The Baltimore Children & Youth Fund is defending its financial transparency after FOX45 News reported the fund operates outside of the city’s auditing structure despite being entirely funded by taxpayer dollars.

Established in 2015 following the death of Freddie Gray, the Baltimore Children & Youth Fund is guaranteed millions in Baltimore City money every year via a charter amendment approved by voters in 2016. The funding structure never sunsets and, unlike city agencies, is not subject to biennial performance audits.

There is no routine cadence for making sure the money given to the fund, which is further handed to local non-profits, is being spent effectively and responsibly.

FOX45 News reported the lack of city auditing on Sept. 13. On Sept. 17, financial statement audits appeared on the fund’s website, followed by a lengthy statement about its “commitment to transparency.”

The statement explained the fund has “undergone an independent financial audit each year.” The fund also insisted these audits are “available upon request” despite not responding to an inquiry from FOX45 News for the Sept. 13 article.

Financial statement audits, unlike performance audits, provide limited insight into the specific ways money is being spent. The primary purpose of financial statement audits is to ensure financial statements, such as ones submitted to the IRS, are accurate. Performance audits evaluate program outcomes, operations and whether funds are being used effectively. Baltimore City uses performance audits to make sure its agencies are operating efficiently.

Tax filings show the fund received nearly $15 million in fiscal year 2022, most of which came in the form of government grants. About $9 million of that sum went toward grants for other community organizations, while roughly $3.7 went toward salaries, wages and management costs.

David Williams, the president of the non-partisan Taxpayers Protection Alliance, reviewed the financial statement audits released by the fund. Williams told FOX45 News the information included in the audits is basic and does not provide any accountability for how the fund’s grantees are using taxpayer dollars.

“This just shows overall numbers. It doesn’t do a deep enough dive into the performance of the money and where it went,” Williams told FOX45 News. “Yes, they gave financial information, but much more is needed. There needs to be a deep dive on these financial numbers. There needs to be a deep dive on where the money was spent.”

FOX45 News asked the fund if its financial audits have ever been shared with Baltimore City officials and whether the fund would agree to have its performance audited by the city on a regular basis. The fund did not respond to those questions, among others, instead pointing to its public statement.

Williams also raised red flags about the way the fund is constructed, pointing to the fact it receives Baltimore City taxpayer funds every year with seemingly no strings attached.

“Seeing the funding structure for this entity really sent a chill down my spine,” Williams said. “You have a funding mechanism that is going on in perpetuity … this is never going to end. So when you have an entity that’s receiving an annual appropriation, an annual payment, you can do a lot more oversight, a lot more accountability.”

In response to the fund’s statement pledging transparency, Comptroller Bill Henry reaffirmed his support for conducting performance audits of “entities that are stewards of City funds, including but not limited to the Baltimore Children and Youth Fund” contingent on adding more resources for the city auditor.