North Carolina Rural Economic Development Center questioned in audit
RALEIGH -- A new audit from North Carolina State Auditor Beth Wood takes aim at the North Carolina Rural Economic Development Center, questioning its oversight of state money and how it pays its long-time president Billy Ray Hall.
Among the key findings:
- Approximately $20 million in interest earnings from undisbursed state funds is not available to the State.
- Job creation or other performance measures were not verified for at least five grants.
- Grant reporting requirements were not diligently enforced.
- Executive pay is not reasonable.
The center's mission is to focus on economic improvement for people in North Carolina's 85 rural counties.
But in a two-part series last month, Raleigh's News and Observer newspaper reported the center claimed it created jobs in places where none exist.
Wood's audit seems to bear that out, saying reporting requirements on grants issued by the center were not diligently enforced and that job creation claims on five grants could not be verified.
The audit also claims the center's top executives were overpaid when compared to the salaries of similar positions. The audit calls the $221,000 annual salary paid to president Billy Ray Hall as "not reasonable" and questions more than $241,000 in a special account to be paid to Hall if he leaves.
In an interview Wednesday with ABC11, Wood said interest earned on grant money was not handled properly.
"The federal government will tell the State of North Carolina, if you earn interest on our money, you return it to us, or put it back into the program for the exact same things we gave you money for in the first place," she explained. "That's not happening here. The State of North Carolina has been silent on the interest earnings of state grant money for this, for the Rural Center, since 2003."
The audit comes as the General Assembly decides on the center's funding. In a statement Wednesday, Senate President Phil Berger said he wants to cut off the money.
"This audit reinforces my belief that the Rural Center should receive no taxpayer funds in the state budget. Funding the Rural Center would send the wrong message to voters who elected Republicans to provide accountability in state government," he said in a statement.
In his response to the audit, Hall said the center has maintained the highest degree of ethical and fiscal integrity over its 26-year history.
He pledged to examine and improve its operating policies.
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