Taxpayer Philanthropy: Feds gave nonprofit $23M despite accounting woes

(The Center Square) – The National Council of Urban Indian Health received $23.6 million in federal funds over four years even as an auditor flagged accounting problems in three of those years, an investigation by The Center Square found.

The Washington, D.C.-based nonprofit had a material weakness, the most serious category of internal-control deficiencies, in both 2022 and 2023. Its faulty accounting coincided with a doubling of its federal funding during the pandemic.

In 2022, the Council received $200,000 in federal funds before it had eligible expenses to justify the payment, according to Sikich, the accounting firm that audited the nonprofit. The auditor found it then asked for more federal cash without accounting for the money it had received.

The following year, the Council counted too much of a promised contribution as revenue before meeting the conditions for receiving the full amount. The error forced the nonprofit to correct its books, reducing reported revenue and the amount it expected to collect by $200,000. Blaming staff turnover

After both audits, the Council attributed the material weaknesses to staff turnover in its “financial functions” and “finance division.”“The organization changed drastically in size and scope, thereby going through a substantial adjustment period,” the Council wrote in response to its 2022 audit.