An investigative audit into spending in the small Scotland County town of East Laurinburg found that a former finance director used town money to pay her utility bills and used taxpayer dollars to make purchases without showing those expenses were connected to town business.
As a result, the town’s bank account was overdrafted and it couldn’t cover operating expenses, the audit said.
The town has been in trouble with the Local Government Commission, a state government body that reviews municipal finances and approves their borrowing. State Auditor Beth Wood is a member of the commission.
East Laurinburg has not submitted annual financial audits for 2017, 2018, 2019, or 2020. The Local Government Commission recommended earlier this year that East Laurinburg lose its charter. Stripping a town of its charter requires legislation, and lawmakers have not acted on the commission’s recommendation.
The town’s former finance officer, who was not named in the state audit released Wednesday, wrote $2,674 in checks from the town’s account from May 2017 to January 2011 to pay her utility bills. She worked for the town from December 2016 through March 2018, the audit said.
The audit also found 42 additional questionable transactions totaling $8,542, including 14 purchases totaling more than $4,000 on a gas card and six checks written to the finance officer totaling $905 that had “petty cash” written in the memo line.
A town commissioner who is the former finance officer’s mother cosigned some of the checks.
“There was no oversight of how taxpayer dollars are being spent in that town,” Wood said in a YouTube video about the audit.
East Laurinburg has about 300 residents and had an annual budget of about $75,000 for the year that ended in June 2020, the audit said.
The town does not have any written accounting policies and procedures.
The audit report included a quote from the town commissioner who cosigned checks for her finance officer daughter: “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.”
The audit recommended the town seek reimbursement from the former finance officer, consider legal action against her, make sure all checks have supporting documentation, have an independent, objective commissioner sign checks, and have an annual audit performed.
Town officials could not be reached Wednesday. No one answered the phone at town hall and calls to two town council members were not returned. The town did not submit a formal response to the audit, but the report included a quote from the mayor saying that commissioners have decided to pursue charges against the former finance officer.