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YELLOW SHEET Office of the State Auditor of Missouri |
December 31, 2001
Report No. 2001-122
Missouri�s financial
support of not-for-profit foundations needs better definition, more
accountability and specific results
This audit reviewed the
controls over state resources used to subsidize not-for-profit foundations.� Auditors focused on 6 of the 23
not-for-profit foundations headquartered in state offices, and in many cases,
run by state employees.� The foundations
are considered �quasi-governmental� entities that help state agencies meet
public missions and are mostly funded through private donations.� Each entity is also privately incorporated, which
keeps records of foundation contributors and expenditures closed to the public.
State law does not prohibit such
public-private affiliations, but it is illegal to give public money to a
private corporation.� (See page 2) Auditors
found the public money subsidizing these foundations is not well-documented, making
it nearly impossible to ensure such money is effectively used for state-authorized
purposes.
Foundations fund items inappropriate
to charge to taxpayers
State officials created some
of the public-private affiliations to avoid tapping taxpayer money for certain
expenses, such as receptions, dinners or gifts to promote Missouri.� For example, state leaders created a
foundation in 1981 to help attract business to Missouri.� State employees, who also run the
foundation, bring gifts to dignitaries during foreign trade missions or host
more elaborate meals for business leaders to attract companies to the state. �The foundation covers the gifts, the meals and the foreign travel. �(See Appendix I, page 7)
State funds foundations�
administrative costs without agreements
Auditors estimated that
state officials spent $278,987 from 1997 to 2001 in public funds to support the
six not-for-profit foundations detailed in this audit.� Most of the money went to equipment,
including office space, and salaries/benefits for state employees who help run
the foundation. �State officials
consider these state resources as their share of the public-private
affiliation.� But no documents exist to show
the breakdown of state and private funding for these entities, how each entity
benefits from the affiliation or the specific results of such affiliations.� (See page 3)
State employee time spent
on foundation work not documented
Only two of the six foundations reviewed by auditors track the time state employees spend on foundation work and then reimburse the state for that time.� The remaining foundations do not track such charges. �None of the foundations document the use of state business equipment such as computers and telephone for foundation work, which is considered a non-state activity. �(See page 4)
