The N.C. Commission on Volunteerism and Community Service under the office of Gov. Roy Cooper has agreed to a settlement with the federal government after an investigation alleged falsified timecards and compliance documents for grants from the federal AmeriCorps program.

AmeriCorps is a federal volunteer grant program established in 1993 to connect and fund students who are willing to serve with low-income communities in need. The NCCV is a department in the executive branch run by state employees reporting to the governor and a board of commissioners. It was established in 1994 to promote volunteerism and administer the AmeriCorps program in North Carolina.

“NCCV acted with reckless disregard in making false claims and causing false certifications for employee salaries to administer AmeriCorps programs, failed to maintain certifications, timesheets, and documentation for the separate AmeriCorps work of NCCV employees as required, and failed to maintain proper internal controls, such as allowing one employee to work under two overlapping grant awards and another employee to not provide the required monthly certification for over two years,” the U.S. Attorney’s office of the Eastern District of N.C. wrote in a news release issued Wednesday.

NCCV denies wrongdoing but settled the claim, agreeing to pay $327,500 to the U.S. government. East Carolina University and the University of North Carolina at Chapel Hill were also accused of providing false certifications to AmeriCorps and have agreed to pay $140,000 and $375,000, respectively.

The investigation

The settlement follows an audit by the AmeriCorps inspector general studying the documentation of grant funds paid between 2014 and 2017.  In an investigation report dated March 2019, investigators say they found multiple disparities between the costs reported to AmeriCorps by NCCV and what their ledgers and accounting showed in an audit. Additionally, the investigators, referring to NCCV as “the Commission,” turned up questionable salary allocations.

“We found that the Commission charged the AmeriCorps grant for the salary of an employee performing unrelated duties on another grant, after that grant was exhausted,” investigator Monique Colter, assistant inspector general for audit wrote to Chester Spellman, director of AmeriCorps, state and national, in her report. She was referring to an employee who was paid under a separate grant of the Department of Public Safety but then charged to AmeriCorps when the other grant ran dry.

According to the report, the NCCV administered more than $21 million dollars in AmeriCorps money, awarding subgrants to 14 organizations, including ECU and UNC Chapel Hill. Inspectors say that more than $2 million of that money is improper or unsupported. In addition to questioning employee timecards charged to the AmeriCorps grant, investigators questioned lodging and car rentals, training programs, and nearly $40,000 in stipends for the Governor’s Office Page Program charged to the grant. Pages serve for one-week terms in the summer and primarily perform office duties and tour state buildings.

In addition to NCCV reporting problems, UNC and ECU are alleged in the report to have filed false certifications for service hours worked. The IG report includes approval of hours for work done on holidays and weekends beyond the service site hours. Investigators say excessive hours were reported and approved at the end of the semester, with at least one report claiming 16 hours a day.

“These AmeriCorps programs were meant to support at-risk and low-income youth academically, said AmeriCorps Inspector General Deborah Jeffrey. “Instead, the universities and agency involved here ran them in a way that allowed participants to falsify their timesheets, and robbed North Carolina communities of the assistance they were supposed to receive.”

How did it happen?

Among the reasons the AmeriCorps inspector general cited for the alleged misuse of federal funds was that in 2016 after defeating then-Gov. Pat McCrory, Cooper gutted the NCCV and replaced all staff, except two lower-level AmeriCorps administrators, with his own hires.

“The practice of replacing nearly the entire staff following an election created conditions under which mistakes were likely and subgrantee monitoring was likely to suffer,” the IG report stated. “We note that the current staff has made progress in addressing these issues and correcting the deficiencies.”

However, the report cited staff timecard reporting problems within the governor’s office, saying “employees completed a generic, undated certification stating that the employees spent a certain percentage of their time supporting ‘the efforts and initiatives of the N.C. Commission on Volunteerism and Community Service,'” rather than properly documenting how that governor’s office staff member spent their time on federal or non-federal activities.

In the grants awarded by NCCV to UNC Chapel Hill the report questioned, among other points, more than $35,000 awarded to the UNC-CH Literacy Corps between 2015 and 2017 for 12 suspicious instances. The Literacy Corps is supposed to provide literacy tutoring to adults, children, and new English speakers, but in some cases, student hours were allegedly over-reported, approved, and a grant was awarded. Similar issues were allegedly happening at ECU. The IG questioned, among other things, the distribution of almost $10,000 in grants to nine students who reported hours that had not been served, but their time was approved. When the inspectors deducted those reported student work hours, they failed to meet the grant requirements.

“Universities, state agencies, and all those seeking federal funds are required to make honest claims for payment,” said acting U.S. Attorney Norman Acker. “Those who do not will be held accountable. Our office will zealously pursue damages and civil penalties where warranted … cooperation was a key factor in determining an appropriate resolution in this case.”

According to his LinkedIn profile, Acker attended UNC Chapel Hill, earning his undergraduate degree and law degree there.

The schools and N.C. Commission on Volunteerism and Community Service denies wrongdoing. The NCCV reportedly provided the inspectors with its internal audit process and disagreed with some findings. The agency told investigators that it did conduct site visits, but that Hurricane Florence damage in 2016 prevented some visits and oversight.