The Local Government Commission is stepping in to help the town of Spring Lake in Cumberland County. The move by the commission, which voted Wednesday, March 23, will avoid payment processing problems, a news release says.
A scathing report from State Auditor Beth Wood’s office last week found that a former accounting technician in the town misappropriated more than $430,000 in taxpayer money for personal use and has referred its report to the FBI and State Bureau of Investigation for a possible criminal investigation.
Wood’s team found several troubling financial issues, including more than $36,000 in cash missing from the Revenue Department and Recreation departments’ daily deposits. Auditors also found questionable credit card purchases from town employees using nearly $103,000 in town funds, and the overpayment of the former economic development director by nearly $10,000.
Spring Lake attorney Jonathan Charleston submitted his notice to resign, the commission says.
The LGC, chaired by State Treasurer Dale R. Folwell and staffed by employees in the Treasurer’s State and Local Government Finance Division, assumed control of Spring Lake’s finances on Oct. 5, 2021, citing authority under N.C. General Statutes and LGC rules.
The commission has a statutory duty to monitor the financial well-being of more than 1,100 local government units. Commission members impound Spring Lake’s books and records, assumed control of its finances, and will oversee and direct all its financial affairs due to concerns the town might be in danger of default on nearly a quarter-million dollars in November 2021 debt service payments, the LGC says.
“Employees, taxpayers, and residents depend on their elected officials to find out what’s right, get it right and keep it right, and any time we can help a local government in that capacity we are ready and willing. Our only goal is to save Spring Lake and keep it from drowning,” Folwell said in a statement.
Samantha Wullenwaber, who had the support of the LGC as the town’s deputy finance officer and interim town manager, was terminated Friday, Wood told fellow LGC members. Wullenwaber had the authority to sign checks, and her abrupt dismissal left the town with limited options to perform that function. Wednesday’s LGC action should ensure checks go out on time, the news release says.
Wullenwaber prepared a response to the state audit that met criteria Wood said were necessary to explain how the problems occurred, spell out action to address findings of the audit, identify who was responsible for the work and provide a timeline for completing the steps. The Board of Aldermen opted instead to submit a response from the town attorney that Wood said was vague and misleading, and did not provide essential answers, the news release says.
The LGC voted to retain David Erwin as town finance officer and appointed Tiffany Anderson and Susan McCullen as deputy finance officers. All three are SLGFD employees. Erwin was retained as account signatory. Anderson and McCullen also were named as account signatories. Wullenwaber, former mayor Larry Dobbins, and former mayor pro tem Taimoor Aziz were removed from the as since they are no longer in office.
In a letter to Spring Lake Mayor Kia Anthony on Wednesday, Charleston, the release says, expressed appreciation for the opportunity to work with the Board of Aldermen.
“While we have worked with the Town through several challenges, we believe now is a good time to transition to new counsel.”
Noting the long-time financial turmoil of the town, Folwell told Carolina Journal “the more we peel the onion, the more we cry.”
He’s concerned about the millions of taxpayer dollars that flow into the coffers of small towns, often lacking capable accountants and transparency. And Folwell, who serves as chairman of the LGC, said the problem is not an easy fix because “you can’t legislate common sense and common courtesy.”
Folwell said it’s up to local citizens to become more involved to ensure their tax dollars aren’t squandered. He pointed to East Laurinburg, which had its charter revoked after years of financial trouble. He said that in the most recent East Laurinburg town election, with four open council seats and the mayor position open, only one resident ran for office.
“The communities have to be more engaged and interested in the process,” he said.