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).
BACKGROUND
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.





KEY FINDINGS
• 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
KEY RECOMMENDATIONS
• 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

INV-2017-0416

2 Responses to Audit reveals $365,000 of N.C. pre-K funds misused

  1. Edo Studio 04/19/2017 at 9:02 am

    Is anything been done about this? Any charges filed? Any changes in leadership?

  2. Joe M. Simmons 04/24/2017 at 7:33 am

    The continued revelations that our governments have a problem with oversight is troubling. Missing funds by a Rutherfordton Town Clerk several years ago, 3/4 million fraud in the RC EMS with out internal controls & no management change, and now this!

    When elected officials stay in office for years and folks will not run for those position, corruption is bound to occur, and in some cases has!

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