State Auditor Beth Wood’s office has found the town of Gaston is at significant risk for fraud and accounting errors, which could go undetected due to sloppy recordkeeping. A lack of oversight allowed questionable financial decisions by a former town clerk, examiners said.
The audit for the 2019-20 budget year is now more than six months overdue. The town has submitted audits late each of the past five years. Gaston, with a population of about 1,000, is in Northampton County.
The auditor’s office began investigating Gaston after receiving nine complaints through a hotline. The report said “substantial … resources were required to investigate the nine allegations received due to the lack of accounting records maintained by the town.”
Most problems tied back to alleged actions of a former town clerk. The report does not name the clerk. The town secretary confirmed to Carolina Journal that the clerk was Angela Easter. Examiners said the clerk “abused her position” to issue unauthorized loans to herself and other employees for $39,072, received $4,400 in unallowed vacation pay, and commingled her personal money with town funds.
The auditor’s report says the clerk issued several unauthorized loans, including $11,244 to herself and $13,772 to a former police sergeant, in violation of town policy. The loan balances weren’t tracked and were not recorded in the town’s accounting system, according to examiners.
In all, $39,072 was not available for town business because it was tied up in outstanding loans. The report quotes a former police chief who complained he couldn’t get an adequate patrol car due to the town’s finances.
The report noted that once the board was notified of the loans, board members required them to be paid back.
The commissioner (not named in the report) responsible for reviewing and approving checks told auditors he didn’t pay close attention to what he was signing.
“See, the clerk’s already reviewed everything … and then all I do is co-sign,” he said. “It’s just in a stack of checks I’m signing. I might’ve missed — I might’ve missed those, might not have looked over it that good. Like yourself, I’m trying to get back out and go do my job. Sign what they got to do and get out.”
While recommending the clerk’s termination and calling for a deeper forensic audit, Wood’s office said the Gaston Board of Commissioners should increase oversight and monitoring over town functions “to ensure any actions taken are in the best interest of the town residents.”
In some cases, checks were pre-signed by the commissioner before they were filled out, auditors found.
The now-former clerk told auditors that because her bank was in Virginia, with no local branch, she regularly deposited child support payments into Gaston’s bank account and wrote herself checks to cover the deposited funds. Occasionally, she wrote checks to herself greater than the amount of the deposits and treated the excess amounts as employee loans, auditors said.
Town attorney Geoffrey Davis, in a letter of response to the audit, concurred with the findings.
“While [the clerk] bears responsibility for these actions, they would have been caught much earlier had the town board exercised stricter oversight of [the] actions, and in some cases might not have ever taken place,” he wrote.
Davis said that Gaston recently swore in a new town clerk and wrote, “I hope that this process will help to illustrate to our new clerk how to ensure best practices when she is dealing with town money.”
Police Chief C.L. Dixon recently said that the matter has been turned over to the State Bureau of Investigation, which will conduct a forensic audit.