Detroit is in danger of losing over $20 million in grants if the city fails to use the federal funds that have already been allocated to it by May 2, 2012.
City officials are more than two years behind in spending Community Development Block Grants (CDBG), which can be used to demolish abandoned houses, revitalize neighborhoods and create new jobs.
Detroit receives about $33 million in CDBD funding per year. Because Detroit is now in its third year of failing to spend the money, funds have accumulated to nearly $70 million. If they do not spend the money by May 2, they could lose more money and future grants.
The city has already been accused of mismanaging other grant funds, forced to return $9.2 million in funding for home weatherization and misusing $3 million in grants intended for the poor. The federal government has also required the city to return nearly $10 million for failin to spend any money on the Head Start early childhood education program since 2005.
Detroit Mayor Dave Bing said the city inherited old technology and a mismanaged grant system.
For more information, see Detroit faces loss of cash from federal block grant