East Laurinburg became an unincorporated part of Scotland County July 1, due to financial mismanagement and statutory violations.
Last fall, N.C. Treasurer Dale Folwell urged the North Carolina General Assembly to dissolve East Laurinburg’s charter because he said they “ceased to function as a viable governing unit.” Originally, concerns were raised after an investigation by State Auditor Beth Wood’s office revealed that a former finance officer of East Laurinburg illegally obtained more than $11,200 from the town’s bank between December 2016 and March 2018.
The former finance officer used the money for 14 gas payments totaling $4,102, 13 checks for personal utility bills totaling $2,674, $905 in petty cash, and checks totaling $880 for various reasons. Some of the checks were signed by a town commissioner who happened to be the former finance officer’s mother.
“This is not a measure we ever want to take, but it is a necessary, last-resort action when a government unit fails repeatedly to comply with state regulations and statutes,” said Folwell, who chairs the Local Government Commission (LGC), in a press release issued on Nov. 3, when East Laurinburg’s financial books were seized. “Town residents must have full faith and confidence that their government is acting in accordance with the law, money is properly accounted for, tax funds are not being misused and essential services are being provided.”
The town of East Laurinburg operated on a budget of $75,000. The embezzled funds left the town unable to fund town operations, and its bank account overdrafted.
This is not the only instance of embezzlement in towns under LGC control. On June 10, the former finance director of Spring Lake in Cumberland County was arrested and indicted for embezzlement of more than $500,000 town funds, bank fraud, and aggravated identity theft. The director forged signatures of the mayor and town manager on fraudulent checks.
Folwell has advocated for consequences if towns are severely overdue on their audits.
“For the state of North Carolina to require people to do audits and then there’s no consequence for failure to meet that obligation is also unacceptable,” said Folwell, “The fact is that the right types of audits could have caught these types of violations hundreds of thousands of dollars ago.”
The district attorney of Scotland County has declined to pursue Folwell’s and Wood’s recommended charges of embezzlement against the former finance officer of East Laurinburg for now.