County policies are all over the map in North Carolina when it comes to holding employees and elected officials accountable for the misuse of public money, especially involving credit cards, Carolina Public Press found in its survey of all 100 counties.
The question isn’t just hypothetical.
In one town, Robbinsville, in Graham County, members of the newly elected council have accused members of the previous board of using town credit cards to buy themselves groceries and gasoline. Buncombe County’s former county manager, Wanda Greene, retired last year just ahead of a federal probe into years of questionable purchasing practices.
These issues have been going on for years across the state. Former Scotland County Sheriff Shep Jones became the subject of a State Bureau of Investigation probe and was voted out of office in 2014. Without the knowledge of county financial authorities, Jones had made purchases including top-shelf liquor and a gold cross with a cash fund that mingled public and private dollars.
Carolina Public Press spent nearly a month asking every county in North Carolina about its policies overseeing credit card use by its employees and elected officials. What policies each local government has in place can play a major role in holding suspected thieves accountable, which in turn can deter future theft.
During the survey, local governments across the state relayed multiple instances in which they disciplined or prosecuted employees or elected officials caught taking from taxpayers. Additional cases have captured statewide media attention.
State law criminalizes inappropriate spending by employees, but without the right policies and procedures in place, detecting theft and punishing perpetrators can be complicated — especially for high-ranking public employees and elected officials who may be hard to catch.
ASKING EVERY NC COUNTY ABOUT TAXPAYER-FUNDED CREDIT CARDS
CPP asked every county government in North Carolina whether they had a policy on improper use of credit cards or other financial resources by employees and elected officials. If they did, CPP asked to see the current policy. In the nearly four weeks between requesting policies and publication, 62 of the state’s 100 counties responded.
Based on responses, a CPP analysis found:
· Most counties have some kind of policy. Just 6.5 percent reported having no policies at all.
· 13 percent of responding counties had no written policies, but said they have a verbal policy forbidding personal use of cards and other resources.
· 80 percent of responding counties have some sort of written policies. These, however, vary widely in several ways.
While many counties have simple policies that state their position clearly, others spread various aspects of their policies across multiple documents. For instance, appropriate behavior with cards might be listed in a purchasing policy. Inappropriate behavior in a card-user agreement and consequences may be listed in a personnel policy.
One county even relies upon a card-user agreement from the bank that issued its procurement cards as the only document outlining wrongful activities and their consequences.
Top county officials across the state weren’t always certain of what their policy was or where it might be contained.
More than one county ended up sending CPP additional documents over time, as they researched the question more carefully.
PUNISHMENT OR PROSECUTION? DEPENDS ON THE COUNTY
Based on the documents CPP received, about 11 percent of responding counties have a written policy that forbids personal use of cards or other resources. But those counties don’t spell out consequences for misuse beyond having to make financial amends.
About 34 percent of responding counties have policies with warnings indicating that employees could face discipline, potentially termination, for unauthorized use of cards or other resources, but didn’t allude to possible prosecution.
Just 33 percent of responding counties provided policies that clearly state unauthorized users could face the legal consequences for such theft, in addition to losing their jobs and having to repay what they spent.
For example, Gaston County’s policy lists the type of personnel action, up to dismissal, that an employee making unauthorized purchases might face. Then it adds, “Any fraudulent p‐card use will be subject to legal action in addition to dismissal.”
A number of counties go so far as to identify the specific law under which such stealing could be prosecuted.
Graham County takes this a step further and spells out the statute, the potential criminal charge and the scope of public officials to whom it might apply:
“Chapter 159 of the North Carolina General Statutes also provides than an employee, department head, elected official, or (Board of Commissioners) member who violates the requirements … may be prosecuted in criminal court for a Class 3 misdemeanor and can be fined up to $1,000.00, and forfeit his office,” the Graham policy says.
On the other hand, a few counties appear to be confused about which law banned such misuse of public financial resources.
Several counties’ policies cite a statute that applies only to state employees, not local government employees. Some list statutes that have nothing to do with criminal prosecution.
One county’s policy, adopted in 2017, threatens dishonest employees with prosecution under a statute that the legislature repealed in 1972.
Many counties forbid trying to avoid spending caps by splitting up a purchase with another employee. Several warn about accepting kickbacks from vendors for making otherwise legitimate purchases.
Warren County correctly reminds employees that they must not lose or destroy receipts, not only because they are needed for auditing purposes, but also because under state law they are open records.
WHAT STATE LAW SAYS
The variations in what counties’ policies say doesn’t mean that employees or elected officials caught stealing won’t face prosecution just because those counties lack written policies, lack clear statements about criminal consequences or have policies with minor mistakes.
Local policies or not, General Statutes Chapter 159 stipulates the detailed procedures for fiscal control and financial accountability in local governments.
In G.S. 159-181, enforcement of those provisions is clearly outlined. Those who misuse local government financial resources valued at $50 or more are guilty of a misdemeanor and are subject to removal from office. This includes base-level employees, department heads, finance directors, county managers, county commissioners and other elected officials, such as sheriffs and registers of deeds.
This law has been applied successfully to punish theft in North Carolina counties. At least one county, with no written policy of its own, told CPP that several county employees caught misusing procurement cards in the past had been successfully prosecuted under Chapter 159.
Even in counties whose policies address disciplinary action without mentioning prosecution, the decision to publish public theft isn’t necessarily in the hands of county officials. An outside law enforcement agency, such as the State Bureau of Investigation, can investigate. A district attorney can decide to prosecute even without the support of local policies and county leaders.
Despite the strength of Chapter 159, having a clear policy can avoid potential complications.
According to Kara Millonzi, a professor at the University of North Carolina School of Government, a major problem can arise if there’s no clear policy and a member of the board that sets policies is involved in making purchases for personal use.
County commissioners or town council members could claim afterward that their actions had received official sanction, possibly as part of their compensation for serving on the board, Millonzi explained.
If the jurisdiction has a clear written policy criminalizing this activity, including by board members, such claims by those who are caught stealing won’t work. They would instead have to show that a board went on record voting to approve the board member’s personal purchases in advance and contrary to established policy.
Some counties told CPP that they generally avoid this entire issue by not issuing cards, cash or other resources to commissioners.
However, that’s not an option everywhere. Several counties told CPP that using procurement cards is one of the best ways to handle commissioners’ reasonable travel expenses when their duties take them on the road. For those counties, having clear policies can be especially important.
Even when state law is adequate for dealing with theft by employees, having a clear policy outlining consequences can discourage theft to start with. It can also discourage potentially prolonged litigation that the county is likely to win, but that could still be costly for taxpayers.
Editor's note: This article was reported and edited by the Carolina Public Press. Read the original.