Two former Wilkes Transportation Authority executive directors have been charged with embezzling a combined $131,344 from the public transit in the form of unauthorized medical supplements, salary and merit pay.
Arrested Monday were Robin Craven Kipp, 55, of Speedway Road, North Wilkesboro, and Michael Keith Norwood, 41, of Country Lane, Millers Creek. They had first appearances in Wilkes District Court Wednesday. Kipp and Norwood were released from the Wilkes County Jail under secured bonds of $30,000 and $25,000 respectively.
They’re charged with one count each of felony conspiracy for conspiring with each other to embezzle funds from WTA between July 1, 2014, and May 16, 2017.
Kipp is also charged with seven counts of embezzlement by a public official and three counts of obtaining property by false pretense for offenses that occurred between July 1, 2014, and June 30, 2018. She was WTA finance manager in the first half of this four-year period and executive director the second half.
Kipp is charged with embezzling a little over $86,800 from WTA: $53,927 in unapproved salary, almost $28,000 in unapproved office merit pay (including $25,325 “to other WTA employees”) and almost $5,000 in “excess medical supplements.”
Warrants charging Kipp with three counts of obtaining property by false pretense accuse her of using a WTA credit card to purchase “personal items” (Doterra essential oil products), personal insurance for Plunder jewelry for $105.88 and auto and other personal insurance for $708.42.
Norwood is also charged with six counts of embezzlement by a public official for offenses that occurred between July 1, 2013, and June 30, 2017. Norwood became WTA executive director in early February 2013, after working eight years as finance officer for AppalCART, the public transit in Watauga County.
Norwood is charged with embezzling a little over $44,500, including almost $28,000 in unapproved office merit pay (including $25,800 “to other WTA employees”), a little over $7,700 in unapproved salary and about $830 in “medical supplement funds.”
Norwood resigned as executive director at the May 16, 2017, meeting after the WTA board approved a motion to fire him if he didn’t resign as asked. Minutes said the WTA board agreed to waive repayment of a personal loan WTA made to Norwood before he resigned in exchange for him not speaking about WTA. Minutes said Norwood agreed to this.
Norwood was hired as a social worker at the Wilkes Department of Social Services soon after he resigned as WTA director. Wilkes DSS Director John Blevins said Tuesday that Norwood has been suspended with pay pending a review of his employment status.
The WTA board appointed Kipp interim executive director at the same meeting Norwood resigned, and then voted to promote her to executive director on Sept. 19, 2017. At the July 31, 2018, WTA board meeting, Kipp resigned from WTA after board members said they had no faith in her plans for improving the public transit’s finances.
Angie Gentry, WTA finance director, and Steven Church, WTA safety director, served as co-interim WTA directors for a couple of months during the search for a new director.
In early October 2018, the Wilkes County commissioners named themselves the WTA board in place of nine members they appointed in early 2018 by approving amendments to a 2004 county ordinance converting WTA from a private, nonprofit to a public agency. Some of the nine named to the board in early 2018 were already serving in that capacity, but hadn’t been appointed in accordance with WTA policy.
Prior to the commissioners becoming the WTA board, the board included people representing human service agencies that use WTA services, the Wilkesboro and North Wilkesboro town managers and representatives of county government.
Acting as the WTA board, the commissioners named Gary Page, former Wilkes County manager, the interim WTA director in October 2018.
In December 2018, they approved a contract with certified public accountant R. Lawrence Young of Raleigh authorizing a forensic audit. This is often done to provide evidence for prosecuting financial malfeasance. Page said results would be shared with the office of District Attorney Tom Horner to help determine if further legal action was needed. He estimated the audit’s cost at $20,000.
The WTA board (commissioners) approved promoting Michael Johnson from trip scheduling to WTA director, effective March 25. In his two-plus years at WTA, Johnson had been morning trip dispatcher, a driver and held other positions.
Results of the forensic audit were shared with Horner’s office later this year and Horner notified the Wilkes Journal-Patriot about the charges filed against Kipp and Norwood. State Bureau of Investigation Agent L.D. Hagaman III is the complainant in warrants charging them.
WTA’s mounting requests for financial help from county government, starting in 2017, made the commissioners increasingly aware that something was awry. Prior to 2017, the county hadn’t appropriated any funds to WTA since $40,500 in fiscal 2009-10 and $50,000 the prior year. At one point last year, WTA officials had to choose between paying the fuel bill for WTA vehicles or payroll taxes due to a lack of revenue.
A Whiteville CPA firm hired by the county to review WTA finances reported finding that WTA directors made cash advances to themselves and that a WTA credit card was used improperly, including for a home insurance payment. The CPA reported finding that two WTA directors were paid more than their approved salaries and said he was told one never worked more than 25 hours a week.
Florida-based Transpro Consulting LLC, hired by the N.C. Department of Transportation to review WTA finances in 2017, cited personal loans of WTA funds to Norwood and Kipp and Christmas bonuses to employees. The Whiteville CPA said both aren’t allowed.
Changes were made under Page and later under Cecil Wood, another former Wilkes County manager, to improve WTA’s profitability.
This includes cutting administrative staff from eight to six, reducing driver overtime pay by hiring more drivers, using a better method of applying for Medicaid reimbursements, recouping sales tax refunds from the state, making WE Shuttle trips on established routes in the Wilkesboros on three weekdays instead of five and raising rates for WE Shuttle and “demand response” trips. Johnson recently made route changes to improve efficiency.