NC Budget Proposal Eliminates The Rural Center

Jul 23, 2013

The NC Rural Economic Development Center has come under fire in the past week.

The North Carolina Rural Economic Development Center and the Office of State Budget and Management are working to resolve issues in last week’s crippling audit.

The Rural Center wants the state budget office to release funds already obligated to local governments and other rural partners.  The problem is, the state budget office has lost confidence in the Rural Center and legislators have eliminated funding for the center in its preliminary fiscal year 2014-2015 budget.

This swift turn of events was spurred on by a state audit of the Rural Center revealing the non-profit failed to provide proper oversight of millions of dollars in state-backed  grants.

State Budget Director Art Pope said in a statement, their goal is to resolve problems raised in the audit so grants can proceed.

Top lawmakers want to cut $36 million in proposed funding to the center and instead fund a rural economic development division under the Commerce Department.

The Rural Center sent a message to its partners Monday saying the organization will be "undergoing significant changes in coming months."  Elaine Matthews, Senior Vice President of the center also wrote, "The Rural Center board of directors will meet in July and August to carefully weigh the options and determine directions for the future."

Longtime Rural Center President Billy Ray Hall retired last week, a day after a scathing audit of the center was released.  The audit questioned how the Rural Center board came up with Hall's $221,000 a year salary.  On Thursday, July 18, 2013, Governor Pat McCrory called on the state budget office to "suspend dispersement of state grant money to the North Carolina Rural Economic Development Center immediately."