Charlotte sports company improperly spent $6 million in state dollars, audit says. How?
A state agency audit has found more than $6 million in “unallowable” spending by a Charlotte-based company that received $25 million from state lawmakers to attract high-level development of Olympic sports.
The six-page audit released Tuesday found that the U.S. Performance Center spent some of the $6.2 million on alcoholic beverages, fines on payroll back taxes and a donation to a nonprofit political organization.
Duplicate payments, payments without adequate documentation and spending outside of the approved budget period were also identified in the $6.2 million spent, the audit says.
“Items identified for the reasons above, are a misuse of State grant funds and do not comply with the terms of the contact between OSBM and the Grantee,” says the internal audit from the Office of State Budget and Management.
The budget office is disallowing the $6.2 million in submitted expenditures, Evans said. But the center could keep the state money if it identifies allowable expenditures and applies the dollars to them, Evans said.
Other findings in the report include more than $26,000 in unallowable expenses on personal vehicles, 21 transactions totaling $36,000 that had been bundled into one, and a lack of documentation supporting an unidentified number of expenses.
The audit reviewed a sampling of the center’s expenditures, said Marcia Evans, a budget office spokeswoman.
The audit also found an issue with the reporting system set up by the state budget office. One of the reporting categories should have provide more options to allow the center to better explain its spending. That has been corrected, Evans said.
A spokesman for the center could not be immediately reached.
Targeted funding from legislators
State lawmakers in 2021 gave the company $25 million for “capital needs,” but provided little detail as to what qualified. The state budget office has oversight of the spending.
A similar internal audit is underway on the N.C. Sports Legacy Foundation, an affiliated nonprofit that received $30 million from state lawmakers last year.
The News & Observer in August reported that the U.S. Performance Center’s expenses showed $67,000 spent on hotels, including $1,300 to a Ritz Carlton; $55,000 to pay vehicle loans; and another $34,000 for meals and entertainment. The center also reported to the state more than $13,000 used to pay late taxes and penalties to the Internal Revenue Service.
Much of the center and the legacy foundation’s funding has provided grants to governing bodies of Olympic sports such as judo, taekwondo and field hockey. The center, which is located at UNC-Charlotte, is also building a $6 million bobsled training facility there.
One of the recipients of the center’s funding is Marion Warren, a former director of the state Administrative Office of the Courts who is now the legislative liaison for UNC-Wilmington. He and his consulting firm received $410,000, according to expenses the center submitted to the state budget office.
He has been named in federal subpoenas requesting records linked to state lawmakers’ spending on a domestic violence prevention nonprofit and on dredging and affordable housing projects in Dare County.
The audit does not mention Warren or his firm.
The state budget office sought an internal audit because of the volume of the center’s expenses and a lack of detail.
This story was originally published November 19, 2024 at 2:06 PM.