Raleigh cuts ties to business incubator after critical audit

The city opened the Business and Technology Center downtown in 2000 to serve as a business incubator, providing inexpensive office space, networking opportunities and other support to start-up companies. Raleigh has provided the center with annual appropriations of $162,000 in recent years to help finance its operations.

Auditors found some questionable spending by center officials, including $940 paid to Executive Director Robert Robinson and $18,720 paid to a trust account that had no supporting documentation. Also, about $25,000 in cashier's checks cannot be accounted for, according to the audit.

The audit also questioned transactions between the Business and Technology Center and various board members. Some board members loaned the center money, and the center loaned $13,000 to a church where a board member serves as pastor and $290,000 to a group founded by Robinson.

"There are a number of issues that relate to records that aren't complete," Interim City Manager Perry James said. "The police department is really going to have to get into the details and review what the trail of the money and the funds is to really determine what the final status is."

"Probably we could have had stronger oversight, but you probably need to understand the personality of the person who was here," Wray said, referring to Robinson.

City officials have turned the audits findings over to Raleigh police and the Wake County District Attorney's Office for possible criminal prosecution, McFarlane said.

Other problems noted in the audit include the center's loss of its tax-exempt status for failure to file IRS paperwork and the tardy submission of audited financial statements.

The Business and Technology Center has been ordered to vacate its offices at the intersection of Wilmington Street and Martin Luther King Jr. Boulevard by the end of the month. McFarlane said city officials would review how to provide business incubator services in the future.