Grants issued by federal and state governments are not loans, but monies given to businesses and organizations to perform a specific task. And as you can expect, whenever there is “free money” to be had, there will be a cloud of vultures flying around looking for easy pickings.
So who is to ensure that these vultures are meeting their contractual obligations? Well, if you’re in North Carolina it’s the Office of State Budget and Management. But according to a Civitas Institute report, this agency is having a hard time holding these grantees accountable:
Funding for over 1,000 recipients of North Carolina state grants has been suspended, repeatedly in many cases, mainly for not filing required annual reports of how the money was spent, but many of them still received additional grants. By the time many of the grants were suspended, however, the funds had already been spent with no accounting for how the money was used.
What is even more disturbing is that these vultures know that the state of North Carolina can’t do anything about their non-compliance. By law, the federal government mandates that the states must pay these bandits:
About half of the 1,000 suspended grants were for child and adult nutrition programs administered by the state Division of Public Health. Most of those grant recipients had funding suspended over the course of three to four grants in consecutive years, but they continued to receive the grant funds anyway. Those recipients knew they wouldn’t lose their money even if they didn’t comply with reporting rules. The state couldn’t actually withhold those funds because of federal law. Those food programs were paid for with federal tax dollars that the Division of Public Health simply administered. Under federal law even if a grantee receiving federal funds doesn’t comply with state reporting rules the state still has to continue the funding.
And the entitlement class wins another round.