Lisa Shoemaker with the State Budget Office testified today how a second installment of $250,000 in grant funds was cancelled when it was determined that Detroit 3 D's first installment had exceeded the purview of the initial grant agreement.

The State Budget Office took particular issue with 2 points- the first was the purchase of a multi-unit dwelling and the second a lack of supporting documentation for the more than $249,000 in expenditures.

The court heard how $100,000 of the initial amount was paid out to Carlita Kilpatrick's U.N.I.T.E organization for peer mediation and conflict resolution services.

Other costs included $79,246 to establish a skill training area. Court exhibits included a check to Detroit Interiors for $37,000 as well as a subcontract between Detroit 3D and Detroit Interiors that indicated a total of $71,500 to "provide floor prep for installation of floor tables" and "work station partitions".

Calling it the most difficult correspondence she had ever encountered, Shoemaker testified that the SBO struggled to get Detroit 3D to provide a requested purchase agreement for the dwelling, information on renovation costs, all sources of financing if there was money additional to the grant funds and what services would be provided to the seniors and youths.

Detroit 3D initial grant agreement had stated that its intent was to improve quality of life for seniors and youth in part by providing housing for displaced seniors and runaway youth.

After some certified mail was returned to the SBO indicating that 3D had moved and "left no address", Shoemaker tracked them down to an address 14365 Wyoming, also the location of co-defendant Bobby Ferguson's business.

Susan Van Dusen, one of Ferguson's defense lawyers, tried to get Shoemaker to admit under cross-examination that perhaps she had misunderstood the invoices.

Shoemaker told the court the SBO didn't seek restitution of initial grant funds to get conclusion on the matter. Her recommendation was that it would be protracted process to get the money back and in order to minimize further exposure, it was best to let it go.

Van Dusen asked "Isn't it safe to say that if you thought there was some wrongdoing, you would have sought the money?"

"We didn't know what we had," answered Shoemaker.

Witness testimony continues Monday morning.