Baltimore overpaid vendors serving the city’s homeless population by more than $460,000 for meals, an investigation from the city’s inspector general found.

The investigation, sparked by a tip received in December 2023, focused on a homeless shelter in a city hotel. Baltimore began contracting with the hotel’s owner, who was unnamed in a report issued Wednesday by Inspector General Isabel Mercedes Cumming, in April 2020 for the use of 123 rooms.

In July 2022, a separate vendor, also unnamed, was tapped by the city to provide additional services at the shelter, such as mental health treatment. A third vendor, this one a subcontractor, provided meal services at the shelter. That contractor was also not named in the report.

According to the report, the meal services subcontractor invoiced the shelter vendor for meals provided to residents of the shelter. The shelter vendor paid those invoices and then sent itemized receipts in an invoice to the city to be reimbursed.

A review of invoices by the inspector general from August 2022 to June 2023 found that the city was charged by both the hotel’s owner and the shelter vendor for the costs of the same meals. The city paid the shelter vendor $643,220 while the hotel owner received $460,920, the report found. The shelter vendor was billing for the meals at a higher rate than the hotel owner during that period, the inspector general found.

A subpoena of bank records showed the hotel owner also neglected to pay the meal services subcontractor during the same period.

According to the report, the hotel owner said they were not notified that a new meal service subcontractor had been selected in August 2022, leading them to continue to invoice the city. The fiscal administrator for the Mayor’s Office of Homeless Services, or MOHS, which oversees the shelter program, told the inspector general that the invoices from the shelter vendor and hotel owner were being processed by two different city employees, potentially contributing to the error.

The review further found that the hotel owner did not pay the meal services subcontractor for more than $247,000 owed after July 2023. The hotel owner told the inspector general that the delay was due to the city failing to make a timely payment for $2 million owed to the owner. In January, Baltimore officials made multiple payments to the hotel owner totaling $1.9 million.

City employees told the inspector general that “constant turnover” at MOHS was also a contributing factor to the late payments. In September 2023, director Irene Agustin abruptly resigned following a separate problem in which the office failed to draw down $6 million in federal money to reimburse costs. That incident, which was just recently rectified, was also caused by staff turnover. Ernestina Simmons has been serving as the office’s new director for the last year.

Simmons said in a written response to the report that the August 2022 contract with the shelter vendor should not have included food as an eligible line item for reimbursement because food services were already covered under a separate contract.

Simmons said she is “committed to improving our systems and process,” and has implemented a number of safeguards to prevent the same situation from happening again. Going forward, employees will check to make sure contracts do not have duplicate services and supporting documentation will be required for all third-party vendors, she said.