Councilors Flynn and Murphy have called for a hearing to discuss potential noncompliance and a lack of transparency regarding the use of American Rescue Plan Act (ARPA) funds.

Boston received $560 million in ARPA funding intended to help the country respond to and recover from the impacts of COVID-19. In May 2025, it was reported that $32,000 in ARPA funds were misused by Three Squares Main Street, one of 20 independent nonprofits in the Boston Main Streets program, which aims to revitalize neighborhood businesses.

The Finance Commission, an independent agency created to monitor city businesses, found that two contracts funded by ARPA had been deposited into a commingled bank account containing $57,500 in Community Development Block Grants.

“When suspected altered statements were discovered, bank statements submitted for the same month for different grants were compared, and altered documents were detected,” the commission wrote.

“This incident may or may not be isolated, and that additional incidents of possible fraud may have taken place,” Flynn said Wednesday. “It does not matter if it’s $30-million or $3, it’s taxpayer money. It is critical to determine whether the city of Boston has identified similar cases and whether it is communicating with any organizations regarding the return of ARPA funds.”

On March 4, the council requested additional information about the use of ARPA funds. On April 8, the city responded but did not confirm whether the return of ARPA funds had been requested from any non-profits or small businesses. “We are unable to comment on that at this time,” the city said.

Flynn added that he has written letters to former Chief of Economic Opportunity and Inclusion Segun Idowu in January, looking for additional information relating to the funds misuse and city communication with organizations that received funding. “Ultimately, these questions were unanswered,” he said.

“It is critical that Boston is in compliance with city, state, and federal guidelines and regulations. We must demonstrate fiscal discipline, transparency, and accountability,” Flynn said.

“I think it’s time now to really take a hard look at not only how the money was spent, but was it effective, and if any money was spent inappropriately,” said Murphy. She added that one Main Street program’s inappropriate use of funds should not paint the entire program in a negative light.

“It is absolutely our responsibility to check on that and make sure the money was spent appropriately, and if not, what actions we need to take going forward,” Murphy said.

The resolution has been sent to the Committee on Post-Audit: Government Accountability, Transparency, and Accessibility to be scheduled.