The Local Government Commission (LGC) has issued a warning to Rocky Mount leadership to deal with its financial shortfalls swiftly, or the commission could take control of the town's finances. 

The LGC has assumed control of a local government unit’s finances only 12 times in its history. That's a possibility with Rocky Mount, months after the city was found to have spent millions more than it brought in every month for more than two years.

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Estimates had the town accumulating a $3.4 million budget shortfall by the end of July. 

At a Local Government Commission meeting on Wednesday, a panel of leaders from Rocky Mount presented their plans for financial recovery. That includes budget cuts and revenue increases. Rocky Mount officials have already taken some action, as recently as this week, approving a utility increase.

City leaders are currently developing the 2026-2027 budget, in which city officials said other cuts and revenue increases will be evident. City Manager Elton Daniels said the budget process itself is changing.

"We are re-evaluating how the budget is prepared. If you recall, last year, when we adopted the budget, the audit was eight months late. We just can't operate like that," he said. 

The LGC said that Rocky Mount has been warned numerous times about the late submission of the required financial audit report to the commission. A report drafted by the LGC says the city's 2024 audit was due on Oct. 31, 2024, but was not submitted until May 6, 2025. The 2025 audit report has only been sent as a draft and not a finalized report. 

“The actions and inactions of the Rocky Mount City Council are nothing short of financial malpractice,” said North Carolina Treasurer Brad Briner. “It’s been over 80 years since a city, county or special district has defaulted on a bond obligation in North Carolina. That long-standing record is going to remain intact while I am at the helm of the Local Government Commission.”

Should the state intervene, Rocky Mount would be the largest municipality ever placed under LGC financial control.

"If the LGC finds itself in a position to have to assume control of the day-to-day finances and management of the city of Rocky Mount, I view that as a failure of the politically elected leadership," said State Auditor Dave Boliek. 

Briner said, while some progress has been made, Rocky Mount officials have more work to do. 

“Rocky Mount leaders have made progress in their massive deficit, but are still avoiding making some tough decisions about overspending," Briner said. "It is not sustainable to ask citizens to shoulder the burden of budget mismanagement.”

WRAL News asked Rocky Mount City Manager Elton Daniels if he feels the city is on the path to recovery. 

"We are not out of the woods, but I feel we are headed in the right direction," he said. .