The state is sanctioning the Spring Lake government because the town has not submitted annual audits for the past three fiscal years to the North Carolina Local Government Commission.
The Local Government Commission voted on Sept. 9 to withhold small amounts of sales tax revenue from Spring Lake and 10 other municipalities for not turning in their audits. Audits are normally due by Oct. 31.
The commission withholds up to 150% of what a town paid for its last completed audit, the Office of the State Treasurer said. This comes to $37,500 for Spring Lake, out of an estimated $1.76 million that the town expects to receive in sales taxes this fiscal year.
The withheld money is released after the late audits are turned in.
Spring Lake Mayor Kia Anthony told CityView that the town staff is working to complete the tardy audits. She expects them to be submitted by the end of the year.
The Local Government Commission oversees the finances of city, town and county governments, and the state treasurer is the commission’s chair. The commission took control of Spring Lake’s finances in October 2021 following years of troubles and corruption, including a finance director who embezzled nearly $570,000.
Anthony was elected a month after the takeover. The commission returned control back to the town in summer 2024.
The town’s finances were so bad in 2021 that it was impossible to produce an audit for that fiscal year, Anthony said. The Local Government Commission let Spring Lake forgo an audit that year, and the town had to resume audits starting in 2022.
The 2022 audit and subsequent audits were hampered by the lack of reliable figures to start with from 2021, Anthony said.
“Our current finance officer, Mr. James Overton, has been working diligently to get our 2021 ending balances,” Anthony said. “We found out we were about $1.9 million in debt in our general fund. And we had about $225 in reserves.”
With data for 2021 in hand, Anthony said, the town has been working on its audits for 2022, 2023 and 2024, as well as this year.
Senior reporter Paul Woolverton can be reached at pwoolverton@cityviewnc.com.
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