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Despite evidence that previous town aldermen in one Western North Carolina town misused public funds, no law enforcement agency is investigating the apparent financial misconduct.
The situation could raise multiple questions about the ability of voters to hold municipal officials accountable for apparent misconduct that may rise to the level of criminal behavior.
One problem is that towns without clear policies — or with ones with clear wording that states the wrong thing — may face legal loopholes that allow what otherwise appears to be criminal behavior.
The second problem is that even when there is clarity and no loophole, authorities may be reluctant to prosecute.
What happened in Robbinsville
Newly elected aldermen in the small Graham County town of Robbinsville discovered multiple questionable charges on municipal financial statements that showed large purchases for gasoline and food on town credit cards that appeared to be unrelated to town business.
Those aldermen told Carolina Public Press that they believe former aldermen, who were ousted in the November 2017 election, made the purchases, though they haven’t specified who they think made which purchase so far.
Auditors with the Waynesville-based Ray, Bumgarner, Kingshill and Associates accounting firm conducted an audit of Robbinsville’s books for the fiscal year concluding at the end of June 2017 and found “deficiencies in internal control” and “opportunities for strengthening internal controls and operating efficiency,” including a lack of a policy governing the use of town credit cards and lax documentation of purchases with those cards.
Auditors said, in a report dated Nov. 20, 2017, that they found “very little documentation backing up the expenditure(s)” and found two cases of “excessive use of gas cards in one day with no detailed documentation to validate the usage.”
North Carolina statutes govern how a town or city is organized, personnel rules, methods of taxation, the hiring of police officers and firemen, rules for parks and recreation departments and hundreds of other operations of cities or towns.
But state law doesn’t mandate that towns and cities have thorough policies regulating the use of municipal credit cards, leading to potential opportunities for misuse that are only discovered once a potential crime has taken place.
However, nothing prevents a municipality from adopting a thorough policy, which could clearly state that certain uses of town resources including credit cards are unacceptable.
On the other hand, a city or town could take the opposite approach.
In theory, municipal leaders could adopt a policy that allowed certain types of purchases using town credit cards. These would still be benefits that a board member or town employee would need to report to federal and state tax authorities, but such a policy could make otherwise felonious and unethical action perfectly legal, if still ethically dubious.
Absent a local policy, whether it limits such expenditures or is permissive, state statutes don’t clearly address such credit card uses for general personal expenditures, such as for food.
Even with ambiguity about the legality of some purchases, state law does expressly forbid one type of purchase and it’s one of the items in question in Robbinsville. State law makes a special provision that says the use of public money to purchase fuel or repairs for private vehicles is unlawful, and that any public official or employee accused of embezzling public funds could be charged with a felony, outside of general rules about theft generally. A separate provision applies that law to municipalities as well as counties.
Town officials said no local criminal investigation has been opened into the alleged misconduct, but they lodged a formal complaint with the State Bureau of Investigation, which typically handles cases involving public officials’ misconduct.
A State Bureau of Investigation spokeswoman told Carolina Public Press that the agency received the through its Asheville SBI office, but an inquiry was never conducted.
The spokesperson noted that the absence of a clear town policy on credit card use could make prosecution difficult.
However, that may not have taken into account that fuel purchases, specifically banned in state law, were involved in this case.
It is unclear whether the SBI might still decide to pursue an investigation of the Robbinsville situation as more information comes to light.
The allegations of misuse of public money in Robbinsville mirror several other scandals that have rocked North Carolina cities in recent years.
In early 2017, the former interim town manager and fire chief in the Polk County city of Tryon were fired after allegedly using town credit cards to pay thousands of dollars in private expenses for an elected official.
The former fire chief, Joey Davis, and a councilman, Leroy Miller, were later charged with fraud in federal court.
In 2016, town officials and employees in the Cumberland County town of Spring Lake were accused in a state audit of misusing nearly $500,000 over a five-year period.
Counties have also faced similar issues.
Buncombe County is currently the focus of a federal investigation into allegations of fraud, misuse of public funds and corruption centered on former county manager Wanda Greene, who is accused of spending tens of thousands of dollars of public money on private expenses.
Editor’s Note: CPP Managing Editor Frank Taylor also contributed to this report.