Accountability gaps limit state oversight of $694 million in grants to non-profit organizations : final report to the Joint Legislative Program Evaluation Oversight Committee. - Page 13 |
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Non- Profit Grants Oversight Policy Report No. 2009- 02 Page 9 of 28 reporting can only be considered “ as good as the paper it is written on,” according to the State Auditor. 10 As shown in Exhibit 6, nearly half of the 2,758 grantees ( 49%, or 1,337 grantees) received state grants totaling less than $ 25,000 in Fiscal Year 2007- 08. These grantees, however, received only 2% of total grant dollars. In contrast, a large share of grant dollars ( 79% of the total, or $ 548.8 million) was awarded to 185 ( 7%) of grantees. Exhibit 6 Description of Grantee Reporting Thresholds State Funds Received or Expended Within a Grantee’s Fiscal Year Less than $ 25,000 $ 25,000 to $ 500,000 More than $ 500,000 Certify funds were used for the purposes for which they were granted Provide an accounting of funds received or expended Provide a description of activities and accomplishments Provide an audit by a Certified Public Accountant Number of grantees ( percentage of all grantees) in FY 2007- 08 1,337 ( 49%) 1,236 ( 45%) 185 ( 7%) Grant amounts ( percentage of total amount) in FY 2007- 08 $ 11.0 million ( 2%) $ 134.1 million ( 19%) $ 548.8 million ( 79%) Notes: For grantees receiving or expending $ 500,000 or less in state funds, reporting requirements must be filed within six months of the end of the grantees’ fiscal year. For grantees receiving or expending more than $ 500,000 in state funds, reporting requirements must be filed within nine months of the end of the grantees’ fiscal year. Source: Program Evaluation Division based on 09 N. C. Admin. Code 03M. 0205( a). Paradoxically, in interviews conducted for this report, staff at the Office of the State Auditor and the Office of State Budget and Management reported grantees receiving more funds provide less detailed financial information at the grant level. Grantees receiving or expending more than $ 500,000 in state funds within their fiscal year are required to submit a Yellow Book audit to meet reporting requirements. Although Yellow Book audits require a Certified Public Accountant to review a grantee’s documentation and internal controls, the final audit report does not provide detail on categories of expenditures at the grant- award level. Therefore, although an audit provides assurance that an independent entity has reviewed grantee financial statements, an audit does not provide enough information to determine how grantees expending more than $ 500,000 have spent these funds for each grant. Furthermore, although audit reports assure that grantees conform to reporting requirements, they do not necessarily provide the level of assurance that one might expect. The Office of the State Auditor reviews 10 B. Wood, Office of the State Auditor ( personal communication, July 30, 2009).
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Title | Accountability gaps limit state oversight of $694 million in grants to non-profit organizations : final report to the Joint Legislative Program Evaluation Oversight Committee. - Page 13 |
Full Text | Non- Profit Grants Oversight Policy Report No. 2009- 02 Page 9 of 28 reporting can only be considered “ as good as the paper it is written on,” according to the State Auditor. 10 As shown in Exhibit 6, nearly half of the 2,758 grantees ( 49%, or 1,337 grantees) received state grants totaling less than $ 25,000 in Fiscal Year 2007- 08. These grantees, however, received only 2% of total grant dollars. In contrast, a large share of grant dollars ( 79% of the total, or $ 548.8 million) was awarded to 185 ( 7%) of grantees. Exhibit 6 Description of Grantee Reporting Thresholds State Funds Received or Expended Within a Grantee’s Fiscal Year Less than $ 25,000 $ 25,000 to $ 500,000 More than $ 500,000 Certify funds were used for the purposes for which they were granted Provide an accounting of funds received or expended Provide a description of activities and accomplishments Provide an audit by a Certified Public Accountant Number of grantees ( percentage of all grantees) in FY 2007- 08 1,337 ( 49%) 1,236 ( 45%) 185 ( 7%) Grant amounts ( percentage of total amount) in FY 2007- 08 $ 11.0 million ( 2%) $ 134.1 million ( 19%) $ 548.8 million ( 79%) Notes: For grantees receiving or expending $ 500,000 or less in state funds, reporting requirements must be filed within six months of the end of the grantees’ fiscal year. For grantees receiving or expending more than $ 500,000 in state funds, reporting requirements must be filed within nine months of the end of the grantees’ fiscal year. Source: Program Evaluation Division based on 09 N. C. Admin. Code 03M. 0205( a). Paradoxically, in interviews conducted for this report, staff at the Office of the State Auditor and the Office of State Budget and Management reported grantees receiving more funds provide less detailed financial information at the grant level. Grantees receiving or expending more than $ 500,000 in state funds within their fiscal year are required to submit a Yellow Book audit to meet reporting requirements. Although Yellow Book audits require a Certified Public Accountant to review a grantee’s documentation and internal controls, the final audit report does not provide detail on categories of expenditures at the grant- award level. Therefore, although an audit provides assurance that an independent entity has reviewed grantee financial statements, an audit does not provide enough information to determine how grantees expending more than $ 500,000 have spent these funds for each grant. Furthermore, although audit reports assure that grantees conform to reporting requirements, they do not necessarily provide the level of assurance that one might expect. The Office of the State Auditor reviews 10 B. Wood, Office of the State Auditor ( personal communication, July 30, 2009). |