February 26, 2009

Nonprofit Sector: Significant Federal Funds Reach the Sector through Various Mechanisms, but More Complete and Reliable Funding Data Are Needed. GAO-09-193

"Increasingly, the federal government relies on networks and partnerships to achieve its goals, and many of these involve nonprofit organizations. GAO was asked to assess (1) the mechanisms through which federal dollars flow to nonprofits and (2) what is known about federal dollars flowing through them to nonprofit organizations in fiscal year 2006. To address these objectives, GAO conducted a literature review of funding; analyzed data from several sources, including the Federal Procurement Data System-Next Generation (FPDS-NG) and the Federal Awards and Assistance Data System (FAADS); and analyzed nonprofit organizations? roles in 19 federal programs."

"To ensure that accurate information on federal funding provided to nonprofit entities is available, GAO recommends that the Office of Management and Budget (OMB), which is responsible for a searchable Web site called USAspending.gov that includes federal assistance and contract awards, ensure that its funding information in USAspending.gov is categorized with a consistent definition of nonprofit organizations. OMB commented that while GAO's recommendation would likely ensure more consistent data, it could be burdensome for states tracking sub-award data. As USAspending.gov is developed, GAO believes this is an opportune time to explore ways to improve reliability of sub-award data."