Local News

City of Creedmoor Owes IRS $1.2M

Posted September 17, 2007 7:48 p.m. EDT
Updated September 17, 2007 10:25 p.m. EDT

— An accounting error could cost the city of Creedmoor nearly a quarter of its yearly budget. An audit revealed the city has not filed payroll reports properly with the Internal Revenue Service for nearly seven years.

“I don't sleep much at night worrying about this. This is not the legacy that I wanted to leave for my young daughter,” Mayor Pro-tem Tim Karan said.

City officials said nothing illegal happened, it was simply a big mistake by the former finance director, Eleanor Fowler. That mistake is going to cost the city $1.2 million.

“We never pressed issues with her simply because we knew that she was overloaded. We tried it a couple of times to give her additional staff, but it was always kind of put that it was harder to train someone,” said Karan.

Fowler retired in June. When WRAL called Fowler, she said she cannot tell her side of the story yet.

With an annual budget of less than $5 million, city commissioners have tough financial decisions to make, and some community projects could be delayed. The city planned to buy a new squad car for the police department and make renovations to city baseball fields. There was also a proposed water and sewer line extension to Oxford, which may be harder to accomplish due to the IRS penalties.

“We pay taxes like we're supposed to do, and there's so many things that's supposed to be done that's probably not going to be able to get done, and that's going to affect our community,” resident Sara Sherron said.

Karan said there is a good chance the IRS penalties will affect the community for a generation to come.

The city will present the state Local Government Commission with a response to the audit on Tuesday. The finance department was recently revamped to have three employees instead of one.