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By LAWRENCE MESSINA
CHARLESTON, W.Va. (AP) - Private groups, for- and nonprofit alike, have been required since 1992 to account for how they spend any state grant worth $15,000 or more. But how often they comply is anybody's guess, state officials say.
A potential gap in the oversight of state funds surfaced Tuesday, when a bill (SB3012) to amend the state's audit mandate was defeated during the two-day legislative special session.
The failed bill responded to legislation passed during this year's regular session. Senate Bill 456, which took effect in June, blocks future state funding for any group that has failed to submit an audit for prior grants within two years of spending the money.
Another new provision requires the awarding agency to inform the groups receiving the money of the mandated audits. That was news to the state Tourism Commission, which awards matching grants to industry groups to defray their advertising costs.
"We here at the division, quite frankly, were not aware that recipients of over $15,000 were required to conduct an audit within two years,'' said state Commerce Commissioner Betty Carver, who also oversees the Division of Tourism and its commission.
Carver may not be alone. Director Ted Shanklin of the Legislature's Postaudit Division, whose office is supposed to receive the required audits, said he cannot gauge a compliance rate.
Shanklin also said the state lacks any way to ensure that groups are barred from future grants for failing to submit audits. Whenever his office reviews a state agency, his staff tells them to include mention of the audit mandate on its grant contracts, he said.
Shanklin's office has been auditing Tourism, and told Carver about the audit law last month. That prompted her agency to request the bill on the special session agenda.
Senate Bill 3012 would have allowed groups that received grants before July 2004 to avoid being barred from future funding for the failure to file audits. It would still require the audits, however.
House Republicans objected, and helped defeat two different procedural votes that blocked a final vote on the bill's passage.
"It creates a complete pass in terms of eligibility for future grants,'' House Minority Leader Charles Trump, R-Morgan, said during the floor debate. "It's way too broad.''
Delegate Cindy Frich later suggested the bill aimed to protect the likes of former House Education Chairman Jerry Mezzatesta, D-Hampshire, and Wyoming County Council on Aging Director Bob Graham. Both have faced investigations over their handling of state grant money this year.
"It seems like a smoke screen,'' said Frich, R-Monongalia.
"That was certainly not the intent,'' said Erica Mani, counsel to Gov. Bob Wise, whose office drafted the bill. "I think they misconstrued what we were intending.''
Shanklin said that the county councils on aging, including Graham's, are among those groups that obey the audit mandate.
"They've been very good about audits,'' he said.
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