NeighborWorks America, a congressionally chartered nonprofit with a mission to revitalize neighborhoods, received $163 million from Congress in 2021, but mismanaged procurements and conflicts of interest, has an inadequate whistleblower policy, and didn’t fully meet audit standards, according to a Government Accountability Office report.
Congress created NeighborWorks America in 1978 to “create opportunities for people to live in affordable homes, improve their lives and strengthen their communities,” according to its website. It provides trainings, resources, financing, and other services to achieve these goals, and employs about 350 people.
Unfortunately, the GAO report found multiple areas of concern.
First, it found that staff did not consistently follow procurement procedures like obtaining transaction documentation and supervisory approval. This is likely because NeighborWorks doesn’t train its staff on its procedures, and changes them without notifying staff.
Because of this, GAO found 23 instances of acquisitions worth $100,000 or more with no documentation present, compared to 29 instances of acquisitions with documentation.
Its whistleblower policy is also problematic, lacking both procedures for investigating complaints and criteria for who will conduct investigations. Both are critical to ensuring violations of law and policy and misuse of taxpayer dollars are investigated appropriately.
Finally, in examining prior audits, GAO found it “has not fully met standards on quality assurance and improvement.” These standards are meant to assess the efficiency and effectiveness of its programs.
If taxpayers are giving this nonprofit $163 million, then NeighborWorks America needs to clean up its internal controls and management to ensure its operations are efficient and transparent.
The #WasteOfTheDay is brought to you by the forensic auditors at OpenTheBooks.com
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