the local government commission is stepping in to help the town of Spring Lake in Cumberland County. The decision by the commission, which voted on Wednesday, March 23, will avoid payment processing problems, a press release said.
A scathing report from State Auditor Beth Wood’s office last week found that a former city accounting tech misappropriated more than $430,000 of taxpayer money for personal gain and returned his report to the FBI and the Bureau of State Investigation for a possible criminal investigation.
Wood’s team uncovered several troubling financial issues, including more than $36,000 in cash missing from the Department of Revenue and Recreation Services’ daily deposits. Auditors also found questionable credit card purchases by city employees using nearly $103,000 of city funds and the former director of economic development’s nearly $10,000 overpayment.
Spring Lake attorney Jonathan Charleston has submitted his notice of resignation, according to the commission.
The LGC, chaired by State Treasurer Dale R. Folwell and comprised of employees from the Treasurer’s State and Local Government Finance Division, assumed control of Spring Lake’s finances on October 5, 2021, citing authority under the NC General Bylaws and LGC Rules.
The commission has a legal duty to oversee the financial well-being of more than 1,100 local government units. Commission members seize Spring Lake’s books and records, take control of its finances, and will oversee and direct all of its financial affairs amid fears the city is in danger of defaulting on nearly a quarter of million in November 2021. says LGC.
“Employees, taxpayers and residents depend on their elected officials to know what is right, do it right and uphold it, and whenever we can assist a local government in this capacity, we are ready and willing. Our sole objective is to save Spring Lake and prevent it from drowning,” Folwell said in a statement.
Samantha Wullenwaber, who was supported by the LGC as deputy chief financial officer and acting city manager, was fired on Friday, Wood told other LGC members. Wullenwaber had the authority to sign checks, and his abrupt dismissal left the city with limited options to perform this function. Wednesday’s LGC action should ensure checks are sent on time, the press release said.
Wullenwaber prepared a response to the state audit that met the criteria Wood said needed to explain how the issues arose, specify actions to be taken to respond to audit findings, identify who was responsible for the work and provide a timeline for the completion of milestones. The board of aldermen opted instead to submit a response from the city attorney, which Wood said was vague and misleading and failed to provide essential answers, the news release said.
The LGC voted to retain David Erwin as the city’s chief financial officer and named Tiffany Anderson and Susan McCullen as deputy chief financial officers. All three are employees of the SLGFD. Erwin was retained as signatory of the account. Anderson and McCullen were also named account signatories. Wullenwaber, former mayor Larry Dobbins and former pro tem mayor Taimoor Aziz were removed from office as they are no longer in office.
In a letter Wednesday to Spring Lake Mayor Kia Anthony, Charleston, according to the release, expressed gratitude for the opportunity to work with the council of aldermen.
“Although we have worked with the City through several challenges, we believe the time is right to move on to a new attorney.”
Noting the city’s long-standing financial turmoil, Folwell told the Carolina Journal “the more we peel the onion, the more we cry.”
He is concerned about the millions of taxpayer dollars pouring into the coffers of small towns, often lacking competent accountants and transparency. And Folwell, who is chairman of the LGC, said the problem is not an easy fix because “you can’t legislate common sense and courtesy”.
Folwell said it is up to local citizens to get more involved to ensure their tax money is not wasted. He pointed to East Laurinburg, whose charter was revoked after years of financial difficulties. He said that in East Laurinburg’s last municipal election, with four council seats open and the mayoral position open, only one resident ran for election.
“Communities need to be more engaged and interested in the process,” he said.