NC Watchdog Group Recommends More Grant Oversight

GARY D. ROBERTSON

RALEIGH, N.C. (AP) — North Carolina fails to provide enough or consistent oversight to ensure hundreds of millions of dollars disbursed to nonprofits annually from state agencies are used appropriately, a legislative watchdog agency said Monday.

The report released by the General Assembly's Program Evaluation Division reviewed how agencies tracked $694 million distributed during the 2007-08 fiscal year to nonprofits.

The report found there's no streamlined process to evaluate if the money is meeting expected outcomes, which means there are varying levels of accountability across state government.

"Right now, we have a game of checkers with no spaces on the board," John Turcotte, the division's director, told lawmakers. "It's just a hodgepodge from agency to agency."

The Legislature toughened reporting requirements earlier this decade after a state auditor's report questioned expenses by a nonprofit foundation started with help of state funds secured by then-state Sen. Frank Ballance. Ballance ultimately went to federal prison after pleading guilty to conspiring to divert foundation money to his family and others.

State agency oversight is important because 94 percent of the 2,758 nonprofits receive or spend less than $500,000 in funds annually, the report said. Under that threshold, the nonprofits only must file annual reports with line-item expenditures but aren't required to document those expenses and or get an outside audit.