Pratt has said previously that she will audit the city's involvement with the Baltimore City Foundation, and the scope will be determined after she reviews annual audits conducted by a firm hired by the nonprofit.
The foundation, formed in 1981 primarily to benefit the underprivileged, helps pay for such things as home smoke alarms, assistance to those who cannot pay their water bills and funeral expenses for homicide victims.
The newspaper found that some funds go to projects that have little or nothing to do with the foundation's tax-exempt purposes, a potential violation of Internal Revenue Service rules, legal and nonprofit experts say. Some was spent for Dixon's Christmas cards last year and for her inaugural activities in 2007. Foundation accounts also serve as a repository through which money for city projects can accumulate and be spent without the scrutiny typical for public expenditures.
The Sun's investigation did not identify any problems in the way donations to YouthWorks were handled.
The foundation's president, Lenwood M. Ivey, has said it is the city agencies' responsibility, rather than his or that of the foundation's board of directors, to ensure that foundation money is spent in keeping with its nonprofit status. Ivey did not return messages seeking comment yesterday.
Pratt praised YouthWorks on Wednesday, and said she was concerned that ensuing investigations of the fund could delay disbursement of money to a worthy cause..
"I know that there will be no problem if it comes directly to the city," Pratt said.
City Council President Stephanie C. Rawlings-Blake said she had also questioned the payment during a briefing earlier in the week.
"We asked, 'Why would it not go directly to the director of finance?' " Rawlings-Blake said.
The City Council president said she supports Pratt's efforts to audit the charity.
"My hope is the audit will reflect that the donations go to the appropriate places," Rawlings-Blake said.
Dixon said Wednesday's decision does not indicate a lack of confidence in the foundation and that she disagreed with the comptroller's suggestion to halt donations.
City Solicitor George A. Nilson, a member of the Board of Estimates, said he was not aware of any other firms that the city has required to make a contribution to the foundation to resolve alleged violations of minority and women-owned business requirements.
