Under the Dome

State Audit: Rural Center lacks oversight, pays president 'unreasonable' salary

The taxpayer-funded N.C. Rural Economic Development Center has failed to provide proper oversight of millions in state money and pays its longtime president an “unreasonable” salary of $221,000, state auditors say in a report released Wednesday.

Auditors also found that leaders of the nonprofit Rural Center have put nearly a quarter million dollars into a special account to pay president Billy Ray Hall, 65, a severance when he leaves the rural agency, which emphasizes its efforts to help poor and struggling pockets of the state.

The severance account for Hall was started in 2003 and board members have put $10,000 to $40,000 a year in it since, according to the audit. The severance account held $241,856 on June 30, 2012.

That money for Hall is above and beyond regular retirement account contributions that he also has received, according to the audit. The auditors did not comment on the severance account, but mentioned it in a footnote.

The audit from the office of State Auditor Beth Wood, a Democrat, was released as lawmakers debate how much taxpayer money to send to the center for the next two fiscal years for job-creating infrastructure, leadership training and other community programs it oversees.

A two-part series in the News & Observer last month also raised a range of questions, finding that the center claimed it created jobs in places where none exist; takes credit for creating mostly minimum-wage jobs at a range of retail, restaurant and big-box stores; makes exceptions to its own rules to aid some projects; and that politicians have influenced grant decisions.

Lawmakers in the state House would send the center $36 million through June 2015. The Senate would divert money from the center to form rural programs overseen by state agencies. The governor has proposed providing about $7 million a year to the center over the next two years. Legislators are sprinting to settle the budget soon. Read more here.

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