BALLANCE BACKS PROGRAM

Congressman Says Foundation That Lost State Funding Will File Financial Reports

WARRENTON -- U.S. Rep. Frank W. Ballance Jr. reiterated his support
Thursday for a state-funded drug counseling program that failed to file
financial reports with state and federal agencies. Ballance, chairman of
the board of directors for the John A. Hyman Memorial Youth Foundation,
apologized for the foundation's failure to comply with reporting
requirements. He said reports will be filed with the state Monday and with
federal agencies soon.

Ballance said the recent troubles should not detract from the foundation's
accomplishments in treating substance abuse and helping young people avoid
drugs.

"Hundreds of people have been helped by the work of the foundation, and I
am proud to be associated with it," he said.

A news release issued by Ballance's office said the foundation has enrolled
more than 550 clients in the past three years, 314 of them in Warren
County. Another location in Roanoke Rapids treats families, the release
said, adding that the foundation sees an average of 5,000 people annually.

Ballance also expressed support for the foundation's executive director,
the Rev. Eddie W. Lawrence, who is pastor of a church that receives funding
through the foundation. He said Lawrence would remain as foundation director.

Lawrence resigned as executive director of the state Human Relations
Commission in Raleigh on Wednesday after being required to disclose income
from the two outside jobs.

The foundation, which was solely funded by grants from the Department of
Correction, lost state funding after it failed to account for its spending
of $450,000. After receiving no financial statements for the 2001 and 2002
budget years, Correction Controller Paul Gross told the foundation in a
Jan. 7 letter that he would release no more money until he had the statements.

Foundation officials have also admitted failing to file financial reports
to the Internal Revenue Service. Ballance said reporting requirements were
not clear to the foundation staff.

Ballance said Thursday he did not know where the foundation would obtain
money to continue operating. He said the board would not seek state money
until the accounting problems are cleared up.

State Sen. Scott Thomas, a Democrat from New Bern who is chairman of the
justice and public safety subcommittee of Senate Appropriations, said he
will recommend to his panel Monday morning to not continue funding the
organization.

"I just think that any group that receives state funding should comply with
all the filing requirements," Thomas said. "While there remain so many
unanswered questions, I can't support continuing funding."

Thomas added that if complete disclosure yields no problems, he would be
willing to add a supplemental appropriation to the budget later in the session.