Government departments are not properly monitoring the $98 million they give out in the grants to ensure the money is being properly spent, the Auditor General finds in his report.

The Departments of Cultural Affairs, Health and Family Services, Tourism, Telecommunications and E-Commerce, and Youth, Sport and Recreation do not follow guidelines issued in 1998, wrote Larry Dennis.

The discretionary grants are handed out for sporting, cultural, promotional and philanthropic purposes.

?Based on the audit work performed in the four ministries/departments, many of the important management and financial controls required by ?Financial Instructions? for the proper administration of discretionary grants are not operating satisfactorily at all,? he wrote. For example, at health ?there was little evidence that any information provided by grant recipients had been reviewed by management?.

The department responded: ?While there may be no formal documentation, all the Department heads meet with grant recipients and the needs have generally been in those areas determined by the Ministry.

?The Ministry is in the process of preparing a grants information management system which will ensure that all recipients apply for funds on an annual basis and that the funds are allocated according to the needs of the Ministry.?

Mr. Dennis recommends full compliance with the guidelines.