Wayne Week — Jan. 21, 2024

N E W OL D NORT H M E DI A PR E SE N T S A W E E K LY N E WS M AG A Z I N E

Wayne

WEEK

JA N UA RY 2 1, 2 024

N E WOL DNORT H .C OM

STORM’S A COMIN’ The North Carolina Office of the State Auditor sent the preliminary findings of its deep dive into Goldsboro’s finances to City Hall Jan. 12 — and it’s ugly. by KEN FINE and RENEE CAREY p. 8

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CONTENTS 9 Preliminary audit report:

City leaders misused funds

JANUARY 21, 2024 Volume 1, Issue 23

NEWOLDNORTH .CO M

EDITORIAL EDITOR Ken Fine EDITOR Renee Carey DESIGN DIRECTOR Shan Stumpf PHOTOGRAPHY DIRECTOR Casey Mozingo

ADVERTISING ACCOUNT EXECUTIVE Lara Landers ACCOUNT EXECUTIVE Hallie Hulse Evans

From trips to Los Angeles, California and Park City, Utah and a $1,500 desk set to thousands of dollars spent on BBQ luncheons and stays along the North Carolina coast, former City Council members and a current department head swiped their taxpayer-funded city credit cards without providing documentation to show they were “valid” uses of government funds.

10 Water cutoff rules did not apply to city leaders

Auditors say two former City Council members — and one current city employee — did not pay their water bills for years, but received no consequences despite owing thousands of dollars.

12 Employees left unchecked PUBLISHER

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Water was stolen and city leaders had excessive bills forgiven as City Manager Tim Salmon repeatedly called for rate increases.

14 Report: Salmon broke protocol re: COVID funds

According to preliminary findings from the Office of the State Auditor, Goldsboro’s city manager ignored best practices and “overrode” concerns expressed by his leadership team — leading to misappropriation of federal money.

16 City cannot account for fleet

Auditors claim Goldsboro leaders could not “provide documentation supporting the status or location” of 145 city-owned vehicles worth north of $100,000.

18 City employee forgave mom’s $431 water bill

Auditors say a lack of oversight by city leaders led to “preferential treatment” offered by an employee who still has a job inside City Hall.

COVER PHOTO ILLUSTRATION

BY KEN FINE & SHAN STUMPF, ADOBE STOCK

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NEWS +VIEWS United Way: State funds offer much-needed hope N.C. House Majority Leader John Bell secures windfall to combat gangs, addiction, and homelessness.

B Y K E N F I N E / Goldsboro

A

noticeable expansion of Goldsboro’s Tent City.

Women living with their children

in cars.

Teenagers engaging in a shootout inside Berkeley Mall.

A rising number of youths self-identifying as gang members or affiliates.

But homelessness and gang violence are only two of the issues plaguing Wayne County.

Addiction, poverty, and mental health concerns have come to the fore in recent years, too.

And that is why a “surprise” windfall from state coffers — courtesy of N.C. House Majority Leader John Bell — was “such a blessing” for the United Way, the organization charged with selecting recipients of $500,000 officials believe can and will make a lasting impact on all of the above.

It started back in 2022 when United Way

Executive Director Sherry Archibald and her team spoke with Bell about how COVID-19 had negatively impacted their ability to raise enough money to support the organizations that “show outcomes” and make a “significant impact,” in part, because of dollars they receive from the UW. “He was just interested in, ‘How can I support your campaign?’” Archibald said. “Recognizing that these programs were already vetted, he had some interest in trying to help bring the capacity to those to be stronger.”

But less than a year later, as gun violence escalated in Goldsboro, other conversations unfolded.

“I was getting phone calls on the other side of a shooting we had in the summer of 2023 — all this discussion of gang violence and gang prevention,” Archibald said.

Bell got to work — ultimately securing

$750,000 for the United Way. And while only $250,000 will be used to beef up the organization’s annual campaign’s final fundraising total, Archibald believes the remaining $500,000 has an opportunity to change countless lives for the better.

The application window is open for those non-profits actively working to put a dent in gang numbers and the community’s homeless population who need increased funding to increase their capacity.

And while some might think that everyone who applies will get a piece of the pie, Archibald and her team feel the way to make the biggest strides is to select the “strongest” applicants and hand them a game-changing check.

“We might get 50 applications, but that doesn’t mean we need to water this down. We need to get the strongest applicants so we can make a significant impact somewhere. Some-

times, it’s just so easy to say, ‘Let’s just help everyone. They are all doing great work.’ Well, a lot of them are doing great work, but sometimes, when it’s watered down, you can’t make a strong impact,” Archibald said. “So, where can this money go so we can see big change?

You know, hearing and seeing all these things, we know that it’s not isolated to Goldsboro, but it doesn’t make you feel any better. You don’t want this to be happening here — in this community that you love. So, this (money) came as a huge surprise … and it’s very exciting to know that we can be a part of making a significant impact.”

The deadline to apply for funding is Jan. 26 and those interested in applying for funds can download the application at unitedwayne.org “This funding can be significant,” Archibald said. “I love that it’s not a couple of thousand dollars. It can make a huge impact.” n

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{ our TAKE }

Audit should seal Salmon’s fate City ManagerTim Salmon and Finance Director Catherine Gwynn

T

here are consequences when you wait too long to make a difficult, but necessary, change, or when you accept excuse after excuse and ignore red flag after red flag.

We know — and you know — by watching what has unfolded in several places across this county over the past few years just how much damage incompetence and inattention combined with a whom-you-know-based employment system and voter apathy can do.

We have lived through an almost complete financial failure of a school district and are living now with the consequences on education quality in this community.

We were shocked to hear about a massive scandal — resulting in federal indictments — at our Sheriff’s Office.

We have watched with open-mouth astonishment at the continued unprofessionalism in the Register of Deeds Office, her declarations of unfair treatment, and her lack of promised competence. And we might even have chuckled a little — in that uncomfortable kind of way — when she announced she would be seeking re-election.

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And as we grappled with all of that, we have become increasingly aware of the bad decisions and seeming shoulder-shrug arrogance in the “leadership suite” as questions continue to swirl around management practices and priorities and the curiously never-ending late audits in the city of Goldsboro.

As a community, we recently took important steps to address that last one. We have a new council, a new mayor, and reassurance that the hard votes would be taken and that change would be a top agenda item.

We asked those new council members to live up to the promises they made — that the needs of the citizens of Goldsboro would be top priority, including making safety and adequate police protection Job 1.

Turns out we cast those votes to change leadership just in time.

Because now, we need to ask those newly elected representatives to make two more very important personnel decisions. Now. The State Auditor’s Office has released a preliminary report of its audit of the city of Goldsboro’s financial practices — a report

that is now in the hands of city leaders.

And it is grim. Really grim.

The report is not final yet, so city leaders in general, but City Manager Tim Salmon and Finance Director Catherine Gwynn, in specific, will have a chance to explain — by Jan. 26 — what just a preliminary look at the city’s finances has uncovered.

But the answers, or explanations, for how your money was used — and who benefitted from that use — included in response to the auditors’ questions about city financial practices are puzzling at best and, in some cases, down-right jaw-dropping.

And this is just a snapshot. The auditors are recommending a deep dive in several areas.

That means that the findings in this report — and they are significant — could be just the tip of an iceberg that could have implications in previous administrations as well.

So, buckle up.

We expect this to get worse. Much worse.

But for now, we as a community are finding out about the irregularities not from the finance director who has been chronically late

with audits because “of the mess she had to clean up” and not from the city manager who has been championing the city’s financial practices for months now and excusing away late audit after late audit.

We know how bad it is only because State Treasurer Dale Folwell, back in 2022, said enough, and ordered an audit of the city’s finances.

Thank goodness he did.

You can read the preliminary findings yourself. They are all here.

And then, when the city files its response, you can judge for yourself.

But because we believe that you are busy and might not want to wade through the entire document — although we encourage every Goldsboro citizen to do so — we have pulled together a highlight reel.

Well, let’s face it. It’s a lowlight reel.

Remember when we all talked about how little money there was in the city coffers and that there was no way for the city to pay for the raises for the police and firefighters?

Remember when the city manager said that

the city utility fund was strained and that a rate increase was necessary?

Remember when concerns were raised about water plant capacity and necessary work that had to be done to keep the city’s water and sewer plants operating efficiently?

Remember when some past City Council members whined about their “treatment” and demanded expensive items for their “home offices?”

Remember the incessant bickering and grandstanding that resulted in little to nothing being done?

Well, remember all of that, and then process this: Auditors took a sample of purchases made with city credit cards — 194 charges for a total of $100,733, to be exact.

They found that 81 of them — 42 percent — did not include itemized receipts, evidence of a valid city purpose or proper approvals.

Among the purchases that raised red flags?

A $1,500 desk set, a $3,000 hotel stay in Park City, Utah, $2,000-plus expensed trips to Los Angeles and San Antonio, Texas, a $1,522 stay in Wilmington and a $2,000 barbecue lunch.

By the way, in case it wasn’t clear, you, the taxpayer, footed those bills.

OK, now re-read the comments about the city’s financial constraints and how we couldn’t afford to give police officers a raise when thousands of bullets were flying across your city, Tent City was expanding, and teenagers were getting gunned down because the GPD didn’t even have enough officers to ensure its own headquarters wasn’t vandalized by thugs, much less keep the peace in our community.

Angry yet?

Auditors also discovered that an unidentified former City Council member had not paid their water bill for FOUR years and wracked up more than $4,700 in debt, that another elected official’s bill was delinquent for 1,392 days with a $798 balance and, a current city employee, according to the auditor’s report, did not pay their water bill for 3,111 days and had a balance of $1,466.

How does that sit with you?

Would you not have liked to postpone paying your water bill for YEARS? Could you have found another use for the money you used to keep your water bill current?

And what do you think would have happened had you just stopped paying your bill?

Well, according to the auditors’ report, a current water department employee took care of her mother’s large unpaid balance — she just wiped it out — and did so without a supervisor’s review.

The city’s response?

There was “lee-way” that allowed water de-

partment employees to take such actions in cases of excessive water usage.

Huh? No potential for trouble there.

What do you think would have happened if your mother had a large delinquent bill?

Would her water still be on?

Not. A. Chance.

And there were more examples of a shocking lack of oversight inside the water department.

The auditors’ report also noted that the city, while under the shadow of a rating as a “distressed utility,” did not pay careful enough attention to delinquent accounts.

After a review of just 19 of them, auditors found that the city had allowed more than 2.2 million gallons of water and sewer services to be consumed without payment.

That translated, the auditors’ report said, to $24,537 in water service provided to delinquent accounts, failure to recover $1,012 in stolen water services, and $40,520 in “unsupported balance credits.”

And remember, this is just a snapshot of the water accounts. God only knows what a thorough and full examination of those numbers might find.

So, we ask you to stop and think about this — what would it have cost to add another experienced officer to the police department?

Think we could have added one for the $50,000-plus spent on luxury vacations and BBQ luncheons charged to taxpayers by former City Council members and current city department heads?

Think we could have added another for the $50,000-plus in delinquent account balances that were either not collected by the water department or wiped off the books because the accountholder knew the right city employee or happened to be an elected official?

Of course, there is more.

Like the tens of thousands of federal COVID dollars misspent because, according to auditors, Salmon “overrode” best practices and ignored department heads who had the audacity to question his judgment.

That money is going to have to be repaid, by the way — again, with your tax dollars.

And there are more hits in the report.

You can — and should — read them in the pages that follow.

But before you do, there are lessons we feel the need to share — thoughts we have had that have made our eyes widen and our hearts skip a beat on more occasions than we can count.

How much of the incompetence and downright negligence that has unfolded in the last five years across this county would have been known had someone been looking?

How much of it got worse because no one really was?

Well, we at Wayne Week, and previously on

our sister platform, NewOldNorth.com, are looking now and have been looking and holding officeholders accountable.

And because of the people who have leaked documents, tipped us on where to look, and have decided that sitting back and watching the irresponsible spending and bad hires and decisions happening behind the scenes across the county is no longer an option, we are making a difference.

A real difference.

Together.

There has been a consequence of losing a strong, independent, and fearless watchdog media in this community.

When someone is watching officeholders — and looking carefully at decisions and documents, as well as asking the tough questions — stuff gets done, and those who do things like take expensive trips on the taxpayers’ dime or sign contracts with pricey consultants think twice about doing wrong.

And we feel strongly that we have gotten a lot done in this county since we began this journey because the bad actors are finding it increasingly difficult to operate in the shadows.

Communities are waking up.

Local residents are not willing to just sit back and accept that “this is just politics.”

They are demanding better.

And they are watching — helping us shine a light on those who seek not a better community, but personal gain.

We tell you all the time that Wayne County has massive potential and good people with patriots’ hearts.

But to get to our best self, we have to jettison the chaff.

And it is time to shake things up in the city’s “leadership suite.”

We promised to always tell you the truth — no matter how harsh it might seem.

So, here it is.

If it quacks like mismanagement and lack of leadership, well, then it is most assuredly a duck that needs to go — before it gets any worse.

And if that same duck is championing another, equally underperforming duck, that one needs to go, too.

That means Salmon — and his finance director — should be shown the door.

The city already has a new set of sheriffs in town.

We believe they are good people who want to point Goldsboro toward a brighter star.

It is time for them to bite the bullet and do the hard thing that will get this city back on the right path.

We’ll be watching to see how quickly that decision is made. n

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STORM’S A COMIN’ The North Carolina Office of the State Auditor sent the preliminary findings of its deep dive into Goldsboro’s finances to City Hall Jan. 12 — and it’s ugly. by KEN FINE and RENEE CAREY

B

ack in early 2022, North Carolina Treasurer Dale Folwell excoriated Goldsboro leaders for the city's repeated inability to fulfill its financial reporting obligations in a timely manner — and charged then-State Auditor Beth Wood with taking a deep dive into how business was being conducted inside City Hall.

Nearly two years later, the preliminary findings were sent, via email, to City Manager Tim Salmon — a series of claims that seemingly substantiate Folwell's fear that something wasn't adding up in the Wayne County seat. .From former City Council members using tax dollars to fund expensive trips to Los Angeles, California and San Antonio, Texas and Water Department employees wiping away thousands of dollars in debt accrued by family members and city leaders to Salmon breaking city protocol and ignoring his department heads when they questioned what they believed to be "potentially fraudulent" use of federal COVID-19 funds, the authors of the report highlighted lack of oversight, shoddy leadership, and numerous actions that threaten to undermine the public's confidence in its local government.

The following stories came to fruition because a confidential state source decided to ensure the confidential report was not kept in the dark.

"What has been allowed to go on for years is absolutley crazy and people have the right to know," they said. "That's the only way you're ever going to change Goldsboro for the better."

Editor's Note: The preliminary report is just that and the city has been given until Jan. 26 to challenge the findings revealed by auditors if local leaders believe — and can prove with documentation — that any of the facts uncovered by the state are wrong.

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VARIOUS TRAVEL-RELATED PURCHASES The city made tens of thousands of dollars’ worth of purchases that were not supported by required documentation or approvals.

THE NUMBERS

A city department head spent $2,779 for a hotel in Park City, Utah

More than

$52,000

The former city Finance Director spent $1,293 for a hotel in Wrightsville Beach

in questionable purchases were identified in the sample tested by auditors.

More than

42%

$1,522 for the Hotel Ballast in downtown Wilmington

of those purchases in the sample lacked itemized receipts or documentation supporting a valid city purpose, and lacked documentation supporting approval.

$542 for the Blockade Runner Beach Resort in Wrightsville Beach

A former City Council member spent $2,166 on hotel, airfare, food, and transportation in Los Angeles and San Antonio

They include:

$2,394 and $2,082 for BBQ luncheons.

$1,452 for a desk set.

O

Audit: City leaders misused funds

According to the N.C. Office of the State Auditor, Goldsboro leaders spent tens of thousands of taxpayer dollars without proving the expenses were for “valid” city purposes.

ne former member of the Goldsboro City Council took trips to Los Angeles, California and San Antonio, Texas.

A current city department head spent nearly $3,000 for a hotel in Park City, Utah.

The former Finance Department director went to Wrightsville Beach.

And thousands of dollars were spent on everything from a nearly-$1,500 desk set and a trip to a North Carolina beach resort to several barbecue luncheons that cost north of $2,000 apiece.

According to the preliminary findings outlined by the State Auditor’s Office in a report sent to City Hall Jan. 12, City Manager Tim Salmon and Finance Director Catherine Gwynn — and their predecessors — turned a blind eye to tens of thousands of dollars in purchases charged to city procurement cards that were not justified by required supporting documentation or approvals.

The audit, initiated in March 2022 after State Treasurer Dale Folewell called for it amid Goldsboro’s inability to hit financial reporting deadlines, is nearing its completion,

but the state tipped off city leaders about its findings to allow for an official response it has asked to receive by Jan. 26.

That email — and the “issues” detailed in a series of documents attached to it — were obtained by Wayne Week through a confidential state source.

Here is what auditors found after analyzing a sample of 194 of the 32,000 “P-Card” purchases made from July 2017 to June 2021: • Auditors tested 194 purchases totaling $100,733 and determined that 81 of them — 42 percent — lacked itemized receipts, documentation to support “a valid City purpose,” or documentation of approval.

• The total amount of money spent on those scrutinized purchases was $52,211.

• Specifically, 53 purchases that “lacked documentation to support a valid City purpose” were related to travel, including: - $2,166 spent on a hotel, airfare, food, and transportation by an unidentified former City Council member in Los Angeles, California

and San Antonio, Texas.

- $2,779 spent on a hotel in Park City, Utah by an unidentified current city department head.

- $1,293 spent on a hotel in Wrightsville Beach, North Carolina by the city's former Finance Director.

• More than a dozen purchases lacked “itemized receipts, documentation supporting a valid City purpose, and lacked documentation supporting approval,” including: - $542 for a stay at the Blockade Runner Beach Resort in Wrightsville Beach, North Carolina.

- $1,522 for a stay at the Hotel Ballast in downtown Wilmington, North Carolina.

- $2,082 for a BBQ luncheon.

The report placed blame squarely on “city management” and its lack of oversight over purchases made with Goldsboro credit cards that saw taxpayers foot bills for everything from extravagant travel to expensive meals.

And auditors warned city leaders that

more misuse of funds is possible.

“Since over $52,000 of purchases were not supported by documentation or required approval, there is an increased risk that the City paid for purchases that did not have a valid City purpose,” the report reads.

“The P-Card purchases identified above were only those identified in the sample and may not include all that exist in the entire population.”

That “entire population” includes 4.6 million tax dollars.

It is unclear whether members of the current City Council will call for a thorough analysis of all 32,000 purchases made with Goldsboro credit cards between July 2017 and June 2021 now that the state has identified misspending in nearly 50 percent of its sample.

But the State Auditor’s Office recommended that leaders consider pursuing “recovery” of the tax dollars used for the purchases that lacked required documentation and/or approval and revoking P-Card privileges of any current employees tied to them. n newoldnorth.com

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‘Water cutoff rules did not apply to city leaders’ Auditors say two former City Council members — and one current city employee — did not pay their water bills for years, but received no consequences despite owing thousands of dollars.

I

n 2020, while City Manager Tim Salmon was recommending water rate increases for Goldsboro residents, he knew that a member of the City Council had not paid their water bill in more than four years — and, despite a debt of more than $4,700, had not had their utility services cut off.

But the elected official — who was identified only as “Former Council Member A” in a preliminary report drafted by the North Carolina State Auditor’s Office and obtained by Wayne Week through a confidential source — was not the only member of the board who enjoyed running water despite a massive unpaid balance.

A second person, identified as “Former Council Member B,” was delinquent on two separate occasions without penalty — for a total of 1,392 days that resulted in an accumulated unpaid balance of $798.

And a current city employee was not cut off, “even though the account was delinquent on three separate occasions for a total of 3,111 days” and carried a $1,466 debt.

“In each instance, the city should have cut off City Employee A’s account for nonpayment,” the report reads. “However, the city allowed the account to remain open and continue to accrue usage for a total of more than eight years and six months.”

The findings, which state officials blamed on “inaction from city leadership,” were one of six impeachments discovered during the “thorough audit” N.C. Treasurer Dale Folwell instructed the State Auditor’s Office to perform in January 2022 amid concerns that the city’s consistent failure to meet financial reporting obligations might be indicative of finances that “might be in disarray and therefore vulnerable to mismanagement or misappropriation.”

The six issues sent to City Hall by Performance Audit Manager Brandon James via email Jan. 12 seem to validate Folwell’s fears.

And in the case of Goldsboro leaders giving council members grace not extended to the general public, officials believe they “risked giving the appearance of unequal treatment eroding the public’s confidence.”

“Equal treatment by the government

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City officials did not cut off delinquent utility accounts of City Council members and city employees.

THE NUMBERS A former City Council member, identified in the report as “Former Council Member A,” had an account that had been delinquent for

1,472 days

and accumulated an unpaid balance of

$4,713

A former City Council member, identified in the report as “Former Council Member B,” had an account that had been delinquent on two occasions for a total of

1,392 days

and accumulated an unpaid balance of

$798

A current city employee, identified in the report as “City Employee A,” had an account that had been delinquent on three occasions for a total of

3,111 days

and accumulated an unpaid balance of

$1,466

is a key responsibility for government leaders. Standards from the United States Government Accountability Office state that those entrusted with public resources are responsible for providing service to the public effectively, efficiently, economically, ethically, and equitably,” the report reads.

The preferential treatment extended by the Water Department to council members and city employees did not begin on the watches of Salmon and Finance Director Catherine Gwynn.

The city “should have cut off Former Council Member A’s account for nonpayment” in October 2016 and Former Council Member B and City Employee A should have lost service numerous times had they been held to the same standard as ordinary residents.

But according to the state, more than a year-and-a-half of Former Council Member B’s — and more than a year of the City Employee A’s — nonpayment occurred under the current city manager’s watch.

“The City Manager and Finance Director inherited all three long-standing delinquent accounts when they began employment with the City in 2019,” the report reads.

“However, they did not correct the actions of their predecessors. Consequently, the utility accounts continued to accrue usage for another 17-18 months.”

Salmon and Gwynn were not the only ones blamed.

The state also alleges that former Finance Director Kaye Scott granted “an informal, verbal payment arrangement to Former Council Member A” in lieu of cutting off their water service — a deal “not offered or made available to other utility customers” that, like the inaction of Salmon and Gwynn when they took the reins in 2019, ran the risk of alienating city residents.

“Unequal treatment could prevent the proper operation of democratic government by threatening the public’s confidence,” the report reads. “For example, the City Code of Ethics states: The proper operation of democratic government requires that public officials and employees by independent, impartial and responsible to the people … that public office not be used for personal gain, and that the public have confidence in the integrity of its government.”n

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. Wayne WEEK . 11

‘Employees left unchecked’ Water was stolen and city leaders had excessive bills forgiven as City Manager Tim Salmon repeatedly called for rate increases.

Here is, specifically, what they found: • Auditors reviewed the detailed account balance history for 19 accounts that were delinquent from July 1, 2019, to June 30, 2022, and found that the Utility Department did not cut off the 19 accounts until between 34 and 12

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817 days after what should have been the cutoff date. From that date until their eventual cutoff, those customers used approximately 2.19 million gallons of water and sewer services without paying.

• Auditors found that the Utility Department did not detect in a timely manner, or, in some cases, at all, the illegal reconnection of utility services on accounts that had been cut off. They reviewed 167 accounts that were delinquent between October 2020 and November 2022 for nonpayment and determined that 9 percent of the customers illegally reconnected their service and resumed usage.

• Auditors reviewed the account billing history for 36 accounts that were “delinquent and/or in the name of a City employee or elected official” from July 2019 to June 2022. They found 24 balance credits made to those accounts — and that the city could not justify that they were necessary, calculated correctly, or approved by the unidentified “Utility Customer Service Supervisor.” As far as how much money that cost the city, the state was unable to make a determination. “Since the Utility Department did not have supporting documentation … auditors could not determine how many gallons of water and sewer usage were unpaid,” the report reads.

• Auditors determined that the city failed to collect at least $24,537 in water and sewer services provided to delinquent accounts with untimely disconnections.

• Auditors determined that the city failed to collect $1,012 in stolen water and sewer services.

• Auditors determined that the city failed to collect $40,520 because of “unsupported balance credits.”

It is unclear how the city intends to resolve the issues discovered by the state, but the authors of the report made several recommendations including pursuing collection of utility account balances owed due to nonpayment, illegal reconnection of service, and unsupported balance credits.

They also urged Goldsboro leaders to refer those who illegally reconnected their utility services to law enforcement and to develop and implement written policies and procedures that would allow for oversight and ensure nobody receives preferential treatment because of their status as an elected official or their relationship to a city employee. n

Goldsboro’s Utility Department wasted millions gallons of the city’s water and sewer resources over three years by distributing water without collecting payments.

THE NUMBERS

The city wasted approximately

2.2 million

gallons of the city’s water and sewer resources.

The city failed to collect at least

$52,914

and risked setting a tone that not paying utility bills was acceptable. Auditors reviewed the detailed account balance history for 19 accounts that were delinquent and determined that the Utility Department did not cut off the 19 accounts until between 34 and 817 days after the date on which they became delinquent.

47,100 total gallons

D

espite the fact that Goldsboro was designated a “distressed utility” under the state’s Viable Utility Program in 2021 and City Manager Tim Salmon has repeatedly encouraged members of the City Council to increase water and sewer rates since 2020, the city “wasted approximately 2.2 million gallons of the City’s water and sewer resources over three years by distributing water without collecting payments,” according to a preliminary audit report drafted by state officials and obtained by Wayne Week through a confidential source.

The state investigation was completed after State Treasurer Dale Folwell delivered a scathing review of city leaders for failing to meet its audit requirements — which he characterized as a “basic but critical oversight function.”

“It is troubling that the state’s 30th largest city, the county seat and home to Seymour Johnson Air Force Base, no less, has been unable to get its act together,” Folwell said in January 2022, before instructing then-State Auditor Beth Wood to conduct a “thorough audit” of Goldsboro’s practices. “Audits are necessary to assess financial well-being, to ensure bills are being paid and money is not missing.”

According to the report sent to City Hall Friday, money that should have made its way into local coffers did not. Specifically, from 2019 to 2022, Goldsboro left at least $52,914 on the table and “risked setting a tone that not paying utility bills was acceptable.”

From untimely cut-off of delinquent accounts and illegal reconnection of disconnected services to city employees crediting delinquent accounts inconsistently and without just cause, auditors bemoaned the fact that a municipality with a utility system with “urgent needs for increased revenue and investment” would leave so much money on the table while, at the same time, increasing bills for paying customers.

“In fact, minutes from City Council meetings show frequent discussions on the poor fiscal health of the City’s utility system,” the report reads.

And auditors blamed leaders inside City Hall for failing to develop “written policies and procedures to govern utility operations.”

The Utility Department did not detect the illegal reconnection of six accounts in a timely manner, resulting in the theft of

16,660

gallons of water.

The Utility Department did not detect the illegal reconnection of nine accounts until auditors brought them to the Department’s attention, resulting in the theft of

30,440

gallons of water.

Auditors reviewed the consumption data for all 167 delinquent utility accounts that the Utility Department had cut off between October 2020 and November 2022 for nonpayment and determined that 9 percent of those customers illegally reconnected their utility service and resumed usage. Those customers stole a total of

47,100

gallons of water and sewer services.

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. Wayne WEEK . 13

Report: Salmon broke protocol re: COVID funds According to preliminary findings from the Office of the State Auditor, Goldsboro’s city manager ignored best practices and “overrode” concerns expressed by his leadership team — leading to misappropriation of federal money.

$3,878

for tires, service, parts, maintenance, and fuel for the Three in One Director’s personal vehicle, a Lexus RX350.

$3,500

for a down payment on the Three in One Director’s new personal vehicle, an Acura MDX, plus a $99 shipping fee for a second, additional Acura MDX.

$1,343

for an unspecified “grant writing fee,” including $45 for postage.

$1,046

for three rental cars, a forklift rental, and fuel despite a lack of receipts.

The city paid

$5,000

to Center Street Station, LLC for rent reimbursement. The 2 receipts provided for 2 months of rent were inadequate and there were no copies of cancelled checks or a lease agreement.

The city paid

$2,406

to the Old North State Hospitality Group for “additional staffing and work performed.” No invoice or other details were provided except unclear screenshots from an unknown source.

The city paid

$2,118

to Sleepee 180 Clothing, LLC for rent reimbursement. There were no copies of cancelled checks or a lease agreement, only a hand-written note from an unknown source.

N

early $4,000 to repair a non-profit director’s personal vehicle, a Lexus RX350.

Another $3,500 for a down payment on that same non-profit director’s new Acura MDX. More than $9,500 for rent for two LLCs and “additional staffing and worked performed” for a small business that was not accompanied by required documentation.

And that only represents what state auditors found among a fraction of the recipients — seven non-profits and small businesses — of Coronavirus Relief Funds they received from Goldsboro coffers.

According to the preliminary findings of a “thorough audit” N.C. Treasurer Dale Folwell instructed the State Auditor’s Office to perform in January 2022 amid concerns that the city’s consistent failure to meet financial reporting obligations might be indicative of finances that “might be in disarray and therefore vulnerable to mismanagement or misappropriation,” City Manager Tim Salmon overrode objections from department heads, dismissed grant agreement requirements, and brushed aside the city’s “existing financial procedures,” leading to misappropriation of more than $21,000 in federal funds.

As a result, state officials are recommending the North Carolina Pandemic Recovery Office review all payments to non-profits and small business — $248,996 worth — and pay back all “expenses determined by NCPRO to be not allowable or lacking key documentation.”

Here is what is in the report obtained by Wayne Week through a confidential source: • Auditors tested the city’s disbursements to seven non-profits and small businesses that received a total of $92,500 from November 2020 to April 2021 and found that nearly a quarter of the money spent — 23 percent — was used for expenses that were “not necessary, not incurred due to the pandemic, and not adequately documented.”

• Salmon and his then-assistant overrode the objections of department

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heads regarding payments to Three in One Family Center — the non-profit run by the person who spent $4,000 to repair their Lexus and $3,000 for a down payment on a new Acura — they characterized as “overreach,” “iffy,” “wasteful,” and “potentially fraudulent.” One also told Salmon the purchases “looks like a scam.”

• When asked why he approved the above, Salmon told auditors the city was in “a state of emergency” and his job was to “slow the spread of the virus and potentially save lives.” He said he believed Three in One Family Center’s director was doing that. “There’s no telling how many lives he saved. Maybe he saved zero, maybe he saved many,” Salmon said.

• When asked why he approved the above, Salmon’s then-assistant told auditors the leadership team’s mindset “was to get this process (paid) quickly,” and that he and Salmon “felt like we were being creative.”

• When asked why he ignored existing city procedures, Salmon said, “I don’t know. I guess service.” When Salmon’s then-assistant was asked the same question, he responded, “I don’t know.

That’s a good question.”

• Auditors said the city violated federal law and guidelines by failing to “distribute funds to recipients for qualifying expenses that were necessary, incurred due to the pandemic, and adequately documented” — that as a result, $21,346 was “wasted.”

It is unclear whether the city is on the hook for the $21,346 the state says was misspent, but auditors did recommend that Goldsboro “immediately recoup all expenses” that have been — and could be should the city follow auditors’ recommendation that it have the NCPRO investigate all 248,996 dollars spent — determined to not be allowable or lacking key documentation.

But assuming the City Council takes the finding seriously and follows the state’s call to action, the board would “provide regular oversight of city leaders and management to ensure that legal requirements are followed, and financial resources are safeguarded.” n

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. Wayne WEEK . 15

‘City cannot account for fleet’ Auditors claim Goldsboro leaders could not “provide documentation supporting the status or location” of 145 city-owned vehicles.

W

hen state auditors took a deep dive into how Goldsboro operates at the behest of North Carolina Treasurer Dale Folewell, they found the city could not account for 145 of the 575 city-owned vehicles listed in its inventory — a black-eye the state said represented yet another example of failure by leaders inside City Hall.

The “issue” was identified in a sprawling preliminary audit report sent to Goldsboro leaders Jan. 12 and obtained by Wayne Week through a confidential source — and, according to auditors, increased the risk of “eroding public trust” in its local government by demonstrating how the city failed to “safeguard” taxpayer-funded property.

HERE’S WHAT WE KNOW

Auditors obtained an inventory of 575 city-owned vehicles from the fleet management system so they could review the list for inconsistent record-keeping.

They tested 334 of them that raised red flags — some, because they existed in the Department of Motor Vehicles database but not the city’s records, and vice versa.

Of those 334, the city “could not account for, explain, or provide documentation supporting the status or location” of 43 percent of them. The unaccountedfor vehicles include 122 cars and trucks, 20 cargo and utility trailers, and three commercial lawnmowers worth north of $117,000.

According to the state, city officials could not account for the vehicles because “the City’s Fleet Maintenance Division did not follow City policy that required adequate accounting procedures and records for fixed assets."

And to make matters worse, an unidentified “Fleet Maintenance Superintendent” admitted to auditors that the city did not perform annual inventory counts

of city-owned vehicles.

When asked why there was a discrepancy between a July 25, 2022, inventory report and a copy of the entire fleet management system database provided to the state less than a month later, the city’s Information Technology director told auditors that the Fleet Maintenance Division had been “improperly deleting records when vehicles were sold or disposed of instead of archiving them.”

Shortly thereafter, the person identified in the report as the “Fleet Maintenance Superintendent” could not explain “why or who was responsible.”

But the missing vehicles were not the only issue discovered during the audit.

The state also found that “vehicle records were inaccurate,” with some city assets listed in the database with incorrect Vehicle Identification Numbers and missing license plate numbers and others that had been “misclassified as surplus.”

“Since the City was unable to account for 145 Cityowned vehicles, the City did not ensure that City property was safeguarded,” the report reads. “Since the vehicles could not be accounted for and no documentation could be provided that supported the vehicles’ status and location, it would be difficult for the City to detect fraud, waste, or abuse related to the property.”

And it also risked eroding public trust.

“The City not keeping track of and accounting for City-owned vehicles risks eroding the public’s trust in the City’s financial administration and stewardship of public resources,” the report reads.

Auditors recommended Goldsboro leaders “immediately” conduct an “independent and complete” physical inventory count of all vehicles and equipment — and that it repeat the process “on at least an annual basis." n

The city could not account for more than 100 city-owned vehicles or, as a result, maintain public trust by ensuring city property was safeguarded.

THE NUMBERS

The city could not account for145 City-owned vehicles worth approximately

$117,753 THEY INCLUDE:

122

cars and trucks

20

cargo and utility trailers

3

commercial lawnmowers

SEND US YOUR THOUGHTS Want to sound off on the issues we’re covering?

Send your thoughts to letters@newoldnorth.com and we just might publish them in a future edition of Wayne Week.

Word count is not overly important, but please identify yourself by name and the city or town you reside in.

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. Wayne WEEK . 17

A city Utility employee abused their position for preferential treatment and financial gain without detection

THE NUMBERS A current city employee made

11

Unsupported balance credits to their mother’s utility account, reducing the balance owed by

$431

‘Current employee forgave mom’s $431 water bill’ Auditors say a lack of oversight led to “preferential treatment” offered by an employee who still has a job inside City Hall.

A

current Goldsboro employee allegedly used their position to credit their mother’s utility account nearly a dozen times between Jan. 30, 2019, and March 30, 2022, to reduce her water bill by more than $400 — a violation state officials blame on inaction from city leaders.

The claim of the employee’s ability to offer “preferential treatment” and receive “financial gain without detection” was one of six “issues” discovered during the “thorough audit” N.C. Treasurer Dale Folwell instructed the State Auditor’s Office to perform in January 2022 amid concerns that the city’s consistent failure to meet financial reporting obligations might be indicative of finances that “might be in disarray and therefore vulnerable to mismanagement or misappropriation.”

A copy of the auditors’ preliminary report was obtained by Wayne Week through a confidential source.

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. Wayne WEEK . newoldnorth.com

According to the document, the employee, who was not identified, should only have been authorized to credit utility account balances with “proper support and managerial approval.” But when asked by auditors to unwrap Goldsboro’s process, “the Utility Customer Service Manager and Supervisor” said the city had an “informal practice” that allowed employees to credit accounts when they had “unusually high water consumption” — but only after documentation was provided that proved the cause of the high consumption, like a leak, had been resolved.

But in the case of the employee’s mother, city leaders were unable to provide “any documentation to support balance credits” and a person identified only as the “Utility Customer Service Manager” admitted to auditors that “the credits should not have occurred.”

The city employee, though, said their mother had “a series of plumbing issues” that led to the necessity for balance credits and

that the department manager verbally agreed to the 11 credits. That claim was denied by the manager who said they were “unaware” the transactions had occurred.

The finding, like several others noted in the preliminary report sent to city leaders Friday via email, prompted state officials to question managerial practices inside City Hall.

“The City employee was able to abuse their position without detection because the Utility Department did not monitor to ensure balance credits were properly supported and approved,” the report reads. “Employees were able to make balance credits to any account, including their own, without any oversight by management.”

It is unclear whether or not the employee will be terminated for what the state said was, at the very least, a violation of the City Code of Ethics. Criminal charges could, theoretically, be on the table as well should the city determine crediting

a family member’s water account without documentation qualifies as theft.

But the state recommended the city at least consider taking some action — both against the employee and by putting controls in place to ensure the same behavior is not repeated in the future.

“The City of Goldsboro should consider disciplinary action against the City employee that abused their position by making unsupported balance credits to their mother’s utility account, including payment of the credited amount,” the report reads. “Since the City employee’s abuse was not detected, the Utility Department risked other employees becoming aware and also abusing their positions for financial gain.

In addition, financial gain resulting from City employees abusing their positions would risk eroding the public trust by demonstrating a lack of commitment to ethical and equitable public services.”n

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. Wayne WEEK . 19

the SPECTATOR

Undefeated

The Goldsboro High School Lady Cougars remain undefeated after a thrilling, last-second 53-52 victory over Beddingfield Wednesday.

With the win, the team moved to 13-0 on the season and will take to the court to keep its streak alive Friday evening at Princeton.

Photos by Ken Fine

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. Wayne WEEK . newoldnorth.com

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. Wayne WEEK . 21

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JAN. 20 7:30 p.m.

To get tickets to this must-see concert, part of the Paramount Performing Arts Series, visit goldsboroparamount.com The Paramount Theatre

GRANTHAM GETDOWN

FEB. 3 7 p.m.

Rock out with the Band of Oz and support the Grantham Volunteer Fire Department at the same time.

A $25 donation to the firefighters gets one person in the front door for what is sure to be a great time had by all.

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FEB. 10 4 p.m. — 8 p.m.

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