said. "I think the Department of Justice is pleased with what they've been seeing over the last nine or 10 months and we just have to continue that and get their approval to move forward with the remainder of the grants."
In September, the program was brought back under the police department and is being coordinated by Abdul-Raheem, who has run the Stationhouse program for low-level youth offenders.
McEwen said the city now has a process to review and approve any funds and make sure that everything is properly documented.
The city's CFO gives the final OK, but Detective Alexis Durlacher added that the department has its own internal controls so that no one person is in charge of everything.
"If the coordinator asks for anything, two or three different people have to go through it and give it a check mark," she said.
Currently, Abdul-Raheem refers the kids to different social service agencies and organizations and follows up with them, but more programs are coming as part of the extension that DOJ approved, Durlacher said.
A team of about two dozen people will be brought on to work in the evidence-based program. The kids and families will be assessed and then paired with a mentor.
Other support services will include a truancy liaison, education and career development, life skills, men and women groups, job training, mural arts and service-learning projects.
The program will also be continually evaluated so they know whether or not it's making an impact, Durlacher said.
"Getting direct funding to these direct programs for these direct kids -- intake, evaluations, assessments, those are key," she said. "That's what will make the program awesome."
She said the department could go out to bid within a couple of weeks.
Police Director Ernest Parrey, Jr. said the revamped program is robust, likening it to a one-stop shop.
"The coordinator will be able to have at her disposal all of these different entities that can help with respect to the family, to the child so all the goals are being met for that child," he said. "The coordinator and Detective Durlacher came up with a great plan ... and we're looking forward to the way it's going to go."
Cristina Rojas may be reached at crojas@njadvancemedia.com. Follow her on Twitter @CristinaRojasTT. Find The Times of Trenton on Facebook.
