Report Summary
Special Review
The Department of Children, Families & Learning
Grant Administration
For the Period June 1998 through June 1999
We have conducted a special review of the Department of Children, Families & Learning grant to the United Way of Olmsted County. CFL disbursed $93,237 to the United Way of Olmsted County during the period June 1998 through June 1999. CFL funded the grant using Pew Charitable Trusts and U.S. Department of Education funds.
Key Conclusions
- The Department of Children, Families & Learning (CFL) inappropriately initiated a grant agreement with the United Way of Olmsted County to avoid returning unspent funds to the Pew Charitable Trusts at June 30, 1998. CFL did not comply with certain provisions of the Pew Charitable Trusts grant agreement with the State of Minnesota. The department did not spend funds within the grant period and failed to return the unexpended balance. In addition, CFL filed an inaccurate financial report to the Pew Charitable Trusts stating all funds had been expended by June 30, 1998.
- The CFL grant to the United Way of Olmsted County enabled the department to administer funds in an outside bank account. CFL directed the expenditure of these funds, circumventing state procurement and employee expense reimbursement policies and procedures. CFL employees were able to enter into inappropriate arrangements with other organizations, resulting in conflicts of interest and concerns whether services purchased were ever provided. In addition, five CFL employees received $19,856 in questionable expense reimbursements through the United Way account. CFL did not have appropriate documentation to support these expense reimbursements. CFL employees could not substantiate the public purpose of several of these reimbursements. We identified instances where an employee received reimbursements that exceeded actual expenses or appeared to be for personal rather than business purposes. Employees returned some funds and equipment purchases to CFL during our investigation.
- CFL inappropriately established other grant contracts with counties and nonprofit organizations to avoid funds being returned to grantors or canceled to the General Fund. Program staff arranged for certain counties and nonprofit organizations to hold and expend department funds at the direction of CFL staff. CFL staff circumvented controls over program budgets, state procurement, and employee expense reimbursement guidelines by establishing these agreements.
