RALEIGH — The N.C. State Auditor’s Office has issued an audit report stating the Town of Farmville improperly administered Community Development Block Grant Neighborhood Revitalization (CBDG-NR) grant funds.
The Town of Farmville is located in Pitt County and has around 4,450 residents.
“The Town of Farmville (Town) improperly administered $520,000 in Community Development Block Grant Neighborhood Revitalization (Grant) funds by not following the selection process outlined in the Town’s application to the North Carolina Department of Commerce (Commerce) for the funding,” according to the audit report. “As a result, homeowners did not have an equal opportunity to be selected for these Grant funds.”
The audit says the town could be required to repay grant funds that were not spent in accordance with the grant agreement.
Other findings in the audit include the town’s board “failed to ensure the Town received full and fair consideration for a property exchange related to the Town’s fire station,” as well as failing to make sure the town paid a “reasonable monthly rent for its temporary library.”
According to the audit, the board exchanged an existing fire station for property in June 2019 in order to build a new fire station. The existing station was appraised at $485,000, but the audit claims the town manager “judgmentally valued the existing fire station at $325,000.”
A retrospective appraisal in May 2023 valued the existing fire station property at $332,000.
“The new property was not appraised, but the Town Manager estimated its value at $250,000 as part of the exchange. A retrospective appraisal valued the property at $142,000 at the time of the exchange,” the audit states. “Based on the original appraisal and retrospective appraisals, it is estimated that the Town likely incurred an economic loss of at least $108,000 and up to $268,000.”
The Town of Farmville rented a depot for the equivalent of more than $18,000 per month to serve as a temporary library.
The audit claims that was an “unreasonable amount in rent” given that a similar property was available for $6,000 per month, which the audit says could have saved the town “approximately $12,000 per month.”
Additionally, the town apparently exceeded the maximum allowable amount when transferring money from its electric fund to its general fund by $54,794.
In its response, the Town of Farmville noted it received $750,000 in CBDG-NR block grants and had hired McDavid Associates to manage grant activities following procurement processes.
The town agreed some of the fund uses were “not consistent” with the grant program’s guidelines and would work “more closely” with the town’s consultant for those grants in the future.
Concerning the fire stations, the town agreed it should have sought outside expert real estate advice but said finding a suitable site had taken considerable time and the site chosen was “far superior” and the seller had agreed to demolish the current building on the site at their own expense.
The town defended its choice of the depot building for its temporary library and stated the town “paid no rent for the use of the depot building.”
