Local News

State Auditor Finds No Problems At Smart Start Oversight Agency

Posted September 9, 2004

— Carolina's auditor gave his stamp of approval Thursday to the financial record-keeping of the nonprofit corporation overseeing local Smart Start education programs for young children.

"Our tests disclosed no material weaknesses in internal control over financial reporting and no instances of noncompliance," Auditor Ralph Campbell wrote in a letter accompanying the audit of the North Carolina Partnership for Children.

The partnership oversees the 82 local agencies that provide Smart Start services in all of the state's counties. Smart Start provides child care subsidies for children in poor families, as well as improving the training and programs at day care centers. The program established in 1993 also provides health screenings and health care services, equipment and furnishings.

"The North Carolina Partnership has notably increased its ability to provide effective oversight of, and technical assistance to, the 82 local partnerships ..." according to an analysis of the audit findings.

The audit is the first in two years for the Partnership for Children. The audit issued in 2002 found problems with the group's use of state funds and its accounting practices.

The partnership recorded an operating loss of nearly $6 million in the year ending June 30, 2003, compared to $6.2 million the previous year.

"While the North Carolina Partnership shows operating losses, this is an expected outcome for a nonprofit entity given the recent downturn in the economy," the audit said. The economic slump has led to cuts in both state funding and private gifts.

Taxpayers provided 99.4 percent of the revenues for what has always been described as a private-public partnership, down from the 99.6 percent in state funding in the year ending in June 2002.

Revenues of more than $116 million were down 14.5 percent from the $135.7 million in revenues the previous year, the audit said.

Also Thursday, Campbell's office issued audits for local Smart Start groups in Davidson and Randolph counties. The audit of the Davidson County Partnership for Children found weaknesses in financial reporting. As a result, the Davidson group received staff training on monitoring contracts and grant activities, and hired a new finance director with greater accounting experience and Smart Start experience.

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