By Dan Kane, Staff Writer

The Eastern Region partnership, a public economic development agency based in Kinston, spent money on questionable expenses and kept sloppy books, according to a report by State Auditor Les Merritt.

The 71-page audit of North Carolina's Eastern Region partnership questions more than $15,500 spent on a house rental, food and tickets for last year's U.S. Open in Pinehurst; roughly $2,350 the executive director spent on a trip to Ireland; and $531 spent on travel to New Orleans during Mardi Gras. The partnership said the tournament expenses and trips were business related, but auditors found little business conducted.

The audit also said the executive director received reimbursement for expenses without adequate supporting documentation and its business development consultant was paid more than $1,000 twice for the same expenses. The partnership also did not account for interest it earned on its original state appropriation of $7.5 million, which it then used for economic development loans. The audit said that as a result, the state's six other economic development partnerships missed out on nearly $1.4 million in interest accrued.

Calvin Anderson, chairman of the regional economic development commission that oversees the partnership, said the commission has tightened oversight of expenditures. He said the $1,000 overpayment has been reimbursed. He disputed the auditor's claim that the partnership did not disburse interest earnings as the law required.

The partnership was created by the General Assembly in 1993 and promotes economic development for a 13-county region from Nash to Carteret counties.

This is the second troublesome audit for the regional partnerships. In April, an audit of North Carolina's Northeast Partnership found little accountability for hundreds of thousands of dollars in state money spent on consultant contracts, bonuses and staff pay. That audit has led to an overhaul of the partnership and the regional economic development commission that oversees it.