NC officials to Spring Lake: Cooperate with state audit, or we're taking over

North Carolina officials warned Spring Lake leaders Monday that they need to cooperate with a state audit or face having the state take control of the town's finances.

The move comes after State Auditor Beth Wood ordered Town Hall closed on July 15 and sent municipal employees home.

The state Local Government Commission voted in emergency session on Monday to give Spring Lake officials the ultimatum and empower commission Secretary Sharon Edmundson to impound the town's financial records and assume control of all financial affairs "when she deems necessary."

"As the chair of the Local Government Commission, I felt it was necessary to pass the resolution in order to send the strongest possible message to the Spring Lake elected officials that the Fiscal Accountability Agreement they agreed to is serious,” State Treasurer Dale Folwell said in a statement. “Any second spent trying to get between the work of the LGC, the Auditor’s Office and the team on the ground is a second that can never be spent on getting it right and keeping it right on behalf of taxpayers and getting Town Hall open again."

The commission provides resources, guidance and oversight to more than 1,300 local government units statewide on topics ranging from annual budgets, internal controls and debt management to pensions and health care.

Spring Lake, which has the highest local property tax rate in Cumberland County, has an estimated budget deficit of $1.2 million.

Town officials agreed last month to work with the LGC to get their books in order. State officials said the town's accounting system doesn't show in detail revenue, spending, assets or liabilities.

Wood said previously that her staff is looking into "missing money" in Spring Lake, adding that officials formed a not-for-profit that had "gotten them in a financial situation that's just terrible.”

The town's Board of Aldermen is set to meet Monday night and could discuss the matter.