It's not about the number of students involved, it's about institutional control. UNC should have processes in place, like every other university, that prevents an unqualified individual from holding a for-credit class. If you want to teach a class at Tech, you need at least a master's degree in a related field. The college will check that you actually have that master's degree by contacting the school directly.
Further, there should be no way that any for-credit class should be allowed to not have a college-rigor assignment (essay, exam, etc) to justify the grade. How does the school control this? At Tech, a committee of 3-5 (depending on school) professors review your syllabus the first time you teach and approve the assignment. A random sample of graded assignments is sent for a review to make sure your grades are appropriate. Courses are periodically audited to make sure they're legitimate.
If UNC had this process in place, a secretary would not be allowed to hold a CLASS’S NUTS IN HER MOUTH, the lack of assignments would not have been approved, and the random sample of graded assignments would have failed review.