The Local Government Commission (LGC) has voted to assume full financial control of East Laurinburg after multiple attempts to gain cooperation from the town to correct major bookkeeping, banking and auditing deficiencies. The small community in Scotland County has a population of fewer than 300 individuals, according to 2020 census data.
“This is not a measure we ever want to take, but it is a necessary, last-resort action when a government unit fails repeatedly to comply with state regulations and statutes,” said State Treasurer Dale R. Folwell, who chairs the LGC. “Town residents must have full faith and confidence that their government is acting in accordance with the law, money is properly accounted for, tax funds are not being misused and essential services are being provided.”
The LGC unanimously approved the resolution in the wake of a recent investigative report by the State Auditor’s Office. That audit concluded that a former finance officer used town funds for personal or questionable expenses that drained the town bank account, resulting in overdrafts and lack of money for town operations. The finance officer’s mother, a sitting Town Council member, countersigned the checks.
In addition, annual audits of the town’s books had not been conducted since 2017. The report concluded the Town Council had failed to provide oversight and lacked written accounting policies and procedures. The report recommended legal action be taken.
The LGC has a statutory duty to monitor the financial well-being of more than 1,100 local government units. The commission also examines whether the amount of money units borrow is adequate and reasonable for proposed projects and confirms the governmental units can reasonably afford to repay the debt.
East Laurinburg becomes the eighth government unit under LGC financial control. The others are Eureka (Wayne County), Kingstown (Cleveland County), Pikeville (Wayne County), Robersonville (Martin County), Spencer Mountain (Gaston County), Spring Lake (Cumberland County) and Cliffside Sanitary District (Rutherford County).