Audit Says $1 Million Diverted from North Carolina Central University Program - Higher Education
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Audit Says $1 Million Diverted from North Carolina Central University Program


by Gary D. Robertson, The Associated Press

RALEIGH N.C. – The ex-director of a program based at North Carolina Central University designed to reduce the achievement gap appears to have skimmed more than $1 million in program funds and used nearly $290,000 for her personal use, according to a state audit Tuesday that referred the case to prosecutors.

State Auditor Beth Wood’s office released findings involving the Durham school, which served as headquarters and lead campus for the Historically Minority Colleges and Universities Consortium that included a dozen historically Black schools. The consortium offers tutoring and intensive studies to public school students and grants to faith-based and community organizations opportunities for community service.

Authorities say the investigative review found that the former director diverted $1,000,811 over six years that originated from local school systems, nonprofit groups, individuals, N.C. Central and its foundations and into a bank account discovered by an internal audit by the school only after she was fired in 2009.

The state audit determined the ex-director converted $287,716 to herself through checks, wire transfers, ATM withdrawals and other purchases, according to the findings. While some expenditures appeared related to the consortium’s goals, others were itemized for women’s clothing, car repairs and hair care products and a personal computer delivered to the former director’s home, the report said.

“We believe that all expenditures from the undisclosed bank account should be considered questionable” because the account was opened without proper authorization and with knowledge of few people at N.C. Central, the auditors wrote.

Another person identified as the former N.C. Central University provost and ex-dean also received $61,959 from the undisclosed bank account without providing any services for the consortium, the report said. It added that the former executive director should have deposited funds into an authorized state account and may have broken the law by putting them in the undisclosed account.

“It appears that the former executive director engaged in activities that fit the definition of a skimming scheme as described in professional literature to benefit herself and other university consortium staff and contractors,” the audit read in sending the case to the Durham County District Attorney’s Office, the State Bureau of Investigation and state and federal revenue departments.

Neither the former executive director nor ex-provost was identified by name in the audit. The consortium’s incorporation paperwork filed with the Secretary of State’s Office in 2004 and cited in the audit identified ex-director Nan Coleman of Raleigh and former dean Beverly W. Jones as consortium directors. The audit said the program’s original director was the dean before she became provost in 2005.

N.C. Central University Chancellor Charlie Nelms agreed with the audit’s findings and will work to get the displaced funds returned. The report also alleges other workers received bonuses and salary advances without proper approvals or justification. The consortium lacked proper oversight, didn’t file require tax documents and didn’t have documents to back up grants and other expenses, the report said.

“I am saddened and outraged by the findings of wrongdoing outlined in the report,” said Nelms, who sought an internal audit following extended complaints from parents and others. “However, I cannot allow the misguided actions of a few to overshadow the intrinsic benefits of the tutoring, mentoring and other valuable services received by hundreds of North Carolina children through the program.”

The consortium has operated “Academic Enrichment Academies” in as many as 20 counties. The consortium hired program coordinators and certified teachers to provide extra academic assistance to students. The consortium entered into contracts with school districts, which paid for the services through federal funds and where the consortium could make a profit, the audit said. The consortium also offered mentoring opportunities for Black male students and programs to improve parenting skills and involvement.

A man, who didn’t give his name, answered the phone at Coleman’s home on Tuesday and referred requests for comment to her attorney. A phone message left at a Durham home where someone named Beverly W. Jones lives wasn’t immediately returned.

The State Bureau of Investigation is reviewing the report, spokeswoman Noelle Talley said. Durham County District Attorney Tracey Cline hadn’t returned a phone call by Tuesday afternoon.

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