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Justice’s grant to ACORN-related group misused, says watchdog

New York organization did not comply with requirements on documenting recruitment of students.

A New York City community organizing group that received a Justice Department grant to teach students leadership skills failed to follow requirements for documenting its spending, according to a report the Justice inspector general's office released Wednesday.

The $138,130 grant awarded in 2005 to the New York Agency for Community Affairs was to be used to sustain the grass-roots organizing efforts of the Association of Community Organizations for Reform Now, known as ACORN, which filed for bankruptcy in 2010 after Congress cut off federal funding.

Acting IG Cynthia Schnedar said her team questioned the entire grant awarded by the Office of Justice Programs' Office of Juvenile Justice and Delinquency Prevention. "Our audit found that there were internal control weaknesses; unsupported grant expenditures; a lack of contractor monitoring; weaknesses in budget management; inadequate grant reporting; unmet conditions, including a requirement to request prior OJP approval before using grant funds to advocate for any law, regulation or policy; and deficiencies with the program's overall performance," she said in a statement.

The report also described the New York group as a "pass-through entity" for ACORN, a politically controversial neighborhood activist group that conservatives believe is a tool of the Democratic Party.

"While NYACA's OJP-approved budget was for the allocation of grant funds to payroll and fringe benefit charges," the report said, "we determined NYACA did not have any paid employees at the time it received the grant or at any time during the life of the grant-funded project. All of the individuals who worked on behalf of NYACA were ACORN employees. Further, the former NYACA executive director stated that she served concurrently as the executive director for both NYACA and the New York branch of ACORN."

The group's original grant application promised "to identify and recruit potential leaders, such as block association officers, parent organization leaders and other neighborhood-based activists to accomplish its organizational and grant-related goals," the IG report stated.

The report made 11 recommendations for the community group to revamp its accounting procedures and reporting, both for the grant in question and for any future grants. "Unsupported progress reports hinder overseers' ability to monitor grant activity and increase the risk for grant funds to be wasted or used for unallowable purposes," the report said. "Because we could not determine whether the reports submitted by NYACA were accurate, we recommend that NYACA implement policies and procedures to ensure the submission of fully supported, accurate and timely reports for future DoJ awards."

Though ACORN was officially defunded, grants routed to groups some view as its offshoots have continued to generate controversy, as occurred earlier this year when the Housing and Urban Development Department gave $80,000 to the Affordable Housing Centers of America.

"This is the latest in a series of nonpartisan audits showing taxpayer money is being abused and wasted in Justice Department grant programs," Sen. Chuck Grassley, R-Iowa, said in a statement to Government Executive. "More transparency and accountability by the Justice Department and the grantees is needed to ensure taxpayer dollars are spent in accordance with the program goals. There's zero reason to waste tax dollars like this, especially in this economic climate."

One of ACORN's chief critics is the conservative research group Judicial Watch. Asked about Wednesday's report, Thomas Fitton, the group's president, told Government Executive: "It took three years to find out what everyone has known for years, that this is a typical activity by ACORN, fraudulent and involving federal monies. You can see how the money was used for political purposes, not for the stated purposes."

Judicial Watch has published reports on what Fitton describes as ACORN's "series of front groups designed to thwart oversight -- not that the government needs help having its oversight thwarted." He called for a comprehensive audit of the Office of Justice Programs and said the fact that such groups "continue to get money in violation of the law screams out for a comprehensive criminal investigation."