BOSTON — The Wu administration is facing tough questions from its own City Council after two councilors demanded a hearing on how Boston spent more than $560 million in federal pandemic recovery funds — and why the administration stonewalled their questions for months.

Councilors Ed Flynn and Erin Murphy filed a hearing order this week after the administration failed to answer basic questions about the city's oversight of American Rescue Plan Act funds. The order calls for the Law Department and the Office of Economic Opportunity and Inclusion to appear before the Council and explain what it calls Boston's "alleged noncompliance and lack of transparency in the use of federal funds."

Flynn first raised the alarm on January 8, writing to then-Chief of Economic Opportunity and Inclusion Segun Idowu asking whether other cases of misspent ARPA funds had been reported and whether the city had communicated with any grant recipients about returning money.

Idowu never responded. He resigned in February.

His deputy, Donald Wright, took over as interim chief. It wasn't until the Council formally passed Docket #0491 on March 4 — compelling a response under Section 17F — that the administration said anything. The response came on April 8 and still didn't address the central question: has the city asked any organization to return misspent federal funds?

Flynn then wrote directly to Wright on April 13, repeating the same questions his predecessor never answered.

Flynn's letter put it plainly: "We must demonstrate fiscal discipline, transparency and accountability."

The trigger was a Boston Main Streets nonprofit called Three Squares Main Street, led by executive director Warren Williams, which was caught submitting altered bank statements to the city to cover up misspent federal grant money.

According to the Boston Finance Commission, someone noticed a formatting change in the nonprofit's documents — and unraveled 18 months of alleged fraud. Investigators found nine fraudulent charges between August 2023 and March 2025, totaling $32,447. In one case, a $5.15 PayPal payment had been altered to appear as a $2,301 Staples charge. A $150 Comcast bill became a $14,416 payment to a security company.

Federal tax filings show Three Squares reported $200,480 in total revenue in 2023 — nearly double its pre-pandemic budget. Of that, $145,000 came from federal grants, meaning federal money accounted for roughly 72% of the nonprofit's entire operation. Executive compensation reported on its 990 filing: zero.

The nonprofit's phone is now disconnected and its emails go unanswered.

Boston received $560 million in ARPA funds. The money must be fully spent by the end of 2026, with $129 million still uncommitted. The councilors want to know: if one tiny nonprofit was doctoring bank statements for a year and a half before anyone noticed, how many others might have the same problem?

And why did it take a formal council order to get the Wu administration to even acknowledge the question?