A new state audit of the taxpayer-funded North Carolina Rural Center says the nonprofit agency 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 huge issue here is our tax dollars being granted to create jobs and create infrastructure so that jobs and businesses will come into play," Wood said. "And nobody is monitoring the spending of those tax dollars to ensure that what was promised to be done was ever done."
Gov. Pat McCrory has earmarked $7 million for the center over the next two years. McCrory released a statement reading, "I believe it's time for new leardership at the Rural Center in the roles of president and chairman of the board."
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."
"What if you are in that rural area where the job was supposed to be created and it didn't happen. That means there are people there that could be working that aren't," Wood said.
House lawmakers say they are reviewing the audit today and taking it into consideration while they work on the budget.
House Speaker Thom Tillis said in a statement, "I am deeply troubled by the findings in the audit of the Rural Center. Based on the Auditor's report, it is apparent to me that the time for change at the Rural Center has come."
Senate majority leader Harry Brown previously raised red flags about the center and said the audit "doesn't surprise me."
"I think it is like a lot of nonprofits when you fund them and you have very little oversight," Brown said. "I think it has a tendency to evolve into what has happened with the Rural Center."
Brown added, "Overtime the rural center has done a lot of good things in rural North Carolina. But I think the lack of oversight created a problem and I think those problems are starting to surface now."
Brown said the Senate will take the audit in consideration when determining funding to the center.
"We are still negotiating how that will come out," Brown said, "we have not made that decision yet but it is definitely on the table and has been flagged."