Rural Center to transfer grant money to state

The nonprofit’s board voted Monday to turn over $85 million in grants to the state Department of Commerce, along with $4.3 million of interest income. The department will absorb many of the center’s functions.

The Rural Center uses state and federal money to provide grants to support business and infrastructure development in 85 North Carolina counties, but lawmakers eliminated its funding in this year's state budget after a critical audit and allegations that political connections played a role in awarding some grants.

Auditors charged that the organization doesn't verify that grant recipients use their money for the intended purpose, and they also questioned the high salaries of Rural Center executives.

The board is looking at how to scale down the organization.

“We’ll be working in partnerships with corporations, foundations and others to come up with new ideas and new programs that can have good impacts and good outcomes in rural North Carolina,” said board member Brian Crutchfield, who is chairman of the transition committee.

Board members did not discuss whether it will pay former President Billy Ray Hall's severance package worth $242,000.

An outside consultant is looking at the issue and will make a recommendation to the board at its November meeting.

“We want to do what’s right for the center as well as what’s appropriate for Mr. Hall,” Crutchfield said.