Kerr-Tar, EDA resolve issues, back working together
The Kerr-Tar Regional Council of Governments fully repaid its Economic Development Administration Revolving Loan Fund and the non-profit received word from the EDA that it will soon be allowed to start making loans from that fund again.
Executive Director Diane Cox, in an interview with The Dispatch on Friday, said 20 of the 21 entities it serves paid a one-time assessment fee to bring the EDA Revolving Loan Fund total to $311,367.
In March, the EDA sent a letter to Kerr-Tar that instructed the non-profit to stop making loans from the Revolving Loan Fund, which can only be used for projects and costs related to helping small businesses.
The March letter came after Kerr-Tar’s 2011-12 audit review revealed the non-profit had inadvertently used Revolving Loan Fund money for other expenses not related to small business loans, Cox said.
She said this happened because Kerr-Tar utilized one bank account for its general fund, but the account also included restricted Revolving Loan Fund money.
The funding taken inappropriately from the Revolving Loan Fund was used to cover the cost of overruns from state-administered Community Development Block Grants, which are federal grants for rehabilitating substandard housing.
The audit found that Kerr-Tar had receivables, which never materialized.
Cox said these amounts came from costs related to housing renovation projects that exceeded the initial CDBG grant amount.
“The majority of uncollectable funds were cost overruns on Community Development Block Grant projects,” Cox said.
After the audit and the inadvertent use of restricted funds was discovered, the EDA asked Kerr-Tar to separate the restricted funds into a new bank account and immediately return the inadvertently used restricted funds in full.
In order to return the full amount of $311,367 to the Revolving Loan Fund, Cox said she requested help from the member entities.
The one-time per capita assessment paid by Vance County was $40,941. Henderson paid $21,362.
Granville County’s share was $50,696 and Oxford’s was $11,761.
Warren County’s share was $26,233.
All member entities paid the assessment, except for the Warren County community of Macon, which requested an external review from Kerr-Tar. Macon’s share was $165.
Cox said the non-profit has taken action to ensure the funds are in order for next year’s audit.
“We are tracking actual contracts better and making sure we are not overspending on contracts,” Cox said.
Kerr-Tar no longer keeps all its funding in the same bank account. Cox said the non-profit established financial policies and procedures after the audit that are now in place.
“When this was discovered, a lot of actions were taken to reduce expenses,” she said.
Kerr-Tar cut the community development block grant administrator and accounting technician positions.
With the Revolving Loan Fund repaid in full, Cox said her non-profit will be back to its business as usual: serving its 16 municipalities and five counties.
“For every $1 our member entities provide, they get $61 back in state and federal grants,” Cox said.
Vance County Board of Commissioner Chairman Tommy Hester said the organization is vital to Henderson and the five counties,
“We’ve gotten millions and millions of dollars out of Kerr-Tar,” Hester said. “The investment we put in there is very small compared to what we’ve got out of it for this county.”
Contact the writer at firstname.lastname@example.org.