After nearly three years, North Carolina’s Local Government Commission returned financial control to the town of Spring Lake, Cumberland County, last week.
The LGC is chaired by State Treasurer Dale Folwell and staffed by the Department of State Treasurer.
The LGC took control of the town’s finances in October 2021 after some of the financial malfeasance came to light, resulting in concerns that the town couldn’t balance its annual $13 million budget. State officials found that the town permitted spending that wasn’t in the general fund budget.
It was revealed that the town received a $1 million loan in October 2021 from the South River Electric Membership Corporation to build a fire station without getting LGC approval.
The LGC impounded its books and records, assumed control of town finances and all financial affairs, and dedicated state staff to help the local officials correct course. At the time, the town of 12,000 residents was in jeopardy of defaulting on debt service payments.
A previous 2016 audit by former State Auditor Beth Wood found mismanagement of the town’s finances, which included 63 Town of Spring Lake employees and three Board of Aldermen misuse of procurement cards and travel expenses for personal and unnecessary items over a five-year period.
The former finance director and accounting technician for the town pled guilty in September 2021 to embezzling more than $500,000 from the town between 2016 and 2021.
Gay Cameron Tucker pled guilty to one count of embezzlement from a local government receiving federal funds and one count of aggravated identity theft. She was sentenced to four years behind bars in December 2022.
After Spring Lake’s removal, only three towns remain on the list of local governments under the state’s financial control. They include Kingstown, Cleveland County, Cliffside Sanitary District, Rutherford County, and Eureka, Wayne County.