More than a year after federal authorities investigated the Good Neighbor Center, operations at the troubled North Charleston shelter for homeless veterans remain in disarray.

Nearly half the facility's 32 beds are empty, although recent reports show the area's homeless population is skyrocketing and demand for housing is strong.

The U.S. Department of Veterans Affairs in November halted payments on a grant intended to expand the shelter, leaving contractors unpaid for work they already completed. The two-story expansion, funded by local, state and federal tax dollars, remains unfinished.

The VA in August demanded repayment of more than $122,000 the shelter misspent under former Director Nancy Cook. The board of directors missed the Jan. 5 deadline federal investigators gave them to respond.

The shelter's former board members remain entangled in a civil lawsuit filed by Cook, who was fired in May after documents obtained by The Post and Courier revealed she spent tens of thousands of dollars of the shelter's money to support her own lifestyle. Cook alleges the nonprofit shelter owes her $10,000 in unpaid wages and benefits. Former board members named in the suit deny that. A hearing is scheduled for Wednesday.

Cook has denied any wrongdoing. Her attorney could not be reached Monday.

Board President Bobby Knight, the sole board member remaining from Cook's tenure, said righting the ship at what is now called the "North Charleston Community Interfaith Shelter" is an uphill battle.

An all-new board of directors includes four veterans, one of them a shelter resident, Knight said. The shelter also hired two new case managers, a resident manager and a truck driver. It is searching for a new managing director.

Knight balked at the VA's demands for repayment, saying investigators should pursue Cook instead of board members. He characterized correspondence with the VA as "a game of badminton" and "a battle of who can hold their breath longer."

But the board was supposed to oversee Cook's handling of the center and by law ultimately is responsible for its spending. Federal investigators determined the shelter misspent more than $122,000 under Cook's leadership, according to a February audit prompted by an October 2010 report in The Post and Courier.

The agency now will decide "whether to issue a formal letter of indebtedness" that creates a formal debt to the federal government, VA spokesman Timothy Graham said. He did not elaborate.

The misspent funds were drawn from the VA's per diem grant program, which provides the shelter with $33 per bed each day to cover the costs of food, utilities and other necessities for residents, according to the audit report.

The facility received a separate, $542,000 capital improvement grant from the VA in 2008 to begin an ambitious, 14-bed expansion. The state matched the grant with $300,000. Knight reported last fall the effort was $99,000 over-budget due to increased material costs.

Shortly after Knight reported the cost-overruns, the VA sent him a letter saying it indefinitely would be withholding grant payments to the shelter, including $18,000 Knight requested shortly before the letter was sent. The agency made that decision because the shelter "cannot provide documentation that it has in place firm commitments of match funding to ensure project completion," the VA grant program director said in the November letter.

Construction is about 65 percent finished, Knight said. It is unclear when or whether the rest of the project will be built. The shelter was supposed to use $9,700 of the VA grant to buy a new van, but it has not done so, he said.

Renovations on the existing facility, however, are drawing to a close. Bathrooms were rebuilt in eight of the shelter's two-person rooms.

Tonya Lobbestael, a spokeswoman for the Ralph H. Johnson VA Medical Center, which places veterans at the shelter, said in an email Monday the VA has "not been able to place veterans in those eight rooms for construction safety reasons."

An undated letter from the acting director of the VA Medical Center -- Knight said he received it in late December -- shows inspectors also had concerns about the shelter's "case management services."

"There is no documentation describing veteran goals and treatment progress," Acting Director Scott Isaacks wrote.

Patty Davis, one of two new case managers, said the "majority of files reviewed were files that were generated under the previous staff."

Some of the bathrooms have been finished since Thanksgiving and all but one had been renovated by the end of December, Knight said. But the VA has not filled the rooms, he said.

Lobbestael said the VA soon will reevaluate the facility.

"Homeless program staff are working closely with (shelter) staff to ensure clinical requirements are met, and will review bathroom renovations for completion within the next week," she said in an e-mail Monday.

Reach Renee Dudley at 937-5550 or on Twitter @renee_dudley.