Review of Office of Community Services Discretionary Grants Awarded to Delta Foundation, Inc.

EXECUTIVE SUMMARY:

The Office of Community Services (OCS) makes discretionary awards under its Block Grant program to help alleviate the causes of poverty in distressed communities. These awards are intended to promote, in part: (1) full-time permanent jobs for poverty level individuals; and (2) income and/or ownership opportunities for low-income individuals. From 1991 through 1995, the Delta Foundation, Inc. received four grants from OCS for $1.43 million to create permanent full-time jobs for low-income residents of the local community.

Our review showed that the Foundation (1) did not create full-time permanent jobs; (2) used Federal funds for a wide range of purposes unrelated to the objectives of the grants; (3) did not provide the private cash and in-kind services it proposed to ensure the success of the grants; and (4) submitted programmatic and financial reports to OCS that were often untimely and inaccurate. As a result, the $1.43 million intended to assist families in climbing from poverty has provided little or no benefit. The Foundation's failure to accomplish grant objectives resulted from a number of operational and managerial deficiencies, including a lack of managerial controls and accountability to ensure that the terms and conditions of the grants were followed and grant funds were expended only for purposes related to the grants.

We are recommending that the Foundation refund $1.43 million to the Federal Government. We are also recommending that prior to receiving any future grants, the Foundation should: strengthen its management controls to ensure proper grant administration, and demonstrate the capability to properly manage and expend Federal grant funds.

Foundation officials agreed that their grants management controls needed strengthening. To strengthen controls, the Foundation hopes to be in a position to hire a management level employee responsible for grant/special program administration and is in the process of developing internal management controls.