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State auditor to track local government grants

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North Carolina State Auditor Leslie Merritt has launched a new effort to monitor state and federal grants that “pass through” local government to nonprofits.

Of $13 billion in total grant funding that went to local government in the state in 2006, the Office of the State Auditor says, $180 million went to “sub-grantees,” many of which are nonprofits.

But in statement, Merritt says he suspects that “both state and local governments believe that the other is monitoring the $13 billion in grants, but neither is doing much monitoring.”

A recent review by the auditor’s office of a grant to the New Beginning Community Development Center by the town of East Spencer “confirmed the lack of active monitoring even though the town did confirm that receipts were attached for all requested reimbursements,” the auditor’s office says.

“My primary concern is that this review could indicate a widespread problem that could be exploited,” Merritt says in the statement. “If a shepherd thinks the sheepdog is watching the sheep and vice versa, it is all too easy for a wolf to sneak in and steal from the flock, or in our case, $180 million in taxpayer money.”

The auditor’s office released a letter to it from the town administrator for East Spencer that says the town “is not actively monitoring the state funds sub-granted to New Beginning.”

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