Board reveals plans, budget for downsized NC Rural Center - WNCT

Board reveals plans, budget for downsized NC Rural Center

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Last month, state legislators defunded the North Carolina Rural Economic Development Center after an audit found the nonprofit failed to provide proper oversight of millions in grants. Last month, state legislators defunded the North Carolina Rural Economic Development Center after an audit found the nonprofit failed to provide proper oversight of millions in grants.
RALEIGH, N.C. -

A dozen employees will make up the staff of a significantly downsized North Carolina Rural Center, the agency's board announced Wednesday.

Board members revealed plans Wednesday to reduce the N.C. Rural Center staff from 45 employees to just 12 as the agency continues to operate as a downsized part of the North Carolina Department of Commerce. The agency's operation budget will be $1.6 million.

Along with the staff reduction, about 70 percent of agency's 94,876-square-foot building will also be subleased.

Last month, state legislators defunded the North Carolina Rural Economic Development Center after an audit found the nonprofit failed to provide proper oversight of millions in grants while providing excessive payments to its president, Billy Ray Hall.

Hall resigned under pressure, yet his severance package amounted to more than $240,000. After the money was called into question, the Rural Center board froze Hall's severance.

During Wednesday's board meeting, a lawyer recommended the board hire an independent consultant before voting on Hall's severance to see whether the center's executive board set up the compensation acording to legal guidelines.

The lawyer said because there is a possibility of a lawsuit from Hall, or IRS action regarding that severence, the board needs to know exactly what it's doing before deciding to award that financial package.

Board member Brian Crutchfield called it "a murky situation."

If the severance is awarded, the lawyer said Hall will be liable for all taxes, penalties and interest on that money because it is not tax-deferred severance and has been accumulating since 2003.

In the audit of the Rural Center, state Auditor Beth Wood said reporting requirements on grants issued by the center were not diligently enforced and that job creation claims on five grants could not be verified.

In its new role, the N.C. Rural Center will not be allowed to make grants, however it will still loan money to small businesses as part of job creation.

Since Aug. 1, the Office of State Budget and Management has authorized payments for 51 grants submitted for funding by the Rural Center. The grants total more than $3.4 million.

More pending grants are still being reviewed by the Commerce Department and may be awarded in the future.

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Steve Sbraccia

Steve is an award-winning reporter for WNCN and former assistant professor. A seasoned professional, Steve is proud to call the Triangle home since 2005 after over two decades in Boston, Mass.  More>>

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