The News & Observer

 

Under the Dome - August 9, 2006

Merritt gives demerits to naught non-profits

Nonprofit organizations that receive state money but then do not disclose to the state auditor how they spent it are featured on a new noncompliance list on the state auditor's Web site.

The most recent list shows that roughly 450 nonprofits had not provided at least one of two required reports. One report shows how they spent the state money; the other describes the nonprofits' activities.

Chris Mears, a spokesman for State Auditor Les Merritt, said some of those nonprofits had produced the required reports, but they had only given them to the state agency that funded them. They did not realize that the law required them to also give copies to the auditor.

That law will change next year so that nonprofits have to provide the reports only to the funding agencies. The auditor's office will then have to go to the agencies for the reports.

Merritt created the noncompliance list as part of the state's efforts to increase accountability from nonprofits in the wake of a scandal involving a nonprofit started by former U.S. Rep. Frank Ballance.

Ballance had secured $2.3 million in state money for the John A. Hyman Memorial Youth Foundation, an anti-drug and alcohol group, during his tenure as a state lawmaker. But some of that money ended up going to Ballance's law firm and his family.

Ballance is now serving four years in a federal prison after pleading guilty to a conspiracy charge.

The noncompliance list can be found at www.ncauditor.net.

http://www.newsobserver.com/114/story/468948.html