Audit reveals $365,000 of N.C. pre-K funds misused
HENDERSON – The Office of the State Auditor received a complaint through its Hotline alleging Franklin Vance Warren Opportunity, Inc. (Agency) misused program funds. In addition, the complaint alleged the former Chief Executive Officer (CEO) authorized a salary increase and obtained legal services without approval from the Board of Directors (Board).
The Agency is a not-for-profit organization located in Henderson. The Agency provides self-sufficiency services to low-income families and individuals in Franklin, Nash, Vance, and Warren counties.1 These services include Head Start, Section 8 Housing, Community Services Block Grant, and Weatherization.
The Agency receives approximately 77% of its funding from federal and state governmental agencies, including the North Carolina Department of Health and Human Services, Division of Child Development and Early Education.
• More than $361,000 of NC Pre-Kindergarten funds misused
• Former Chief Executive Officer’s unauthorized salary increase resulted in $18,686 additional compensation
• More than $59,500 spent for legal services without Board approval
• The Agency should reimburse its Pre-K program $361,284 from its general fund
• The Agency should ensure management complies with the NC Pre-K Program Fiscal and Contract Manual and should educate staff on program requirements
• The Board should establish procedures for reviewing and approving all staff salaries, including the CEO’s salary, on an annual basis
• The Board should consider pursuing reimbursement from the former CEO for compensation received in excess of her Board-approved salary
• The Board should communicate and emphasize to its members the limits to their individual authority