The audits have uncovered questionable travel expenses, big bonuses and conflicts of interest and also portray the groups, which were designed to help recruit and foster business in local areas, as cavalier and careless.
One investigation involving the Eastern Region economic-development group, which represents 13 counties in eastern North Carolina, showed, for example, that former Executive Director Tom Greenwood made up his own meal receipts for reimbursement. When asked about discrepancies, Greenwood told auditors: "It's nobody's business."
Rep. Stephen LaRoque, R-Lenoir, said he is not happy with the findings. His district falls in the Eastern Region.
"I was very upset," LaRoque said. "I hold these board members that were there at that time, not the new ones, but those who were there at the time, responsible, and I think they need to resign."
Another audit released in April questioned big bonuses paid to executives of another economic-development group, Northeast Partnership. Former Director Rick Watson was cited for conflict of interest. During a deal to bring an entertainment project to Halifax County, Watson announced he was taking a job with Randy Parton's development group.
Rep. Bill Faison, D-Caswell, said lawmakers need to tighten restrictions on the nonprofits.
"It would appear that there are people out there running state-funded enterprise as if it were their own entrepreneurial event," Faison said.
The audits sting many state lawmakers who dole out millions of dollars to the groups. However, aside from cutting back on the Eastern Region, lawmakers have not yet pushed through tougher standards for the economic development non-profits.
Rep. Bill Daughtridge, R-Nash, said the critical audits could change that.
"There needs to be good oversight so they know that the funds are being spent efficiently," Daughtridge said. "And at the same time, in coordination with the Department of Commerce."
Lawmakers don't believe all seven of the state's economic development partnerships are mismanaged, but after two negative audits, they want a new system of oversight.
Copyright 2022 by Capitol Broadcasting Company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.