Funding freeze threatened after audit finds issues with Indy agency (original) (raw)

Updated June 9, 2026, 4:10 p.m. ET

A Republican councilor is threatening to withhold funding from an Indianapolis agency with a budget near $30 million if its leaders fail to make dozens of reforms suggested in a critical internal audit.

An April audit of the Office of Public Health and Safety, created by Indianapolis Mayor Joe Hogsett in 2016 to address the root causes of violent crime, uncovered potential conflicts of interest related to city-awarded contracts and immediate needs to enhance employee ethics training and internal controls. The audit rated OPHS as high risk in six of eight subject areas, meaning the department could damage the city's reputation or financial status.

Indianapolis City-County Councilor Michael-Paul Hart says that because of those findings, the council shouldn't give OPHS any money in the 2027 budget until the agency proves it's making needed reforms. Hart's proposal, which also calls for enhanced ethics training and a centralized system for tracking contracts and invoices, will be heard at a Public Safety and Criminal Justice Committee meeting June 10.

"OPHS is looking at homelessness, they're looking at vulnerability of populations at violent crime, they're looking at food policy," Hart said at a June 9 press conference. "These are very, very sensitive subjects, and when we're dealing with those dollars, we must have the maximum amount of accountability."

OPHS Director Andrew Merkley has previously said that his agency has either implemented or will begin to make the reforms cited in the audit. An agency spokesperson told IndyStar Tuesday afternoon that he doesn't anticipate any issues making the suggested changes.

"OPHS is already making tangible, measurable progress on the audit findings," OPHS Chief Communications Officer Brian Heinemann told IndyStar in an email. "We will continue to do so. Halting funding now is not going to provide our neighbors the results they are hoping to or expecting to see from OPHS."

City-County Council leadership didn't immediately comment on the proposal after IndyStar emailed a council spokesperson Tuesday.

On a 25-person council with 19 Democrats, Hart, a Republican, faces long odds of garnering support for his policy. But councilors from both parties have criticized OPHS's struggle to track spending and present data that clearly ties the millions paid to local organizations with a general decline in violence since 2021.

OPHS at 'inflection point' after pandemic spending issues

The Office of Audit and Performance reviewed the department's spending from 2020 to 2025, years in which OPHS's budget increased 75% to nearly 34million.The2026figurefelltoalmost34 million. The 2026 figure fell to almost 34million.The2026figurefelltoalmost28 million, a small fraction of the $1.7 billion city budget. OPHS pays organizations to offer programs such as offender re-entry services, support for people who are homeless and summer programs for underserved kids.

The audit found that several contracts were awarded to vendors with "significant connections" to OPHS employees. Auditors also found that just over half of OPHS's contracts lacked documentation of compliance monitoring and 84% showed problems with payment invoices.

The potential conflicts of interest were serious enough that Wesley Jones, director of the city's audit office, said he asked the State Board of Accounts to further investigate several contracts.

Merkley, who took the helm at OPHS in 2025, said in a May 13 committee meeting that the agency's practices have improved significantly in recent years. He said the department was disorganized as leaders grappled with how to spend money to help people during the COVID-19 pandemic.

"Because of the emergency and our focused efforts to implement critical programs through our grassroots partners and strategies, we often did not have the time to stop and think about what needed to be measured or ensure that we evaluated and trained our staff," Merkley told councilors. "Now, with the pandemic behind us, OPHS is at an inflection point. Our team is working hard to create systems and safeguards addressing these findings."

The Hogsett administration has said the agency played a key role in reducing criminal homicides by close to 60% since 2021, along with providing food assistance to thousands and emergency shelter to more than 1,100 people who lacked stable housing this past winter.

(This story was updated to add a statement from OPHS.)

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Email Indianapolis City Hall Reporter Jordan Smith at JTSmith@indystar.com. Follow him on X @jordantsmith09 and Bluesky @jordanaccidentally.bsky.social.