Audit: Gaston clerk loaned town money to herself, other staffers

The former town clerk for Gaston "abused her position," according to a state audit released Thursday, by loaning town funds to herself and two police officers, collecting vacation pay while on the job and depositing her own money in the town's accounts.

In addition to calling on town officials to collect any of the money improperly handed out, auditors blistered commissioners for lax oversight of the Northampton County town's finances and recommended a forensic CPA go in and straighten out the books.

For example, the audit quotes a commissioner who signed dozens of blank checks for the clerk to use later to pay town bills and never reviewed how the checks were being used.

"I’m trying to get back out and go do my job. Sign what they got to do and get out,” the commissioner reportedly told auditors, adding that his signature on the checks "don’t really mean anything.”

The former clerk loaned herself $11,244 between 2014 and 2017 and also loaned $13,772 to a former police sergeant and $1,920 to a former part-time police officer, according to the audit. The loans stopped after a part-time clerk noticed the transactions and notified the town board.

Because there were no loan repayment agreements, the clerk and the police sergeant used accrued leave to repay more than $15,000 of the loaned amounts, although the sergeant had accrued more than $9,300 in leave that town policy allowed, the audit states. The part-time officer repaid small amounts over 12 months and then agreed to work off the balance of his loan by painting the inside of the police department and the restrooms at the town's baseball field.

The clerk still owes the town more than $5,600 from her loan, according to the audit.

She also received $4,410 in improper vacation pay between 2017 and 2020. Based on her years of service to the town, she wasn't eligible for 146 of the 350 hours of vacation for which she was paid, according to the audit. A commissioner didn't properly review some of the paychecks the clerk issued to herself, and she issued others to herself without obtaining a commissioner's signature, auditors found.

The clerk also used the town's bank account as her own "for personal convenience," the audit states. She told auditors that her bank was in Virginia, so it was easier to deposit cash child support payments she received into the town account and then wrote checks to herself she could deposit into her own account by mobile app.

"In some instances, the town checks the clerk wrote to herself were greater than the amount of her personal funds she deposited into the town’s bank account. The clerk treated the excess amounts as unauthorized employee loans," the audit states.

Gaston Town Attorney Geoffrey Davis said commissioners agreed with the audit's findings and are taking steps to improve their financial controls.

"The town hopes that the results of this audit will serve as an opportunity to correct the issues you have discovered through this process and to establish policies and procedures to prevent these situations in the future," Davis wrote in a letter included in the audit report.

In addition to the former clerk's activities, the audit chided town officials for not keeping track of how their public works vehicles were used, not monitoring who was using town credit cards for fuel and selling a used lawn mower to a commissioner at below-market value.