RALEIGH — The North Carolina Office of the State Auditor released an investigative report on the town of Speed, highlighting several areas of noncompliance with state laws and financial management practices.
The investigative audit was prompted by complaints alleging failures in maintaining accurate financial records, oversight of funds, and adherence to open meetings and audit requirements. The investigation covered the period from Jan. 1, 2024, to Sept. 10, 2025.
Speed, located in Edgecombe County, has a population of 63 residents, according to the 2020 U.S. Census. The audit noted the town is included on the Local Government Commission’s (LGC) list of municipalities to monitor.
“The severity of the findings included in this report cannot be ignored, but neither can the struggle of small North Carolina towns to rebuild from natural disasters,” State Auditor Dave Boliek wrote. “Ultimately this investigative report is a cautionary tale.
“While larger cities have more staff and resources, places like Speed have no such luxury. Nevertheless, large and small communities alike have to pay attention to financial realities, trends, and everyday accounting.”
The audit’s main finding was the town failed to reconcile its financial records in a timely and consistent manner. The lack of bookkeeping practices contributed to fraudulent activity that went undetected for several months.
A total of $3,507.15 in unauthorized charges was withdrawn from the town’s accounts. The expenditures involved taxpayer funds used for items such as gift cards, groceries and electronics.
Specific examples included activity in 2024, when the town’s bank statements were sent twice to an address in Texas that was unaffiliated with the town without the knowledge of the town clerk. The audit noted that this issue has “since been remedied.”
Additionally, between May 2024 and February 2025, $110.32 was fraudulently withdrawn from the town’s checking account.
During the same period, 41 unauthorized purchases totaling $3,396.83 were made from the town’s money market account. Many of the transactions involved food purchases, with one instance including the purchase of two American Express gift cards amounting to $413.76, including fees.
The Office of the State Auditor (OSA) referred these transactions to the United States Attorney’s Office for the Eastern District of North Carolina. Following the referral, the OSA concluded “the Town had fallen victim to a common foreign scam.” The report emphasized that the town’s inconsistent oversight allowed the activities to persist unnoticed.
Another finding addressed the town’s failure to maintain full and accurate minutes of its official business and meetings, as required by state law.
During the investigation, auditors attempted to review meeting records for the specified period, but the records provided by the town were “unverifiable.” The OSA noted the noncompliance undermined local government transparency and hindered the public’s ability to understand the town’s decisions and financial transactions.
The report also determined that the town violated a state law that mandates that each unit of local government have its accounts audited annually. The OSA’s audit found no evidence of completed annual audits for the relevant period.
Furthermore, the town failed to fully comply with a resolution adopted by the LGC requiring it to hire a public accountant to assist the finance officer with their duties. The resolution was intended to address ongoing financial management challenges.
The report also noted that during the investigation, auditors uncovered additional information not directly related to the original complaints but relevant for inclusion for public transparency.
In addition to the primary allegations, the investigation uncovered information about recommendations for the town’s future.
The LGC and the North Carolina League of Municipalities advised the town to voluntarily dissolve, and last October, Speed adopted a Resolution of Intent to Administratively Dissolve the town’s charter. According to the audit, the resolution gives the town until June 30 to complete the disbandment process.
The report included several recommendations to address the identified issues.
First, the town should maintain accurate financial records while exercising proper and consistent oversight of those records. Second, the town should reconcile its financial records monthly to prevent further fraudulent activity.
It was also recommended that the town clerk receive remedial training on financial management and operations, and until such training is completed, the town should employ a qualified finance officer to maintain its financial records.
Finally, the audit suggested Speed should continue following the recommendations and guidance issued by the North Carolina League of Municipalities to disband by the June deadline, as well as following the steps to voluntarily disband in the town’s adopted resolution for dissolution.
