Pets in Town Hall, pay records falsified and money misused, NC audit finds
An incriminating report by the state’s auditor’s office says a former Town of Fremont mayor permitted two people to live in Town Hall, with their pets, and that hundreds of thousands of dollars in local funds were misused or misreported.
Fremont is in Wayne County and has about 1,190 residents.
The report, which covers from 2014 to 2021, was issued on Wednesday by Auditor Jessica Holmes. She was appointed to finish the term of former state Auditor Beth Wood – who resigned – by Democratic Gov. Roy Cooper.
Holmes is facing off in November against Republican candidate Dave Boliek, a member of the UNC-Chapel Hill Board of Trustees.
Here are some of the main findings, according to the report:
Stay at Town Hall
An unnamed former town administrator and former mayor allowed two people and their pets to live in Town Hall for approximately six months.
Due to this, these people had access to documents with personally identifiable information.
The former administrator also authorized the use of $3,450 in town funds to renovate Town Hall, including approving a shower and hot water heater be installed.
According to the audit, during a March 17, 2020, meeting of the Board of Aldermen in closed session, a board member questioned the mayor about this living situation. The mayor replied that he was going to start taking certain liberties granted to him as mayor, according to the report.
In Fremont, voters elect the mayor. Meanwhile, the Board of Aldermen appoints the town’s administrator to carry out day-to-day administrative operations. The board also appoints the town’s clerk.
Quarter of a million paid to employees not reported in taxes
More than $230,000 paid to the former town administrator and former payroll clerk for services performed from 2014 through 2021 was not reported to the IRS.
Federal law requires employers to report compensation paid over $600 yearly to employees.
This lack of reporting may result in the town being penalized. The report says this was caused by the town not having procedures in place to ensure all compensation was reported.
Records falsified, audit says
The town paid the administrator $32,424 for vacation hours she did not earn, according to the audit. While the report does not name the administrator, it refers to the administrator using female pronouns.
The town’s former payroll clerk falsified town records in order to pay herself and two other employees over $14,000 between January 2014 and December 2021 for more holiday time than they earned, the audit says.
The former payroll clerk received $4,710, the former public works director received $9,174 and the former town administrator received $384.
The town did not ensure that compensation for the former town administrator and the former payroll clerk was authorized and accurate, according to the audit, which blamed incomplete personnel files and documentation and improper oversight.
Due to this, over $500,000 in compensation paid out from July 2015 through March 2022 may not be accurate.
From January 2017 through December 2020 the town administrator and the former finance officer charged more than $100,000 to town credit cards. A large number of transactions on these cards did not have supporting documentation on use, the audit says.
Response from the town
In a May 7 response, Jonathan Allen, the town’s current administrator, wrote that the town has taken corrective actions.
According to Allen’s letter, current staff and board members have been informed about restrictions on property use and the town is sending correct tax forms to former employees who did not report income. The town will also adopt an internal policy for issuing tax forms.
As for vacation and employee overpayments, the town will ask former employees to make repayments, giving them 30 days after it sends them notifications to repay.
The town will also review all current employee personnel files to make sure they have required documentation and payroll information.
Asked about the audit, Allen told The News & Observer that “the report basically speaks for itself” and that the town is “ensuring those things happen and just moving forward being transparent.”
Allen said he had been town administrator for about a month and “that a lot happened before I got here.” Asked who specifically the report is referencing, he said he was “not sure who they’re talking about because it was before my time.”
The N&O asked early Wednesday afternoon for an interview with the auditor. Public information officer Catherine Nagy said she would follow up.
