After missing deadlines to get reimbursed for about $10 million spent on key housing services in Baltimore, city government officials received approval from the U.S. Department of Housing and Urban Development for a second chance at the money.

Mayor’s Office of Homeless Services director Ernestina Simmons told City Council members about the development last week at a grants management hearing. A spokesperson for Mayor Brandon Scott confirmed Tuesday that HUD’s approval to resubmit came in November, and last month the city submitted a request to be reimbursed for $6.4 million.

The city fumbled about $10 million in federal housing dollars received in fiscal year 2020. Banking on getting reimbursed later, city government workers paid out that money to partners who help house some of Baltimore’s most vulnerable residents.

But as The Banner revealed last year, the city couldn’t maintain its access to HUD’s electronic grants management system — sometimes because city staff had violated HUD security rules and other times because staff members with the credentials had left for other jobs. The implications were dire: HUD, which funds millions of dollars worth of homelessness eradication projects in Baltimore every year, considers how well grant recipients comply with funding rules before awarding more in subsequent years.

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These projects fund a wide spectrum of services, from rental assistance programs to social workers who can help people transition out of homelessness. In general, those who receive services live with chronic disabilities, may not have the ability to work and may depend on the supports to survive.

The federal housing agency has specific rules for recipients handling grant money. For example, grantees must submit all required reports to HUD no later than 90 days from the date of the end of the project’s grant term, HUD code states, and any “unused” grants funds will be “deobligated,” meaning canceled or adjusted by HUD. In 2022, the city used only $14.7 million of its $25.4 million award, according to sources with knowledge of the situation.

After the issue became public, Irene Agustin, who was the director of the city’s homelessness office at the time, went before City Council members and defended the staff’s performance, saying they had inherited a personnel deficit and other challenges during the coronavirus pandemic. Later that month, Agustin resigned.

Representatives from HUD would not say last summer whether it was possible for the city to win back the $10 million. In June, in response to questions about the reimbursement snafu, a HUD spokesperson said only that it prioritized the well-being of people receiving HUD services.

In late June, Scott sent a letter to HUD Secretary Marcia Fudge and asked for the agency to reconsider, citing “administrative hurdles” as the culprit behind the city’s tardiness. He pledged to have the city’s Chief Administrative Officer Faith Leach institute a series of reforms, including having a monthly compliance meeting and creating a report that he would review personally.

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Earlier this month, representatives from the city’s homeless services office said HUD had awarded them more than $29 million for a range of housing projects across Baltimore, an increase from the year prior. In a statement, Simmons said the funds serve a critical purpose for the agency and thanked the city’s partners for their efforts.

“I ... look forward to continuing this incredibly important work with them as we begin to receive this critical funding,” said Simmons, who took over the agency in October.

Hallie Miller covers housing for The Baltimore Banner. She's previously covered city and regional services, business and health at both The Banner and The Baltimore Sun.

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