Company Misspent $6.2 Million in State Funds to Lure Olympic Groups, Audit Finds

The U.S. Performance Center, a company that aims to bring U.S. Olympic organizations to Charlotte, misspent nearly $1 out of every $4 that was appropriated to it by the state legislature, according to a memo from the Office of State Budget and Management.

The company, which was awarded $25 million from the state legislature in 2021 in a no-bid grant, billed state taxpayers at least $6.2 million in unallowable charges, the memo said. 

In addition, the state budget office also said the company charged taxpayers more than $26,000 for personal vehicle expenses, including purchasing a $21,000 vehicle, which are unallowable.

In August, The Assembly reported that the U.S. Performance Center and its sister organization, the nonprofit North Carolina Sports Legacy Foundation, were awarded a combined $55 million “for capital needs” to lure national Olympic governing bodies to the Charlotte region. The leaders of the center hope that eventually, the Queen City and the Carolinas would host the summer Olympics.

At the time, The Assembly reported $10 million had been spent on construction and equipment. The company also spent $10 million on “USPC Consulting Services,” $4.5 million on external consultants, $4 million in services to Olympic organizations, and nearly $3 million on salaries and benefits.

While dozens of Olympic athletes train in Charlotte, no national governing body has relocated there.

The state budget office audit was ongoing at the time of publication. A separate review of the nonprofit foundation is still in process, said Marcia Evans, the communications director for the state budget office. 

The audit of the for-profit company found at least 89 expenses that violated rules that the center agreed to in its contract, due to duplicate billing, missing documentation, purchasing alcoholic beverages, contributions to a political organization, and expenses incurred outside of the budget period. 

Among the expenses that were not allowed: 

• $6.15 million to USPC that the company paid itself for “services.”
• $20,000 to Worthwhile, a Greenville, S.C., technology company, that was double charged.
• $18,710 in interest payments for equipment.
• $15,000 to USPC co-founder David Koerner as an expense and not salary.
• $13,112 for late penalties to the IRS.
• $11,257 to Ecoflow, a portable generator company.
• $10,000 to a charity associated with former NASCAR driver Richard Childress, a longtime campaign contributor to state Republicans. 
• $1,282 as a deposit for a Las Vegas hotel. 
• More than $1,000 spent at restaurants, where receipts may have been missing or included alcohol, such as $240 at Generations Restaurant in Lake Placid, N.Y.; nearly $500 at BrickTop’s in Charlotte; and $160 at Lang Van in Charlotte. 

The audit reviewed about $12.5 million in expenses charged to the grant, so the $6.2 million could be an undercount of misused taxpayer money.

The U.S. Performance Center didn’t immediately respond to a request to comment on the audit. Evans said that the company is cooperating with the state budget office, and could identify other expenses to be applied to the grant in place of the misused money.

Clawing money back wouldn’t happen unless the organization didn’t identify allowable funds, Evans said. “They would have to not work with us to become noncompliant,” she said. “This document is to help them be compliant.”

The Assembly previously asked the U.S. Performance Center for receipts to analyze in detail how consultant expenses, often billed at five or six figures a month, were spent. 

Jonathan Felts, a spokesperson for the center, said in an email at the time that they were not required “to provide a reporter, or anyone outside of the [state budget office], with full access to how our business succeeds.” One consultant, Seneca Jacobs, told The Assembly that he didn’t have to provide invoices to USPC for his $20,000 per month services.  

No significant payments to consultants were included in the “unallowable” expenses noted in the audit.

Felts said then that USPC was confident that the investment of tax dollars would pay off for the state. 

Evans said information from the audit has not been shared with the Office of State Auditor, which has the ability to subpoena bank records. The state auditor’s office cannot confirm or deny any ongoing audits. 

State Auditor Jessica Holmes told The Assembly in the summer that “any entity that would receive, or has received, $55 million would certainly be of interest to the Office of the State Auditor.”

This article was updated to add comments from Marcia Evans and more detail about unallowable expenses.

Ren Larson is a staff reporter at The Assembly. She previously worked for The Texas Tribune and ProPublica’s investigative team, and as a data reporter with The Arizona Republic. She holds a master’s of public policy and an M.A. in international and area studies from the University of California, Berkeley.