Monday, January 11, 2021

Mismanagement In A Detroit City Program - Say It Ain't So!

 The tl/dr version: Federal money for a Detroit business creation program gets spent on consultants and then "mismatchea" and inappropriate expenditures occur with a "lack of oversight",  and the vast majority of businesses thus "helped" failed.

The inspection that took place due to a whistleblower found a lack of checks and balances, and that expenditures were found not to line up with the actual number of businesses opened.

This is otherwise known as business as usual in the D.

The Detroit News: Duggan’s Motor City Match program had excessive spending, lack of oversight: report

The Detroit Free Press:  Detroit's Motor City Match hampered by failures, mismanagement, watchdog says

Instead of it being a failure, even as the vast majority of the rather few businesses -- for the amount of money involved -- it  "helped" failed, it worked exactly as designed - the consultants and administrators got paid.  

It is also likely the consultants then made donations to the appropriate politicians and administrators and the funding thus did exactly what it was supposed to do in Detroit.

The program had $21 million in funds, including $9.1 million from the Feds, $6.2 million form the general fund and $6 million from philanthropic partners.

But, out of $8 million in federal funds spent between 2014 and 2018 on Motor City Match and Motor City Re-Store, only about $1.5 million went directly to small businesses, according to the inspector general. The rest went to program consultants and other administrative costs.  So all of 18% of Federal funds actually went to the businesses themselves, and the rest got swallowed up.

For example: under review was a March 2017 payment for $153,000. HUD said only $20,000 of the total was directly tied to assisting 10 businesses. The rest went to administration, project assessment and outreach and engagement.

So all of 13% of that payment, even less than the overall average of 18%  actually went to helping businesses.

Anyone surprised by this, at all?

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