NC City CFO unqualified, filed for bankruptcy
The City of Spring Lake hired a CFO in 2020 without conducting interviews or viewing resumes, though his track record included multiple bankruptcies, tax liens, unpaid credit card bills and failing businesses, learned The News & Observer.
At the time, the town about 50 miles south of Raleigh was already mired in money troubles, according to state auditors in a 2016 audit, having spent nearly $500,000 on purchases questionable or in violation of its own policies.
Now, a second NC audit reports the same CFO spent at least $430,112 for personal use, pushing the city deeper into its financial hole.
NC Auditor Beth Woods’ 2022 report does not name Gay Tucker, now 63, who was an accounting technician in Spring Lake at the time of her promotion. But the employment dates and personal details in the report match Tucker’s tenure at Spring Lake, and multiple news outlets have identified her.
In 2020, the city council voted 3-2 to put him in charge of Spring Lake’s finances and pay him a salary of $71,000. Alderman Fredricka Sutherland objected, saying she did not speak to Tucker and that Tucker did not submit an application or resume, according to meeting minutes.
“I have continued to insist that we have experienced people in our finance department,” Sutherland, who no longer sits on the board, told the N&O this week. “We asked for her information, her background, so that she could be checked. Those who voted for her, they did not force her to give the papers.
Tucker could not be reached by the N&O via various phone numbers, email or at his listed address.
The state report and Spring Lake court filings show the city is unable to complete its own audits on time, spending more than $1 million a year, keeping no record of its expenses and sometimes not taking no notes on official meetings.
Shortly after Tucker left the city job — laid off in 2021, according to the most recent audit — the state’s Local Government Commission announced it would take control of Spring’s finances. Lake.
Woods’ audit recommended the city take legal action against his former accounting technician.
No charges have been brought against a Spring Lake employee since 2016, but the Cumberland County District Attorney’s Office told the N&O on Thursday that the FBI and U.S. Attorney’s Office are now handling the case.
And on Thursday evening, after aldermen voted to hire former Wake County executive Joe Durham as interim city manager, members of the General Assembly met privately with newly elected mayor Kia Anthony.
“We are surprised and appalled by the state auditor’s and LGC’s response contained in the report,” she said in a YouTube video released last week, noting that all but one of the aldermen are new. “As mayor, I want to assure you that the town of Spring Lake is stabilizing and moving in the right direction.”
At Thursday’s meeting, Rep. Marvin Lucas, a longtime Democratic lawmaker and former city mayor, told reporters he didn’t know the details and hadn’t spoken with Woods’ office.
“Laying blame is pointless,” he said. “He’s not getting the money back.”
A troubled financial history
Spring Lake sits next to Fayetteville, its larger neighbor to the south, and Fort Bragg, the sprawling army post whose soldiers make up a large portion of its roughly 12,000 citizens.
The 2016 audit was triggered by reports of missing money and purchase card abuse, and it forced city officials to come up with a plan to better track their spending.
This plan called for a relatively new employee to be responsible for overseeing all acquisition card purchases in the city – Tucker, then still an accounting technician.
She would provide “day-to-day” oversight of the purchase cards, making sure only those assigned them could use them, according to a city memo given to the state auditor.
She also had to prepare a monthly report detailing the use of the acquisition card which required the approval of the city manager.
But by then, Tucker and her husband were suffering from their own considerable money troubles, according to court records.
Their Chapter 13 bankruptcy filing reported zero family income and also showed that Tucker’s income and family car had been seized in payment for a state income tax lien.
Their total liabilities were nearly $150,000, according to the bankruptcy filing, including state and federal income taxes and at least seven credit cards.
Chapter 13 bankruptcy involves money that a debtor plans to repay. Although records were unavailable for two earlier repositories, it appears that at least one of them has been deleted.
But in Tucker’s 2014 filing, she and her husband worked out a $667 monthly repayment plan that their trustee quickly reported they weren’t sticking to. In 2015, a judge dismissed their bankruptcy filing for non-compliance, and it’s unclear what consequences followed.
Trouble followed Gay Tucker to Spring Lake
As Tucker rose in city leadership to become chief financial officer, she began abusing her authority to quietly pocket $430,000 in city money, the state audit released last week revealed.
A quarter of the money she took paid for her husband’s expenses at a senior living facility, reported in the bankruptcy filing at more than $2,000 a month. Tucker wrote 13 checks for $113,015 from the city’s account to Heritage Place Senior Living, according to the 2022 audit. She wrote 72 checks in all for “personal use.”
Her role as finance director allowed her to write and sign the city’s checks, according to the 2022 audit.
Earlier in his job at Spring Lake, in 2016the state auditor approved oversight of Tucker’s purchase card along with several other measures intended to curb the city’s sloppy spending practices, then-mayor Chris Rey told the N&O this week.
The 2022 audit noted the city’s lack of follow-up from the 2016 audit.
“If the City had followed the recommendations of the 2016 report, developed a detailed corrective action plan, including an estimated date of implementation and who was responsible for the corrective action, and ensured that the plan was put in place and followed up by City employees, the issues uncovered in this investigation, particularly those reoccurring since the 2016 investigation, may not have occurred,” the audit report states.
City officials were unaware of Tucker’s financial troubles when they assigned her to oversee the purchase cards, Rey said, but that role did not give her the power to abuse it.
He said the officials who promoted her to chief financial officer should have checked on her first.
2016 Spring Lake Audit
Rey said the expenses identified in the 2016 audit were mostly legitimate but lacked proper documentation. This included approximately $9,000 in travel and other expenses he incurred.
The city pored over hundreds of expenses that lacked receipts or pre-approvals, and uncovered about $17,000 in wasteful spending by a handful of officials, all of whom resigned or were fired, it said. he declares.
The city ordered them to return the money or the city would press charges, Rey said.
Among those identified in the audit as making personal expenses with city money were the city manager, the acting director of recreation and the acting director of finance.
“Because they refunded the money, we were happy with that, based on their explanation of how the money was used,” Rey told the N&O.
The state auditor’s report says he referred the 2016 findings on personal expenses to the SBI. But referrals do not automatically trigger an SBI investigation, and the SBI has not investigated unnecessary spending, spokeswoman Anjanette Grube wrote to the N&O in an email.
“I thought it should have gone to the DA,” Sutherland, the former Spring Lake alderwoman, told the N&O this week. “No one has ever been prosecuted”
Rey said that when he was elected mayor in 2011 he inherited serious problems with running the city. Two years earlier, two police department sergeants were charged with fabricating reports and several other crimes. The county sheriff had to take over the city police.
When he left in 2017, he said subsequent administrations failed to follow through on reforms put in place after the 2016 audit. Rey, a Democrat who unsuccessfully ran for a U.S. Senate seat in 2016, said he now works for a healthcare company in Phoenix, Arizona.
“At the end of the day, everything goes up and down with leadership,” he said. “Unfortunately the leaders before me didn’t do what they were supposed to do. I did what I was supposed to do when I was the leader of the town, then the leaders after me didn’t did what they were supposed to do.
“I’ll tell you as a former mayor, it really hurts my heart to see what happened,” Rey said.
This is part of an ongoing series of stories about Spring Lake’s financial troubles.
This story was originally published March 25, 2022 1:45 p.m.