The board of the North Carolina Rural Economic Development Center decided Monday to freeze the severance of former president Billy Ray Hall.
Hall resigned under pressure earlier this month. His severance package amounts to more than $240,000.
Despite calls for Chairwoman Valeria Lee's resignation from board members and Gov. Pat McCrory, Lee said she has no immediate plans to step down.
"I am still chair ... I do not know that I have to step down," Lee said.
State legislators have defunded the center and created a new division within the Department of Commerce to handle the work of the Rural Center after a blistering report by the State Auditor released earlier this month outlined the misuse of state funds.
"I think they probably did what they think is in the best interest of rural North Carolina. Whether I agree with it or not is not something I need to express an opinion on," Lee said.
North Carolina Commerce Secretary Sharon Decker was a guest speaker at Monday's board meeting.
"I'm here today, yes, as commerce secretary but as a resident of rural North Carolina with great passion for the rural parts of our state," Decker said. "We find ourselves in a place of transition and we need to move forward in a different way."
The details of the transition will be ironed out over the next 30 days, but Decker said the Commerce Department and the Rural Center will try to honor grants that have already been awarded.
"What you're not going to see is less support for rural North Carolina. I think you'll see more support for rural North Carolina. How that looks and how that's executed, I can't tell you right now," Decker said.
The board voted to form a special committee of five members of the board, including appointed and elected members, to determine how the center should move forward. The committee will also meet with the appropriate governmental officials to negotiate and approve a plan to transfer the state funds to the appropriate state governmental agencies.
Lee will appoint the five-person committee.
"The governor asked [Lee] to resign, and now she is going to appoint the people who determine the future of the center. I think that's a very bad idea," said board member Bob Luddy, who was the only opposing vote.
The committee is expected to make a recommendation to the full board whether the center should begin the process of dissolution at next month's board meeting.