Car rental costly to state

Audit says $32,000 could have been saved by assigning a car to an education official

A state auditor's report released Tuesday found that North Carolina could have saved more than $32,000 if it had assigned a state car to Howard Lee, the chairman of the State Board of Education, instead of allowing him to rent one for more than $1,500 a month for the past three years.

The investigative report also found that the state Department of Public Instruction improperly reimbursed Lee $9,500 for meals he billed the state. The report said Lee continued to bill the department for meals after he was appointed to the state Utilities Commission, when he was no longer eligible for state-paid meals.

DPI officials told auditors they continued to reimburse Lee because they did not realize that his position on the Utilities Commission was a state job.

Lee was in a commission hearing Tuesday and could not be reached for comment on the report. He said in a statement from the DPI that he stopped renting the car in September.

Lee, a Democrat and a former state senator from Chapel Hill, was appointed to the state education board by Gov. Mike Easley in May 2003. Board members are not paid a salary but are eligible for mileage reimbursement and other travel expenses.

Two years later, Lee was appointed to the Utilities Commission, where he makes $119,900 a year.

In a written response to the audit report, Public Instruction officials said the State Budget Office agreed to let Lee rent a Chrysler 300 after they determined he was not eligible for a state car.

They also said they decided against letting him lease a car because it would have locked the department into a long-term contract. They now concede that because Lee used the car for three years, they could have saved more than $26,000 if they had leased it.

The officials said Lee has reimbursed them $2,300 for meals. They said the lower amount reflects about $7,700 in meal expenses he was owed before his appointment to the Utilities Commission.

The report also said most of Lee's mileage on state business came from his 40-mile commute from home to work and "short trips around the Raleigh area." The auditors recommended that the DPI obtain a state car that it can give to Lee when he is conducting board business.

Public Instruction officials said in the statement that a lawyer with the Department of Administration advised them that Lee could not be assigned a state car because he is not a DPI employee. If he were to get into a wreck, Public Instruction officials said, state insurance would not cover it.

Chris Mears, a spokesman for the auditor's office, said the report sprang from a tip to the office's hot line more than a year ago. He said the tip came about the time that The Insider, a McClatchy-owned state government news service, had reported the rental car spending. The McClatchy Co. also publishes The News & Observer.