A bill passed by this year’s Legislature and signed into law just last week is aimed at preventing financial fraud, waste and abuse in municipal government entities.
House Bill 1058 was signed by the governor May 16. It modifies the audit requirement for municipalities with an income of at least $50,000 and population of less than 2,500.
State Auditor and Inspector Cindy Byrd has said the legislation will transform the way her office can provide financial oversight of municipal governments. She believes it’s a preventative measure that will catch any fraud, waste or abuse before it becomes a significant problem.
This legislation may have prevented what reportedly happened in the Town of Tryon, one of our area towns in Lincoln County, that led to a special investigative audit by State Auditor and Inspector Cindy Byrd’s office.
The findings from that audit resulted in felony charges recently being filed against three former town employees.
Two charges of embezzlement and one for conspiracy have been filed against the former police chief. The former Clerk-Treasurer, who also was a Utility assistant, faces a charge of embezzlement and one for conspiracy.
And the former Utility Clerk, who also was the Court Clerk in Tryon, is charged with a count of embezzlement and conspiracy.
Byrd said among the findings in the audit was the Board of Trustees improperly appointed the clerk-treasurer to an elected position which she held for more than eight years.
“That is a violation in state law,” Byrd added.
The Trustees had discovered there were not sufficient funds to meet the Town’s financial obligations. The Trustees asked for the audit of questionable financial activity of the three former employees.
But by that time, the damage had been done.
The audit found that more than $95,000 was misappropriated in the Town of Tryon and that three former employees reportedly misappropriated almost $80,000 in payroll.
Byrd further said, “The person in charge of law enforcement appears to have been breaking the law.”
The audit found the majority of the unauthorized payroll amount was received by the former Police Chief
According to further audit findings, Trustees became aware of certain facts. They included:
Prickett had reported W-2 earnings for 2018 of $106,000.
The Town’s bank account was overdrawn by around $8,000.
The Town was several months behind on paying bills.
Purchase Orders were being signed in advance. Credit card statements were being paid out but not shown to the board.
There’s little doubt that had this legislation been approved several years ago and already in place, this alleged abuse of taxpayer funds, as described in the audit, would have been prevented.
Of course, that also means the Trustees must perform their due diligence and pay attention to how town employees are doing their jobs.
Because as Byrd noted in her closing remarks of the audit, “The Board ultimately bears the responsibility for the financial welfare of the town.”
We couldn’t agree more.