Former mayor Adrian M. Fenty’s administration improperly awarded more than $1 million in no-bid grants to Peaceoholics, a local violence-prevention group that was ill equipped to manage city money it received from 2006 to 2010, the D.C. Auditor has concluded.
In a much anticipated report, Auditor Yolanda Branche concludes that the nonprofit group “did not develop the appropriate internal controls” to “verify that all District funds were consistently used for the intended purposes.”
During the four-year period, seven District government agencies and the Children and Youth Investment Trust Corp., a quasi public-private charitable group, awarded Peaceoholics $13.8 million for various conflict-resolution and gang-prevention initiatives.
Although the report recognizes Peaceoholics’ efforts to diffuse violence, it found numerous irregularities in how the money was awarded and managed.
Peaceoholics, founded in 2005 by Jauhar Abraham and Ronald Moten, consistently co-mingled grant monies between its bank accounts in violation of city grant procedures, according to the audit.
The organization also was unable to meet required reporting agreements and relied on basic computer banking software to try to keep tabs of taxpayers’ money.
“Peaceoholics transferred District funds between financial institutions,” the audit states. “Peaceoholics’ financial management system did not provide a written record to track specific transfers to any individual grant, sub-grant, contract or loan.”
But the audit, which was requested by D.C. Council member Yvette M. Alexander (D-Ward 7), does not conclude any city money was stolen.
Instead, Branche urges the District government to “establish standard, uniform grant agreements” and bolster monitoring so “effective” organizations such as Peaceoholics can continue to do business with the city.
“It’s clear we didn’t steal any funds. It’s clear we didn’t misappropriate any funds, but it’s clear we made some mistakes,” Moten said. “We’ve learned from those mistakes. We will get training to clarify what we did wrong.”
Alexander requested the audit last year, when Moten was a key Fenty (D) adviser during his unsuccessful reelection bid. Alexander was a major supporter of Fenty’s opponent, Mayor Vincent C. Gray (D). Moten is now challenging Alexander in next year’s Ward 7 council race.
Branche did not pursue whether it was appropriate for Moten to have worked on Fenty’s behalf last year, saying that question was better suited for the D.C. Board of Elections and Ethics.
The audit confirmed that the Fenty administration used CYITC money for Peaceoholics, including a $360,000 grant that was not competitively bid. Peaceoholics was supposed to complete a report for CYITC, but auditors were unable to verify if it was ever done.
In all, auditors found Peaceoholics received $1.3 million in no-bid grants. When the city money arrived at the organization, some of it was transferred among “six bank accounts at two different financial institutions,” despite agreements prohibiting the co-mingling of funds.