An audit of the Southeastern Economic Development Corp., released this morning, finds that the agency spent $20,787 last year on food for employees, an expenditure the auditors called “inappropriate for organizations like SEDC which is primarily funded with public monies.”

The audit also identified other “questionable expenditures,” including $3,000 the agency spent at the Catfish Club, a community discussion forum. The Catfish Club was founded by the Rev. George Walker Smith, father of ousted SEDC President Carolyn Y. Smith.

The audit states:

“The SEDC President has a direct family relationship to the Club founder that appears to be a conflict of interest.”

And the audit questions $156,680 that SEDC spent on a 25th anniversary party in August 2006. That expenditure received no approval from the agency’s board of directors and was not listed in SEDC’s budget, the audit states.

From the audit:

Instead, SEDC funded the event through using available funds from its non-personnel budget and by transferring funds available between line items. For example, a memo to the SEDC President that was prepared by SEDC’s Director of Finance stated he was able to find funding of $30,000 in various accounts and had moved it to postage in an effort to secure funding for the party.


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