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ROCKY MOUNT — City officials tried to mislead the public with a press release about an investigation into City Hall’s finances, State Auditor Beth Wood said Thursday.
“The actual report will refute quite a bit of what’s in the city response,” Wood said. “Much of the information in their press release is inaccurate.”
Wood said city officials don’t have the authority to release confidential information from a draft audit report.
The city’s statement, released at noon Thursday, lists five findings in the report along with mitigating explanations.
The press release also fails to name any city officials involved in nonpayment of utility bills, loans and other apparent malfeasance.
“The real story will be released tomorrow,” Wood said Thursday afternoon. The report will be uploaded to the state auditor’s website at 10 a.m. Friday.
According to the press release, the city wrote off a councilman’s unpaid utility bills.
Andre Knight, elected in 2003, didn’t return messages about the press release or state audit report.
“According to Finding 1, multiple city officials prevented the Business Services Center from attempting to collect $47,704 in utility bills owed by a city council member,” according to the press release from Jessie Nunery, the city’s media relations specialist.
While the release doesn’t use Knight’s name, independent investigation by this newspaper has confirmed Knight is the subject of the finding. Knight represents Ward 1 on the council and is Rocky Mount’s mayor pro-tempore.
Rocky Mount Mayor Sandy Roberson said he was surprised by the sudden release of the press statement.
“I don’t know who authorized its release,” Roberson said. “We were working on it. The council members most affected by the report were working on a response.”
The city council met in a closed session April 30. Roberson confirmed the audit report was a topic of discussion, but no vote was taken as to when to release a statement.
“Someone in the city preempted the report,” Roberson said. “It’s a big surprise to me. I want to wait until the report is released to comment. I have lots to say. I’m embarrassed as the mayor of Rocky Mount.”
The press release details five findings listed in the N.C. State Auditor Investigative Report. It’s not immediately clear whether the report has additional findings.
In the first finding, the city’s finance director wrote off outstanding utility bills for a city councilman in 2013 and 2017, under the tenure of the former city manager, according to the release. The city manager during some of that time was Charles Penny.
Penny said Thursday that he has nothing to hide.
“I spoke to the auditor,” Penny said. “Utility bills are private under federal law. I didn’t know how much was owed.”
The city writes off more than $1 million a year in unpaid utility bills, Penny said.
“All I can say is, check my bills — they were paid,” Penny said.
The city press release states that the account in question was subject to possible manipulation by unauthorized city staff for a good portion of the time the write-offs covered.
During the same time period, several business and residential accounts were also written off. Staff provided information on more than 30 accounts with delinquent balances that had continuing active service. The press release states other customer accounts were managed in a similar manner without being investigated.
According to the second finding, the city failed to follow program guidelines resulting in $32,452 of uncollected loans associated with the Downtown Roof Replacement Assistance Program and $28,000 of improperly awarded funds related to the Downtown Building Assistance Program.
The city’s records indicate no collection efforts were undertaken for 300 N. Grace St. The press release doesn’t identify that property as the OIC Family Medical Center. City Councilman Rueben Blackwell is CEO of the OIC organization whose name stands for Opportunities Industrialization Center.
Guidelines for properties at 119-121 N. Washington St. weren’t followed. Not mentioned in the press release is that according to tax records, the various properties in question were co-owned at the time by Knight and Garland Clark, the city’s natural gas distribution manager.
According to the third finding, the Rocky Mount engineering division’s non-compliance with the city’s Code of Ordinances could cost the city $31,000.
In 2009, the city’s engineering division did not collect on a letter of credit and in 2010, the division allowed the letter of credit to expire. The city’s press release doesn’t explain that the subdivision in question was owned by former Mayor David Combs, a real estate agent who received a state reprimand over related matters.
According to the fourth finding, City Manager Rochelle Small-Toney failed to comply with the city’s travel policy, resulting in $1,575 in unallowable travel expenses from July 2016 through May 2019. Small-Toney isn’t identified by name in the press release.
Small-Toney believed she was covered for the expenses by a medical exception, according to the release.
Finally, according to fifth finding, the city didn’t designate an Americans with Disabilities Act coordinator as required by federal law. City officials agree it should designate at least one employee as an ADA coordinator, and the city manager has appointed two ADA coordinators, according to the release.
Wood began her investigation in 2019 based on complaints received through her office’s hotline and other means. After more than a year of investigating, Wood released a draft report to city officials in early April.