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Report: L.A. lost out on more than $125 million in federal money

January 23, 2012 |  1:56 pm

Los Angeles lost out on more than $125 million in potential federal stimulus money because of a lack of oversight across the various departments pursuing the funds, City Controller Wendy Greuel said Monday.

In an audit of the city’s application processes for competitive grants from the 2009 American Recovery and Reinvestment Act, Greuel found that the lack of a centralized body to oversee the city’s scattered departments led to a series of oversights that reduced the city’s share of the billions in funding awarded across the country.

The city applied for 88 competitive grants worth about $1.3 billion under the federal stimulus. Of those, the city was awarded 24 grants totaling $261 million, the audit found. Greuel said the city failed to pursue all funding that it was eligible to receive.

Among other reasons, various departments contended that the grants were not pursued because of a lack of staffing due to furloughs and early retirements and decisions by some officials to pursue only the grants that they felt they had the best chance of winning, the audit found.

“The city must not leave opportunities and cash on the table,” Greuel said. “It is reckless to do so.”

Because there are no formal, citywide guidelines on application processes, the quality of the grant applications varied between departments, Greuel said. While some departments have formal guidelines and manuals for grant applications, others rely on a handful of employees to navigate the often complex application processes on top of their other duties.

Among those without guidelines are the Los Angeles Police Department, the Los Angeles Fire Department and the city attorney’s office, Greuel said.

In one instance, Los Angeles World Airports, the city's airport agency, applied for and received $10.8 million in funding from the Department of Transportation for the relocation of a fire station at L.A. International Airport.

The funding program, which included $1.1 billion available nationwide for airport improvements, could be used for a variety of different projects and applicants could apply in more than one category.

The agency, however, applied in only one category. The audit found that officials chose to focus solely on the category in which they felt the city could win and did not pursue any others, although they were eligible.

Greuel also criticized the pace at which the cash-strapped city has accepted and received grant funding. Typically, the process takes between five and six weeks. But most American Recovery and Reinvestment Act grants were accepted by the city council months after they were awarded, the audit found.

In addition to establishing citywide guidelines and an oversight body, Greuel recommended the city provide support to departments to ensure quality applications and require departments to seek and document reasons for grant denials.

“We need to have a focused attention, a focused process that is going to guarantee that we get those dollars on the street as quickly as possible,” she said.

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-- Stephen Ceasar at L.A. City Hall

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