* Conclusion of a 2-part report
Raleigh – The Graham Star’s second part of an examination on the recently-released North Carolina Office of the State Auditor’s 2023 investigation report of the Town of Robbinsville includes comments from local officials about the non-issued W-2 corrected statements and a non-documented mileage reimbursement.
As reported in the Dec. 28 edition of the Star, the investigation revealed that:
* The members of the town council overrode internal policies and laws and overruled decisions made by town employees;
* The town failed to take action to issue corrected wage and tax statement (W-2) to former town officials and employees in a response to a 2019 investigative audit;
* The town council and Town of Robbinsville Tourism Authority Board violated the North Carolina open meetings law;
* The town council issued a $414 mileage reimbursement to an alderman without approving use of the personal vehicle or if it was for a valid business purpose;
* The town did not complete its monthly bank reconciliations.
The state auditor’s office declined to comment on the investigative report. This week’s recap picks up with a second board violating open-meeting laws; for more on the town’s purported ‘disregard of responsibility’ and violations of open and closed-session procedures made by the board of aldermen, copies of the Dec. 28 edition are still available at the Star’s office.
Meeting laws violated
In addition to the Town of Robbinsville, the Robbinsville Tourism Authority did not properly enter closed sessions from July 2020 – August 2022 and did not maintain meeting minutes for some of the closed sessions during 2021 and 2022.
In the timeframe, the tourism board held 34 meetings. The board entered closed session during 25-of-34 meetings (74 percent). For all 25 closed sessions, the meeting minutes for the open session do not reflect that the board cited all the required information to enter a closed session.
Also during this time, the tourism board did not maintain meeting minutes for 24-of-25 closed session meetings.
The town’s official letter response written by Town Attorney, Leo J. Phillips – and signed by the council – stated their corrective action,
“The former town attorney, M. Ellen Davis, did not attend Robbinsville Tourism Authority meetings; however the town’s new attorney (Phillips) is attending the Robbinsville Tourism Authority meetings and ensuring that proper procedure rules are followed and the minutes are kept accurately.”
Corrections not issued
The town did not issue corrected wage and tax statements (W-2) to former town officials and employees. As a result, the town is potentially at risk of IRS penalties and fees.
The town was made aware of this in the 2019 audit investigation of $15,900 in fringe benefits excluded from W-2s provided to town officials and employees.
The Internal Revenue Code requires employers to provide a W-2 that includes the total amount of wages paid to the employees. The code also states that any employer that provides an inaccurate W-2 may face a monetary penalty.
The investigative audit report found that the following was excluded from the W-2’s:
* $7,900 in gift cards;
* $8,000 in payments, in lieu of health insurance benefits, and
* The former mayor and town alderman’s personal use of a town vehicle.
According to the report, the town has not issued corrected W-2s to any of the former town officials or employees. The report also states that the town council failed to cooperate to correct the W-2s, according to mayor Shaun Adams.
“The town is working to amend the W-2s, as the auditors requested unless town officials try to block me again; the amended W-2s should be sent out soon,” said Adams in an email.
Adams said he worked hundreds of hours in the summer and fall of 2019 to compile all of the information to correct the W-2s and discovered documentation of around $80,000 in gift cards, $50,000 in hotel rooms and $30,000 in meals.
Adams did not find all the necessary information because several credit card statements, information on bonuses, gift cards and fuel purchases were all missing. He attempted to find the missing information, but said that the board of aldermen kept him from accessing them by locking up the files.
“Now if the paperwork is locked up, you have no business looking at it,” said alderman Debbie Beasley in a voice recording directed towards Adams in 2020.
“If it is being taken from you or not for you to see, then you need to request it.”
Also according to Adams, town officials told him that the records belonged to the Robbinsville Tourism Authority, but that is incorrect. The information Adams was pursuing is public record.
Adams was also told by town officials that he had to be supervised when looking at the records.
“Did anyone supervise you when you went in there before and the padlock was put on there?” asked Beasley, directed to Adams in a voice recording.
“The town even went as far as having most of the records shredded in 2021,” said Adams in an email. “However, many copies remain, so the town will have to use what records we have to amend the W-2s for take home vehicles, checks in lieu of insurance, bonuses, meals and fuel purchases for personal vehicles.”
The town’s official response – written by Phillips – addressed the excluded fringe benefits in income.
“The Town of Robbinsville shall issue the correct amended taxes to reflect former Mayor Steve Hooper and former Alderman Jacky Ayers’ use of take-home vehicles on a lease rate as required by the internal revenue service, as well as taxing bonuses, gift cards, and any other fringe benefits that need to be taxed,” said a portion of the reply. “The town will seek outside professional CPA services to assist in the correction of these errors.”
Phillips also added in the letter that Adams spent hours and months trying to compile a list of all the fringe benefits that needed to be taxed and placed many public records requests that were denied by the town.
Where’s the mileage?
An internal policy was overridden when the former finance director refused to issue a $414 mileage reimbursement to a town alderman due to a lack of approval and documentation.
The town alderman in question, Debbie Beasley, overrode this decision by issuing and signing a check to herself with the mayor as cosigner.
The town issued the check to Beasley on July 22, 2022, for a mileage reimbursement. The mileage report submitted by Beasley reported a total of 707 miles over seven trips from March 6 – June 26, 2022.
The mileage report did not include a location traveled to, or a valid business purpose for any of the seven trips. There was also no documentation to support that the use of the personal vehicle was approved in advance.
According to Beasley, some of the places she went was to the Trophy Shop in Asheville and the Sylva Print House for banners. She also went to various places to get items for events and went to different meeting to present the passport book program.
Beasley was adamant that she did not drive during the recorded time for anything personal while on business. She also was not given a mileage form to fill out and she wasn’t aware that she had to track her miles.
The former finance director refused to issue the mileage reimbursement due to no documentation. The town council overrode the officer and voted to pay Beasley during the May 31, 2022 meeting. Beasley signed the check for herself, with Adams as the second signature.
According to Beasley, she and Adams were the only ones authorized to sign checks at the time.
The town’s response letter explains the signing of the check.
“The mayor refused to sign the check until two Robbinsville Tourism Authority board members and the former finance director signed off on the invoice, which they did, and only did that based on the fact that the responsibility for the payment would fall on the members of the Robbinsville Tourism Authority, and has refused to sign any more RTA-related checks,” reads the letter.
The town’s response to the auditor’s finding of no documentation to support business use of vehicle was, “It was also discussed during that meeting that Debbie Beasley was acting as a contractor and not an employee of the Robbinsville Tourism Development Authority in her role as interim tourism director, so based on that, the town believes she was not bound by the town of Robbinsville’s travel policy, as the town’s travel policy does not bind contractors.”
The state auditors’ countered that Beasley is also an alderman for the town, so the town’s travel policy still applies to her.