Half a million dollars, dozens of cars can’t be found in NC town taken over by the state
A former city accountant took nearly half a million public dollars for her own personal use, a top state official alleged Thursday, the latest in an ongoing saga of missing money in a small town south of Raleigh.
State Auditor Beth Wood, a Democrat, and Treasurer Dale Folwell, a Republican, have been digging into potential corruption and waste in the Town of Spring Lake for months. Located in Cumberland County on the edge of Fort Bragg, just outside Fayetteville, the town’s 12,000 residents consist of many current and retired soldiers.
On Thursday, Wood said Spring Lake’s former finance director has taken at least $430,000 for her own use, by either depositing the town’s money into her personal bank account or using it to pay rent at the senior center where her husband lived. Another $36,000 remains missing and over $100,000 more may have been misspent, Wood’s audit found, plus the town has no record of dozens of vehicles it appears to have bought over the years.
Thursday’s announcement wasn’t entirely unexpected given the high public scrutiny of Spring Lake recently.
The town’s finances had become so dire that the state government seized control in late 2021, after months of warnings issued to local leaders during the investigation into the missing money.
Thursday’s audit, however, contains far more details than have been made public previously. The employee isn’t named in the audit.
The town’s elected leaders, the Board of Aldermen, responded to Wood’s audit by noting that the board is now made up almost entirely of new elected officials who weren’t in office when the investigation began. They agreed with the audit’s findings and even suspect the amount of money taken was higher than Wood’s estimate — it was actually over $565,000, Mayor Kia Anthony wrote.
“We will reinforce our code of conduct and fraud reporting requirements through training” as well as “a more robust external hotline reporting system that allows for anonymous reporting,” she wrote in her formal response to Wood’s audit.
Wood is not allowed to bring criminal charges herself, but her audit notes that it’s a felony for government employees to take public money, and that the punishment is increased for those who take more than $100,000. She suggested the town pursue legal action to try to get its money back.
“Findings from this investigation are being referred to the Federal Bureau of Investigation and the State Bureau of Investigation to determine if there is sufficient evidence to pursue criminal charges related to misappropriation of public funds,” the audit says.
The town’s new leadership laid out some plans to begin addressing the numerous problems detailed in the audit. But Wood criticized those plans for having little to no details on issues like who would be in charge of implementing the changes, or what deadlines they’d have.
“Since the town did not provide the specific procedures for the corrective action plans, it will be difficult for the town and other stakeholders to monitor whether the corrective actions are implemented,” Wood wrote.
Not just missing money
In addition to the money the former employee is accused of taking, the town may have wasted an extra $103,000 by letting various other employees make questionable purchases on their work credit cards, the audit found.
The report said employees weren’t required to submit receipts for their purchases, and many didn’t.
The town also bought dozens of vehicles but then failed to keep track of who had them or where they were driven, the audit found, leading to increased risk for waste and possible theft. Records from the DMV show the town owns 138 vehicles, the audit said, but the town only has records on 80 vehicles, and a different recent audit found 92 town-owned vehicles. Wood recommended the town try to reconcile those numbers and figure out if vehicles might be missing or stolen.
The audit says several employees appear to have misused town vehicles by driving them for their own personal use, not for official business. They include the town’s former economic development director, the audit says, who also did not report it when the town accidentally paid him $10,000 for a cell phone stipend instead of the $100 he was supposed to receive.
He told Wood’s investigators he thought it was a tax return, the audit says, and later paid back a little over half the money.
Finally, Wood said in her report, the town’s political leadership skirted public records laws by not recording many of their meetings and discussions in 2019 and 2020. The town clerk, whose job it is to record meetings, tried to make her notes from several closed-door meetings in 2019 public but “got shot down” by the Board of Aldermen, the audit says, who then banned her from attending meetings in person starting in January 2020. She retired soon after.
“As a result of the missing and incomplete minutes of closed session Board meetings, there is no official record of decisions made on important issues such as personnel, economic development projects, acquisition of property, investigations of alleged criminal misconduct,public safety matters, etc.,” the audit says.
Who was involved?
Neither of the former finance directors or economic development director work for Spring Lake anymore, the audit says.
The audit doesn’t name any of them but public records like town meeting agendas, matched with dates in the audit, show that the former finance director accused of taking at least $430,000 appears to be Gay Tucker. The Fayetteville Observer also reported Tucker’s identity as the suspect.
The News & Observer was not immediately able to find contact information for Tucker. She was let go in June 2021, the audit says, shortly before the state took over control of the town’s finances.
A database of government employee salaries maintained by The News & Observer shows Tucker started working for Spring Lake in 2014 and typically made between $37,000 and $41,000 a year, although that jumped to $85,000 in 2020 after she was promoted from accounting technician to finance director and also claimed more than $24,000 in overtime pay.
The finance director before her, whom the audit blames for some of the lax oversight, is Butch Watson, currently the finance director for the Town of Aberdeen in Moore County. He did not immediately respond to a request for comment on Thursday. The Fayetteville Observer previously reported that Spring Lake hired Watson in 2015 to clean up a similar situation, also involving the misuse of government credit cards. He left for Aberdeen in 2020.
Data reporter David Raynor contributed to this story.
For more North Carolina government and politics news, listen to the Under the Dome politics podcast from The News & Observer and the NC Insider. You can find it at https://campsite.bio/underthedome or wherever you get your podcasts.
This story was originally published March 17, 2022 at 1:00 PM with the headline "Half a million dollars, dozens of cars can’t be found in NC town taken over by the state."
