RALEIGH — The North Carolina State Auditor’s Office has found that the former Finance Officer for the Town of East Laurinburg used town funds for “personal and questionable expenses.”
State Auditor Beth Wood’s office found the East Laurinburg’s finance officer spent $8,542 on 42 transactions in funds that came from the town’s bank account that were questionable during the time period spanning February 2017 through February 2018.
According to the audit, there were 14 purchases totaling $4,102 made via a gas card, six checks written to the finance officer totaling $905 with “petty cash” in the memo line, six checks written to various vendors totaling $895, seven checks written to the finance officer totaling $880 with various explanations in the memo line including “supplies,” and four checks written to the finance officer totaling $585 for additional time worked.
Additionally, the audit found checks written to the finance officer for $500 with “parts & labor for repair for street” in the memo line, two checks totaling $400 with “insurance” in the memo line, and two bank withdrawals totaling $275.
None of the 42 transactions have the appropriate support documentation for the expenses.
“Of the 42 transactions noted above, 28 were checks written and signed by the Finance Officer. Of those 28 checks, 22 were also signed by a Town Commissioner who is the Finance Officer’s mother,” the audit findings read.
The audit also says that because the finance officer used town funds to make “personal utility payments and other questionable expenses,” it caused the town to lack money to pay for its other bills.
“In fact, the Town’s bank account was over drafted in August 2017 and February 2018, demonstrating the impact of the Finance Officer’s personal use of Town funds,” the audit says. “These instances where the Town’s bank account was over drafted resulted in the Town incurring $444 in fees.”
The audit concludes that the town council for East Laurinburg failed to provide oversight and did not conduct an annual financial audit which could have caught the misspending. The audit recommended the town institute annual audits as a corrective measure.
According to the report, “Specifically, Town Council allowed the Finance Officer’s mother (a Town Commissioner) to provide the second signature on checks written by the Finance Officer.”
Wood’s office asked about the review process in place for signing checks and reported that the mother/commissioner stated, “I can’t tell you if she had receipts or not. I just made a butt of myself and assumed that she had a receipt. I did not ask for one… Finance director [Finance Officer] was in charge of that, and I just took it for granted that that’s what it was.”
Recommendations made by Wood’s office for East Laurinburg include the town seeking reimbursement from the former finance officer for the amount put to questionable use and that the town “should consider pursuing legal action against the former Finance Officer.”