NCInnovation Audit Committee Delays IRS Filing Amid Compliance Concerns
Raleigh, NC — The audit committee of NCInnovation, a state-funded nonprofit under scrutiny for its financial practices, has postponed the approval of its IRS Form 990 following concerning compliance issues uncovered during a recent review. The committee, in a lengthy meeting attended by external auditors from BDO, examined the draft of the FY2023 tax return, revealing significant documentation and disclosure gaps.
NCInnovation reported a substantial revenue surge, jumping from $10 million to $259 million due to increased state appropriations and endowment funds. However, committee members voiced serious concerns over the accuracy of this financial documentation. Particularly alarming was the draft’s assertion that there had been no changes to the nonprofit’s governance documents—a claim refuted by board member Art Pope, who stressed the necessity of acknowledging recent amendments made to the bylaws and articles of incorporation.
Further issues regarding the documentation of executive committee actions were raised, including the award of a bonus to CEO Bennett Waters, which had not been promptly reported to the full board, potentially undermining internal governance policies and IRS standards.
The committee also scrutinized NCInnovation’s lobbying expenditures, which exceeded $460,000. Members questioned the adequacy of recordkeeping related to these expenditures, stressing the need for real-time documentation.
Frustrations were voiced regarding previous returns, particularly concerning amended Form 990 compliance. The board committed to revisiting the FY2023 tax return and engaging an independent firm for thorough scrutiny.
With a September 15 deadline imminent for final submission, NCInnovation faces increased pressure amid legislative inquiries into its fiscal management. Lawmakers have previously sought to reclaim $500 million in taxpayer funding, underscoring the heightened risk associated with the nonprofit’s financial oversight.
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