Baltimore City sends millions of dollars to a nonprofit youth fund every year without a routine auditing structure, leaving little accountability for how taxpayer money is being spent via the organization.
The Baltimore City Children and Youth Fund was established in the wake of the death of Freddie Gray. The brainchild of then-City Council President Jack Young, the fund was intended to address "inequities" in Black communities across Baltimore. The city contracted with Associated Black Charities, a local nonprofit, to administer the fund.
Baltimore voters approved a charter amendment in 2016 that guaranteed city money be sent to the fund on an annual basis. That guarantee, which has no sunset date, is tied to the total value of city property, granting the fund at least $0.03 for every $100 of property value in Baltimore.
A 2019 audit of the fund found several "opportunities for improvement" regarding how grants were administered and awarded.
City Auditor Josh Pasch reported there were no set time frames for award recipients to fulfill the terms of their agreements. He also found Associated Black Charities did not conduct any site visits to check on award recipients despite a requirement under its agreement with the city.
The Baltimore City Charter requires city agencies to be audited once every two years. But the Children and Youth Fund exists outside of city government and is not subject to regular auditing despite receiving millions in taxpayer funding. 2019 is the last time the fund was audited.
The Biennial Audits Oversight Commission can add entities to the annual audit list. Most recently, the commission added the Mayor's Office of Neighborhood Safety and Engagement to its 2024 audit list.
Baltimore City Comptroller Bill Henry, who sits on the commission and oversees the Department of Audits, told FOX45 he would support an audit of the Children and Youth Fund "as soon as the necessary time and resources are available." He rejected the idea of paying an outside firm to audit the organization.
"I don't support exporting City work to third parties. If there's money to pay for an outside audit, then it means there's money to pay for more in-house auditors," Henry said.
FOX45 asked all members of the Baltimore City Council about auditing the fund and the practice of funding it in perpetuity. Only one member, Councilman Yitzy Schleifer, said he would support a regular schedule of audits for the fund.
"This fund should be audited every two years like every other taxpayer-funded entity," Schleifer said.
Councilman Mark Conway chose not to respond when reached, according to his chief of staff. The rest of the council, as well as Mayor Brandon Scott, provided no response when reached via email.
The fund issued a request for proposal for an outside audit in 2023, though it is unclear what the status of that effort is. The fund did not respond to an inquiry from regarding the request for proposal.
The structure of the fund has changed significantly since the 2019 audit. The fund is no longer administered by Associated Black Charities. Instead, an independent nonprofit was created to oversee the flow of grant money. The fund began hiring permanent administrative staff in 2022, according to its website.
Tax filings show the fund received nearly $15 million in fiscal year 2022, nearly all of which came in the form of government grants. About $9 million of that sum went toward grants for other community organizations, while roughly $3.7 million went toward salaries, wages and management costs.
The filings list several "independent contractors" hired by the fund for a variety of services, including human resources and legal representation. Leaders of a Beautiful Struggle, described as a "grassroots think-tank" on its website, was paid $120,000 by the fund in 2022 for "community engagement services," the filings show.
A total of 41 grants of $100,000 or more were distributed by the fund in fiscal year 2022. Many of the grant recipients appear to run fitness and athletic programs. The largest grant recipient, The Fund for Educational Excellence, received $1.8 million that year. The Fund for Educational Excellence describes itself as an organization "working to close the equity and opportunity gaps for all students in Baltimore City Public Schools."
Officials are taking a critical look at their balance sheet as Baltimore City is expected to face a significant budget shortfall over the next decade. The Baltimore City budget office estimates the city's general fund will come up $27 million short in fiscal year 2026. That shortfall is forecasted to balloon to $217.3 million by fiscal year 2034.
"To summarize, even before accounting for any future tax rate reduction, the City's baseline forecast shows that current service levels cannot be maintained without taking one of three actions: raising additional revenue, making service reductions, or finding efficiencies within the current budget," the office wrote in a recent report.