Henderson-based nonprofit misused $361k in taxpayer funds, report says

North Carolina
NC Nonprofit Allegedly Misused Tax Money

A nonprofit organization that provides low-income services to four counties in North Carolina is accused of misusing over $361,000 of taxpayer money.

The State Auditor’s Office released a report in April 2017 highlighting some of its findings after its investigation into the Franklin Vance Warren Opportunity.

The Franklin Vance Warren Opportunity provides services, most notably Head Start and Section 8 housing, to low-income families and individuals in Franklin, Nash, Vance, and Warren counties.

Some of the allegations in the audit claim the non-profit misused more than $361,000 of NC Pre-K funds, including the former CEO’s unauthorized salary increase resulting in more than $18,000, and nearly $60,000 spent for legal services without board approval.

The State Auditor’s Office decided to look into the organization after receiving a tip that the non-profit was potentially misusing funds.

Henderson Pastor John Miles says he filed a complaint with the State Auditor’s Office after some former employees with the non-profit came to him with concerns.

“Anything we asked for maybe a year ago or two years ago is coming forward now. The State Auditor went in and found what happened,” said Miles. “I think right now the Franklin Vance Warren Opportunity can do what they’ve supposed to have done from day one, which is to take care of the community and move forward.”

Parents who have used the non-profit to help enroll their children in Pre-K say it’s frustrating to know some of the money may have been misused.

“I was very surprised. I had no idea that kind of stuff was going on over there,” said Tasha Sanders. “I do expect them to use the money wisely because we need the help.”

Soon after the allegations came to light, Former Franklin Vance Warren Opportunity CEO Sara Rudolph was fired, the Board hired a new legal team and many board members were replaced.

Miles says he believes a lot of the problems have been fixed since those changes were made.

“I’m just asking the community to give Franklin Vance Warren Opportunity a chance to move in the right direction,” said Miles. “We’re asking the organization to build the trust back with the community. We’re going to hold the interim CEO accountable and we ask her to build back relationships that we know Franklin Vance Warren Opportunity had back in the old days.”

Franklin Vance Warren Opportunity’s Interim CEO Felicia Coleman tells CBS North Carolina she is out of town and is unable to comment on the audit results until she has a chance to review them.

In the audit report, the organization had a chance to respond to the claims. They wrote they believe the allegations to be a “misunderstanding of FVWO’s contractual relationships with other parties and responsibilities….notwithstanding our difference of opinion on this point, FVWO has taken or agrees to take a number of actions as set forth in this response to improve our processes and activities.”

The findings have been forwarded to the Inspector General’s office, but no word yet on whether or not they’ll pursue the case.

Late Tuesday afternoon, an attorney for the board issued a statement on the board’s behalf:

“Franklin Vance Warren Opportunity, Inc. (“FVWO”) took appropriate actions over a year ago to address the findings contained in the Office of the State Auditor’s Investigative Report (the “Report”) with respect to the former CEO’s salary being increased without proper board authorization and funds being spent for legal services without proper board approval. FVWO disagrees with the findings contained in the Report with respect to North Carolina Pre-Kindergarten Funds (“NC Pre-K Funds”). We stand by our position as stated in our response included in the Investigative Report. The Investigative Report states that our response is “disingenuous and misleading.” On the contrary, the Report with respect to the Pre-K findings is without basis in fact, law, or contract and dismisses the responses provided by FVWO and the North Carolina Department of Health and Human Services (“DHHS”). We invite those interested in this issue to carefully read FVWO’s and DHHS’s responses attached to the Report and to draw conclusions based on the actual controlling documents rather than the Report. FVWO remains committed to providing quality services to underprivileged, impoverished, and unemployed residents within the counties of Franklin, Granville, Person, Vance, Warren, and Nash.”

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