Summary of Survey on the Federal Sources of Funding for Nine Nonprofit Organizations

GAO was asked to determine whether any of 17 organizations received Federal funds during calendar years 1977 through 1981 and distributed them to suborganizations which might have used the funds for political purposes or for any other prohibited activities.

GAO found that 9 of the 17 organizations received Federal funds during the 5-year period specified. Six Federal agencies awarded 31 grants and 13 contracts totaling approximately $5.8 million to those organizations. GAO also found that: (1) 90 percent of all the grant and contract funds awarded to these organizations are subject to audit; (2) eight completed audits had not disclosed any use of Federal funds for political purposes although some costs had been questioned for other reasons; (3) in two instances, personnel of these organizations were engaged in improper activities; (4) changes made by one agency, regarding the program through which nearly half of all funds identified in the survey were awarded, should reduce the potential for misuse of funds; and (5) the Office of Management and Budget recently announced guidelines directing attention to the possibility of the misuse of grant funds for political purposes.