A provision in the state budget for FY2023-25 (H.B. 259). gives the Joint Legislative Oversight Committee on Governmental Operations (GovOps) broad authority to investigate any nonprofit with a state grant, contract, or appropriation. GovOps is run by legislative leaders and hires partisan legislative staff to conduct its operations and investigations. Among other things, the budget provision gives GovOps broad authority to:
“Study the efficiency, economy, and effectiveness of any . . . non-State entity receiving state funds”; and
“Investigate possible instances of misfeasance, malfeasance, nonfeasance, mismanagement, waste, abuse, or illegal conduct by . . . officers and employees of a non-State entity receiving, directly or indirectly, public funds as it relates to the officer’s or employee’s responsibilities regarding the receipt of public funds.”
The provision expressly allows GovOps to require nonprofits with state funds – and many of their employees and board members – to provide legislators with virtually any record or document that they may request and to allow GovOps staff to access the facilities of any nonprofit with state funds. Legislators and GovOps staff can force nonprofits to keep these investigations confidential and also (seemingly contradictorily) could choose to make details of these investigations available to the public. Nonprofits and their staff or board members who do not comply with requests for information or access to their facilities could be subject to criminal penalties.
Practically, this gives GovOps the authority to impose extremely burdensome information requests on nonprofits for almost any reason. The Center is deeply concerned that this provision could lead to costly and unwarranted legislative investigations into some nonprofits’ finances and operations that could be harmful to nonprofit organizations and to the people and communities they serve. The Center is continuing to research the practical implications of this new legislative investigative authority for nonprofits with state grants, contracts, and appropriations.
