State audit finds flaws at technology center

Published 11:51 am Wednesday, November 14, 2007

By Staff
Windows on the World still not meeting state regulations
Staff Writer
An audit has found problems with how state grant funds were spent by Windows on the Worlds in Roper.
The audit concluded that “WOW failed to follow established payroll procedures for certain payments to employees,” according to the office of State Auditor Leslie Merritt.
WOW is a technology center designed to teach computer literacy and open up the world of the Internet to Washington County residents who might otherwise not have the opportunity.
Certain employees of WOW were being paid through a grant from Elizabeth City State University to complete a 21-county broadband Internet study, but no contract with the university could be found by auditors, the report reads. The center billed ECSU $28,000 for the study which was deposited in one of the center’s bank accounts.
Dorenda Gatling, WOW’s chief executive officer, responded that the $28,000 was not a grant, but a fee for services rendered to the university and that the conflict of interest policy did not deal with the performance of duties outside regular working hours. The conflict of interest found in a previous audit conducted in March was “specifically related to … the employment of Yurecia Norman (former internal auditor) who was the third cousin of the then executive director, Larry Norman.”
Gatling said the fee paid WOW by the university was paid to employees as “contractors” to subsidize the comparably low incomes they receive caused by the inconsistent income of the center from grants and other sources.
But, Merritt’s office contends that the monies paid to WOW by ECSU for services rendered do constitute a grant and should not have been used to pay employees above their expected salaries.
The audit also found that “WOW has not implemented all the internal control recommendations” established in the March 2007 grant examination, citing “serious internal control weaknesses in the handling of funds.”
Merritt’s office found 10 instances, in a sample of 77, where no approval of payment was noted on the documentation. There also the continued use of a signature stamp, which he writes “weakens this control and allows for the potential misappropriation of funds.”
The audit also concludes that though WOW’s board of directors changed its policy to allow advanced payment of employees, the center did not address the potential control issue — “the need to account for and reimburse for work as it is performed.”
In response, Gatling wrote that the board of directors has since changed its policy to eliminate the use of signature stamps “altogether” and to “forbid any advance payment of salaries.”