Eastern Region chairman agrees to tighten procedures

(Editor's note: This is the final installment in a series examining this week's release of the state's 2006 audit of North Carolina's Eastern Region conducted by the state auditor's office.)

Although state auditors had numerous recommendations for improving questionable businesses practices at the N.C. Eastern Region, the group's chairman is quick to point out that the review found no evidence of criminal conduct.

Calvin Anderson, chairman of the region's development commission, said in a letter to state Auditor Leslie W. Merritt, "Even so, this present board of commissioners (of the Eastern Region) takes very seriously the Review findings."

The region's former executive director, Tom Greenwood, made trips that resulted in no particular value to the development group, and without the board's apparent prior knowledge, auditors said.

Anderson said the board, which has reduced its membership and reorganized, will oversee all planned and actual expenses, have the treasurer or assistant treasurer review expense reports monthly, include a monthly treasurer's report to the board, formulate a written policy and get pre-approval for "outreach marketing events, seminars or other similar trips representing the Eastern Region" and require a written report afterwards to gauge the event or trip's effectiveness.

A major focus of the audit was Greenwood's reimbursement for expenses without adequate documentation. He admitted to auditors that he even invented some of the expense vouchers he submitted for repayment.

The board already has put into place a more restrictive expense reimbursement policy, Anderson says.

" … the reimbursement only occurs provided that the person seeking reimbursement exercises the same care in incurring expenses that a reasonably prudent person would exercise if traveling on personal business and expending personal funds."

Furthermore, Anderson lists six steps that must be followed before reimbursement occurs, including actual receipts submitted within 30 days. Eastern Region credit card use is being restricted to business purposes only, unlike in the case of Greenwood who is believed to have used the card at times for personal expenses. Auditors admitted, however, that this could not be definitively proved.

Anderson disagrees with the auditors' opinion that the Eastern Region underreported interest earnings, but agreed to get further clarification from the state Department of Commerce Finance Center and the General Assembly Fiscal Research Division.

Anderson also disagrees that business consultant Scott Frederick Enterprises was treated as an employee but hired and paid as a consultant, as the audit states. Anderson agreed, however, to have the region's attorney review service contracts for future consultants, and ask for a pre-determination of worker status from the IRS.