08/25/2023
Toxic work environment leads to county audit investigation
An investigative audit report that was released on Aug. 2 by State Auditor Beth Wood’s office describes a number of issues it found while investigating more than a dozen allegations against Edgecombe County. The investigation was centered around 13 allegations that were reported to the state auditor’s office, according to the audit report.
The audit report indicates more than two dozen sets of penalties and fees paid to the Internal Revenue Service for federal withholdings that were submitted late, a purchasing policy that the county manager overrode for catering services on three separate occasions, lack of completing monthly bank reconciliations for trust accounts, insurance payments for former employees and findings of 12 employees that were overpaid.
In the response letter from the county to Wood’s office, it explains they have put corrected actions in place so these type of things will not happen in the future.
But all of the wasteful spending could have been avoided according to former finance director Katherine Walters. As she explained, in detail to The Tar River Times in a recent interview, her hands were basically tied from putting corrective actions in place where she discovered many of these findings early on in her tenure with the county. And she stated that on numerous occasions she was told not to cross certain lines, which led to several of the continued issues. And when she attempted to put corrective actions in place, she had 18 allegations brought against her for discrimination and inequality. Only to later have those allegations dismissed with no findings to back up the complaints.
Walters explained she attempted to put measures in place to correct the wrongs, change procedures in the finance department, and work with human resources, which came under County Manager Eric Evans, at that time. But she hit a roadblock each time.
“When I tried to work with HR I was told not to cross that line. But the problem was HR had problems that trickled down to finance and I wanted it fixed,” she said. “This caused the bank reconciliations to be out of balance. It wasn’t the finance departments wrongdoing.
“It wasn’t that I couldn’t reconcile the accounts, but the discrepancies I couldn’t fix or get corrected because of where it had generated from. I wasn’t allowed to cross that line.”
When Walters tried to put new procedures in place by going to certain employees at the time, she was later hit with a discrimination case. The accusations came from anonymous sources that ended up turning into 18 allegations coming from two employees – one in HR and the other in finance.
Walters said she found discrepancies in the finance department, and brought them to Evans’ attention. She begged for an outside investigation of the finance department, but was denied. She was told it would be handled in-house.
“When I tried to put things in place to hold people accountable, that’s when I was hit with the discrimination case and immediately, the board of commissioners hired an outside investigator,” she said. “The investigation consisted of them interviewing everyone in the finance department and on the fourth floor.”
At the end of the investigation by an outside firm, Walters wasn’t found guilty or responsible for any of the allegations. Plus, after standing before the county commissioners for more than two hours while explaining her side and why the finance department couldn’t move forward, she felt like it feel on deaf ears.
“At the end of the day, all I was doing was my due diligence and doing my job,” she said.
So she brought to the boards attention all of the discrepancies and roadblocks that she had discovered and asked for help.
“I don’t feel like they gave me the help or support that I needed,” she said. “Things were still going on, and I was walking on eggshells.”
In the audit investigation, it was noted there were 12 employees that were overpaid $21,983 from January 2020 through December 2021.
The former finance director explained the issue wasn’t a finance department mistake, the issue came from the human resources department.
“Whatever they keyed into the computer is what came out of payroll,” she said. “Things could have been eliminated if the two departments were allowed to communicate. A lot of the problems could have been avoided had there been communication between the two.”
The audit report revealed the county had paid $100,088 for insurance costs for former employees. Walters explained she discovered the problem when she first began working for the county, and admits the problem had been going on for a while.
“When I brought it up, I was told once again not to cross the line,” she said. “I found the county was paying for insurance for former employees that were not living any longer.”
The audit report didn’t go back past 2018, but Walters noted the county was still paying insurance for employees that had been deceased as long as 15 years.
The audit report stated 26 budget amendments totaled $9.6 million during the fiscal year ending June 30, 2021 were done without approval of the board. Walters said they were done by Evans and former assistant county manager William Johnson, and none of the amendments went across her desk, so she wasn’t aware of them.
“The assistant county manager was highly involved in the finance department up until the time he left,” she said. “I wasn’t given the authority or support to do my job. I had to follow or go along with what the assistant county manager said.”
Thirty days after Walters started her position as finance director, she had to complete the 2017 audit, which came back bad, she said.
“When I realized there were problems and what they were, it became concerning to me. I took my concerns to the county manager and it was like I hit a road block,” she said. “I was not allowed to correct things that I called their attention to and things leading to the bad audits.”
Walters explained from what she had uncovered during her time as finance director, and the overspending, the county’s tax rate could much lower than it currently is. She noted that it isn’t just in the finance department, but across other departments, and the many discrepancies that she found.
