Auditors: Council members received water, travel perks

An “informal, verbal payment arrangement” offered by former Goldsboro Finance Director Kaye Scott — and a directive delivered by her to Water Department employees — allowed former City Council member Mark Stevens to avoid paying his water bill for more than four years without disconnection of his service, despite the fact that he accrued a debt of nearly $5,000.

And the finding, which was included in a preliminary report sent to City Hall Jan. 12 by the North Carolina Office of the State Auditor, also determined that the arrangement was “not offered or made available to other utility customers,” which led auditors to conclude that the grace extended to the elected official ran the risk of “eroding the public’s confidence” in its local government.

According to the state, Stevens’ water services should have been cut off for nonpayment on Oct. 9, 2016.

“However, the account remained open and continued to accrue usage for over four years,” the report reads.

And to make matters worse, Stevens, the former District 3 representative who resigned in August 2019, was not the only person with a connection to City Hall who received alleged benefits from the Water Department that were scrutinized by auditors.

According to the report, several people, from City Manager Tim Salmon to Mayor Pro Tem Brandi Matthews, received what auditors characterized as “unsupported utility account balance credits.”

(New Old North has reached out to Ms. Matthews and Mr. Stevens for comment, but did not, by press time, receive a response. Should they, at any point, choose to address the issue, their thoughts will be published in a future story.)

The names of the city manager and former and current council members were not disclosed in the report given by a confidential state source to New Old North ahead of the publication of its contents Jan. 21, but have since been confirmed by several city sources — including one who was in the room during one of the City Council’s marathon closed sessions held the week of Jan. 22 when the previously unidentified officials were named by Finance Director Catherine Gwynn.

The city has an opportunity to respond to the concerns noted by the state, but Salmon has, according to sources, asked for — and received — an extension to avoid failing to meet the original Jan. 26 deadline.

The allegations came to light after State Treasurer Dale Folwell instructed then-Auditor Beth Wood to conduct a “thorough” review of how business was conducted in City Hall after Goldsboro leaders repeatedly failed to fulfill their financial reporting duties in a timely fashion.

The treasurer excoriated city leaders for failing to meet “basic but critical” oversight functions and said he was concerned that the Wayne County seat might have “major weaknesses” in its day-to-day operations and its finances “might be in disarray and therefore vulnerable to mismanagement or misappropriation.”

“It is troubling that the state’s 30^th largest city, the county seat and home to Seymour Johnson Air Force Base, no less, has been unable to get its act together,” Folwell said in January 2022.

Two months later, Deputy State Auditor Katie Gleason sent a letter to then-Mayor David Ham, officially notifying him of the investigation and its objective — to “determine whether the City of Goldsboro implemented controls to detect and prevent fraud, waste, and abuse according to applicable laws, rules, and best practices, and identify the effects and causes of any lack of controls.”

One of six findings revealed that the “city did not cut off delinquent utility of accounts of Council members and employees” — a point auditors substantiated by noting that Williams, Stevens and a current city employee never had their service disrupted despite “being delinquent for three to eight years” while, after testing 19 of “the most delinquent accounts” of non-Council members and non-employees, “all were eventually cut off.”

That discrepancy, which the state blamed on “inaction” from Scott, former City Manager Manger Scott Stevens, Salmon and Gwynn, “risked giving the appearance of unequal treatment.”

“Equal treatment by the government is a key responsibility for government leaders,” the report reads. “Standards from the United States Government Accountability Office (GAO) state that those entrusted with public resources are responsible for providing service to the public effectively, efficiently, economically, ethically, and equitably.”

And there is more.

Back in June 2020, then City Councilman Antonio Williams threatened to vote against passing the city’s 2020-21 fiscal year budget because the spending plan did not include funding for a “forensic audit” he felt was necessary after noting that during a closed session, he was told that there were “a lot of problems” with the city’s financial records.

“There was a lot of problems. A ton of problems. A lot of bad behavior,” he said then. “We have to have a forensic audit. I mean, look at the Board of Education. We have citizens asking them to step down due to their lack of attention to their financial health. I’m not saying that we’re the School Board, but I am saying we need to assure our citizens that we are paying attention to how their tax dollars are being spent. The forensic audit allows us to do that.”

What Williams did not disclose at that meeting — and has never publicly disclosed — is that at the time he made that comment, it had allegedly been more than three years since he paid his water bill.

Several sources said Williams was named by Gwynn as the person identified as “Former Council Member B” in the NCOSA’s preliminary findings.

According to the sprawling report, his service was not disconnected despite the fact that “the account was delinquent on two separate occasions for a total of 1,392 days and accumulated an unpaid balance of up to $798.”

Williams’ bill, auditors said, should have been cut off Dec. 3, 2016, and again on Jan. 29, 2021, but the city “allowed the account to remain open and continue to accrue usage for a total of more than three years and nine months” — creating, according to the state, the risk of “giving the appearance of unequal treatment and thereby eroding the public’s confidence.”

New Old North reached out to Williams, via phone and the email account provided to him as a member of the Wayne County Board of Commissioners, and asked for a response after detailing the allegations. As of press time, he had not responded.

Williams was elected to represent the city’s District 1 in 2015 and won re-election in 2019. A year later, he stepped down after he was elected to serve as District 2’s county commissioner.

He is currently involved in a lawsuit he filed against the city that claims, among other things, that during his tenure on the council, he was “subjected to repeated harassment, mistreatment, deprivation of due process, and abuse as City employees continuously relegated his voice from councilman to nothing more than a nuisance.”

It is unclear if the supposed “preferential treatment” he received for his delinquent water account will give the city an opportunity to refute any of his allegations.

But “Former Council Member B” is not the only way Williams is identified in the preliminary audit report.

A confidential state source — and sources inside City Hall — confirmed that the former District 1 representative was also one of the people who made, on the taxpayers’ dime, “travel-related purchases” that “lacked documentation to support a valid City purpose and documentation of approval.”

His hotel, airfare, food, and transportation charges in Los Angeles, California, were noted as among 53 of 194 charges made with a city “P-Card” flagged by auditors, who recommended that the city should “review all P-Card purchases identified in this finding that lacked required documentation and approvals and consider pursuing recovery of the funds.”

Had Williams responded to New Old North’s request for comment, he would have been asked about allegations made about his prolonged lack of payment on his city utility account — and why, if he was receiving a stipend from Goldsboro as a sitting council member, the money he owed could not have been deducted from those earnings.

He also would have been asked whether he feels not having his water bill disconnected as a sitting council member could have sent a message to ordinary citizens that he was receiving preferential treatment because of his status as an elected official.

He would have had an opportunity to talk about his alleged trip to Los Angeles, California, and whether he feels — regardless of whether the city, in its official response to auditors, can provide the missing documentation and/or prove it was for a valid city purpose — that traveling across the country is a good use of taxpayer money.

And he would have asked about his repeated calls for a “forensic audit” of the city’s finances and the “ton of problems” and “bad behavior” he spoke of back in June 2020 — if he feels elected officials and city employees allegedly not paying their water bills sends the wrong message to the citizens he referenced then whom he said had concerns about their government’s “financial health.”