Fraudulent Block Grant Claims
In an October 25 letter, San Diego's city auditor confirmed allegations that non-profit Alliance For African Assistance, working with the Economic Development Division, knowingly submitted a false claim for more than $20,000 in Community Development Block Grants. The investigation began after an anonymous tip was left on the city's fraud hotline.
"The complaint alleged that the organization submitted the request for work to be done knowing that the work had already been completed. We concluded that the allegation was SUBSTANTIATED (emphasis theirs)," read the October 25 letter addressed to Beth Murray, director of the city's Economic Development Division.
According to the block grant contract, projects must be approved before work begins in order to qualify for reimbursement.
To make matters worse, the investigation found that the non-profit submitted false bids in order to fulfill the three-bid-requirement on the application. And, to make matters even worse, the audit found a potential conflict of interest between an executive from the non-profit and the contractor who was awarded the bid.
"This matter will be referred to law enforcement for potential criminal prosecution for fraud and falsification of [block grant] reimbursement documents," read the letter.
"We recommend the Economic Development Division issue a demand letter for return of the [block grant] funds that were paid to the non-profit organization for work that appears to have been completed before the reimbursement agreement was authorized."
Beth Murray director of the city's Economic Development Division failed to respond to requests for more information in time for publication.
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