Nancy Vaughan, DGI and $142,598.28
$107,401.72 - $250,000 = $142,598.28; What happened to the money?
On the nights of May 30 and 31, 2020, Greensboro experienced widespread civil unrest amid nationwide protests following the killing of George Floyd in Minneapolis. What began as peaceful demonstrations in the city’s downtown quickly escalated into clashes, vandalism, and looting after dark. Numerous storefronts were smashed, windows shattered, and properties defaced, with some businesses reporting significant interior damage and theft. The disturbances left a visible trail of destruction along key commercial corridors, prompting both immediate cleanup efforts and longer-term recovery initiatives to restore the area.
The City of Greensboro’s $250,000 Rebuilding Downtown Greensboro Grant Program, authorized by City Council on June 16, 2020 to reimburse businesses for property damage from the May 30–31 civil unrest, was administered through a contract with Downtown Greensboro, Inc. (DGI). Mayor Nancy Vaughan attended DGI’s September 24, 2020, board meeting, during which the minutes note:
February 25, 2021’s DGI board meeting, also attended by Vaughan, said the leftover money from the Strong program would be given be given back to the City of Greensboro;
Another DGI board meeting minutes said the $143,000 was still on the balance sheet;
At the same meeting, Zack Matheny talked about keeping downtown outdoor patios in front of restaurants put up during Covid permanently;
On September 20, 2021, DGI board meeting minutes said patio dining is on a City Council agenda, and Mayor Nancy Vaughan sought lobbying of other Council members on the issue;
On January 24, 2022, DGI board meeting minutes, stating Nancy Vaughan was in attendance, said the $143K “is available for "additional public purpose programming";
On July 18, 2022, Greensboro’s Internal Audit Division completed a review of the $250,000 grant;
Which said $107,401.72 was disbursed;
$250,000 - $107,401.72 = $142,598.28
On July 19, 2022, the next day, City Council approved $142,600 for permanent outside patios for Downtown Greensboro;
DGI gave the money back before the vote, and received the money back on 6/15/2023;
"From: Joy Ross <Joy@downtowngreensboro.org>
Sent: Monday, July 21, 2025 1:48:50 PM
To: Vaughan, Nancy (Mayor) <Nancy.Vaughan@greensboro-nc.gov>
Subject: Fund information
Hi Mayor Vaughan
DGI – refunded to the city the balance remaining of the Rebuilding Greensboro Funds on 6/30/22 $142,598.28
DGI received a check from the city on 6/15/23 in the amount of $142,600 to be utilized towards the outdoor dining patio project.
Thanks
Joy"
Nancy Vaughan confirmed;
“Jul 23, 2025, 9:13 PM
from: Vaughan, Nancy (Mayor)
to: George HartzmanGeorge, on June 30, 2022 DGI refunded the City $142,598.28 which was the amount remaining on the Rebuilding Greensboro Funds.
City staff felt that it was cleaner to close out the Rebuilding Greensboro fund, have DGI return the money and to handle the Sidewalk Dining project as a separate transaction.
At the July 19, 2022 City Council meeting, council voted to allocate up to $142,600 to DGI (see items H.2 and H.3) for Sidewalk Dining Beautification and Accessibility...
On June 15, 2023 DGI received a check from the city in the amount of $142,600 to be used for the outside dining project.
Thank you for your patience.
Mayor Nancy Vaughan”
On June 1, 2023, more than a month before the vote to give the $142,600, DGI announced;
"Permanent Outdoor Dining Patios Coming to Downtown Greensboro
...DGI is funding the majority of this project with some additional assistance from the City of Greensboro. In all, the patios cost a total of $430,700, with $288,140 covered by DGI and $142,700 in City funds."
https://www.downtowngreensboro.org/articles/post/outdoor-dining/
On Jul 24, 2025, I wrote back "Nancy Vaughan was a board member who attended the 1/24/22 meeting when Joy said the $143k money was available to spend. How did Joy know the money was available to spend?"
And;
"The Len Lucas/Schwartz audit (7/18/22) predates the grant vote (7/19/22)"
And;
"At the July 19, 2022 City Council meeting, council voted to allocate up to $142,600 to DGI (see items H.2 and H.3) for Sidewalk Dining Beautification and Accessibility."
"Mayor Vaughan recused herself from this item due to a conflict of interest, as she serves as a Board of Director."
And;
"DGI 3/30/2023 minutes say DGI paid DGF to pay Modstreet $219,785.
And;
"The Agenda Item states "It is recommended that the Mayor and City Council empower the City Manager to enter into a reimbursement-based grant funding agreement with Downtown Greensboro, Inc. in order to allow Downtown Greensboro, Inc. to administer funding to businesses desiring it in order to make essential adjustments to their outdoor extensions."
If Mayor Nancy Vaughan knew the resolution passed by the City Council was inaccurate, misleading, or incomplete if city council wasn't informed of the money transfer back to the city of 6/30/22 and the DGI/DGF payment to Modstreet, she had a clear legal and ethical duty to disclose that information, especially as she had prior knowledge of the moving around of funds or their use.
DGI's August 24, 2023 meeting minutes state "Ms Ross identified a new line item on the Statement of Financial Activity for 2023 which represents the beginning of rental charges for the outdoor dining patios."
Did City Council know DGI/DGF was going to make income from the patios?
The July 19, 2022 vote appears to retroactively legitimize DGI's earlier use, or at least possession of the funds that had already been spent or committed before formal City Council approval.
DGI Returning the funds on June 30, 2022, then voting to reauthorize them weeks later, may have been an effort to paper over what could be seen as a procedural or ethical violation.
If Council was not told that the money had previously been refunded, or that it had effectively already been used or committed to DGI before being properly authorized, then the July 2022 vote was based on incomplete or misleading information. If council members weren’t told about the refund, earlier use of funds or promises made, they couldn’t exercise informed oversight.
As Mayor Vaughan attended the 1/24/22 meeting and was a DGI board member, she had prior knowledge that could have been critical to the discussion. As a board member of DGI, Mayor Vaughan had a duty to disclose material facts to city council, especially if prior activity could cast doubt on the legitimacy of future council actions. During the same meeting "Mr. Matheny stated that we have funds in the budget to support this program", as in the $142,600.
The nearly identical dollar amount ( $142,598.28 refunded, $142,600 re-granted, $142,600 check issued) raises red flags that this wasn’t coincidental, but rather a deliberate cycle to justify past actions.
Even though the mayor recused herself formally from the vote, her prior knowledge and failure to disclose the sequence of events may indicate a breach of public trust.
It appears the 7/19/22 vote was used to retroactively cover the improper or premature retention/use of public funds by DGI, with Mayor Vaughan’s silence contributing to a lack of transparency, despite her legal and ethical duty to disclose what she knew. This raises serious questions about the integrity of the process, possible breach of fiduciary duty, and misleading conduct toward fellow council members and the public.
That the 7/19/2022 vote was meant to retroactively justify improper retention of public funds up until June 30, 2022, when DGI refunded the City $142,598.28", only for the money to be re-given to DGI 11 months later.
The actions suggest a pattern of fraudulent inducement, whereby materially inaccurate or incomplete information was presented to secure a Council vote. The subsequent resolution appears designed to retroactively justify the use or retention of public funds, potentially constituting a post hoc attempt to manufacture legitimacy after actions already occurred.
Did City Council know the funds were just given back before the vote?
Zack was a councilman when the money came in.
If DGI passed money to DGF just so DGF could pay Modstreet, this could be:
An attempt to create distance between DGI and the actual vendor payment?
A way to mask the origin or use of public funds, especially if the City reimbursed DGI and then those funds quietly passed through DGF?
A way to avoid procurement oversight? (DGF might not be subject to the same scrutiny or rules as DGI or the City).
This could be seen as deliberately convoluting the transaction path to make it harder to track who authorized or paid for what, especially if public money was involved.
By running the transaction through DGF:
DGI may be trying to keep the expense off its own books.
It could influence how the money appears in audit reports, IRS filings (990s), or City-required documentation.
DGF may have less public scrutiny, allowing more freedom in contracting or payment.
Were City funds given to DGI and then moved to DGF without disclosure?
Was the City or Council told who was actually paying the vendor?
Were Council members (and the public) misled about who managed the project?
Did the use of DGF avoid transparency, bidding or oversight requirements?
Why didn’t DGI pay Modstreet directly?
Was the transfer from DGI to DGF disclosed in any City or IRS filings?
Did DGF act as a pass-through to obscure the City’s financial involvement?
Did DGI or DGF issue the purchase order or contract to Modstreet?
Was there a bidding process?
Did DGI use DGF to get around MWBE issues?
Was this structure used to misrepresent who controlled the project?
The item attached says "In order to ensure accessibility and beautification, City Council must grant funding." and "It is recommended that the Mayor and City Council empower the City Manager to enter into a reimbursement-based grant funding agreement with Downtown Greensboro, Inc. in order to allow Downtown Greensboro, Inc. to administer funding to businesses desiring it in order to make essential adjustments to their outdoor extensions."
DGI/DGF created a new revenue stream from rental charges for outdoor dining patios. The item did not disclose that DGI or DGF would be collecting any rental income. Instead, it framed the project as one of beautification and accessibility, and asked City Council to approve a reimbursement-based grant to DGI so it could administer funding to businesses for “essential adjustments.”
Nowhere in the language presented to City Council does it disclose that DGI would later collect rental income from the patios. If DGI began collecting rent from businesses using public infrastructure or improvements funded in part by taxpayer money and this financial benefit was not disclosed to Council at the time of the vote;
Councilmembers may have approved the grant under the assumption it was for public benefit, not private revenue generation.
If DGI's plan to collect rental income was in place or anticipated at the time, this could constitute material omission.
If Zack Matheny, as DGI CEO and a City Council member, participated in voting for or lobbying the grant without disclosing the revenue arrangement, that could trigger scrutiny under:
NCGS § 160D-109 (Conflicts of Interest)
City ethics policies
Possibly IRS private benefit doctrines if foundation funds or charitable resources were involved.
If the grant agreement did not permit or contemplate rental income, DGI may be in breach of the grant conditions.
Thanks,
g”
Answers have not been forthcoming.
Under the State Government Ethics Act (G.S. § 138A-36), a public servant must abstain from any verbal or written action in matters where they have a conflict, this includes participating in discussion, seeking information or influencing outcomes.
Simply voting “no” or abstaining isn’t enough; full absence from the process is required.
Recusal in Name Only?
North Carolina’s ethics laws require public officials to completely step back from matters where they have a conflict of interest, meaning no voting, no discussion, and no presiding over the proceedings. In this case, Mayor Nancy Vaughan declared a conflict because she serves on the board of Downtown Greensboro, Inc., but still acted as presiding officer to open and close the public hearing on the $142,600 sidewalk beautification grant to DGI.
Under state statutes G.S. § 138A-36 and G.S. § 160D-109, proper recusal means refraining from any action that could influence the outcome, including procedural duties. By facilitating the hearing instead of handing the gavel to the Mayor Pro-Tem, Vaughan blurred the line between compliance and participation, raising questions about whether the city’s recusal practice meets the letter, or even the spirit of North Carolina ethics law.
She opened it, closed it and managed the process until others took the motion. That’s not recusal, it’s participation dressed up as compliance. By keeping the gavel, Vaughan didn’t just test the boundaries of ethics law, she signaled that City Hall’s definition of “recuse” may be little more than a formality.
A Breakdown of Trust
When Mayor Vaughan sat silent during the July 19, 2022 vote, despite her knowledge as a DGI board member of the prior fund movements and commitments, she may have allowed her fellow council members to make decisions based on incomplete information.
The nearly identical dollar amounts, $142,598.28 refunded, $142,600 re-granted, suggest this was not coincidental bookkeeping but a calculated effort to retroactively legitimize questionable financial practices. The subsequent revelation that DGI would collect rental income from the very patios funded by taxpayer money adds another layer of concern about what information was withheld from council deliberations.
Perhaps most troubling is the apparent use of the Downtown Greensboro Foundation as a pass-through entity to pay vendors, potentially circumventing transparency requirements and public oversight. This labyrinthine financial structure raises the question: if the transactions were proper and above board, why the need for such complexity?