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April 10, 2013

Auditor finds money misuse by mayor

Details of the report headed to SBI for further investigation

PRINCEVILLE — PRINCEVILLE — The grey cloud that has hung over the town since the Local Government Commission took over its finances July 30, became even darker Monday after the state auditor released an investigative financial report detailing possible misuse of funds by town officials.

The finding points out that Mayor Priscilla Everette-Oates and former fiance officer made questionable credit card purchases totaling more than $10,000 without providing receipts or documenting the business purpose at the time of the expenditure.

The report also questioned Everette-Oates, a commissioner and a former interim town manager receiving a total of more than $4,112 for travel reimbursement without adequate supporting documentation.

"I'm happy and I'm sad," Ann Howell said. "I'm happy because all of this corruption that Commissioner Knight and I have been talking about for more than two years has finally been uncovered. I'm sad because the citizens of Princeville do not deserve this. It's another embarrassment that the town has to live through."

The state auditor's report did not mention the names of the finance officer, the commissioner or the former town manager, however similar documents by the LGC describing the same allegations, listed Diana Draughn, the fiance officer, Isabelle Purvis-Andrews, the commissioner and Maggie Boyd, the interim town manager.

The report recommended the town "to pursue any and all legal action necessary" to obtain reimbursement.

Town officials were given a draft confidential copy of the findings March 13 and were given an opportunity to argue the claims. Town attorney Chuck Watts drew up a response likely refuting the claims. The board apparently discussed the letter during a closed session March 25 at its regularly scheduled meeting.

Three days later, the divided board called an emergency meeting concerning Watt's response. Only Commissioners Ann Howell, Gwendolyn Knight and Calvin Sherrod attended where the board voted 3-0 to reject Watt's letter.

The board also agreed that the auditor's findings should be submitted to the SBI, Edgecombe County District Attorney, the IRS and the N.C. Department of Revenue for even more investigations and accepted a slew of recommendations that will prevent those issues from occurring again.

"For the citizens, I hate that it had to come to this degree," Knight said. "These are serious allegations that we have been hollering about for quite some time. At first they (the other part of the divided board) made Commissioner Howell look like we were the bad apples. Now the citizens can see for themselves."

Since the allegations were unveiled in September by the LGC, Everette-Oates has denied any wrong doing. As recently as the town's March 25 meeting she claimed that she is innocent.

"Everything that I done was for the benefit for the town," she said during the meeting. It is written down. If you want to know what happened to the files, I don't know. When LGC came in all the files got missing. I'm not going to be responsible for anything."

Emails and phone calls to the mayor were left unanswered by press time.

The findings charge that Everette-Oates had $8,115 of charges including 22 visits to Madison Seafood ($1,255), 11 visits to Crystal Palace($848) and two visits to Bed Bath & Beyond ($222). The credit card was also assessed $572 in late fees and fiance charges. The report called it, "unnecessary and imprudent use of town funds."

According to the report "the former town manager, (Victor Marrow) and former finance officer (Draughn) said there was seldom any supporting documentation for the mayor's credit card purchases and they believed most of the charges had no legitimate business purpose."

Draughn apparently cooperated with investigators. The report revealed that she charged $3,595  of which $2,290 was not supported by receipts. Her card was also assessed 184 in late fees and finance charges.

Before the LGC took over the town's fiances, Draughn was demoted from finance officer to clerk due to allegedly paying for car repairs with town funds. In an effort to repair the town's fiances, the LGC cut Draughn's position, including at least four other positions.

The state auditor also found:

• Questionable reimbursement by the mayor that totaled $3,289, Purvis-Andrews, $619 and former interim town manager $204.

Purvis-Andrews was the interim fiance officers when the jobs were slashed.

• Town attorney was paid more than double the salary that was budgeted. The contract amount for legal fees for fiscal year 2011 were, $36,000. Watts was paid $79,215. According to the findings, $24,000 of that incurred to defend against a suit brought against the town by Knight to recover a fine of $450 imposed on her by the board for violating an anti-disruption policy. In fiscal year 2012, Watts received $45,750 in legal fees for fiscal year 2012. North Carolina towns of approximately the same population as Princeville have median legal fees $12,125.

The town also paid the attorney $200 for roundtrip travel to Princeville from Durham plus $112 for mileage reimbursement.

• The mayor entered into an agreement with Reginald Smith to provide economic development planning. That contract was not approved by he board or pre-audited. According to the report, Smith was previously employed by a company in which the mayor has ownership. Between July 1, 2010 to March 31, 2012 Princeville paid Smith $24,000 without board approval or pre-audit.

In 2005, Everette-Oates hired Smith during her first term in office under the same provisions.

One of the recommendations  mandates that the LGC will retain control of the town's financial affairs until all the matters are resolved.

 

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