NC STATE AUDIT INVESTIGATION
Official News Release
Final Report from Audit review Committee
The Town will host a Community Forum for citizens on Monday evening, January 16, 2017 at 6 pm at the Spring Lake Town Hall to discuss the Committee’s report.
The Office of the State Auditor has released their audit report as a result of their investigation of questionable purchasing card transactions by current and former employees of the Town of Spring Lake. The Office of the State Auditor’s report includes recommendations to address their findings, as well as the Town’s plan for corrective action included as an appendix to the audit report.
During the year long investigation State Auditors reviewed thousands of purchasing card transactions and conducted dozens of interviews that culminated in the issuance of their report which outlines three key findings. The Town has taken proactive steps to correct two of the three findings and has developed a plan to correct the remaining one.
The three findings include the following:
Finding #1. Town Employees and Board Members spent more than $122,000 on questionable purchases. Town Response. The Town is poised to review all of the 1,448 questionable purchases identified by State Auditors, one transaction at a time, to determine which transactions represent actual misuse. Where misuse is confirmed, the Town will determine those that warrant reimbursement to the Town and those that might include the need for Town Employee disciplinary action.
Finding #2. Town Employees and Board Members spent more than $366,049 on purchases in violation of Town policies. Town Response. If any actual misuse of funds is discovered in relation to these policy violations, the Town will determine those that warrant reimbursement to the Town and those that might include the need for Town Employee disciplinary action.
Additionally, the Town has reviewed, revised, and reissued key financial management and accounting policies as well as instituted stringent management controls to ensure Town policies are followed.
Finding #3. The Town failed to bill, record, and collect $90,930 from a customer for utility services. Town Response. The Town has taken action to bill the real estate management company for under-billed water services and taken steps to ensure that all meter readers are properly trained to read the variety of meters in use throughout Town.
The investigation was launched by the Office of the State Auditor in response to a Hotline allegation regarding possible abuse of the Town’s purchasing cards and missing revenues. Following the revelation of possible abuses, the Mayor and the Board moved deliberately to install new day-to-day leadership for the Town, ensure implementation of critical financial management and accounting policies, and establish more stringent management controls.
The Town is grateful for the assistance of the Office of the State Auditor in investigating the purchasing card program. In moving forward, the Town acknowledges the seriousness of the audit findings and will strive to ensure Town financial management and accounting practices properly comply with state and local government guidelines, and endeavor to restore the faith and confidence of Spring Lake residents in the Town’s ability to govern.
The Town of Spring Lake will be hosting a Community Forum in the very near future to provide an overview of the Town’s corrective action plan. All residents are encouraged to attend.
Selected Town of Spring Lake Polices (directly linked to the investigation):