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Audit: Social services agency misspent $4.8M

Posted February 6, 2014

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— An agency that provides social services to several southeast North Carolina counties misspent more than $4.8 million in state and federal funds on an array of items, from cars to gym memberships to employee bonuses, as well as paying a contractor for work that wasn't performed on low-income housing, according to a state audit released Thursday.

Four-County Community Services Inc., based in Laurinburg, runs 16 Head Start facilities and provides assistance and services, such as job training and housing, to low-income people in Scotland, Hoke, Robeson, Bladen, Columbus, Pender, and Brunswick counties. It administers $15 million to $21 million in state and federal grants every year.

The state Department of Health and Human Services began auditing Four-County in 2012 after receiving allegations of misuse of state funds, and DHHS brought in the State Auditor's Office last year for further investigation. During the course of the state audit, dozens of new allegations surfaced, the new audit states.

Much of the state audit focuses on the activities of former Four-County executive director Richard Greene, who was fired in 2012.

Following are some of the findings involving Greene:

  • Four-County spent more than $52,000 from 2008 through March 2013 to lease a 2008 Ford Expedition and 2012 Chevrolet Suburban for Greene. The vehicles featured amenities such as heated and cooled seats, wood trim, chrome wheels, a rear-seat entertainment system and a trailer tow. Greene also didn't keep a travel log to separate his personal use of the SUVs from business use.
  • Greene also had two cellphones, one used for calls and the other for email and online searches. He ran up about $1,100 in overage charges on the two phones during fiscal 2012, and he didn't provide details of business versus personal use.
  • Five vendors received no-bid contracts from Four-County after agreeing to sponsor Greene in fishing tournaments. There was no evidence that the agency's board ever approved the contracts.
  • Greene's wife also worked for Four-County as its fiscal manager, and he approved her annual raises. Auditors determined that her annual salary increased almost 15 percent from 2009 to 2010 and that her pay, which reached $78,900 in fiscal 2013 was far above that of financial managers at similar social services agencies.
  • Money placed in a tax-deferred retirement account for Greene was about $160,000 over what was approved by the agency's board. In 2007 and 2009, Greene collected a bonus in lieu of a retirement contribution, but there was no evidence the board approved the moves.

State auditors also questioned Four-County spending on board members, other agency employees and projects, including the following:

  • Four-County paid a contractor more than $2.7 million for weatherization work on about 700 homes from 2010 to 2012, and state inspectors determined the company did none or only some of the work that was billed. The contractor employed two sons of the woman who served as Four-County's interim director after Greene's termination and provided gifts to agency employees. Auditors found that the owner of the contractor and an agency employee shared a room at the Grove Park Inn in Asheville during a May 2010 conference. The owner also paid for a $300 massage for that employee while in Asheville, purchased robes for two other employees and paid for a hotel bar tab. Auditors also determined that the agency also gave the contractor improper access to its computer system, allowing it to select the most profitable jobs.
  • Four-County used $761,800 in excess funding for pre-kindergarten programs for other uses. Auditors said it's unclear how the agency accumulated the extra money.
  • Grant money was used to pay $640,800 in employee bonuses in 2010 and 2011 and $23,700 worth of gym memberships from 2010 through 2013.
  • The agency improperly paid for educational costs of one employee whose degree wasn't relevant to her work, and it also paid twice for some courses, reimbursing the school directly and helping the employee repay a student loan at the same time.
  • An employee was paid to help retrieve two vehicles that had been repossessed and was later paid to help purchase another car. Greene overruled the decision of the Four-County board to deny the money for the vehicle purchase.
  • A company owned by the mother of Four-County's interim director cleaned Four-County's headquarters for years, even though the owner was physically unable to provide cleaning services. Other relatives of the interim executive director actually did the cleaning.
  • Employees used agency equipment to perform services for Four-County board members.

Four-County officials agreed with most of the findings of the state audit and said in their formal response that they were taking corrective actions, including meeting with federal and state grant agencies to determine whether any money should be refunded.

43 Comments

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  • MrsLaura LauraGail Feb 13, 2014
    user avatar

    This is not a Democratic or Republican problem, this is a problem with the person that is in charge and thinks they are above the law. Show them their jail cell.

  • MrsLaura LauraGail Feb 13, 2014
    user avatar

    If it had been cash, there would be an embezzlement charge, in my opinion, it's no different. Charge them and send them to jail! 4.8 MILLION

  • angelallgrim Feb 8, 2014

    Every day there seems to be craziness coming out of the Republicans in our state. Either they don't care because they feel they have no more political threats, or they are all happy to serve one term and get out.

  • faperrigo Feb 7, 2014

    Umm. Look at who was on the Executive Committee of this organization before you slam repubs. During the time of the events in this audit, you will find some names that are familiar.

  • Rebelyell55 Feb 7, 2014

    The board will review to see if any of the money should be refunded? What kind of crackhead statement is that? Of course the money should be refunded and some should face crimminal charges for fraud. Bid rigging and flat our stealing. I certainly hope this report goes to the state AG for possible charges. Or does the Leg. group have to request that?

  • recoveringrepublican Feb 7, 2014

    This just in from your state republican leadership.
    Privitization and lessening of restrictive government regulations will dramatically improve the effectiveness and efficiency of your state government.
    Just about every day we are seeing the results of this brilliant conservative policy. There are lots more Four Counties type organizations out there whose only purpose is to steal our tax dollars. We are hearing about a new scandal every week. SO LETS PRIVATIZE MORE OF OUR STATE GOVERNMENT. Lets allow more environmental disasters from power companies. Of course a DNER which has been kneecapped by staff reduction can well handle all this. Conservatives in NC are throwing us all off the cliff so their buddies can get their hands in our tax dollar cookie jar. When are we going to stand up and stop this insanity? Look at who benefits from these policies.
    Certainly not the people of NC.

  • GOPtakersSociety Feb 7, 2014

    View quoted thread


    you all need to just stop it with the Reduce the Debt, the GOP spend way more than the Dems ever could, your lying if the words reduce the deficit are anywhere in your comments....pipe dreams

  • uBnice Feb 7, 2014

    View quoted thread


    DHHS handles close to $18 billion. Republicans are just itching to get it to their chosen private companies for exploitation.

  • crkeehn Feb 7, 2014

    View quoted thread


    And done by a private agency that administers the program. Just like the private agencies that the current legislation wants to turn Health and Human Services over to.

  • cooldela1966 Feb 7, 2014

    I knew just as soon as those Republicans got in office they would start spending money like this! A shame is what it is, a shame.

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