This story happened in Washington, DC, but the lesson to be learned from it can apply anywhere. It shows why government grant money needs to be used properly and there needs to be proper oversight to be sure that it is.

Government grant money in the amount of $330,000 was awarded to an organization called “Miracle Hands” for the purpose of renovating a warehouse in the lower-income Northeast quadrant of the city to turn it into a job training center for residents with HIV/AIDS.

The mission of Miracle Hands, according to its website, is to “implement strategies and programs designed to meet the needs of the city’s most under-privileged and neglected communities.”

“With funding from local and federal government agencies, Miracle Hands has proudly and effectively served those populations whom many describe as the most difficult populations to reach and effect change.”

That description of proposed activities prompted the granting agency to award government grant money to Miracle Hands.

Here’s what happened instead, though. The director of Miracle Hands allegedly accepted the government grant money and started the warehouse renovations. Instead, according to the ensuing civil complaint, Miracle Hands changed the of the agreed-to job training facility from one building to another, but continued to submit invoices for renovation work at the original location.

Then, the non-profit did not open the job training center it had promised, but instead secured a liquor license and opened a strip club in the renovated building. As a result, the office of the attorney general in Washington, D.C. has filed a civil suit that seeks to recover nearly one million dollars, that includes the original amount of the grant, plus damages and penalties.

This alleged misuse of government grant money is probably much more blatant and extreme than most government grant recipients would ever consider trying. But even though this was large-scale and audacious, there are still lessons for everyone who applies for government grant money. It may be tempting to pad the budget or divert the funds or supplies for personal use. It may seem like no one would ever find out, especially if it’s not quite as high profile as a strip club operating at the same address as the listed location for a non-profit organization.

The best policy is complete honesty when you are applying for government grant money. It’s of course ethically wrong to mis-state your intended use of funds or to misuse them. It’s worse yet when the government grant money is taken from those who really needed the services. Aside from that, though, you run the risk of being caught. And, as this story tells us, you also run the risk of being on the hook for much more than the original amount of the government grant money that was misappropriated.

A secondary lesson to be learned is that government grant reviewers need to be diligent about preliminary checking and follow-through to be sure that deserving individuals and organizations are receiving the government grant money, and that they’re using it properly.

Those of us who are involved in, and interested in, locating and securing government grant money owe it to others and to ourselves to be scrupulously honest. If too many stories start surfacing about blatant, terrible misuse of government funding, than the next step could be that government grant programs would start being de-funded, and that’s something that would definitely hurt us all.