(The Center Square) – Mismanagement in Edgecombe County is costing taxpayers hundreds of thousands of dollars, according to a new state audit.
State Auditor Beth Wood, a fourth-term Democrat in her 15th year as state auditor, responded to 13 allegations her office received regarding Edgecombe County with an investigative audit report published on Wednesday.
The document explains a series of issues in recent years that have cost taxpayers well over $250,000, from fees and fines for submitting tax withholdings late, to employees who received pay and benefits for months after separation.
Auditors found “from January 2018 through December 2020, the county submitted 26 of its 59 (44%) federal withholdings to the IRS after the federal due date.” The issue involved 16 of 36 regular monthly payrolls and 10 of 23 miscellaneous payrolls, with some submitted as late as 68 days after the deadline.
“As a result of the county filing withholdings late … the county paid $167,602 in penalties and fees to the IRS,” according to the report. “These funds could have been used for other county purposes.”
The problem, auditors wrote, stemmed from a lack of procedures and oversight by the former finance director and county manager Eric Evans.
Katherine Williams was the finance director. The county has since changed the role from finance director to chief financial officer, an elevation to executive level in county structure, and named Linda Barfield to the position.
Another $100,088 was wasted on insurance for 63 former employees that continued beyond their separations from the county in 2020 and 2021.
“The separated employees received anywhere from one to 22 additional months of insurance benefits past the date of their separation,” auditors wrote. “For example, two employees separated from county employment in January 2020 and another employee separated in February 2020. The county continued paying insurance costs for these employees through at least December 2021.”
The oversight was also the result of inadequate review procedures, which contributed to overpayments to a dozen employees over the same time frame, as well. In total, the county paid the employees $21,983 for 1,357 hours they didn’t work.
Other findings include $9.6 million in budget amendments in fiscal year 2021 without approval from the county board, $5,699 in spending by the county manager for catering that did not adhere to county purchasing policies, and bank statements that have not been reconciled in a timely manner for five years.
County commissioners responded to the audit report with a letter to Wood on July 3 that acknowledged the findings and included “critical information that clarifies inaccurate assumptions or conclusions made in the report.”
Officials blamed the late tax withholdings on faxes to the IRS that were missing pages, and said the employee responsible no longer works for the county.
Evans is still the county manager.
“The IRS has not assessed any penalties against Edgecombe County since the fourth quarter of 2020, and the county is currently in compliance with all IRS requirements,” the letter read.
The county is also working with its insurance provider for reimbursement of costs and fees for separated employees, which commissioners blamed on mistakes in processing Personnel Action Forms. The county has since added a human resources assistant to help oversee the county’s more than 500 employees and ensure insurance and pay stops when they leave.
