With Fiscal Accountability Agreement, LGC puts Goldsboro on notice: Fix your finances, or face potential takeover

Should Goldsboro fail to comply with the terms of a Fiscal Accountability Agreement sent to Mayor David Ham, City Manager Tim Salmon and Finance Officer Catherine Gwynn Jan. 7, the Local Government Commission could take control of the city’s finances.

The agreement, an apparent last-ditch effort by the state to provoke action from city leaders, is on the agenda for Monday’s meeting — the first gathering of the board since State Treasurer Dale Folwell instructed State Auditor Beth Wood to conduct a “thorough audit” of the city’s books amid concerns that “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 to conduct a basic but critical oversight function. Audits are necessary to assess financial well-being, to ensure bills are being paid and money is not missing,” Folwell said Jan. 12, adding that Goldsboro has not only failed to submit audits for 2020 and 2021, but its 2019 audit contained multiple bookkeeping adjustments to capital assets and notes receivable — a potential sign of “major weaknesses” in day-to-day operations.

Under the terms of the accountability agreement, which the LGC expects to be signed and returned by the end of the month, the city will be required to:

• Provide a copy of the fiscal year 2022 budget, including budget amendments, as of Sept. 30.

• Be open to additional visits from LGC staff as necessary.

• Ensure board members attend “fiscal training.”

• Provide budget to actual reports three times between now and April 15.

• Submit a draft 2023 budget by May 16.

“Failure to comply with the requirements of this agreement may result in the LGC enforcing NCGS 159-181(c) and assuming control of the financial affairs of the town,” the letter read.