The Missouri State Auditor's office is taking the next step in their investigation of the St. Louis Development Corporation by opening a full audit into a troubled grant program.
According to a press release, Auditor Scott Fitzpatrick's team will be looking into possible improper government activity involving the alleged misuse of American Rescue Plan Act funds by the North St. Louis Small Business and Non-Profit Grant Program.
The North St. Louis Small Business and Non-Profit Grant Program drew scrutiny when it came to light grant money was conditionally awarded to questionable businesses and organizations, some of which did not exist.
Then SLDC CEO Neal Richardson blamed the problem on a thirty-party organization they outsourced the application viability assessment review process to. The program was paused while SLDC reassessed the conditionally awarded grants. The program eventually resumed with SLDC opening a transparency portal.
However, Auditor Fitzpatrick says questions remain over whether that reassessment ever happened, telling KMOX they received no documentation proving it did.
"They said they were going to [rereveiw the conditionally approved grant applications] but they did not produce any records to us indicating that those reviews actually did take place."
A preliminary audit began about a year ago, prompted by a whistleblower complaint from State Representative Steve Butz.
According to Fitzpatrick, this complaint, along with others, alleged fraudulent misuse of ARPA dollars and potential conflicts of interest. He confirmed to KMOX they are also looking into grants potentially being improperly awarded to businesses and organizations tied to a family member of SLDC Board Member and Alderwoman Shameem Clark Hubbard.
Richardson's exit as SLDC's CEO is also apart of the audit. While he isn't accusing Richardson of any wrongdoing, the auditor says they are looking into payments he received on the way out.
Auditor Fitzpatrick says they want to look into why "a severance payment was necessary as well as a $25,000 consulting fee that was paid in addition to the severance for someone leaving the organization."
The audit officially began on September 25th.
"What we have seen so far raised several red flags," said Fitzpatrick, adding, "With millions of dollars flowing through this program it is imperative sufficient oversight is provided to ensure the funds are used appropriately."
The grant program's issues became the driving force behind Richardson's removal as CEO when Mayor Cara Spencer won April's election.
In a statement to KMOX, a spokesperson for SLDC said they are aware of the audit. KMOX has asked for further clarification around the rereview of the conditionally approved grant applications.
KMOX has also reached out to Alderwoman Shameem Clark Hubbard and is awaiting a statement.