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McCrory calls for funding cut to Rural Center

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"There is really a need for there to be accountability," Berger said. "There is really a need for there to be accountability," Berger said.
RALEIGH, N.C. -

Gov. Pat McCrory released a statement Thursday requesting the State Budget and  Management suspend dispersement of state grant money to the North Carolina Rural Economic Development Center immediately.

McCrory also directed the center to stop spending public funds until it fixes issues highlighted in a state audit released Wednesday. 

The audit said the nonprofit agency failed to provide proper oversight of millions in grants while providing excessive payments to Hall. 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.

Sen. Phil Berger expressed concern about the severance package for the retired president of North Carolina Rural Center Board, a day after a state audit criticizing the center was released.

Billy Ray Hall, who abruptly retired Thursday morning, has been the president of the center for 26 years, since it began in 1987. His retirement goes into effect immediately.

McCrory said the resination of Hall was a positive step for the center but he requested the center's entire board review the audit. The statement released by McCrory states that if the center does not comply with the law immediately, McCrory requests the Office of State Budget and  Management recover the public money held by the center.

A severance package of $241,000 intended for Hall was in a special account.

"I am really concerned at this point about the severance package," Berger said. "I would call on their board to do whatever is necessary to keep that from happening."

The audit questioned Hall's $221,000 annual salary and the severance package.

Berger said, "I don't think anyone can read that report and not just be frustrated, disgusted and just really concerned about public dollars and how they're being managed."

Hall, in a statement Thursday, said, "Today, I informed the Rural Center Board of Directors that I am stepping down as president. It is the right decision for the organization and the rural communities we serve."

Valeria Lee, president of the Rural Center's board of directors, said she accepted Hall's decision with a heavy heart.

"Rural North Carolina has been blessed by his leadership, which has brought to rural communities clean water, jobs, business opportunities and the practical knowledge and skills for leading change in a rapidly evolving economic environment," Lee said in written release.

Lee's announcement came one day after a sharp statement by Gov. Pat McCrory, calling for fresh leadership at the Center.

"Based upon the recent audit, I believe it is time for new leadership at the Rural Center in the roles of president and chairman of the board," McCrory said Wednesday.

"At a time when rural areas of our state are suffering the most, we must ensure that we are using our limited funds by the most effective, efficient and transparent means. These funds must be used to grow our rural economies and create jobs.

"I believe that new leadership will begin to address and fix the serious issues identified by the state audit."

Board member Bob Luddy sent Lee a note Thursday asking that she resign immediately as chair. Luddy also said in the note that public funding for the Rural Center has been suspended.

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