Lawmakers Want Tighter Rules On Nonprofit Funds After NC Rural Center Audit

RALEIGH, N.C. (AP) - State lawmakers want more restrictions on how public money is distributed to nonprofits and accounted for in light of critical reviews of the North Carolina Rural Economic Development Center.

The panel overseeing the legislature's government watchdog organization asked agency staff Monday to draw up draft legislation likely debated next year. The recommendation followed State Auditor Beth Wood's presentation on last month's audit on the center.

The audit found grant reporting requirements weren't carried out, job creation measures for grant recipients failed to be verified and pay of then-President Billy Ray Hall was unreasonable.

Panel members sounded most unhappy with $20 million the center collected in interest from unspent state funds. Wood says there are no rules on whether the state or nonprofit gets the interest sitting in private bank accounts.
RALEIGH, N.C. (AP) - Directors of a taxpayer-funded nonprofit agency created to help North Carolina's rural communities are freezing payment of a $241,000 severance to its founding president.

The North Carolina Rural Economic Development Center's board of directors voted Monday that there would be no payments under Billy Ray Hall's severance pay arrangement unless authorized by the full board. Hall had inquired through an attorney when he would receive the money.

Hall resigned this month after a state audit found his $221,000 annual salary "unreasonable," the non-profit did not adequately oversee the $25 million in state funds it received annually, and claims of jobs created were not verified.

Gov. Pat McCrory called for Hall's ouster after the audit. State lawmakers cut off the group's funding, shifting rural development efforts to existing state agencies.

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RALEIGH, N.C. (AP) - Gov. Pat McCrory's administration says it's suspended giving state money to the North Carolina Rural Economic Development Center and directed center officials to halt distributing state funds to grant recipients.

State Budget Director Art Pope also told N.C. Rural Center leaders Thursday the state was considering recouping potentially more than $100 million held by the center in the light of a stinging state audit issued the day before. Center President Billy Ray Hall announced his retirement Thursday.

Pope wrote separately to legislators who are determining how much money to give to the center in the two-year budget being negotiated. He says it appears the center may have tried to conceal the audit until after the final budget was completed.

Center officials didn't return phone calls seeking comment.

The longtime president of the embattled North Carolina Rural Economic Development Center has announced he will retire, effective immediately.

Billy Ray Hall announced his departure Thursday, after the release of a state audit Wednesday that showed the taxpayer-funded nonprofit agency failed to provide proper oversight of millions in grants while paying Hall too much money. The audit prompted Gov. Pat McCrory to call for the replacement of Hall and Valeria L. Lee, who chairs the center's board.

State Auditor Beth Wood's report said oversight requirements on millions in grants issued by the center were not diligently enforced and that job creation claims could not be verified. The audit also questioned Hall's $221,000 annual salary and another $241,000 in a special account to be paid as severance pay.

A new state audit of the taxpayer-funded North Carolina Rural Center says the nonprofit agency has failed to provide proper oversight of millions in grants while providing excessive payments to its long-time president.

The audit released Wednesday by State Auditor Beth Wood says 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 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.

The center is supposed to spur economic development in 85 North Carolina counties. Hall says the center maintains "the highest degree of ethical and fiscal integrity."

You can read the full audit yourself by clicking the link below.


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