In interviews before publication, the foundation's president, Lenwood M. Ivey, said it is the city's responsibility to make sure the money was managed properly, not his or his board's.
Pratt said the Department of Audits in the comptroller's office asked Monday for copies of independent audits of the foundation over the past five years and expects to get those by the end of the week. A review of those documents - along with board minutes and financial reports that the foundation's nine-member board has received - will determine the size and focus of the audit, and when it begins, she said.
"We want to make sure the funds were not used as an improper pass-through," she said.
Pratt said there was an "apparent lack of controls" at the city foundation.
The foundation's board of directors has a responsibility to ensure that money disbursed from the nonprofit group's treasury complies with its tax-exempt purposes, Pratt said, and board members should have received reports of all contributions and how they are spent.
Based on the amount of contributions that the foundation receives, Pratt said, the nonprofit should have an employee of its own handle its finances. Under the current arrangement, two employees of the city Finance Department do its books and serve as its treasurer on city time.
Pratt said she is concerned about the potential consequences of missteps by the nonprofit group.
"If the organization disbursed money not for the purpose that it was intended, there could be an Internal Revenue Service ruling that they could lose their tax-exempt status," she said.
Cole, who served from 2005 to 2007 as a staff member to Robert L. Bogomolny, then chairman of the ethics board and president of the University of Baltimore, said city employees are trained to get prior approval before soliciting funds from anyone doing business with their agency.
"You don't want someone soliciting a gift for the foundation from someone who is doing business with the city at the same time," he said. "You don't ever want there to appear to be a quid pro quo in a solicitation and a gift."
Cole said The Sun's investigation "raised a lot of red flags." In particular, he said, it suggests that additional controls are needed to prevent questionable transactions involving city employees who spend foundation funds.
"If this is a nonprofit operating under the same laws as every other nonprofit, what is it that their board didn't understand?" he said.
He said Pratt's audit should examine whether the foundation's annual audits addressed how the nonprofit organization operates, who is making spending decisions, whether the board has spending policies, and who is authorized to signs checks and at what amounts.
Councilwoman Rochelle "Rikki" Spector agreed, saying the foundation lacks oversight from its board of directors and that city agencies should provide more detailed explanations when they draw down money from foundation accounts.
"It appears that just submitting a request for a [check] signature is all it takes. That's not good enough," she said. Ivey, board members, and the foundation's treasurer, Michael E. Broache - chief of the city's Bureau of Accounting and Payroll Services - did not return messages seeking comment.
