(The Center Square) – Purchase limits were exceeded and evidence of a supervisor’s review or approval was missing in procurement card purchases by city employees and the former city manager of Elizabeth City, an audit says.
Receipts and purchasing logs also had deficiencies, says the North Carolina auditor. Like an earlier audit in the small community of Mount Olive, this one was triggered by a call to the office tip line.
“The State Auditor’s Office is committed to responding to the public’s concerns, and our work in Elizabeth City is an example of that response,” said first-term Republican state Auditor Dave Boliek. “Our investigation shows that tighter controls are needed on the use of government credit cards in Elizabeth City. We’ve delivered that recommendation to the city’s management and will remain active in our mission to bring accountability to government in North Carolina.”
Elizabeth City, population an estimated 19,000, is home to a U.S. Coast Guard air station and is roughly halfway between the Outer Banks and Norfolk, Va., in the northeastern part of the state. The Harbor of Hospitality, as it is known, is on the Intracoastal Waterway and bounded by the Great Dismal Swamp and Pasquotank River.
Elizabeth City has gone through five finance directors since August 2022, spent more than $500,000 on contractors assisting the Finance Department in the last two years, and today is without a permanent director of the department.
Montre Freeman began as city manager in October 2022 and was succeeded on an interim basis in November 2024 by Reginald Goodson. The interim tag has since been dropped. A number of points were defended by him throughout the audit.
In a letter of response to the audit, Goodson wrote in part, “The end goal is for the city to be self-reliant on internal staff and the in-house staff having the knowledge, skills and expertise to perform all financial tasks both during the audit year as well as during the audit. That is what we are working toward and where we expect to see ourselves in the future.”
Boliek’s staff reviewed procurement card purchases by city employees worth $79,166, and $14,640 worth by Freeman. In a release, Boliek called the spending “fast and loose” and highlighted a team dinner with eight orders of stuffed flounder from Waterman’s Grill at $32.99 each.
Freeman’s report cites nine purchases by Freeman that exceeded the $500 limit and totaled $7,066. Fourteen purchases didn’t have a receipt. In one case, Freeman had per diem for travel and used the procurement card instead.
The auditor’s office made 11 recommendations for the city. Included was an update to the purchasing manual related to guidance; oversight; limits on volume of procurement cards disbursed to employees; and additional budget account codes.
