Rep. Bakari Sellers, of Denmark, said Haley should prevent the program from doling out any money until it's overhauled.
"It's an executive agency running awry," he said. "I'm very concerned. In poor, rural South Carolina, we have to make sure we're using agencies and resources wisely. The mission is not being met, that's my largest concern."
The program, created by Congress in 1996, is designed to promote tourism and economic development in a mostly rural 17-county swath of South Carolina.
According to a Legislative Audit Council report issued last month, a 2006 internal audit by the state's parks agency found questionable spending between July 2004 and December 2005 by the private, nonprofit board that managed the program.
The council report listed more than $65,000 in examples, including $5,600 spent on alcohol for meetings; $27,000 on Christmas meals; $8,500 on Santa suits, a hot dog warmer and gift certificates; $3,500 on credit card payments without a receipt; and $650 on a band.
The board also awarded itself more than $50,000 in grants for brochures, marketing and maps, according to the audit.
The state's Parks, Recreation and Tourism Department made some reforms, culminating in 2008 with former Gov. Mark Sanford putting the program under the agency's control, and giving the nonprofit advisory status.
The agency never asked for the money back or disciplined staff, partly because it couldn't determine whether the questionable spending involved state, federal or private money, agency officials told the council.
Sellers contends it demonstrates a lack of concern for a program serving rural South Carolina.
"I'm not sure what's going on over there, and I'm trying to get somebody to give me some answers," he said.
The council recommends the agency get reimbursed for the questionable spending, revamp management, and measure the program's effectiveness.
While there is information on visitation to certain sites and promotions, "data concerning the extent to which the program is achieving its mission of heritage tourism and economic revitalization has not been available," the audit said.
Haley's spokesman said the governor and the agency's new director, Duane Parrish, are committed to addressing the issues.