MCN supports reform of state grants process
“State grants should be more consistently and effectively managed.”

On January 5, 2007, the Office of the Minnesota Legislative Auditor released an evaluation report examining state grants to nonprofit organizations, and making recommendations. (http://www.auditor.leg.state.mn.us/ped/2007/grants.htm)

The report’s recommendations for improving the state’s fragmented system of contracting with outside organizations are very similar to those presented a year ago by Drive to Excellence Grants Management Steering Committee, of which MCN was an active member (represented by Marcia Avner, MCN Public Policy Director).

Minnesota has benefited greatly by using nonprofit organizations to deliver public services throughout the state, taking advantage of their knowledge and close community connections, and their ability to leverage additional resources through charitable contributions and thousands of volunteers.  Nonprofits have long wanted the state to develop clear, consistent and timely practices for handling contracts and reporting.

The specific recommendations will be considered by the legislature and the administration, and MCN will be providing additional information and analysis to nonprofits during the Legislative Session. MCN supports the overall goals for reform of the state grants process, including the establishment of a Grants Management Office and requirements that state agencies follow best practices.

 

 

 

DOWNLOAD THE REPORT
STATE GRANTS TO NONPROFIT ORGANIZATIONS (http://www.auditor.leg.state.mn.us/ped/2007/grants.htm)

Evaluation Report Summary, issued January 5, 2007
Major Findings by the Legislative Auditor:

• In 2005, the State of Minnesota made $4.7 billion in payments to nonprofit organizations. Most of the money was paid directly to hospitals, health plans, and other large institutional service providers. Approximately $1 billion was awarded in grants to almost 1,900 nonprofit organizations and administered by either a state or county agency.

• State grants to nonprofit organizations pay for a wide range of services—from environmental projects to employment training for the disabled.

• The state’s approach to managing grants to nonprofit organizations is fragmented and inconsistent, and does not provide adequate accountability.

• Many state agencies have grant-making policies and procedures, but they vary considerably in the degree to which they provide for oversight and accountability.

• Agency oversight of grant recipients is especially weak when the Legislature selects and names a recipient in law, rather than allowing the agency to select the recipient.

Key Recommendations from the Report:

• The state should establish a Grants Management Office in the executive branch to strengthen accountability and improve management of state grants.

• The Grants Management Office should have the authority to formalize and require agencies to follow the best practices discussed in this report.

• The Legislature should not name grant recipients in law but allow agencies to select recipients through a competitive process.