Federal government asks Minneapolis Park Board to repay $5.3 million

The federal government wants the Minneapolis Park and Recreation Board to pay back more than $5.3 million in disaster aid, saying the agency did not follow federal procurement standards in awarding contracts for repair work after severe storms in 2014.

An audit from the Department of Homeland Security's Office of the Inspector General said the Park Board did not follow federal guidelines when it spent a portion of the $8.4 million it received from the Federal Emergency Management Agency (FEMA).

The audit said the Park Board awarded a contract worth more than $1 million without soliciting bids, did not complete some projects and misspent funds. The audit questioned the use of federal disaster aid for repair of the mudslide along West River Parkway after the hillside had been stabilized.

The Park Board said in a statement issued Wednesday that it followed standard procedures and relied on state procurement guidelines.

"The Park Board did follow the City of Minneapolis' procurement procedures, including oversight and approval by the City of Minneapolis' Office of Civil Rights, which ensured that small and underutilized businesses were given the opportunity to bid on the project," the statement said.

The audit also faulted the state, and said it should have had more oversight as the grantee of FEMA funds.

The state Department of Public Safety's division of Homeland Security and Emergency Management is responsible for informing applicants about federal funding requirements. Guidance comes from a presentation and documents, as well as follow-up meetings, said Amber Schindeldecker, a division spokeswoman.

"This is an issue between the Park Board and FEMA," she said.

The federal government has asked the state to oversee the remaining grant funds.

Faiza Mahamud • 612-673-4203

Emma Nelson • 612-673-4509