The executive director of the Wilkes Community Partnership for Children (Wilkes Smart Start) resigned Tuesday after being placed on unpaid leave starting March 26.
The Wilkes Partnership board’s executive committee voted to put Laura Welborn on leave for a month without pay, followed by a year of probation with pay, after N.C. Partnership for Children (NCPC) officials monitored the local organization’s records for the eight months ending Feb. 29 and the 12 months ending June 30, 2011.
Monitoring was conducted at the Wilkes Partnership’s offices Feb. 28 to March 2.
A statement with a March 28 report on the monitoring, signed by N.C. Partnership for Children President Stephanie Fanjul, said seven issues were identified.
One issue was that Mrs. Welborn signed Wilkes Partnership board members’ names on two checks (for $64.38 and $168.30), a notarized state grant certification of no overdue tax debts form and other documents without their knowledge or permission. One of the checks was to Mrs. Welborn.
Mrs. Welborn said in an interview Thursday that the checks are supposed to have two confirmed signatures, but the two in question both only had one. “NCPC cannot determine the extent to which this has happened in the past,” Ms. Fanjul said in the statement.
The other six issues included noncompliance with partnership bylaws, inadequate physical security, noncompliance with a Smart Start contract, questionable accounting and financial reporting, board operations and other internal control issues. Ms. Fanjul said the Wilkes Partnership executive committee’s response to these issues, except for signing checks and other documents with board members’ names, was due by April 19.
Mrs. Welborn said she and the Wilkes Partnership’s executive committee mutually agreed on her resignation. She said stress from the job is adversely impacting her health.
Mrs. Welborn said budget cuts, including a 26.8 percent reduction in administrative funds last year, while working with the Wilkes Partnership’s 12 programs, left her able to spend only about 40 percent of her time on administrative duties. She said no fraud occurred.
“I have had 18 years of clean audits” since co-founding Wilkes Smart Start 18 years ago, said Mrs. Welborn.
Wilkes Partnership Board Chairman Viva Aldrich said Mrs. Welborn’s annual salary was $56,614. Mrs. Aldrich said an attorney has been contacted for advice on anything else the local board can publicly say about the matter.
Tracy Zimmerman, media spokesman for NCPC, said the monitoring resulted from a Wilkes Partnership staff person raising concern about certain financial matters.
The local executive committee appointed Britt Johnston, the Wilkes Partnership’s literacy outreach coordinator, as interim executive director after it put Mrs. Welborn on unpaid leave.
A Wilkes partnership executive committee member, who didn’t want to be identified, said the executive committee and the local agency’s staff are working together to address issues raised in the monitoring report and that a full written response would be provided to state partnership officials no later than April 19.
“Wilkes Smart Start’s programs remain intact and its services to children and families will continue uninterrupted. The partnership remains capable of meeting its financial obligations,” said the executive committee member. “The staff and board of directors remain fully committed to the goal of ensuring that all young children in Wilkes County enter school healthy and ready to succeed.”
Wilkes Smart Start has an annual budget of $1.21 million.
“It is evident that there is a pervasive and unacceptable lack of accountability at the (Wilkes) Partnership that has resulted in fiscal mismanagement and a breakdown in the control environment. Both of these conditions present serious problems for the internal control system,” said Ms. Fanjul.
Ms. Fanjul said it was also evident that working conditions at the Wilkes Partnership were tense and general employee morale was low.
“While we are concerned about the pervasive lack of accountability across almost all facets of the partnership and poor employee morale, we are extremely concerned by the ethical lapses of the executive director (Mrs. Welborn) as detailed in the monitoring report,” she said. “Smart Start funds are state funds, and ethical lapses by executive directors constitute unacceptable behavior.”
Ms. Fanjul said a month of unpaid leave and a year of probation is “inadequate under the circumstances and do not meet our expectations.”
She asked the executive committee to let the state partnership know by April 11 if different actions would be taken. “We will then determine the necessity of taking this issue to NCPC’s Executive Committee for considering of placing sanctions on the (Wilkes) Partnership.”
Ms. Fanjul said NCPC had authority to suspend all state funding of a local Smart Start agency until accountability is demonstrated and integrity defects are corrected. NCPC also has authority to assume all management of a local Smart Start’s programs, said Ms. Fanjul.
She said NCPC must provide a copy of the monitoring report to the N.C. Office of State Auditor (OSA). “Given the seriousness of the issues, there is a potential that the OSA will want to perform an investigative audit of the (Wilkes) Partnership and/or refer the issue to other authorities.”
The report also said there was no documentation on file to substantiate that minutes were kept for a closed session during the board’s November 2011 meeting and that the executive committee made and adopted a motion to enter into closed session at its September and October 2011 executive committee meetings. Other problems with the minutes were cited.
The report said a board member voted on an issue for which there was a real or perceived conflict of interest on one occasion.
The report said that not all Wilkes Partnership purchases using Smart Start funds complied with “Smart Start Cost Principles.” It said the local partnership must immediately reclassify the current fiscal year’s expenditures of $3,262 to a source of funds other than Smart Start.
The report said the local partnership should develop and implement procedures for periodically reviewing its general ledger to ensure accurate coding and consistency with the required Smart Start chart of accounts.
The report recommended that the Wilkes Partnership board:
• consult with an attorney to determine any potential liabilities for the partnership and board members due to actions of Mrs. Welborn and review the partnership’s liability insurance coverage;
• change locks on all doors, provide staff with keys to the building, stop leaving a key outside; and make sure all doors and windows are secure;
• reclassify current fiscal year’s expenditures of $3,262.24 to a source of funds other than Smart Start, with help from an NCPC financial consultant for assistance if needed;
• make sure grant award amounts don’t exceed amounts to be awarded as stipulated in grant agreements;
• develop and implement procedures for periodically reviewing the general ledger to ensure accurate coding and consistency with the required Smart Start chart of accounts.
The Wilkes Partnership’s website said the organization’s board members, in addition to Mrs. Aldrich, are Jennifer Murray, past chairman; Kendra Jackson, vice chairman; Jim Faw, treasurer; Gretchen Barelski, secretary; Tim Murphy; Kevin Laplante; April Brinegar; Gary D. Blevins; Amanda McMillan; Bill Sebastian; Judy West; Wanda Hutchinson; Ann Absher; John Yates; Dr. Gordon Burns; Debbie Ferguson; Tony Marin; Brenda Roten; Anita Oliver; Dr. Julie Koch; Norma Walter; Crystal Dillard; Michael Brinegar; Christy Pruess; Larry Poole; and Amie Rose. Murphy, Laplante, Ms. Brinegar and Blevins are listed as being on the executive committee.