A published last month found evidence that taxpayer funds in Spring Lake have been misused, including over $430,000 used for personal purposes by the town鈥檚 former accounting technician.
N.C. Auditor Beth Wood鈥檚 office conducted the audit and issued it in response to 17 allegations regarding Spring Lake鈥檚 finances, according to the report. Spring Lake, a town of about 11,000 people, is located north of Fort Bragg in Cumberland County.
Last summer, the Local Government Commission voted to warn Spring Lake of of finances due to concerns over questionable financial activities amid the investigation. A few months later in October, the commission and has continued since.
The audit alleges that a former accounting technician and finance director used at least $430,112 for personal use.
The person in question served as accounting technician from July 2014 to March 2020 and again from April to July last year, according to the report. She served as finance director from March 2020 until April 2021.
The report does not name the person, but according to minutes of town meetings, Gay Tucker was in March 2020. According to minutes from February of last year, she was serving as the .
The alleged personal use, from July 1, 2018, to the end of June last year, includes 32 checks worth a total of $166,082 made payable to a personal bank account at Bragg Federal Credit Union, as well as 27 checks totaling $151,015 made payable to the accounting technician described in the report.
Another $113,015 was paid to Heritage Place Senior Living. According to the report, this money was used to pay her husband鈥檚 monthly resident bills.
The audit alleges that this misuse of funds was caused by a lack of oversight from the Spring Lake Board of Alderman and the town鈥檚 finance director, to whom the accounting technician reports.
The findings from the investigation are being referred to the FBI and the N.C. State Bureau of Investigation to determine whether enough evidence exists to pursue criminal charges for misappropriation of public funds, according to the report.
Other findings
From July 1, 2019, to the end of June last year, at least $36,400 in town funds went missing, as they were never deposited into the town鈥檚 bank account, according to the audit.
Employees also spent $102,877 of town funds, from Jan. 1, 2019, to Dec. 31, 2020, on credit card purchases that either lacked an itemized receipt, documentation to verify a valid purpose or both.
In April 2020, Spring Lake overpaid a former economic development director $9,900 on his monthly cellphone stipend due to an error by the payroll technician.
According to the audit, the former director didn鈥檛 realize the error because he was already expecting a tax return and didn鈥檛 investigate further.
The overpayment wasn鈥檛 found until the town鈥檚 financial audit in March of last year, according to the report.
Town response
In a letter signed by Spring Lake Mayor Kia Anthony last month responding to the audit, the mayor said the town is committed to 鈥渨orking with the LGC and the (state auditor) to appropriately address the underlying basis for each finding.鈥�
In the enclosed attachment to the letter that responded to each finding from the audit, the town agreed with the conclusions of the investigation, stating that the former accounting technician, along with other former employees, 鈥渟ystematically circumvented, overrode and inappropriately used their positions over the town鈥檚 system of internal controls for apparent personal gain.鈥�
To address this alleged fraud, the town will 鈥減lace enhanced emphasis on oversight,鈥� according to the letter.
This includes oversight of various budget processes and use of town credit cards.
In a response to the town鈥檚 letter, Wood鈥檚 office found Spring Lake鈥檚 response unclear. It said the town did not include specific details that were requested, such as explaining specific corrective actions, estimating dates to complete those actions and identifying who will implement the actions.
The LGC, the state agency that has taken over Spring Lake鈥檚 finances, responded to the town鈥檚 letter in agreement with Wood鈥檚 office.
鈥淚t does not include target completion dates for corrective action, nor does it include enough specifics about necessary changes in processes, procedures and policies,鈥� said LGC Secretary Sharon Edmundson, who signed the commission鈥檚 response to the town鈥檚 letter.
鈥淭he submitted response does not indicate which town staff position is specifically responsible for each corrective action and refers to a town audit committee that currently has no members.鈥�
According to the LGC letter, the commission helped draft a response to the audit that included more detail.
But the Spring Lake Board of Aldermen opted for a different response, according to the LGC letter.
鈥淟GC staff made our concerns known to the town during the discussion on March 7, and the town opted to not make substantial changes to what was submitted as the final response,鈥� Edmundson wrote in the letter.
State Treasurer Dale Folwell, who is also LGC chairman, said in an interview with Carolina Public Press that the Spring Lake Board of Aldermen needs to better address the audit.
鈥淭he spirit at the treasurer鈥檚 office is we鈥檙e trying to save Spring Lake, but we can鈥檛 be more interested in saving Spring Lake than the governing board has been in saving it itself,鈥� Folwell said. 鈥淭he current government of Spring Lake needs to understand that this is a serious matter, and we鈥檙e there to help them as we have the whole entire time.鈥�
