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The Guilford County Mental Illness Board disputed parts of a state report critical of its conduct, following a two-hour closed door meeting Tuesday night.

The board also unanimously agreed to request a meeting with the investigator for the Governor's Advocacy Council for Persons with Disabilities who compiled the report and with F.L. and Margaret Recoulley, who had requested the state's assistance.The state investigation came after the board's executive committee threatened in June to sue Margaret Recoulley, who was accused of slandering the mental illness agency. The state report faulted the committee - with later support from the full board - for that threat.

The slander charges were levied after mental illness officials learned that Recoulley had talked with the manufacturers of a plastic fiber being packaged at a sheltered workshop for the retarded where her son works.

Recoulley denied the accusations and asked the Governor's Advocacy Council to investigate.

The state's report by investigator Larry Jones concluded last month that:

Recoulley was entitled to ask questions about the fiber, and the committee's legal threat ``was not appropriate.'

The workshop should stop packaging the fiber because the retarded employees who work in it are not made to wear protective gloves and other devices required on the warning label packaged with the fiber.

Board Chairman David Reilly said the second finding was wrong because the state investigator did not contact the local distributors of the fiber for their input.

Representatives of the distributors, THEM Inc., told the board in a presentation last month that the fiber presented no hazard and that the warning label was an old one issued in 1987 that no longer applied.

Reilly also disputed a finding that said the investigator's office received no written evidence that workshop administrators had tried to purchase safety equipment before May 1989. Reilly said that purchase orders were written and available as early as February 1989, but said he didn't know if they had been shown to the investigator.

Reilly also acknowledged that the board had agreed, prior to the report's release, to accept its findings. Reilly said, however, that the agreement was based on an assumption that officials would be presented with a draft report and have a chance to comment on it before a final report was issued.

He said the board maintains that Jones' report is just a draft. Jones, who has been on vacation for the past three weeks, has been unavailable for comment. However, a copy of the report obtained by the News & Record does not indicate that the report is a draft.

Margaret Recoulley would not comment Tuesday on whether she would meet with the board, saying she had to consult with her husband.

Reilly is to appoint three members from the 20-member board today, to meet with the Recoulleys and Jones. Reilly said his appointments will not include members of the executive committee.

Board member Marina Wilder, who had asked Reilly to make the appointments during the meeting, said that she doesn't want to be on the committee. Wilder, who said she is a friend of the Recoulleys, said she wants the committee to maintain objectivity.

Reilly said Tuesday that he regretted the executive committee's decision against Recoulley.

``In retrospect I regret the action that was taken,' Reilly said during an interview. ``It caused a situation that was really not necessary, that could have been solved in a much more satisfactory manner.'

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