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Thursday, September 12, 2013

State takes over grantmaking from greatly shrunken N.C. Rural Economic Development Center

The North Carolina Rural Economic Development Center has been in the news for all the wrong reasons, with auditors finding in July that funds weren't being used for the purposes intended, and contributions to a retirement fund for then-President Billy Ray Hall were unreasonably high. Hall and board chair Valeria Lee resigned, and the state froze the center's funding, which includes about $90 million in grants left in limbo.

While the center may never fully recover, it will continue to serve the people and communities it was intended to help, Caitlin Bowling reports for the Smoky Mountain News in Waynesville. CeCe Hipps, a board member, told Bowling, “The best news is all the grants that were promised will be paid. Those are in the pipeline to get final approval by the state budget director.”

But "the first full-year budget of the new Rural Center will only amount to about $1.5 million — about $30 million less than it is used to operating with," Bowling writes. "All the state money previously in the center’s budget will now go to the state Department of Commerce, which will take over the grant-making functions of the center with a new rural economic-development division. The center is expecting to then operate on about $1.5 to $2 million a year, a combination of private donations, corporate sponsorships and grants — and as a backup can draw from about $11 million in savings," form interest accrued from unused state appropriations.

The new division "will also hire some of the center’s employees and will use part of the center’s building in Raleigh. Already the center has trimmed its staff. A couple weeks ago, 15 people were handed pink slips," Bowling writes. "The 50-person operation will eventually be whittled down to between 10 and 15 people. The Department of Commerce is expected to hire 15 of the center’s employees by the end of this month to run the grant programs under the rural division." Many of the center's programs will continue, though some that were previously free could now require a fee. "One thing’s for sure, though, the nonprofit won’t be what it was." (Read more)

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