A new report from the Government Accountability Office says that federal funds directed through nonprofits, estimated at more than $200 million in 2006, are not followed throughout the process. These funds, which support federal programs, include grants, cooperative agreements, and contracts for services.
A couple of specific complaints are mentioned in the report. First, that the relationships between the government and the nonprofits are frequently complex and multi-directional, making it difficult to keep track of the funds as they make their way through the system. Another complaint is that the status of nonprofit recipients is often self-reported and not always verified; additionally, no consistent definition of a nonprofit is used.
To improve the relevant data, the Government Accountability Office recommends that the Office of Management and Budget use a consistent definition of nonprofit in its searchable website, USAspending.gov, and that a system be developed for better tracking of sub-awards. Recommended steps include measures to improve the identification of nonprofit organizations by the agency as well as outside analysts. It is also reported that potential ways to validate a nonprofit’s status are being considered.