RALEIGH — The State Auditor’s Office has begun using a new Web-based tool to increase nonprofit organizations’ compliance with state reporting standards. The auditor’s office now posts on its Web site a list of all nonprofit organizations receiving state grants that are not in compliance with reporting requirements.

According to the most recent noncompliance report, dated through June 30, 459 private organizations were listed as having failed to file required reports with the auditor's office. Those nonprofits received a total of $49.6 million in grants last year.

Grantees have been required to annually file an “activities and accomplishments” report with the auditor's office and with the granting agency, as well as a report of receipts and expenditures that explain how the state money was used. The new reporting on noncompliant groups will be updated monthly on the auditor's Web site, an increase in frequency from its annual reporting in the past.

“Taxpayers expect grantees who spend taxpayer money to comply with a schedule of public reports that lends itself towards an open accounting,” Auditor Les Merritt said in a press release. “But we’ve found that once grantees understand the rules, and that they’re being enforced, they have done a good job at complying.”

Despite the public disclosure intentions, however, not all the kinks in the system apparently have been worked out. According to the Department of Health and Human Services, at least nine of its grantees on the noncompliance report shouldn't have been listed there. The auditor's office could not confirm that, but allowed for the possibility.

For example, the recipient with the largest grant on the noncompliance list was Cape Fear Tutoring, Inc. in Wilmington, which provides tutoring services to children and adults, and sponsors day-care homes and centers in the USDA's Child and Adult Care Food Program. The auditor listed its grant amount last year as almost $9.6 million.

But an official with Cape Fear Tutoring said in a telephone interview that it was listed on the report in error. Debbie Crane, a spokeswoman for DHHS, validated that claim.

"Cape Fear Tutoring definitely shouldn't be there," she said.

Crane chalked up the error to a problem in communication between DHHS and the auditor's office. She said auditor officials sent their noncompliance list to various state agencies last month to verify that the organizations on their report should be there. She said either the agency's response didn't get to the auditor in time or it didn't get there at all. She said the auditor has the correct information now and is reviewing it.

But Chris Mears, Merritt's spokesman, said the nonprofits have been required to file the reports with both the granting agencies and the auditor's office, so both should have had the reports. He said the "check" with the agencies was done to verify its own records.

"That's a courtesy [to the nonprofits], because we don't want to give a black mark to a (nonprofit) that is not deserving," Mears said. He also said the laws changed effective July 1, and now nonprofits are now only required to file reports with the granting agencies, which are in turn required to send copies to the auditor.

Mears and Crane said there were still a few minor problems to work out in the process, but were optimistic about the new reporting.

"I think it's a really good idea," Crane said. "I think it's going to be helpful in the long run. People are going to be a lot more careful about their reviews."

The auditor's Web site is at www.ncauditor.net and the list of grantees in non-compliance can be found in the upper right-hand corner of the main home page.

The information includes the name of the grantee and the funding agency, the dollar amount of the grant and the reason for non-compliance. The grantee list will be updated at the end of every month, according to the auditor's office.

Over the past few years, the number of grantees that have complied with the reporting requirements has been improving, Merritt said in his press release. In his first full fiscal year (2005- 2006), the number of noncompliant grantees that were placed on the official suspension list has decreased from 437 to 91, he said, representing an approximately 80 percent increase in compliance.

"I know over here [at DHHS] the review process is going to be taken very seriously," Crane said, "because you're talking about reputations."