A Baltimore City government agency’s delays in submitting timely reimbursement requests to the U.S. Department of Housing and Urban Development may have cost the city more than $10 million.

It’s not clear how Baltimore could recoup those funds, which are designated for homeless services across the city. HUD and city officials declined to be interviewed for this story.

Representatives from The Mayor’s Office of Homeless Services, which helps provide shelter for people experiencing homelessness, said in an email that they worked on more than 30 projects related to homeless services with nonprofit providers in fiscal years 2020 and 2021 using federal funds from HUD. In fiscal year 2020, the federal housing department awarded the city $23.1 million for these projects; in 2021, it awarded $25 million.

Facing high rates of staff turnover, mounting workloads and a far-reaching financial scandal perpetrated by one of its most frequently relied-upon partner organizations, the homeless services office fell behind on its payments to nonprofit service providers and began using city dollars instead of the designated HUD funds. The city counted on eventually getting reimbursed for the general funds from HUD, but “due to several administrative hurdles,” the homeless services office did not request the back payments on time, agency spokeswoman Kyana Underwood said.

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The federal housing agency has specific rules for recipients handling this type of 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.

HUD representatives told The Baltimore Banner in a statement that the agency’s priority is the well-being of those receiving services, but offered no other information on the matter. And Underwood said an investigation into the situation and a resolution is ongoing.

“Our partnership [with HUD] and commitment to making homelessness rare, brief, and nonrecurring in Baltimore City remains strong,” she said in a statement. “Services for the communities and individuals that MOHS works with will not be interrupted or impacted.” She added that the fiscal year 2022 award increased by $1.3 million from the previous year’s award.

The Mayor’s Office of Homeless Service applies each year for competitive grant funding from HUD to finance projects related to homeless services. Typically, funding is assigned based on need and how well recipients — in this case the Mayor’s Office of Homeless Services — complied with the rules, spent the money and delivered services during the previous year. The homeless services office typically spends most of the funding on permanent supportive housing services, according to the city’s website, which pairs housing subsidies with social services to keep people sheltered long-term.

To help execute the work, the city relies on dozens of nonprofit partners to provide both housing and counseling services. Problems with paying partner organizations on time have been well documented, with one 2022 report by the Abell Foundation finding that only 1 out of 115 federal housing grants surveyed in the study was approved on or before the date work was scheduled to begin. Typically, small organizations dipped into their own coffers, the report found, and the problems have led to “fewer and more strained partnerships” overall.

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The money nonprofits receive for housing and counseling services often trickles down to property owners and managers who house tenants paying little or no rent; the rest is typically subsidized by HUD. Money for rent payments is supposed to flow from the city into the nonprofits, who then make payments to their partners for items such as rent, utilities and other social services.

Landlord Andrea Campo has one tenant who receives a housing subsidy from Community Housing Associates, a Baltimore nonprofit that provides affordable housing access and resources. Campo has housed the tenant for 12 years and grew accustomed to monthlong payment delays, she said.

But starting in 2021, Campo said the delays became longer and longer. She is owed at least three months’ rent this year, she said, and last year had a six-month payment gap.

“Small landlords in this city are running,” she said. “We’re being driven out of the city.”

Another property owner, Denise Uhrin, said she’s owed as much as $21,000 in rent payments for one tenant.

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“I just want to get paid,” Uhrin said, adding that even when reimbursements trickle in, they rarely cover the full balance owed. “I’ve started selling some of my properties. In Baltimore City, it’s been way more challenging year to year.”

Underwood, from the homeless services office, said the city is working with HUD to secure reimbursement and is “exploring all options” but did not elaborate on what those options could be. And HUD officials would not say if future funding awards would be affected by the city’s lateness.