After years of fiscal crisis and fraud, is Spring Lake coming out of the woods?

Spring Lake’s town government is moving past its years of fiscal mismanagement and fraud, a financial management adviser with the state Treasurer’s Office told the N.C. Local Government Commission on Tuesday, and could be free from state government control in the not-distant future.

With continued improvement, that might be mid-2024, a spokesman for state Treasurer Dale Folwell said later Tuesday, citing the adviser. Folwell is chair of the commission.

Back in 2021, Spring Lake Mayor Kia Anothony said, the town was told it would be under state control for seven years to get the town’s finances in order.

The Local Government Commission watches the finances of 1,100 local governments and agencies. It steps in when it sees problems. The commission took control of Spring Lake’s finances in October 2021 as the town struggled financially and was at risk of defaulting on its debts.

The town also had lost track of nearly 100 vehicles and former Finance Director Gay Tucker had embezzled $567,000.

The town, in Cumberland County on the north side of Fort Liberty, has about 12,000 people.

Learn about Spring Lake’s troubles: Ex-Spring Lake finance director gets four years in federal prison for embezzling $567K

Hard work, tough decisions and a change in culture

“There is a culture change in process in Spring Lake,” said David Erwin, an accounting and financial management adviser with the Treasurer's Office. The Local Government Commission in March 2022 appointed Ewrin to be Spring Lake’s finance officer.

“They’ve listened. They’re working hard. They’re making tough decisions. They’re transparent. I think it’s showing up,” Erwin said.

The town’s overdue fiscal 2022 audit should be completed in the fall, to be quickly followed with the fiscal 2023 audit, Erwin said. “And then it may be that we can make our exit out of there shortly thereafter,” he said.

“They’re in a much better place than they were two years ago, when your office was down there,” he told state Auditor Beth Wood, who is a member of the commission. Wood’s agency investigated Spring Lake and found numerous problems. These included the unaccounted vehicles, Tucker's embezzlement, questionable credit card purchases, money that never got deposited into the town’s bank account, and erroneous overpayments to a town employee’s cellphone stipend.

Some of the changes Erwin cited:

• The town now tracks its revenue and spending daily, Erwin said. Because of this, it caught two instances when the bank had not credited the town’s account.

• The town collected three years of sales tax refunds it was due — $186,036. It did this without using a consultant, as it had before, who took 35% of the money.

• It avoided paying a $20,000 bill for telephone service it no longer had.

• It collected $203,576 that had been due to the town since 2020 related to the portion of Fort Liberty that is in the Spring Lake town limits.

With these and other changes, Spring Lake is taking in more money than it spends on various town services, Erwin said, and employee morale has risen. He said residents are seeing the effects in terms of things such as street repairs, maintenance of city property and the purchase of a ladder truck for the Fire Department to replace an old one.

Interim town manager is ‘an Energizer Bunny’

The mayor was elated on Tuesday to hear that Erwin had presented a good report. “Oh my gosh! I need to go watch that immediately,” she said.

Anthony was elected in November 2021, a month after the takeover of Spring Lake’s finances. Since then, she said, she and the Board of Aldermen and town staff strived to pull Spring Lake out of the troubles left by their predecessors.

Anthony and Erwin credited interim Town Manager Jason Williams for much of the recent success. Williams was the fire chief and has worked for Spring Lake for 16 years, Anthony said. He became interim town manager in November.

“He’s been a real instigator of — just a better work ethic,” Erwin said. “He’s an Energizer Bunny. He’s kind of changed the processes. He’s got people doing their jobs and they’re taking pride in their work.”

Williams originally was to be the interim manager for two weeks, Anthony said, while waiting for another town manager to take office. He ended up staying in that office, now eight months, because the treasurer in the fall rejected the town’s choice of a permanent manager.

“What has been accomplished in that amount of time is nothing short of miraculous,” Anthony said. “We are now operating like a well-oiled machine. We were able to clean up all the mess that we walked into, balance our budget, update our policies, and now we’re actually moving into new initiatives.”

Senior North Carolina reporter Paul Woolverton can be reached at 910-261-4710 and pwoolverton@fayobserver.com.

This article originally appeared on The Fayetteville Observer: Spring Lake, NC is putting fraud and mismanagement behind