Louisiana moves to tighten oversight of $113.5M in nonprofit funding

Louisiana Inspector General Angele Davis is urging tighter controls on $113.5 million in taxpayer funding authorized for 272 nonprofit organizations after a review identified questionable payments, inadequate financial reporting and weaknesses in state oversight, The Center Square reports.

In a letter to state Treasurer John Fleming, Davis outlines 10 recommendations to reduce fraud, waste and abuse, including requiring reimbursements for documented expenses instead of advance payments, screening nonprofits and their contractors, capping certain administrative costs at 10% and withholding funds from organizations that fail to meet reporting requirements.

The review identified several cases raising concerns about how appropriated funds were managed. In 2024, the Treasury advanced $400,000 to the National Association for African American Economic Development, but auditors later found that $205,123 had been transferred out of the organization’s dedicated account within six months without required progress and cost reports. 

Another case involved Divine Kingdom Ministries, whose director was arrested Sept. 22 on allegations of felony theft and false public records charges following an investigation into a $37,500 advance. Investigators also identified an organization whose expense report included $13,000 in payments to connected parties and another whose agreement listed subcontractors responsible for 90% of its funding as yet to be determined.

Three recipients of 2026 appropriations, the Louisiana Sports Hall of Fame Foundation, Thrive New Orleans and Broad Community Connections, also appeared on the Legislative Auditor’s September noncompliance list. 

Under Davis’ proposals, advances would generally be capped at 25% and require documented financial need and written approval from the commissioner of administration. Commissioner Taylor Barras approved a revised agreement template incorporating the recommendations Wednesday, but Treasury implementation remains a separate step. 

Davis is seeking immediate changes to pending agreements and remaining payments under existing ones. The $113.5 million represents authorized funding, not money already spent, and the review did not establish how much has been disbursed.

The Center Square has the full story.