State Auditor Releases Investigative Report Revealing Fraud In The Town Of Mount Olive
Yesterday, the Office of State Auditor released its investigative report into the Town of Mount Olive. After receiving several tips from residents about potential issues, the investigation revealed several issues with Mt. Olive’s operation.
“Proper management at the local level is incredibly important to ensuring resources are not abused and protocol is followed,” said State Auditor Dave Boliek. “Our Investigative Division took a deep dive into Mount Olive’s finances and uncovered several concerning issues. Local officials agreed with the findings in our report. Now, it’s time for our recommendations to be put into action.”
In response to the investigation, Interim Town Manager Glenn Holland wrote that the Town of Mount Olive “takes these allegations seriously,” and accepts all findings and recommendations made in the report.
Here are the key findings from the report:
The Town bears the financial burden of providing fuel at the Airport, even though it is the Airport Operator who is contractually obligated to purchase and sell the fuel.
The Town’s Airport Operator extends credit on the Town’s behalf for fuel purchases.
The Town’s Finance Director lacks a process to verify monthly fuel commission invoices from the Airport Operator, creating a risk of overpayment.
The Town’s Finance Director did not include all checks in the Town’s accounting system.
A sitting Town Commissioner failed to pay his utility bill for several months, yet his water service was not disconnected.
In 2024, hundred of water cutoff fees were voided monthly. This includes cutoff fees for two employees of the Water Department who failed to pay their utility bills and manipulated the system so their water service was not disconnected.
The Town’s utility rates were improperly entered into the Town’s utility system and resulted in over $210,000 in lost revenue to the Town.
The Town lacks policies and procedures governing the authorization of timesheets for hourly employees.
Key recommendations from the State Auditor based on the findings in the report:
Town officials review all Wi-Fi expenses dating back to the beginning of the Contract and recoup any amounts that should have been paid by the Airport Operator.
Town officials review contracts and payments with the internet service provider to determine what their financial obligation is.
Town officials review all telephone expenses dating back to the beginning of the Contract and recoup any amounts that should have been paid by the Airport Operator.
The Town determine who authorized automatic withdrawals from one of its bank accounts for the payment of fuel.
The Town ensure banking activity and contracts are only conducted by authorized officials.
The Airport Operator immediately cease extending fuel credit on the Town’s behalf.
All future fuel purchases are made by the Airport Operator.
The Town’s Finance Director ensure that all parties receive their correct fuel sales commissions.
The Finance Director document the Town’s financial activity in a timely manner.
A clear purchase control system be established for both the Town and airport.
The Town’s Finance Director and Airport Operator have regular monthly meetings to review airport expenses.
The Airport Operator provide the Town with semi-annual reports on expenses and costs.
To reduce the risk of future fraud, OSA recommends that the Town develop and implement policies and procedures regarding voided cutoff fees and proper segregation of duties.
The Town should develop and implement proper controls to ensure that rate information is correctly entered in the Town’s utility system.
The Town should develop and implement policies and procedures related to the review and approval of employee timesheets, including, but not limited to, who is responsible for reviewing timesheets and how their review is documented.
