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Mystery money – N.C. nonprofits fail to report grants

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Dozens of N.C. nonprofits continue to receive state grant money in spite of the fact that they have failed to account for money received, the Raleigh News & Observer reports.

A 1996 state law requires nonprofits that get more than $15,000 in a year’s time to submit an annual financial report to the state. The law states a nonprofit cannot get new state grants until the report is filed. There is no central accounting system, however, that lets officials in one department know if a group has failed to report to another department.

State Budget Director Marvin Dorman told the N&O that the state needs such a system. He also said that the law needs to be clarified.

“The law doesn’t say what I shall do if somebody refuses to send in a financial statement or doesn’t spend the money for two years,” he said.

The problem is most common with pork-barrel projects, or grants that are directed by individual legislators to their home districts. Over half – 15 out of 29 – of the nonprofits that received such grants from the Office of State Budget and Management did not provide an account of their spending until the N&O inquired.

Failure to account for state money has not kept some nonprofits from getting more. Durham’s Carolina Theatre failed to file a report on the $22,000 grant it received from the Secretary of Cultural Resources in 1998, but last year received a $16,500 grant from the North Carolina Arts Council.

Some state agencies are very successful at holding nonprofits accountable for grant money. The Department of Health and Human Services, the Department of Commerce, and the North Carolina Arts Council are highly successful at getting their grantees to file reports.

One reason the Arts Council is strict is that part of their grant money comes from the federal government, which requires timely accounting for every penny of its art grants and cuts off funds to states that don’t comply.

For full text, go to the News & Observer.


Office of state budget and management: http://www.osbm.nc.gov/.

NC Dept of Cultural Resources: http://web.dcr.state.nc.us/.

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