Keller regime allegedly cheated child care providers out of COVID aid: OSI

The Office of Inspector General (OIG) released a 24-page report on January 2, highlighting alleged misuse of $287,972.77 in federal COVID-19 Child Care Stabilization Grant funds by 27 employees under Mayor Tim Keller’s administration. These funds were intended for child care providers but were reportedly used to distribute bonuses to city employees, including high-ranking personnel.

The investigation was prompted by an anonymous tip about the alleged improper use of the grant. According to the report, the funds were diverted to compensate employees not directly involved in child care services. This action appears to violate the grant’s stipulations, which explicitly restrict use to personnel associated with licensed child care facilities or services. “The evidence obtained by the OIG substantiates that employees, including high-ranking department personnel, received several premium pay disbursements in violation of allowable personnel costs,” states the report.

Attorney John Day noted the potential for broader consequences, emphasizing, “The real problem for the city is whether the Department of Justice or U.S. government will look at this,” citing similar federal investigations into misused pandemic relief funds. Day added, “If the Department of Justice determines that money was misused, it could be a significant problem.”

The controversy centers on whether the city’s interpretation of “premium pay” under the grant’s guidelines was appropriate. Associate Chief Administrative Officer Carla Martinez defended the payments, stating, “These were employees who kept childcare centers open during the COVID crisis. These were not bonuses and were not inappropriate.” Martinez argued the funds were used for “necessary overtime funding for critical early childhood caregiver programs and management.”

City Council President Dan Lewis, however, referred the investigation to the U.S. Attorney’s Office, alleging federal crimes. “These funds, approved by the Council, were intended exclusively for early childhood programs,” Lewis said. “However, they appear to have been unlawfully redirected as cash bonuses for the Mayor’s staff.”

Mayor Tim Keller’s spokesperson, Alex Bukoski, dismissed Lewis’ accusations as politically motivated, calling them “a grossly inaccurate overreaction” and part of a series of “bitter rants” against Keller’s administration. The OIG report also notes discrepancies in the grant applications, including electronic signatures of employees who were either unaware or no longer employed at the time of submission. These irregularities raise further questions about the oversight and administration of the funds.

Adding to the complexity, the Accountability in Government Oversight Committee—tasked with reviewing the OIG’s findings—declined to approve the report, citing jurisdictional concerns. By a unanimous 5-0 vote, the committee stated the OIG lacked sufficient authority under the Inspector General Ordinance to investigate some allegations.

The OIG’s recommendations include reviewing the disbursements, potentially reallocating misused funds to the city’s General Fund, and repaying the granting authority. Additionally, they suggest implementing clear policies to define “one-time premium pay” and ensuring authorized personnel handle future grant applications. As scrutiny over the issue intensifies, the matter remains unresolved, leaving questions about accountability and adherence to federal guidelines.