Investigation: Town had over $64K in undocumented spending

May 15, 2019 GMT

RALEIGH, N.C. (AP) — The western North Carolina town of Robbinsville spent over $64,000 of taxpayer money on gas, restaurant meals and other expenses without adequate documentation, a state auditor’s investigation revealed.

The agency’s report, released this week, also found that town officials and employees received over $15,900 in fringe benefits that were not reported as taxable income.

Between July 2016 and Feb. 2018, employees of the small town in the foothills of the Great Smoky Mountains, spent $34,343 using town credit cards without any proof to support a legitimate business purpose, according to the report .


Of that, $21,214 was spent on travel and $4,084 was spent on meals, including a $403 charge at the Rioz Brazilian Steakhouse in Myrtle Beach, South Carolina; a $325 charge at the Fins Island Buffet restaurant at Carolina Beach, North Carolina; and a $282 charge at Southern Gals restaurant in Robbinsville, North Carolina.

Mayor Steve Hooper, who has been serving since 2014, says these charges were related to town business. For example, he said that the Rioz Brazilian Steakhouse charge was from a trip that he, three board members, and the town’s finance officer took to a conference to learn about a new computer system for Robbinsville. Hooper could not recall what the Fins Island Buffet restaurants were related to, but said that the charge at Southern Gals was for an employee Christmas dinner.

He said that he wasn’t fully aware of the requirements for using town money.

“Up until December 2017, there was no active policy that the board was requiring town employees to use,” he said. “Since then ... we’re doing our level best to do exactly what’s required by the state of North Carolina. We are abiding by any and all state rules.”

Adequate documentation was also lacking for $30,660 spent on fuel between July 2016 and Nov. 2017, when the town averaged approximately $1,800 in monthly fuel purchases. After Dec. 2017, under newly-elected Town Council members, fuel purchases declined to $950 a month.

“This decrease suggests the Town could have operated on fewer monthly fuel purchases,” the report states.

Roughly a third of the undocumented fuel purchases were made by two former town council members and Hooper.

Hooper confirms these purchases and said he used the gas for town purposes.

“We’ve had multiple projects ongoing and I personally was at each individual site multiple times,” he said. “I’m a hands-on mayor.”


Some of these projects involved fixing sewer plant and water plant problems, he said.

The report also says town employees and officials received over $15,900 in fringe benefits that were not reported to tax authorities, including over $7,900 in gift cards received between July 2016 and Dec. 2017. The gift cards were given to town employees in addition to a holiday bonus, according to the report.

Issuing the gift cards and bonuses to employees may not have been legal under the state constitution, the report says. That question is being reviewed further by the state treasurer’s department.

The report also found that the town failed to track three laptops that were purchased in March 2017 to be used by the mayor and by a Town Council member and finance director who have since left office. Investigators could not locate the computers, valued at about $2,300. The report states that the mayor says the laptop assigned to him was destroyed in a fire and the other two laptops remained in the personal possession of the former town council member and former finance director after they left in December 2017. Hooper said he has replaced the laptop he had been assigned, using his own money.

In a response to the audit, town council members wrote that expense documentation has improved since a new finance director was hired in February 2018, and the new director ensures that all receipts and invoices are for business purposes only. Town officials said they switched to a new monitoring system for fuel expenses.

Officials said that all fringe benefits will now be included on wage and tax statements, and that the town doesn’t give gift cards to employees anymore. The town will seek reimbursement for all undocumented and unauthorized credit card purchases and fuel purchases. Town officials are also requesting the return of the missing laptops or reimbursement for them.