NC town accused of mishandling funds recently violated open meetings law, state officials say

State officials on Tuesday said a North Carolina town under investigation for misappropriation of funds also violated the state’s open meetings law in the past two weeks when it dismissed an interim town manager and swore in a replacement without a public vote.

In a letter to the the town of Spring Lake’s mayor and board of aldermen, State Treasurer Dale Folwell also said the current interim manager was sworn in without a contract in place.

“Without a contract that is properly executed and pre-audited, no payments can be legally made for the interim town manager’s services,” Folwell wrote, citing state law.

The Local Government Commission, which is chaired by Folwell, has a statutory duty to monitor the financial well being of more than 1,100 local government units. The commission took control of Spring Lake's finances in October, citing concerns that the town could default on its debt.

The town has a track record of questionable practices, a state audit found. State officials in 2016 reported dozens of officials and town employees misspent nearly $460,000 over five years.

Last month, State Auditor Beth Wood released a new report that concluded the Cumberland County town's former accounting technician and finance director used more than $430,000 of town funds for personal use. The employee was dismissed in July 2021.

The audit doesn’t name the employee, but it said that a woman served as the town’s finance director from September 2020 until April 2021. Town meeting minutes indicate that Gay Tucker held the title of finance director during that period. Efforts to reach her were unsuccessful Tuesday.

The report also highlighted nearly $103,000 in questionable credit card purchases by town workers from Spring Lake funds, an almost $10,000 overpayment to a former economic development director and at least $36,400 in cash missing from the revenue and recreation departments’ daily deposits.

Wood recommended legal action be considered against the former accounting technician, who was fired in July, and encouraged the State Bureau of Investigation and Federal Bureau of Investigation to evaluate her report to see if there’s enough evidence to file criminal charges.

Kia Anthony, who was elected late last year as the town’s mayor, responded to Wood’s findings, saying that the town “accepts the findings and recommendations contained in the report” and believes with help from Wood and Folwell that Spring Lake “will emerge from this period as a much stronger governmental unit.”

Anthony did not immediately respond to a request for comment on the letter from Folwell.

At a special meeting on Tuesday to discuss Spring Lake’s misuse of funds, Wood and Folwell expressed their frustration with the situation.

"I want to work harder on these elected officials that are not taking good care of their citizens,” Wood said.

Folwell told reporters earlier in the day his only interest is saving the small town from financial ruin. “There’s more peeling of this onion to take place,” he said.