Cook sees the commissioners' audit request as part of continuing effort to take over MAG programs. The commission is expected to send a petition to the state to take over services for the elderly in the county today.

"The request comes from the county commission in their quest to try to take over the CDBG program, and part of that is demonstrating some inappropriate use of funds or some overextension of the use of the funds that Mountainland has experienced or been involved in," he said.

White denies that allegation and says he wants to see the state process investigated as well as MAG.

"I'm not trying to steal (CDBG) from MAG," he said. "If you look at the request for the audit, I'm not saying that MAG is the bad guy here. I'm saying they should look into the project with MAG and look into the state office and see if they did what was right."

White said it is possible that MAG thought it was in compliance because of an error on the part of the state Department of Community and Economic Development, which reviewed the grant request.

"Maybe there was a little lack of oversight by the state that allowed this to go through," he said. "But if there isn't a written waiver, then somebody owes $1.2 million back to the state. . . . "

The state Auditor General's Office will now conduct a review of the matter and report back to the committee at its next meeting to determine if a full audit is warranted.

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E-mail: mdecker@desnews.com