A fresh fiscal 2024 audit of the Downtown Partnership of Baltimore, the nonprofit that manages the city’s central business district, is raising serious questions about how money was handled and who was watching. Auditors warned that weak financial controls could have led to errors or potential fraud, pointing to missing account reconciliations, undocumented purchasing rules and heavy turnover in the finance office, all while millions in public dollars flowed through the organization. City officials and Partnership leaders say they are now tightening oversight as the findings land in public view.
Audit Finds Holes In Bookkeeping And Purchasing Rules
According to the audit, DPOB collected $6.5 million in surcharge taxes and reported $4.7 million in grants and contributions in the 2024 fiscal year, while spending roughly $1.1 million in federal American Rescue Plan funding. That level of federal spending triggered what is known as a single audit, a deeper review of how federal money is managed.
Auditors flagged late account reconciliations and wrote that the possibility exists of financial statement errors or potential fraud occurring and not being detected. They also reported finding no formal policies for procurement, suspension or debarment during the period under review. Those figures and findings were laid out in a detailed audit summary, according to FOX Baltimore.
Federal Relief Dollars Brought Extra Scrutiny
Because the Partnership spent a substantial amount of federal relief money, auditors carried out a single audit, an enhanced checkup that tests whether recipients are following federal award rules and helps flag any misuse of funds. Single audits, along with the federal compliance supplement, are built to give federal agencies and watchdogs tools to demand fixes and follow up on weaknesses that might lead to improper payments.
The U.S. Government Accountability Office has documented how single audits and post-award oversight are used to detect and respond to improper payments and compliance problems, according to the U.S. Government Accountability Office.
Allegations, Missing Statements And A Finance Shake-Up
Inside the Partnership’s books, things were rocky enough that records had to be rebuilt. Former temporary controller Daren Williams told auditors he discovered that a finance employee had not been producing monthly financial statements, forcing staff to reconstruct records for the audit. Williams and two other former employees claimed that the same staffer had been overbilling the Partnership for pay. Auditors said they were unable to verify those allegations from the records they reviewed.
DPOB told reporters it would not discuss personnel issues. The organization says that in response to the audit, it has adopted a procurement policy, brought in an outside consultant and named Sundeep Kohli as vice president of finance. The mayor’s office said it is aware of the audit and is preparing the required comments, and the audit reporting also notes the group’s reported compensation figures, including President Shelonda Stokes’ $317,000 pay package and several senior staffers earning six-figure salaries, as filed on the group’s Form 990, according to FOX Baltimore.
City Response And What Comes Next
City recovery officials are now drafting the required responses, and the Partnership will be expected to spell out its corrective actions to address the single-audit findings. Auditors attributed many of the problems to “significant turnover” in the finance department over the past three years, and said that churn contributed to the breakdowns in recordkeeping.
If the fixes fall short, federal awarding agencies have tools under single-audit rules to push for remediation or other remedies, according to the U.S. Government Accountability Office.
