OIG: Baltimore spent $516,150 in ARPA funds on Artscape talent without approvals

BALTIMORE (WBFF) — Baltimore’s Office of the Inspector General (OIG) found the City used more than half a million dollars in federal COVID relief funds to pay music artists at Artscape 2025 — exceeding the approved budget for talent and reallocating hundreds of thousands of dollars without required approvals.

The investigation began after a complaint alleged that about $600,000 in American Rescue Plan Act (ARPA) funds were spent on music talent for the annual arts festival.

According to the OIG report:

• The City used $516,150 of a $1.6 million ARPA grant for music artists.
• $240,500 went to one headlining performer and $125,000 to another.
• Spending exceeded the approved $300,000 performance talent budget and $40,000 booking fee budget.
• A total of $582,809 in ARPA funds was reallocated without required approval from the Chief Recovery Officer or the Board of Estimates.
• At least $26,546 in ARPA funds were used for a Mayor’s VIP Reception during Artscape weekend.

The report also found that the City did not require the talent booking vendor to submit a competitive proposal. Because the grant was categorized as “Revenue Replacement” under federal guidelines, competitive procurement rules did not apply.

The OIG also reviewed hospitality riders that included alcohol requests for performers. While documentation showed alcohol purchases were prohibited under federal rules, investigators could not independently confirm whether ARPA funds were used for those expenses due to a lack of required receipts. In its response, the City stated neither it nor the booking agent paid for alcohol.

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Emails reviewed by investigators show officials within the Mayor’s Office of Recovery Programs (MORP) expressed concern about using federal relief dollars to pay high-priced national artists. One official wrote they were “really not okay” with using ARPA funds for a $240,000 performance.

Despite those concerns, contract amendments increased the talent vendor agreement from $400,000 to $475,500.

City leadership acknowledged one administrative oversight: failing to submit a required budget modification to the Board of Estimates when reallocations exceeded the 25% threshold outlined in the grant agreement. Officials say they plan to seek retroactive approval.

The City defended its use of ARPA funds, arguing Artscape qualified under federal “Provision of Government Services” rules. Leaders also pointed to an economic impact study estimating the 2025 festival generated $8.8 million in economic activity, supported 33 jobs, and brought in more than $1 million in tax revenue.

The City said alcohol was not paid for with ARPA funds and that sponsorships covered bar costs at the VIP reception.

The Inspector General issued one formal recommendation: that the City develop standard operating procedures for large events like Artscape to better define roles, strengthen oversight, and ensure cost-effective vendor selection.

The OIG report does not allege criminal wrongdoing but raises concerns about oversight, budget compliance, and the use of federal relief funds for high-cost entertainment expenses.

Read the full report and response below.