Raleigh, N.C. — State Auditor Leslie Merritt on Thursday called for a criminal investigation into a defunct Hoke County nonprofit, alleging that the agency's former director used state grant money for personal expenses.

Hoke County Youth and Family Services, which closed two years ago, didn't keep adequate financial records and owes state taxes, Merritt said in a statement. It also appears the former executive director, Karen Wright-Fairley, might have put grant money to personal use, he said.

The audit cited $1,500 in cash withdrawals from an automated teller machine shortly before Hole County Youth and Family Services shut down and almost $17,000 in purchases made between August 2004 and June 2006 in areas the agency did not serve. A lack of documentation made it difficult to establish what was purchased, according to the audit.

“Our auditors found only one client file showing activity after June 30, 2005, but accumulated 2½ pages of questioned expenditures,”  Merritt said. “It’s clear to me that the grant’s purposes were not being fulfilled.”

Hoke County Youth and Family Services received grants from the state Department of Administration and the Department of Health and Human Services to assist domestic violence victims in Hoke and surrounding counties.

The agency reported serving 27 people between July and December 2005, but auditors said they could locate only one file. There also was no evidence the agency opened a shelter for domestic violence victims, as required under a DHHS grant, according to the audit.

“After spending over $135,000 of the taxpayers’ money, the organization is no longer in existence and cannot supply adequate documentation on how those funds were spent,” Merritt said. “I highly recommend that law enforcement officials investigate whether these funds should be returned to the taxpayers for the public’s use."

In her response to the audit, Wright-Fairley tried to justify as many of the questioned expenditures as possible and said the audit didn't note that she loaned $5,000 of her own money to Hoke County Youth and Family Services and often worked without pay.

"My veracity and integrity is (sic) being questioned, and I am ready to do all to ensure that my name is not tarnished," she wrote. "If I am guilty of anything, it is taking on too much and trusting staff to follow through."