Inspector General: $396,000 PACT grant payment processed for services not received; state audit required repayment

The Montgomery County Office of the Inspector General told the Audit Committee that investigators found Montgomery County Police Department staff processed a $396,000 invoice against the Maryland Police Accountability Community Transparency (PACT) grant for services that had not been delivered before the grant period closed.

"We opened an investigation and found that in 2022 the governor's office of crime prevention and policy had given a grant to the county ... on 06/29/2023 the county had encumbered that money for work that had not yet been received," Inspector General Megan Davey Lamarsi said. She added the OIG referred the matter to the Governor's Office of Crime Prevention and Policy (GOCAP), which audited and determined the county must return the funds.

Assistant Chief Frank acknowledged the payment violated county policy and said the department conducted an internal review. "We ended up signing the invoice and it was against policy," he told the committee. Frank described the error as "a mistake of the mind, not the heart," said it would not happen again and said the department repaid the $396,000.

Frank told the committee the repayment came from a mix of internal cost savings: trimming contractor work, slowing a fleet upgrade rollout and reallocating other discretionary purchases. He said the department slowed a planned Fleet 3 enhancement and reduced reliance on outside contractors (including some Axon-related contractor work) to cover the shortfall and make repayment without interrupting core public-safety services.

Council members pressed how the multi-person approval chain failed and whether the county asked the grantor for an extension. Committee members were told that, although the county did attempt to request flexibility from the state, staffing and timing constraints prevented approval before the grant deadline and that an improper chain of approvals and a management override of controls led to the payment being processed.

Lamarsi characterized the incident as a classic oversight failure: management override of controls after warnings and internal approvals that should have stopped the payment. She urged improved enforcement of the chain-of-approval "go/no-go" checks and said the OIG remains an available channel for employees who feel internal controls are being bypassed.

The committee asked for follow-up and documentation of fixes to the approval chain; the inspector general and police leadership said they will provide updates as they implement stricter go/no-go signoffs and staff training.