Students lose in alleged money-skimming scheme at NCCU | Durham County | Indy Week
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"If they had been really dedicated to finding good mentors for these boys, this program really could have gone far." Plus: a look at the numbers and people in the audit

Students lose in alleged money-skimming scheme at NCCU 

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The audit

State Auditor Beth Wood's office released a 60-page report on the N.C. Central University Historically Minority Colleges and Universities Consortium (HMCUC) on June 28. The consortium operated from 1999 to 2010 and received more than $3.5 million in state money before state lawmakers discontinued it.

NCCU Chancellor Charlie Nelms commissioned the audit in 2008 after he received complaints about consortium-related programs. The audit says:

Nan Coleman, former director of the consortium, diverted more than $1 million in program revenue to a private bank account between 2004 and 2009. From those funds, she took more than $287,000 for personal use.

Former NCCU provost Beverly Washington Jones received almost $62,000 from the bank account. She told investigators she didn't recall providing services for those payments.

Two administrative assistants, Barbara Fields and Vermal White, received at least $15,000 in improper salary advances and loans.

An unnamed contractor received payments for accounting services she wasn't qualified to perform and received payments even after Coleman was fired.

The consortium kept insufficient records; was improperly established as a center or institute; improperly used the nonprofit NCCU Foundation for accounts related to a for-profit tutoring program; had employees without contracts or agreed-upon salaries; failed to prepare and submit required tax documents to its employees or state and federal departments of revenue; and lacked proper oversight.

In a response to the audit, Nelms wrote that the university would implement all recommended changes to ensure these types of failures do not occur again. "Personally and professionally, I am disappointed and dismayed regarding the alleged behavior of a few to the detriment of the university as a whole," Nelms said in a June 28 statement. "However, I am confident that North Carolina Central University will emerge from this situation stronger and even more committed to excellence." Nelms declined an interview with the Indy to further discuss the matter.

Correction (July 13, 2011): In print, the word "million" was omitted from "$3.5 million in state money."


The numbers

An investigative report released by State Auditor Beth Wood last week alleges the former executive director of a statewide program housed at N.C. Central University, Nan Coleman, diverted more than $1 million in program funds to a private account and used more than $287,000 for her own purposes. The report also indicates that former NCCU provost Beverly Washington Jones said she provided no services but received almost $62,000 from the account. The 60-page analysis has been turned over to state and federal authorities. Coleman and Jones could face criminal charges and be forced to repay the money if prosecuted. Jones retired in early 2009 and Coleman was fired later that year for poor performance.

Payments Nan Coleman allegedly made to herself and family, 2004–2009
Check card purchases $67,362.37
Checks payable to Coleman's company $62,000.00
Checks payable to Nan Coleman $60,770.00
ATM withdrawals $46,643.50
Checks written for credit card payments $34,595.41
Wire transfers $8,345.00
Checks payable to "cash" endorsed by Nan Coleman $7,500.00
Checks payable to Coleman's husband $500.00
TOTAL $287,716.28
   
Payments to Beverly Washington Jones
Checks payable to Jones' company $37,700.00
Checks payable to "cash" and endorsed by Jones $13,000.00
Checks payable to Jones $11,259.00
TOTAL $61,959.00

Sources: NCCU; Report, Office of State Auditor


The players

The four employees indicated in the audit no longer work for NCCU.

Coleman, 68, worked for Durham Public Schools for 26 years until 1999 as vocational director. NCCU then hired her to work for the consortium before she was fired in 2009 for reasons unrelated to the issues raised in the audit, NCCU officials said. Coleman and her attorney, Rhonda Young, declined to be interviewed for this story. According to records with the N.C. Secretary of State, Coleman owns Youth Educational Services, a company she incorporated in 2008. In 2010, the office notified Coleman that the company's annual report was overdue. Records do not reflect that the report has been submitted.

Jones, 63, rose from a faculty member in 1974 to various leadership roles at NCCU, becoming provost in 2005. Jones was asked to step down as provost in 2008 for reasons unrelated to the issues raised in the audit, then took a six-month paid leave before retiring in 2009. Jones graduated from Hillside High School in 1966 and served on Durham's school board from 1992 to 1998. She has published numerous books and articles, including writings about growing up in Durham. Her parents both worked for the Liggett & Myers Tobacco Company.

Attorney James D. "Butch" Williams, who represents Jones, declined the Indy's request for an interview for this story, but said, "Before people rush to judgment or criticize, you need to look at her record of service over the last 40 years to the university, and you'll see [the accusations are] a contradiction to everything she has done for the university. We're digging through records now. We'll be able to produce records to show that she hasn't received anything under false pretenses."

According to the N.C. Department of Public Instruction, Jones is the contact for an education company, Academic Enrichment Services and Systems, based in Durham. The company is an approved provider of tutoring services under a federal educational program. Durham Public Schools says that it paid Jones' company $29,534 for services for 99 students in the 2010–11 school year.


Interns Rebecca Collins and Jason Y. Lee contributed to this report.

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