INDIANAPOLIS — The city of Indianapolis is re-evaluating how they are distributing certain federal funds.
Many non-profits say they may not get funding that had already been approved. That's causing major issues for some, including the ShExperience Shoppes.
The space in downtown Indianapolis is home to several black-owned businesses. The ShExperience Shoppes was created as an incubator for black entrepreneurs.
"I didn't have a place to go, and I came to Katina and I say, 'Hey I got clientele, at least like 45 to 50 clients that are booking consistently for their hairstyles and I don't have a place right now,'” Natalie Smith, the owner of FH Beauty, said. “She said, 'You know what, I have a space for you.'”
Since then, Smith says her business continues to thrive. She says if ShExperience goes away, she and other small businesses would have a hard time sustaining their jobs.
"It would not only impact me, but it would impact the community of other entrepreneurs that services here,” Smith said. “We would literally be misplaced and not be able to sustain our businesses."
But the non-profit may have to close soon. The organization was in line to receive significant funding from money awarded to Indianapolis through the American Rescue Plan Act.
"We received an approval for $115,000 and did receive half of that,” Katina Washington, the president of She Event Indy, said. “Then, we also were to receive another $35,000 in funding for capacity building from another entity as well."
Now, the city is putting a pause on the distribution of funds. They sent the following lengthy statement in response to our questions:
In March of 2024, the City’s Office of Finance and Management (OFM) started monitoring 46 ARPA recipients whose spending plans were behind schedule. Many of them got back on track, several agreed to return some portion of their grants that they could not spend, and a few, including LISC, just failed to respond.
As a result, on August 23, LISC, along with several other awardees of American Rescue Plan Act (ARPA) funding, was sent the most recent in a series of notices and conversations regarding the federal government’s requirements on this funding. It is important to note that this is ARPA funding, not City budgeted dollars, as the federal government has required that all ARPA funding must be committed by the end of 2024, or it will be returned to the U.S. Department of Treasury. The City has been diligent since the beginning of the year in taking the following steps to ensure that Indianapolis residents do not lose out on this critical boost in funding, which we may not see again at these levels for decades:
Groups like LISC, which as of August 23 had not provided adequate documentation according to the federal government’s guidelines, were sent notices as early as February requesting supporting documentation for past expenses as well as a spending plan for anticipated expenses through the end of their contract. I have attached the communications that were sent related to the two contracts associated with LISC, one on February 9 requesting these documents by March 1, the second in mid-June requesting these documents by June 30. As you’ll see, each request made for this additional documentation made clear the federal government’s obligation deadlines which required that OFM evaluate these programs and contracts or risk losing the remaining millions of dollars that were awarded to support the people of Indianapolis.
Specific to LISC, the several financial claims that had been received by OFM related to their contracts prior to the August 23 notice (which were far less than the total contracted amount) were not submitted with adequate supporting documentation according to the federal government’s guidelines. OFM had returned these claims with requests for additional supporting documentation and in addition met with LISC representatives multiple times to try to assist them in addressing the issues with these claims.
In short, the notice that was sent to LISC on August 23, despite OFM’s multiple previous notices and best efforts to support them, was a necessary step considering OFM’s obligation to be good fiscal stewards for the City of Indianapolis and Marion County. With just four months left in the year to reevaluate and commit remaining ARPA funding, it is simply too great a risk that the residents of Indianapolis will lose out on millions of dollars of funds intended to support and uplift them.
After LISC was sent the notice on August 23, they put together the information that had been repeatedly requested for the past several months and sent it to the City late last week. The OFM Grants team will put them on a performance improvement plan in an effort to minimize negative effects on their subgrantees and ensure that we do not have to return ARPA dollars to the Treasury.
Washington says they were counting on the money to keep their doors open.
"That was the greater of our budget,” Washington said. “It's something we were definitely depending on."
Washington says she will wait as long as she can but knows she may have to close in a couple of months.
