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Archive | $21 million in grants go unchecked

A state program that has doled out $21 million in taxpayer money to more than 300 projects has limited procedures in place to verify how that money is spent.

All grant recipients are required to file final reports. But only two have been submitted so far.

The money has been given out with lawmakers' blessing over the past 11 months.

The lack of oversight differs from standard practice among grant-givers. Private foundations, for example, typically require detailed reports. And lawmakers themselves require state agencies to document spending and administration when the budget is drafted each year.

The loose approach means state taxpayers know little about how the money has been spent.

"Nobody seems to know how the money has gone out," said Sen. Larry Grooms, R-Berkeley. "How do you assure taxpayer dollars are spent wisely?"

The competitive grants program, designed as an alternative to including local projects in the state budget, has been blasted as a way for lawmakers to fund pet projects with little scrutiny. Critics say projects are being approved with no set criteria.

But supporters say it is too early to expect reports from groups getting grants. Many of the grants only recently were approved or were given to longer-term projects.

The length of the grants is openended, requiring a report only when all the money is spent.

Jimmy Bailey, chairman of the committee that awards the grants and a former Charleston lawmaker, said the state can't force compliance and might never see reports for some of the smaller awards.

"If they just go tell us to jump in a lake, I don't know what kind of enforcement power we have," he said.

House lawmakers included $9.3 million to continue the grants program in the 2007-08 spending plan. An additional $22.5 million remains unspent, and more grants could be awarded as early as next month.

No changes in the program's operation -- such as requiring more detailed applications or reports to break down spending -- are included in the House-passed budget.

According to the State Budget and Control Board's Web site, applicants "must file a final report of expenditures with the Committee." The site gives no guidelines how grantees should document expenses.

Former State Budget and Control Board executive director Frank Fusco said when he left the agency in January he was working on a plan to send out letters 30 to 45 days after grants were awarded, reminding groups to send in the reports.

"It wasn't a problem," Fusco said. "I felt like we needed a procedure to follow up with the grantees."

Board spokesman Mike Sponhour said the agency sent letters out late last week.

Following how money is spent is a key part in any grant award, local foundations say.

Tom Keith, executive director of Sisters of Charity Foundation of South Carolina, said his group typically requires a site visit, a progress report while the grantee is spending the money, and a final report once the program is done.

Joan Fail Hoffman with the Central Carolina Community Foundation said grantees do not receive the second half of their money until they file a progress report. The foundation also requires a final report.

Both foundations require grantees to document how the money was spent.

Gov. Mark Sanford thinks the program falls short of needed accounting.

"If only two reports are coming back, that clearly doesn't appear to be" enough, said Sanford spokesman Joel Sawyer. "Not only is there not a paper trail on how projects are chosen, there's not even a paper trail on how it's being spent."

The two filed reports were for a $10,000 grant for the Ridge Spring Harvest Festival and a $10,000 grant for the Greer Community Ministries Meals on Wheels program.

The festival said it spent the money on radio advertising, sweatshirts, hiring a band -- the O'Kaysions -- to perform and other expenses. The ministries' report shows canceled checks for 8,325 meals -- 25 days worth of food.

Sen. Jake Knotts, R-Lexington, said the competitive grants committee could prevent any group that misspent money from receiving another grant.

"You certainly look at the track record," Knotts said. "If they're not doing what they say, the next grant pays a price."

Senate Finance chairman Hugh Leatherman, R-Florence, said the Legislature could tighten requirements or impose penalties for those who fail to report.

"I certainly don't think people are spending the money on personal things," said House Ways and Means chairman Dan Cooper, RAnderson, who serves on the State Budget and Control Board with Leatherman and Sanford. "I would imagine we'd be able to find that out."

Sanford has asked lawmakers to add objective criteria and rank applications, the way a federal competitive grants program does.

Some lawmakers, such as Grooms, are unhappy with the program. It is not clear, he said, why one project is chosen over another and who makes those decisions.

Others said the process gives every area of the state a shot at the grant money and reduces sniping over which local projects are included in the state budget.

Reach O'Connor at (803) 771-8358.

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THE PROCESS

Here's how the competitive grants process works: Local government and nonprofit groups may apply for money. Requests must be signed by a lawmaker or the governor.

Grant requests for $100,000 and less may be authorized by the State Budget and Control Board executive director. New director Henry White has stopped the practice.

A five-member committee has approved grants of more than $100,000. It will now approve all grants.

Checks typically are made out to the applicants but are given to lawmakers to deliver.

Grantees must file a report detailing how money is spent. There are no specifications for what the report must show.

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