Boston city councilor pushes for state audit of federal grant funds after misuse by city program

Boston City Councilor Ed Flynn requested that the state auditor’s office conduct a formal audit of the nearly $560 million in American Rescue Plan Act funds the city received from the federal government, in light of misspending by a city program.

Flynn sent a letter to State Auditor Diana DiZoglio on Friday requesting an audit of the federal grant funds the city received through the ARPA legislation of 2021 that was issued as a COVID-19 pandemic-relief measure.

The councilor said Boston received nearly $560 million in federal funds for pandemic recovery. The money was committed by the end of 2024, and must be spent by the end of next year, he said.

“In May of this year, it was reported that the City of Boston’s Three Squares Main Streets program allegedly misspent ARPA funds in the amount of $32,000,” Flynn wrote in the letter. “Irresponsible funding and spending leads to inflated costs and missed opportunities to improve our communities.

“It is critical that the City of Boston spends taxpayer dollars responsibly to regain our credibility and show respect to the residents,” he added.

Flynn wrote that he chose to pursue a state audit due to the City Council’s failure to hold oversight hearings, and ensure that “Boston is in compliance with spending regulations.”

Auditor DiZoglio’s office said Friday that it had received Flynn’s letter and that the councilor’s request requires a majority vote from the City Council and approval from the mayor to permit the auditor’s office to conduct a municipal audit.

“Our General Counsel will be sending Councilor Flynn the legal process required, under the law, to engage the Office of State Auditor with respect to a municipal audit,” DiZoglio spokesperson Andrew Carden said in a statement.

“Unlike the Office of Inspector General, which has the full legal authority to audit and investigate municipal government entities without a request or permission from a city or town, the Office of State Auditor, while mandated to audit state government entities, is actually legally required to obtain permission from a municipality, via both a majority vote from the City Council and approval by the Mayor, to be permitted to conduct a municipal audit,” Carden added.

Flynn told the Herald he wouldn’t hold his breath for approval from his colleagues on the City Council, which is largely allied with Mayor Michelle Wu.

“Since the City Council failed to hold the necessary oversight hearings to determine how we spend federal funds, an outside audit is essential to ensure appropriate spending, demonstrate transparency and accountability,” Flynn said. “The Boston City Council will not support an independent audit of our financial records to ensure we are complying with federal spending laws.”

Mayor Wu’s office didn’t respond to a request for comment on whether the Wu administration would support Flynn’s request for a state audit.

Wu’s office launched an internal audit last May after the city main streets’ program’s alleged misuse of federal ARPA funds was flagged by the Boston Finance Commission, a City Hall watchdog.

“We’re grateful for city staff who have been working to ensure oversight of every dollar of federal funds spent on pandemic recovery, including grants to nonprofit organizations,” Wu spokesperson Emma Pettit said in a statement at the time. “Through their diligence, these financial irregularities were identified and reported to the appropriate agencies to take action.

“The city will continue to support any further investigation, and is undertaking a further audit to ensure full accountability.”