North Carolina rural development center discusses its future

August 28, 2013 3:41:52 PM PDT
Big changes are coming to the North Carolina Rural Center, and not by choice.

The embattled non-profit will shrink in size and scope, but will likely continue to help develop businesses in the state's 85 rural counties.

A state audit sparked a fire last month that would fundamentally change the rural center. It called out the non-profit for poor oversight of grant programs and overpaid top management.

In response, the governor froze all state money going to the Rural Center. The chair of the board and president resigned, and a group of board members was tasked with reinventing the center.

Brian Crutchfield heads up the small committee that recommended a series of changes to the full board at a board meeting Wednesday.

"We're looking at a reduced program and a revitalized center, reinvented," Crutchfield said.

The biggest change is that there will be no more grants, which have been the center's staple for 25 years.

"Their vision is that they would not be a grant-making organization, but rather a service and leadership development organization.  The grants making operation will happen through the department of commerce moving forward," said Department of Commerce Secretary Sharon Decker.

Decker said grants already promised will be paid. Several hundred grants worth nearly $90 million are still in the pipeline.

Without grants to offer, the Rural Center will now be more of an advisor that will help small rural companies with loans and business development.

"There is a role for the rural center and they ought to explore that aggressively," Decker said.

Among the questions unanswered is what happens to the nearly $11 million the center received by investing taxpayer money.

"My concern is that those dollars be spent in rural North Carolina," Decker said.

Also, what happens to the $250,000 set aside as a severance package for the center's long-time and now former president Billy Ray Hall?

Board members told ABC11 they have two options, both with potential consequences.

"Paying and having the scrutiny of the IRS or not paying and having a court battle with attorneys for Mr. Hall," Crutchfield said.

Even though the Rural Center's staff will shrink from 47 to 12-15, they plan to stay in their building and could potentially lease some of it out to the state. Some employees at the center will be moving to commerce to manage grants already in the pipeline.

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