A state worker criticized for incurring tens of thousands of dollars in taxpayer-funded travel will leave her job at the end of June, according to the director of the controversial military-aid program that employs her.

As Carolina Journal reported in 2009, Susan Kerner-Hoeg, director of military relations for the Citizen-Soldier Support Program, racked up $76,558 in travel reimbursements during the last three years. She is CSSP’s second-highest-paid employee at $129,600 annually.

The program, housed under the Odum Institute for Research in Social Science at the University of North Carolina at Chapel Hill, is meant to assist combat veterans returning from Iraq and Afghanistan. The initiative is funded by a $10 million federal defense appropriation, half of which U.S. Rep. David Price, D-4th District, obtained with an earmark.

An internal university review released last year, however, condemned the program for having an “ambitious and ill-defined” mission, misappropriating funds to irrelevant activities, and potentially overpaying its employees. That led to cutbacks and layoffs.

Kerner-Hoeg’s role was part of the overhaul. Previously, she had worked from her home near Washington, D.C., and commuted to Chapel Hill several times a month, submitting reimbursements for airfare, car rentals, and hotels. Her travel was curtailed beginning late last year.

Kerner-Hoeg’s departure at the end of the fiscal year June 30 will help CSSP shore up its budget, said Bob Goodale, a retired grocery store executive who now serves as the program’s director. They won’t seek a replacement, he said.

“She’s been a real asset,” said Goodale, who also served in the Hunt administration. “I’ll miss her in terms of connecting with resources up [in Washington].”

CSSP had $2.2 million on hand at the end of March. It received a no-cost program extension through the end of the current calendar year, and Goodale said he’ll request another for 2011. Meanwhile, he’s looking for new sources of public and private funding.

“We are really working to get other funding,” Goodale said, “and I think the prospects are very good for that to happen.”

Last fall, the program shed three employees but kept its highest earners — Goodale ($130,000 per year), Kerner-Hoeg, and deputy director William Abb ($120,000 per year) — on staff. That means half of its six full-time employees take home six figures.

Peter Leousis, deputy director for the Odum Institute, was CSSP’s director for two years before Goodale replaced him. Leousis still serves as principal investigator for the program and earns almost six figures.

High salaries were one of a laundry list of criticisms in the UNC-Chapel Hill review. In one case, “a staff member was paid approximately twice what other UNC employees would typically receive for similar work, and several other cases in which salaries were substantially higher than those for comparable employees on campus,” officials wrote.

The review also questioned pricey payments to contractors. CJ revealed that CSSP paid $150 an hour to Kansas-based consultant Kent Peterson “for strategic thinking and action” that included “developing and disseminating” the program’s bimonthly newsletter. Payments amounted to hundreds of thousands of dollars.

During that time, Peterson was considered director of community relations. Officials called his management role “not appropriate” given his out-of-state status.

Until recently, CSSP rented offices on the second floor of a minimall in downtown Carrboro, located southeast of Chapel Hill. Goodale said the program has now moved to the Odum Institute’s location at Manning Hall on the UNC-Chapel Hill campus and isn’t paying rent.

In response to the university’s findings, CSSP in November began phasing out its “community partnership” component and channeling resources to its behavioral health initiative, designed to connect veterans and their families with mental health services.

The program launched a provider database in February and has been expanding online training efforts.

“The focus is training civilian providers, both face to face and online,” Goodale said.

David N. Bass is an associate editor of Carolina Journal.