County officials say they probed the library's grant spending a year ago.
ORANGE -- The Orange Public Library this year quietly returned a $48,000 federal grant now under investigation by the FBI after officials failed to provide proof that the money had been spent appropriately, NJ Advance Media has learned.
The unusual sequence of events began in September 2014, shortly after the federal Department of Housing and Urban Development awarded the grant to pay for a new heating and cooling system. The money was disbursed by Essex County.
County officials first questioned how it was being spent after the library submitted a request for reimbursement for work on the HVAC chiller without providing an invoice from the contractor, county spokesman Anthony Puglisi said.
The county requested the documentation. Rather than provide it, however, library officials responded that they, too, had questions about the contractor's work. So the county asked that those concerns be put in writing. Then came another twist.
In a surprise letter, the library said it was no longer pursuing the HVAC project and intended to reimburse the county the $18,328 that had already been paid out. The letter asked that the county allow the library 90 days to repay the money.
From the letter Orange library officials sent to Essex County in December of 2015.Getting the money back, however, proved difficult. Puglisi said the county waited 108 days before tasking its attorneys with drafting paperwork to compel the library, which is financially supported by the city, to repay the money.
After the attorneys reached out to the library, its board of trustees was set to authorize the repayment at a meeting on May 12, Puglisi said. Instead, on June 6, Orange attorneys told the county the city wanted a $4,000-a-month payment plan.
The county refused, Puglisi said, saying the payment needed to be made in full.
Nothing happened until July 25 -- four days after the FBI, investigating alleged extortion and corruption, raided the library demanding documents about the HVAC project, among other things -- when suddenly the money was repaid, Puglisi said.
The FBI has also executed a second warrant inquiring about other city expenditures at the YWCA and in the water department. Federal authorities have questioned the county for information about the use and return of the grant.
County officials have said they are not a target of the investigation.
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A city spokesman said he could not answer questions about the HUD grant because they "assume that the city of Orange Township is responsible for the overall operation of the Orange Public Library--when in fact, it is not."
Library staff declined to comment on the grant and why the money was returned.
It's rare for a recipient of a government grant to give back money, unless their hand is forced. A spokesman for the U.S. Government Accountability Office said recipients have had to give grants back when they are called out for wrongdoing.
"We can't generalize about how often it happens across government," the spokesman, Chuck Young, said. "But in our work, we have found some examples of municipalities having to return grant monies to the federal government."
In a report the office compiled last year, Young said it identified several cities throughout the country in which grant money had to be returned after questionable spending or fund mismanagement, including Detroit and Flint, Mich.
Jessica Mazzola may be reached at jmazzola@njadvancemedia.com. Follow her on Twitter @JessMazzola. Find NJ.com on Facebook.