County sets policy to require audit for some nonprofits

As he does every year, Auditor Braidy Powers presented a schedule of meetings, notifications and deadlines for planning of the 2015 county budget on Tuesday, June 24. After adopting the budget calendar and approving the budget preparation guidelines for county department heads, commissioners continued discussing a question that was unresolved during last year’s budget cycle. What sort of audit should be the prerequisite to distributing grant funds to non-mandated entities?

In October 2013, the county board approved the requirement for audits for the non-mandated entities to which it provides funding such as the Violence Prevention Center, WTIP Radio, Grand Marais Public Library, the Volunteer Attorney Program, Cook County Higher Education, Legal Aid, Birch Grove Foundation, Cook County Historical Society, North Shore Music Association, and the Cook County Council on Aging. The board agreed to require an audit for organizations receiving over $50,000 from the county.

However, Auditor Powers said just what sort of audit is required needs to be clarified as the board begins meeting with those non-mandated organizations.

In the audience to hear the discussion were Cook County Senior Center Director Bev Green and Cook County Council on Aging Treasurer Warren Anderson. The Council on Aging had sent the county board a letter, expressing dismay that their organization was “cherry picked” to have an audit completed before funding would be granted to them last year.

Green noted that the county commissioners had still not come up with a policy after nine months.

The Senior Center received $81,000 from the county in 2013 and will receive that amount again in 2014.

Commissioner Garry Gamble said he understood paying for an audit is hard for nonprofit organizations and said he feels empathy for the organizations for which this will be a requirement. However, he added, “We have an opportunity as leadership to come alongside these organizations and encourage best practices.”

Commissioner Bruce Martinson said he was comfortable with requiring audits for entities receiving over $50,000 in county funding, but added that having an audit every two years would be sufficient.

Senior Center Director Green spoke up, “We’re not opposed to conducting an audit. We just need to know what kind of an audit needs to be done.”

Commissioner Hakes made a motion to require an independent audit every other year for non-mandated entities receiving more than $50,000 from the county. When the requirement should go into effect was discussed and it was agreed to give organizations some time to allow for the additional work and expense of conducting an audit. Commissioner Martinson said no funds would be disbursed in 2015 until an audit is received.

The motion carried, with Commissioner Gamble voting no, because he said all of the organizations that receive funding from Cook County, whether they receive less than $50,000 or not, should have to provide some sort of financial review.

Commissioner Martinson agreed, but said, “One step at a time.”