Published 9:26 pm Tuesday, January 13, 2009
and fiscal controls
Nonprofit’s leadershipsays finding is in error
By TED STRONG
A special review conducted by the state auditor’s office has found that a local domestic-violence shelter inappropriately used grant funding to pay for cat food, flowers and other unallowable expenses.
The report found $12,681.25 in questionable spending.
The auditor’s office found that Options to Domestic Violence and Sexual Assault, which is based in Washington, hasn’t exercised proper internal controls over grant funds. The report also found that, because the state has cut off funding to the nonprofit, Options is charging current expenses to whatever grant funds are still available, even when they aren’t appropriate expenses.
Options’ leadership said it had improved its internal controls, claiming only local funds have been spent since the state began withholding the grant funds.
The N.C. Council For Women/Domestic Violence Commission wants to schedule a meeting with Options’ leadership to discuss the findings of the report, said the group’s spokeswoman, Jill Lucas.
Options hasn’t been receiving money from the state since the shelter refused to repay more than $50,000 the N.C. Governor’s Crime Commission insists is owed the state because of improper spending in the last fiscal year.
Distribution of the funds reverted from the Governor’s Crime Commission to the Council for Women this year.
Other specific expenses the audit questioned included overpaid bills ($1,000 on a $219.74 utility bill, $1,515.76 on a $1,386.15 phone bill), office supplies that weren’t approved by grant conditions, undocumented travel fees, a meal that was deemed excessive ($28.76), late fees and other charges.
Options’ response emphasized what the audit didn’t find.
Options’ leadership said the audit was right to criticize the group’s internal controls, but that leadership claimed organization has changed its ways.
Options has switched to a QuickBooks-based accounting system to improve its internal controls, according to the response.
The auditor’s office included a note with the response, a note stating that Options’ written procedures are fine, it just needs to follow them.
Options also claimed that only local money has been spent since the state began withholding grant funds, so grant conditions don’t apply. Among others, the Beaufort County Commissioners voted $10,000 for Options in their last budget.
The auditor also included a note explaining its position on the issue.
The note reads, in part: “We do not dispute that Options used local or reserve funds to initially pay for the questioned expenditures. However, as noted in Options’ response, the intent was to request grant reimbursement for these expenditures. Thus, all the questioned expenditures should have met the terms of each grant contract to which it was charged to be eligible for reimbursement.”
The note continues that while there was nothing specifically wrong with some of the expenses, they weren’t included in budgets for the grants in question.
Options also defended specific purchases.
Options argues the expenses are either allowable or illustrate flaws in the state’s system.
The flowers were bought upon the death of a staff member’s son, and they are a legitimate expense “if not of grant funds, then certainly from the local general fund,” Options’ leadership wrote.
Options also criticized the state for cutting off its funding “without any prior notice or warning.” The auditor’s office is examining the matching-funds criteria the Governor’s Crime Commission used in distributing grants, which Options has contested.
David Jones, executive director at the Governor’s Crime Commission, emphasized that his office used the same standard for all groups statewide and worked closely with the auditor’s office in its review of Options.
Jones said he wanted that issue to be addressed in the report. Instead, a separate report will be issued later.
The Governor’s Crime Commission still hasn’t received any money from Options, Jones said.
He said that a two-year federal grant that had been on hold for Options has been divided for distribution to other groups working to provide services in the five-county region Options serves.
Later, he said, “It’s just basically, as far as we’re concerned, a dysfunctional agency at this point.”
Services to domestic-violence and sexual-assault victims in the area aren’t as good as they were when an agency within Beaufort, Hyde, Martin, Tyrrell and Washington counties was providing them, but the Governor’s Crime Commission is working to improve them, Jones said.
State grants intended for the five counties, which are managed by the Council for Women, haven’t been given out this year, yet, Jones said.
Options officials complained in their answer to the auditor’s report: “(Council for Women) then refused to release Options’ (fiscal year 2009) funding under existing contracts ‘because Options is being audited and the funds cannot be released.’”
Jones said there is no guarantee that any group like Options will receive state grant funds. Grant funding must be applied for each year, he said.