Baltimore County’s inspector general found that a roofing company that did business with the county and Baltimore City skirted local laws and was approved for public funds under false pretenses, according to a report released Wednesday.

In a 12-page report, Inspector General Kelly Madigan detailed how the company schemed to dodge local requirements designed to ensure diversity in subcontracting on public projects. The county typically asks companies that it works with to allocate 25% of the government’s discretionary funds for minority- and women-run businesses.

However, the inspector general found the roofing company — which it did not identify — falsely reported to the county that it subcontracted demolition work for a roof replacement project at Woodlawn Police Precinct 2 to a minority-run company. Instead, it used an out-of-state subcontractor that wasn’t minority- or women-run. The minority-run company still pocketed $4,000 after its president signed a contract stating that it fulfilled work that it didn’t do, the report shows.

The report doesn’t indicate what prompted the companies to take those actions.

The county has since said that it would withhold about $40,000 from the roofing company, according to public records cited by the report.

In a response, D’Andrea Walker, the county’s administrative officer, said the company would be suspended from doing business with Baltimore County. “Please note at this time, there is no active contract with the [roofing] company,” Walker wrote.

As for the minority-owned business, Madigan said the Maryland Department of Transportation’s Minority Business Enterprise and Baltimore’s Minority and Women’s Business Opportunity Office, which certify minority and women’s businesses for Baltimore County, may remove their certification.

“That’s a big punishment for them,” Madigan said. “Because when you’re not on that list, you’re not going to get the same work.”

The report comes more than a year after Baltimore City and the county IG’s office criticized the roofing company for other violations.

In February 2023, the city’s IG’s office informed the county’s inspector general that the same company had falsely inflated payments to a minority-run subcontractor. Madigan found the company had also inflated the amount of funding provided to another minority-run company to meet the county’s funding mandate later that year. The company reported that it paid the subcontractor $449,500; the subcontractor only got $40,900, the county IG said.

Still, the county signed a contract with the roofing company to redo the roof of the Woodlawn Police building in May 2023, months after Madigan alerted the county administration of her pending investigation. The results of that investigation were released weeks later.

“After we found fraud with the first contract, that company had no business getting the second contract,” Madigan said. “Somebody should have been paying closer attention to the company.”

The new report follows a year in which the administration of former County Executive Johnny Olszewski Jr. has faced questions about some official actions. But the county’s inspector general found no evidence that officials improperly awarded benefits to a retired county firefighter or granted a trucking contract based upon Olszewski’s friendship with an employee of the company.

In the case of the roofing company, the IG’s office said, there is significant evidence to substantiate the fraud.

“There are checks and balances in place and [the administration needs] to take some time to look at them,” Madigan said. “I would hope that this report would be a ‘lesson learned’ opportunity to think about the business processes and what, if anything, they could do better.”