Connecticut Audits Flag Oversight Problems in Blue Hills Grant Spending

HARTFORD, Conn. — Two state commissioned reviews found significant gaps in how public grants were managed and documented at the now closed Blue Hills Civic Association, a Hartford nonprofit that received more than $15.6 million in state funding between fiscal years 2022 and 2025.

The reviews examined grants that Blue Hills passed to other organizations for community programs. Auditors found missing agreements and budgets, inconsistent monitoring, and financial records that did not always show how the money was spent. They said the recordkeeping problems made it difficult to verify the use of much of the funding.

The initial forensic audit identified $208,000 in unsupported disbursements. It also examined a $300,000 wire transfer scam in which money intended for a community organization was diverted after someone supplied fraudulent bank information. Blue Hills later replaced the funds, but auditors found that the organization lacked controls to verify the account details and delayed notifying state officials about the loss. The report said the reason for the delay was unclear.

A follow-up review looked at organizations that received Blue Hills grants. Auditors identified 38 recipients awarded about $7.7 million and conducted detailed testing on 31. They found a range of documentation and reporting problems, including missing receipts, incomplete agreements, expenses that could not be reconciled with financial records, and costs outside the approved grant periods.

One recipient, Upper Albany Neighborhood Collaborative, had about $1.04 million in costs that auditors could not adequately support across two fiscal years. The report said the amount was largely tied to missing or insufficient documentation. "Unsupported" means auditors could not verify the spending from the records provided; it does not, on its own, prove that money was stolen or used fraudulently.

The initial audit documents former state Sen. Doug McCrory's role in identifying some grant recipients and determining allocations. It also says that a federal inquiry into Blue Hills included McCrory and his connections to the nonprofit and certain grant recipients.

The audit does not find McCrory guilty of a crime or conclude that he personally took public money. Auditors specifically cautioned that their review could not determine whether a person committed fraud or other criminal activity. The reports describe shortcomings in grant oversight and identify areas that require further scrutiny.

Connecticut enacted Public Act 26-27, effective July 1, 2026, to add transparency, reporting and monitoring requirements for certain legislatively directed funds and subrecipient arrangements. The follow-up audit notes that the law took effect after the grant periods it examined, so the new requirements were not used to assess those earlier grants.

The audits leave a central question for state officials: whether the new rules will make it easier to track grants from the original award through the organizations that ultimately receive and spend the money.