State agencies granted $694 million to non-profits in Fiscal Year 2007-08. Despite administrative rules and statutes intended to assure funds are spent as intended by the state, gaps in accountability persist. Statewide reporting requirements do not require sufficient documentation, do not adequately address program performance outcomes, fail to produce timely reporting, and lack sufficient enforcement. Contracts often fail to set performance expectations and inconsistent grant monitoring at the agency level results in a lack of accountability statewide. Recommendations address contracting, agency oversight, and reporting; awarding competitive grants rather than earmarks; implementing electronic payment controls; and funding oversight through a discretionary 2% withholding of grant funds.
- House Bill 1852/Senate Bill 1218 (2009–10) required performance-based contracting, program monitoring plans, and timely and accurate reporting on state grants to non-profits; directed the Controller to electronically stop payment to grantees on the Suspension of Funding list; and amended the State Budget Act to give agencies the authority to withhold up to 2% of grant awards to fund oversight. This legislation was not enacted.