RALEIGH, North Carolina — According to internal documents given by the NCDHHS, a confidential source complained to a federal office about childcare centers before the North Carolina Department of Health and Human Services found major problems with a nonprofit run by the lieutenant governor’s wife.
The NCDHHS that show the emails that the USDA Food and Nutrition Service’s Southeast Regional Office sent and received with the NCDHHS over the summer.
The NCDHHS said in emails that a report about Balanced Nutrition, Inc. was sent to the U.S. Office of the Inspector General’s hotline on June 27. The complaint was about two childcare centers that BNI was supposed to serve.
This morning, NCDHHS stated that they got the complaint the next day. However, the OIG did not make the complaint public and did not say who sent it.
An email from July 31 says that the complaint had “various allegations regarding two centers that were previously under the sponsorship of Balanced Nutrition, Inc. and alleges a lack of monitoring practices by the previous Sponsoring Organization.”
The NCDHHS also said, “Because this complaint is private and the two child care centers were not named, the claims about these specific centers cannot be confirmed.” However, Balanced Nutrition, Inc.’s most recent compliance review found similar issues to those mentioned in the lawsuit at other child care centers that were part of the review.
In their study of Balanced Nutrition Inc., NCDHHS did include a timeline, writing:
Balanced Nutrition, Inc. was added to the next review plan because of how many issues were found in the 2022-2023 compliance review. This has happened before in similar situations. On March 1, 2024, Balanced Nutrition, Inc. was told that they would be the subject of a compliance review for the Federal budget year 2023-2024. The review was set to start on April 15, 2024. Five Family Day Care Homes and five Child Care Centers had unannounced facility checks done before the Sponsoring Organization on-site review for 2024. The part of the Sponsoring Organization’s review that took place on-site was difficult. The required paperwork wasn’t fully available when the review team got to Balanced Nutrition, Inc.’s offices, and it wasn’t available after more requests either. The State agency tried several times by email, phone, and letter to set up an in-person exit conference but got no answer.
The Sponsoring Organization got the Finding Report and Disallowance forms from the State office three times. The first letter, sent on July 24, 2024, was about the facility’s results and reasons for not allowing something. The second letter, sent on July 26, 2024, was about the Sponsoring Organization’s results and what wasn’t allowed. The third letter was a summary of the compliance review and the total disallowance because of what the State office found. People who were disallowed had the right to appeal. The total amount that is due to CACFP is $132,118.86. As this answer was being written, no appeal request(s) had been received.
A Notice of Serious Deficiency was sent out on July 24, 2024, because of the amount and types of findings, including findings that had already been found during the previous compliance review.
The documents that were sent to Balanced Nutrition at the end of July list major problems as well as possible six-figure debts owed to the program.
In the complaint from June, the OIG says that “Balanced Nutrition, Inc. has family members on its Board of Directors that were not disclosed as employees at less than arm’s length.”
A search of the FNS Instruction 796-2 rev 4 by the USDA FNS told NCDHHS in an email, “Over 40 references to arms-length and less-than-arms-length transactions are found.” The mention below is only for “purchased services—other,” but it looks like it applies to other types as well.
During its most recent review of Balanced Nutrition, Inc.’s compliance for the Federal Fiscal Year 2023–2024, NCDHHS found that the company “did not disclose less-than-arms-length transactions, including family members as employees, to the state agency.”
This is what the email said about the less-than-arms-length rules:
If the institution doesn’t tell the State agency about any related party transactions, less-than-arms-length transactions, ownership interests in equipment, supplies, vehicles, and facilities, or any other information that makes it hard for the State agency to make an informed decision about whether a cost is allowable, the cost will be denied, and the State agency and FNS may take administrative or legal action against the institution, its leaders, employees, consultants, or others. If the state agency finds that the institution didn’t intentionally withhold relevant information, the agency may let the institution claim and keep CACFP reimbursement up to the amount that would have been allowed had the institution given full and accurate information. However, the agency cannot let the institution claim unallowable costs, keep Program funds earned as a result of claiming unallowable costs, or use nonprofit food service account funds to pay for unallowable costs.
Based on the taxes that Balanced Nutrition, Inc. reported, the last year for which it did so, it paid $172,796 in salaries to its employees. That money included $23,048 that went to Hill and Robinson’s son Dayson Robinson, who worked part-time for the group.
Hill and Cassaundra Spinks are the other two people who work for the charity. There are no other employees named.
Campaign Response
The Robinson team has mostly said that the investigation into Balanced Nutrition Inc. is just political and not related to Robinson’s campaign for governor. Robinson talked about Anna Stein, the wife of opponent Josh Stein. Anna has worked as a legal specialist for the NCDHHS, but in a different section.
CBS17 got copies of documents in which Hill said the compliance review felt like an attack. He wrote, “As an organization, there are many things that have happened and been documented that make us feel as if we are the target of some kind of vendetta, whether it be personal or political.”
Mike Lonergan, who is in charge of media for Robinson’s campaign, said on July 30 that these results are truly political. He has brought up this remark again and again when asked for comment. “An independent auditor put out a report on Balanced Nutrition, Inc.
(BNI) last year that didn’t find anything important.” But as soon as Mark Robinson said he was running for governor in April 2023, the state office run by Democrats began to change the rules.
Just like they did with President Trump, Democrats are using the government as a political tool against their opponents. It goes without saying that BNI knows about these results, strongly disagrees with them, and is excited to challenge them in court.
Lonergan gave him the report from the independent auditor that he mentioned. The report, which was done by the Florida-based accounting company BAS Partners, came out in January 2023 and talks about the year 2021.
The report doesn’t have any details on the years 2022–2023, which is when NCDHHS made the first findings that led to BNI’s compliance review in 2023–2024.
The audit says, “Findings show fairly, in all important ways, the financial state of Balanced Nutrition, Inc. as of December 31, 2021, along with changes in its net assets and cash flows for the year ended in line with generally accepted accounting principles in the United States of America.”