Sunday, January 28, 2007


Government Funding for Nonprofits: Don't Eat Your Young
by pam ashlund

It's like a jungle, sometimes it makes me wonder
How I keep from going under -- Grand Master Flash

I have a bad feeling. The same bad feeling I had when I heard about the Homeland Security Act, or the infamous "weapons of mass destruction" speech. My spidey-sense is screaming "Something is going horribly wrong with Nonprofit Accountability".

I'm not usually a trend watcher, but me thinks I smell a trend. Seems the fall-out from Enron and Sarbanes-Oxley has finally hit the nonprofit sector. Visits from individual government funding sources are on the rise.

OMB A-133 was supposed to protect nonprofit agencies with multiple funding sources from being drowned in a wave of audits. One "Single Agency-wide Audit" would keep everybody happy. Ha!

Government agencies found a loop-hole. "We aren't doing an audit, we're just doing a fiscal review".

At last count one organization I know had twenty-five separate funding source's pay a visit to perform "fiscal reviews". All this in one year.

Another disturbing trend? Those same government agencies began to insist on subsidiary schedules in the annual audit. At whose expense? The nonprofits of course.

I have been a strong advocate for accountability in nonprofits (it's right up there with personal integrity), but I have a bad feeling that the Enron aftershocks have Government agencies eating their young.

What is OMB A-133?
Entities that receive federal funds are subject to audit requirements that are commonly referred to as "single audits". The Single Audit Act is intended to promote sound financial management, including effective internal control, with respect to federal awards administered by Nonprofit Organizations (NPO)s.

Want to read the circular?

OMB Circular A-133 - Audits of States, Local Governments, and Non-Profit Organizations (06/24/1997, includes revisions published in Federal Register 06/27/03) HTML or PDF (127k)

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