The N.C. Board of Funeral Service didn't keep minutes of its closed sessions, as required by state law.

The State Auditor's office, acting on a tip, reviewed five years of board minutes and found that typed minutes were not kept for closed sessions, in violation of the state's open meetings law. The board regulates the funeral business.

Executive Director Paul Harris told auditors that he was aware that typed minutes were required to be kept for closed meetings. The current and previous three secretaries took notes of closed sessions, but those notes had never been turned into minutes and could not be located, according to the auditor's office.

Board President Larry Andrews promised to create minutes for future meetings and to keep notes taken during those meetings in a special file.

The N.C. Agriculture Department allowed a deputy director to use a state vehicle to commute to Raleigh from Reidsville, without reimbursement, for three years, according to the State Auditor's Office.

A management letter from auditor Beth Wood, a Democrat, found that Patrick Jones, a deputy director of the Pesticide Section was driving his state car to Raleigh four days a week, a financial benefit of $36,546. Wood's office was tipped about the car though the office's anonymous hotline.

State workers are allowed commuting privileges if the employee works from home. For that designation, and its exemption from having to pay back the state to apply, the employee cannot drive to Raleigh more than twice a week.

Wood's letter recommended that Jones be required to repay the state.

In a response, Agriculture Commissioner Steve Troxler, a Republican, downplayed the case, saying that Jones and his supervisor intended for Jones to rarely drive to Raleigh. But the department's involvement in the Ag-Mart pesticide case required him to be in Raleigh more often.

More after the jump.

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While 400 state employees are on a waiting list to get a parking space in Raleigh, 18 spaces are not assigned to anyone, according to an audit report released last week.

The report, a financial control audit of the Department of Administration, found that the department's parking division was not regularly reviewing and re-allocating spaces. The department is supposed to re-assign a space that is vacant for two months.

A December 2008 report found that 43 spaces had been vacant for three to 15 months.

The agency noted that since February 2006, 1,100 spaces have been lost because of downtown development. Those losses meant that the department could not accurately re-allocate space.

The Department says it can now return to its previously scheduled review of parking spaces. Also it notes that departments are responsible for paying for empty spaces and that since each agency keeps its own waiting list, the auditors figures may be inaccurate.

It appears that the influence of state Sen. Tony Rand, a Fayetteville Democrat, helped keep secret an audit dealing with former first lady Mary Easley's salary at N.C. State University.

The salary audit has never been released by new state auditor Beth Wood, a Democrat. In an interview, she said the investigative audit raised questions about whether the first lady's $170,000 per year salary at NCSU was justified — but said NCSU officials made detailed counter arguments that would have led to a "he said/she said" audit.

But it turns out that Rand's involvement in an earlier audit — one that dealt with questionable overseas travel by Mary Easley — also played a role, J. Andrew Curliss reports. The Easleys had hired Rand, who is a lawyer and the powerful majority leader in the state Senate, to represent them. The move generated lots of talk because, for one, Rand has power over the state auditor's budget.

More after the jump.

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State Auditor Beth Wood told legislators that state agencies need better oversight of vendor contracts.

Citing three recent audits involving the state Department of Health and Human Services, the state health plan, and and office supply purchases that revealed poor monitoring and other deficiences,  Wood said contracts the state signs should be reviewed by a "cold eye," Lynn Bonner reports

The auditor's office cannot make agencies change the way they do business, Wood said, but she suggested legislators consider some action that would prevent mistakes that lead to waste.

The legislature's Program Evaluation Oversight Committee has invited Wood to make regular reports on audit findings.

"We want to make sure audit reports don't just sit on the shelf," said Sen. Dan Clodfelter, a Charlotte Democrat.

If the program evaluation staff finds patterns of problems identified in state audits, Wood will be invited to the committee to talk about them, said evaluation division director John Turcotte.

Administrators of the State Health Plan did not tell legislators for four months last year about multi-million dollar financial problems.

They underestimated both revenues and claim expenses for the plan, which insures 667,000 teachers, state workers and retirees, creating a nearly $80 million loss last year.

Auditors criticized the administrators, since replaced, for agreeing to a contract with Blue Cross Blue Shield of North Carolina that gave it no incentive to contain costs and was not reviewed by a contract lawyer.

The audit blames much of the problem on too much secrecy among health plan staff and Blue Cross. A company spokesman also faulted forecasting by the health plan's staff. (N&O)

Officials with Blue Cross and Blue Shield of North Carolina and the State Health Plan say there's no need to call for an audit of a contract between the two for administrative services.

They note that the State Auditor is in the midst of a performance audit of the plan, which would likely include a contract review, Dan Kane reports.

"A Performance Audit of the State Health Plan by the State Auditor is currently underway," plan spokeswoman Linda McCrudden said. "Once completed and released, the audit report will be available to the public."

Adam Searing of the N.C. Justice Center's Health Access Coalition, one of two groups that called for the audit, said he is aware there is a state audit under way, but the groups are calling for something different.

"We want something done pretty quickly — I don't know where the state auditor is — and we want something that focuses directly on this contract process (by) someone who really understands in depth the whole contracting process among health plans and employers," Searing said.

Moare after the jump.

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State Auditor Les Merritt this morning said that state trips in which First Lady Mary Easley and others traveled to France, Russia and Estonia included "unreasonable and excessive expenses," including a taxpayer-funded $332 lunchtime caviar cocktail.

Taxpayers picked up hundreds of dollars in alcohol purchases, against state policy. They paid for ballet tickets, and an executive assistant to Easley billed the state $227 dollars for a linen jacket.

Merritt found that the trips to France and Russia were of questionable value to taxpayers. The audit was delayed 30 days because Merritt could not get an interview with Easley.

Easley and an assistant traveled to Paris and Compiegne, France, in May 2007. The trip was designed to celebrate a successful Monet exhibit in Raleigh that had already ended. Easley had no specific duties or obligations on the trip. One year later, a delegation of state cultural resources officials including Easley traveled to Tallin, Estonia, and St. Petersburg, Russia. In Russia, where room expenses averaged $955 a night per person, Easley and the others had one hour of official state business — a meeting with officials from the Hermitage Museum.

"Any direct benefit to the State related to the First lady's presence on the trips to France and Russia is difficult to identify," Merritt said. "For example in Russia, a simple one hour meeting with museum officials does not justify the taxpayers paying for a day-long tour of St. Petersburg plus a trip to the ballet."

An Easley spokesman said all expenses and planning arrangments were handled by the Department of Cultural Resources.

"The first lady was asked by Cultural Resources to attend and while there she did what she was asked to do by the department," said Seth Effron a spokesman for Gov. Easley. Effron declined to answer questions.

"The statement that I've given you is the statement I've given out."

A phone call to the acting head of the Cultural Resources Department was not immediately returned.

Merritt reviewed the trips after news reports in The News & Observer detailed expenses. Merritt received hotline tips that the trips were wasteful. Easley has declined requests to discuss the trips. Her husband, Gov. Mike Easley, has defended the trips, saying Europe is expensive and that just one big museum exhibit, will bring millions to the state.

Details of caviar and alcohol purchases after the jump.

Update: Post now includes response from Easley spokesman.

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A report released Thursday by state Auditor Les Merritt found that financial mismanagement at the nonprofit Autism Society of North Carolina led to a $1.5 million deficit and a shakeup of the organization's leadership.

The organization receives $11 million in government funding. according to the audit report. It has offices in ASheville, Charlotte, Fayetteville, Greensboro, Greenville, Laurinburg, New Bern and Raleigh.

"It's unfortunate to see such a worthy organization that meets so many needs stumble because of poor financial oversight," Merritt said in a news release.

Auditors found that the deficit was caused by an overestimation of contributions, poor planning and false assumptions about what the state mental health program would cover.

The problem surfaced in June 2007 when when organization officials learned they would have trouble meeting payroll. Later that year, the finance director and the executive director were dismissed. Seven employees were laid-off to cut costs.

The auditors also identified what they considered "inappropriate" credit card charges from the former finance director for staff lunches, birthday parties and staff meetings at restaurants.

Auditors recommended tighter financial controls. In a response, officials said they recognized the need to improve.

"Additional improvements and more diligent monitoring of financial performance will be critical for sustained success in fulfilling our mission," wrote F. Whitney Jones, president of the society.

A state audit of juvenile prevention programs funded by the N.C. Department of Juvenile Justice and Delinquency Prevention found that some of the recipients have conflicts of interest because they serve on county councils that award the money.

State Auditor Les Merritt said in a news release that the audit did not find examples of abuse in the program. He said that the department and the county councils need to do a better job of monitoring the community programs they fund, Dan Kane reports.

Some data on the programs that auditors examined was found inaccurate.

The state department provides more than $20 million to county Juvenile Crime Prevention Councils, which then award it to community programs intended to reduce and prevent juvenile crime. Earlier this year, state lawmakers studied the JCPCs to determine if they were working properly before awarding them funding in this year's budget.

The audit found that JCPC council members in 14 counties — none in the Triangle — are also managers and directors of the programs they are funding. "Although our audit did not find abuse, these conflicting duties create the potential for abuse," the audit said.

Merritt said the audit findings are "real opportunities for State leaders and local managers to reinvest in JCPCs and work together to help build stronger communities."

In the 2006-2007 fiscal year, JCPCs funded 499 programs that served more than 34,000 youths.