CHAPEL HILL - The head of a now defunct, publicly funded court-diversion program has been investigated after questions about how he spent the program’s money.

Bill Cozart ran Project Turnaround, a town- and county-funded program that helped first-time drug offenders avoid criminal records. He has been the center of an audit by a private accounting company and an investigation by the State Bureau of Investigation into financial mismanagement.

In an interview, Cozart said he misused no money.

“Every penny that was supposed to go to the town from program fees went there,” he said. “Project Turnaround never really received an increase, so I had to be creative to make that program work.”

The SBI began investigating Cozart June 29, 2011, and forwarded its report to Orange-Chatham District Attorney Jim Woodall on January 20, according to the State Attorney General’s office.

“Although the investigation revealed that money was mishandled, it was not clear that there was any criminal wrongdoing,” Woodall said. “I did not believe there would be would be sufficient evidence to prove any wrongdoing.”

Mishandling money isn’t necessarily a crime, he said. One has to prove money was not used for its intended purpose, which can be challenging since the person responsible for the money is often the same person maintaining financial records of it.

“Often times it can be pretty obvious that money was mishandled, but where the money went and what it was used for can be very unclear,” Woodall said. He declined to discuss details of the investigation.

Budget cut

Cozart, 57, who worked for the town for 18 years, retired in May 2011. His departure corresponded with the end of the program in June 2011. The Town Council cut funding for it amid a tight budget for the 2011-12 fiscal year.

Chapel Hill Police Chief Chris Blue oversaw the program, which was run through the Police Department, and supervised Cozart. He said questions about the project’s finances surfaced after Cozart left and the decision was made to cut the program.

“During the course of winding the program down as you normally do, you reconcile books and we had some questions that we couldn’t explain,” he said.

Blue said he decided to hire a private auditor to look into Project Turnaround’s books, and the town agreed to pay up to $1,000 for the audit from Martin Starnes & Associates, based in Hickory.

Blue would not discuss the audit findings but said it left questions that led him to request the SBI investigation.

The Chapel Hill News made repeated requests to see the audit and any records or reports associated with Project Turnaround. The town would not release the audit, citing an ongoing administrative investigation.

The Chapel Hill News also requested a copy of the SBI investigation, but they are not public, even after they’re complete, according to the Attorney General’s Office.

The Town Council funded Project Turnaround for many years, but Mayor Mark Kleinschmidt said he knew nothing about the audit or the SBI investigation. Council members Laurin Easthom and Lee Storrow also said the council had not been informed of any investigations or questions about the program.

Repeated attempts to reach Town Manager Roger Stancil were unsuccessful.

Cozart confirmed that the audit and SBI investigation happened after he had already retired, but said the town didn’t communicate with him about them or give him a chance to defend himself.

He did not deny Woodall’s assertion that money was mismanaged.

“If that’s what they’re saying, I’m not going to contradict anything that they’re saying,” he said.

He said money was only used to enhance program services, but would not discuss what he did with the money.

The town didn’t really support or understand the program and always talked of stripping its funding, Cozart said. He said he had to find ways to keep it going.

“[I] had to look at when people came into the program, ‘how do we generate funds for people to come into the program?’ That’s all I ever tried to do,” he said.

After he retired, Cozart said he was never allowed to go back and check the books and explain what may have happened to the money.

“If I could have gone back in and got all my books and my records and try to explain myself and justify what was happening, I’m thinking one particular book was missing, “ he said. “I did never see it; I was never told about it.”

‘Really painful’

Project Turnaround wasn’t free for offenders. Misdemeanor offenders were charged $325 and felony offenders were charged $425 to participate in the program, which required drug tests and counseling for offenders to get their records expunged, Cozart said. It served about 2,000 people in Orange County during its tenure and 1,000 people in Chatham County, he said.

Cozart received $6,549.46 in a lump-sum annual leave payment, plus $19,648.39 in regular salary through his retirement in May, according to the State Treasurer’s office. During his last full year with the town, in 2010, he earned a $58,362 salary, according to the treasurer’s office.

Cozart was one of two employees working with Project Turnaround, Blue said. The other employee, LaTonia Davis, was still an employee as of 2011, according to the State Treasurer’s Office. She earned $34,658 that year with no overtime. In 2008 she earned $2,032 in overtime. She earned $35,109 that year with the overtime on top of her salary, according to the State Treasurer’s Office.

The investigation into Project Turnaround has been troubling because he was dedicated to making it an effective solution to escalating drug arrests, Cozart said.

“I take my work very seriously, and I took Project Turnaround very seriously. No one would ever tell you I was trying to hide anything,” he said. “What bothers me so much is that people don’t know [and] will assume that I did something wrong.”

He wishes the town would have come to him first with its questions.

“All of this stuff is really painful right now to talk about it because I still don’t understand,” he said. “I just can’t see how after 18 years someone did not just come to me and ask me what they needed to ask me.”