The Illinois Department of Human Services, which disburses much of the nearly $10-billion the state spends annually on nonprofit contractors, is moving to require government-funded charities to reveal salaries paid to their executives by private management firms, says the Chicago Tribune.
As of the July 1 start of the fiscal year, charities that received $250,000 or more in contracts with the department must release compensation information for all staff members, including those ostensibly working for private companies. The threshold will drop to $25,000 next year.
Charity watchdogs contend some organizations set up for-profit companies to handle executive payroll to shield high salaries from scrutiny. “This issue is of serious concern to the [human-services] department, and we are taking steps to address it,” said Kayce Ataiyero, a spokeswoman for the agency.
Sheldon Holzman, a former chairman of the Illinois CPA Society, said such arrangements have become more common in the past decade and have advantages for participating nonprofit groups, allowing them to centralize some operations and offer more progressive employee benefit plans.