Audit reveals former SEANC director misspent nearly $500K
Posted April 12, 2015
Updated April 13, 2015
Raleigh, N.C. — The former director of the State Employees Association of North Carolina misappropriated nearly $500,000 in credit card charges and unjustified spending, according to an audit released by the organization Saturday.
Dana Cope resigned in February after Wake County’s district attorney asked the State Bureau of Investigation to look into spending irregularities at the 55,000-member nonprofit. The irregularities under question included a $19,000 check paid to a Washington, D.C., computer company that was reportedly cashed by an Apex landscaping company doing work at Cope’s Raleigh home.
The audit, conducted by national accounting firm Bond Beebe, found Cope “fabricated” the invoice for the $19,000 check, which was deposited by the landscaping company. The audit also found only about $14,000 paid to the company was legitimate, while another $94,500 in payments were “excessive.”
Other findings include:
- Cope did not reimburse SEANC for nearly $15,000 in travel expenses for a trip to Asia taken by family members.
- Cope used SEANC funds to buy more than $31,000 in private flying lessons.
- Cope received about $17,200 in reimbursement for questionable charges or items missing receipts.
- Cope used the SEANC credit card more than 2,000 times between October 2012 and Febreuary 2015 to charge nearly $405,000. Of that amount, about $361,000 was for questionable or undocumented items such as women’s accessories, car washes, online retail purchases, hotels, airlines, restaurants, iTunes and online gaming.
“The results of the audit are clear: Our former executive director, Mr. Dana Cope, grossly misused SEANC credit cards and misappropriated SEANC funds for personal gain,” current SEANC Executive Director Mitch Leonard wrote in a letter accompanying the audit summary.
“Based on my observations over the last few weeks and upon review of this audit report, these findings stem from a culture of submissiveness, deliberately built over time by Mr. Cope, and maintained for his own financial benefit. As a result, established financial controls were compromised, transparency thwarted and the truth denied,” he wrote.
Leonard wrote that SEANC is working to recoup the money and implement changes, including many of the recommendations made by Bond Beebe in the report.
The audit firm noted “consistent, broad and systematic internal control failures” because SEANC’s written policies and procedures were not followed.
Among the changes, no check can be issued without proper documentation, a credit limit of $5,000 has been set and credit card charges are allowed only for fuel and hotel expenses unless approved by a supervisor.