More restrictions sought on public money distribution
RALEIGH — 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.
Members of the Joint Legislative Program Evaluation Committee sounded most unhappy with $20 million the center collected in interest from unspent state funds. Wood told the legislators there are no rules on whether the state or nonprofit gets the interest sitting in private bank accounts.
"That is a gaping hole," Wood said.
The Rural Center is a private nonprofit group that has received more than $650 million from the state in the past 26 years. State lawmakers cut off the group's funding and shifted rural development efforts to existing state agencies in the state budget approved last month. Hall retired and center chairwoman Valeria Lee resigned.
Committee members asked the state Program Evaluation Division to write proposed legislation addressing interest revenue generated from public grants sitting in private accounts and whether or not the nonprofit can use the money. Lawmakers also want more specific rules about how grant money is distributed to nonprofits.
Some legislators said the interest should belong to the state. "We need to get our $20 million back," said Rep. Julia Howard, R-Davie, a committee co-chairwoman.
Wood said her office couldn't tell how much of the interest remained unspent because the center had commingled it with state and federal grant money.