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The Golden LEAF Foundation isn't officially a state agency, but it ought to be treated like one when it comes to accountability.

A report issued by State Auditor Beth Wood recommends that the General Assembly tighten the reins.

According to auditors, the foundation, which is funded from the state's huge share of the national settlement with cigarette manufacturers, doesn't effectively oversee millions in economic development grants.

Further, the audit alleges that open meetings laws have been violated and meeting records improperly kept.

Finally, auditors say Golden LEAF officials were "less than cooperative" during the audit -- to the extent of trying to prevent file inspections.

Dan Gerlach, agency president since October 2008 and a former top aide to ex-Gov. Mike Easley, admits that mistakes were made. He also contends they can be easily fixed.

For starters, he says, the foundation will begin standardizing information from grant recipients and do a more thorough job of verifying data.

Golden LEAF, he maintains, isn't trying to hide anything nor are funds being wasted.

Yet, given the stakes, there shouldn't be any room for misunderstanding. Stricter guidelines need to be in place.

Equally important, steps must be taken to guard against the undue influence of partisan politics. The best way to accomplish that elusive goal is following Wood's recommendation to end the foundation's state ethics rules exemption based on it being a nonprofit corporation.

Getting Golden LEAF's house in order is imperative because the foundation plays a critical role in the state's economic future. As the state's unemployment rate soars beyond 11 percent, attracting new industry and jobs looms even more important.

Since it began 10 years ago, Golden LEAF has awarded $326 million in grants designed primarily to boost economic development in rural counties once heavily dependent on tobacco. In accordance with the settlement terms, millions of dollars are pumped into the agency annually.

Some legislators may prefer first to let the foundation try to make the suggested corrections. But, in light of the report's findings of questionable practices, a dose of "tough love" seems justified. And overdue.

Of course, demanding closer oversight is no guarantee that wrongdoing won't occur. Look no further than state departments that regularly have run afoul of ethics sanctions, including blatant political pay-backs.

Even so, establishing safeguards that result in more accountability would be well worth the General Assembly's time and effort.