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January 2007
 State Grants to Non-Profit Organizations
In 2005, Minnesota state agencies made $4.7 billion in payments to
non-profit organizations. Approximately $1 billion was awarded in
grants to almost 1,900 nonprofit organizations and administered by
either a state or county agency. Prior investigations identified
inappropriate spending of state funds by some grantees and
highlighted inadequate oversight of state grants by several state
agencies. In April 2006, the Legislative Audit Commission sought to
evaluate state grants to non-profit organizations.
The auditors determined that the state has a fragmented and inconsistent approach to managing
grants to non-profit organizations and does not provide adequate
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.
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