A city audit has uncovered irregular spending habits by a Scottsdale grant program charged with helping residents improve the look and safety of their aging neighborhoods.
Some projects that should have been rejected were provided thousands of dollars, City Auditor Cheryl Barcala’s 35-page-report states. In addition, the Neighborhood Enhancement Commission, a group of seven residents appointed by the City Council to give advice on which projects to fund with the grant money, has too much authority in handing out the public cash, the report states.
Since 1992, more than $800,000 has been distributed to Scottsdale neighborhoods, homeowners associations and other groups through the grants.
The program is part of Scottsdale’s drive to revitalize its more southern, older communities. Residents there have long complained of neglect. But during the past year, the council has added code in- spectors to patrol neighborhoods in search of eyesores that violate city regulations as residents are encouraged to fix up their properties, making the grant program more important than ever.
During the past three budget years, the grant program has spent about $75,000 annually to help neighborhoods pay for projects such as construction of signs that create a sense of place or installation of lights or pool fences to protect residents.
Neighborhood groups and HOAs apply to the commission, which decides which projects to fund.
Under city code, however, the commission is not permitted to make final decisions on which applicants receive grants, but should only be advising the City Council.
Scottsdale employees have "inappropriately" turned over control of the program to the commission, the report states.
Earlier this year, the commission provided Tonalea Elementary School with $5,873 for landscaping at the campus’ once drab exterior.
The grant program’s guidelines do not permit funding for schools, the audit contends.
Christine Schild, a member of the neighborhood commission, said on Wednesday that the school grant fell within the program’s general scope.
"This was a public building within a neighborhood that was open to the public during regular business hours and . . . the project itself was a community-based project," said Schild, who is also president of the Scottsdale Unified School District governing board.
Though the commission has authority over the grant program, the audit also found the panel did not vote on every project it funded.
For one such project — installation of streetlights at 128th Street and Desert Cove Avenue — Raun Keagy, neighborhood services director, issued a $4,417 check despite the fact that there was no neighborhood application, the report states. Information included with the check indicated the project was approved by the commission at a March 2004 meeting, which the auditors found never took place.
The audit also found a financial misstep in which deputy city manager Ed Gawf authorized an infusion of more than $60,000 from the revitalization budget to the grant program without City Council approval, or even notification.
Judy Register, head of Scottsdale’s citizen and neighborhood resources, said a budgeting error left the grant program without any cash during the 2004-05 budget year.
In order to keep neighborhood projects going, she said, money was moved from one account to another.
Barcala’s office argues that move violated state law by funding something not included in the budget.
In recent months, the commission has received financial statements concerning how much grant money has been committed and what the program’s balance is, Schild said.
The council now must consider changes to the commission’s duties and safeguards against future financial problems.
"It’s down to the paper-clip funding level, but it’s the principal of the thing," Councilman Bob Littlefield said.
"We shouldn’t have the flexibility to just move money around," he said.