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GREENSBORO — Leaders say the city ABC Board has rebounded as a stronger organization than the one mired last year in a controversy that led to the ouster of its general manager.

The board hired a new general manager, reformed operating and personnel policies, bolstered ethics training, and broadened the pool of administrators who make business decisions as a result of last year’s twin investigations, according to board members and city officials.

“It’s a new day,” said Jesse “Skip” Warren, chairman of the local board. “I think in many ways, it has been a very good year for us.”

But the agency that sells liquor and supervises its distribution in Greensboro still has a way to go before returning to the profitability of years gone by.

That profitability is important to residents because it pumps millions into the city budget each year. More ABC profit means less pressure on the City Council to raise taxes.

The board sent the city $2.44 million in profit during the 2011 fiscal year that ended June 30 — down $100,000 from 2010 and way down from the $3 million it turned over at its peak five years ago.

But this year is looking better, and the local ABC system is poised to cut the city a check for almost $664,000 in quarterly profit distribution, said Fred McCormick, the new general manager.

“We’ll be sending them $131,000 more than we sent for the same quarter last year,” said McCormick, the local ABC’s veteran finance officer who took the reins in May after several months as interim manager.

By law, the local ABC board gives the city 91.75 percent of revenue after expenses, the rest to Guilford County and several towns lacking ABC stores.

The board is upping its distribution to local government partly by holding back $50,000 less each quarter in the “working capital” it’s allowed.

The best thing that could happen to boost ABC profits would be a turnaround in the sour economy to loosen consumers’ purse strings, said City Council member Mary Rakestraw, council liaison to the ABC board.

Rakestraw added that she is very pleased with how smoothly things seem to be running under McCormick, a sentiment seconded by local board members Yolanda Leacraft and Roger Cotten.

The local board also mended fences with the N.C. ABC Commission, the Raleigh-based agency that oversees the state’s 168 local ABC systems.

State ABC leaders started the investigation last year by the N.C. Division of Alcohol Law Enforcement, which ultimately caused local board members to fire former manager Katie Alley.

They dismissed her after investigators found what one described as “a pattern of petty corruption” in which Alley allegedly solicited and took liquor, concert tickets, travel, meals and other things of value from liquor distributors who sold through the local board’s 16 ABC stores.

Uncertain of findings against a manager they trusted, local board members created some friction with the state by hiring private investigators to take a second look at those allegations and at the local system’s overall operations. The independent inquiry confirmed the ALE’s probe, and local officials dismissed Alley.

To the extent the local board’s initial skepticism rubbed state ABC the wrong way, it seems to have blown over.

“Greensboro is current with us in everything that we expect,” said Jon Williams, chairman of the state commission.

Williams said the local controversy happened in an era when managers of some larger, local ABC systems thought they could flout basic ethics.

“Some of these folks may have been reinforcing each other’s misunderstanding of what was acceptable,” Williams said.

In addition to Greensboro, ALE investigations uncovered similar wrongdoing in Charlotte, Wilmington and, more recently, Asheville. All the misdeeds occurred before 2010, when state officials cranked up investigations that led to the recent passage of a law increasing the accountability of local ABC boards.

In recent months, McCormick and the Greensboro board followed suggestions stemming from the local investigations to rewrite the personnel manual so it clearly defined expectations. Likewise, they created the board’s first formal operations manual to outline the proper way to do everything from opening a store to disposing of damaged liquor.

McCormick also increased the number of ABC employees who attend board meetings and who meet with liquor company sales reps.

“There are no evening meals, no luncheons or anything like that,” McCormick said of the meetings with sales reps.

In addition, board members took a state-mandated course on ethics earlier this year. And the same course will be offered soon to local ABC employees, McCormick said.

Increasing the board’s contact with ABC staff is a significant reform, said board attorney Mike Fox.

“That’s a change because when Ms. Alley was general manager, with few exceptions, she was the choke point for information to and from the board,” Fox said.

One of the last remaining vestiges of the controversy is a complaint about her firing that Alley filed with the federal Equal Employment Opportunity Commission, Fox said.

Both sides have presented their cases, he said, but it’s unclear when the EEOC will rule.

Contact Taft Wireback at 373-7100 or taft.wireback@news-record.com