In the grand scheme of things, $3,500 may not seem like enough to shutter a town. But the North Carolina Office of the State Auditor says the fact that the Town of Speed had unauthorized charges withdrawn from its accounts is just another sign that the town can’t properly manage its finances.
The rural Edgecombe County town was incorporated in 1901 and has a population of approximately 63 residents. It never fully recovered from Hurricane Floyd in 1999, and has few resources to professionally manage expenses.
In an audit released Tuesday, state Auditor Dave Boliek said his agency received complaints that Speed’s lack of oversight led to financial mismanagement, misappropriation and potentially fraud.
A total of $3,507.15 in unauthorized charges were withdrawn from the town’s accounts, according to the audit. Some of those funds were wrongfully spent on gift cards, electronics, groceries and even dog treats.
While no individual was singled out in the investigation, the auditor’s office concluded the town “fell victim to a common foreign scam,” and did not elaborate further.
A July 2024 bank statement for the town’s business checking account was erroneously mailed to an address in Texas. Checking account statements and information for Speed’s money market account were also diverted to the Lone Star state in August and September 2024.
The town clerk addressed the issue with the local bank and thought the matter was resolved. But again, in December 2024, financial statements were sent to the same unidentified address in Texas.
The investigation found more than 40 unauthorized transactions that the town failed to discover and report for several months. The audit noted the town’s lack of bookkeeping “created an environment in which fraudulent activity occurred within the town’s accounts without detection.”
Tuesday’s audit recommended that the town clerk receive remedial training and that Speed reconcile its financial records monthly to prevent further fraudulent activity.
The unauthorized transactions have been referred to the United States Attorney’s Office for the Eastern District of North Carolina.
A slow end for Speed
It’s not the first financial kerfuffle for Speed. In August 2024, the state’s Local Government Commission (LGC) recommended the Edgecombe County town consider dissolving because of its financial situation. Town commissioners said at the time they were not interested.
At the time, the LGC directed the town to contract with public accountants who could fulfill a finance officer’s duties and to open all accounting records to LGC personnel by December 2024. Town leaders were warned that failure to do so could result in the LGC assuming control of Speed’s financial affairs and the potential dissolution of the town’s charter.
Speed retained an accountant to assist with filing quarterly reports, but then failed to submit annual audits as required by state law for fiscal years 2022, 2023, or 2024.
Last September, the town received a draft of the state auditor’s initial investigative findings.
“Given the severity of the findings and information, the Town should continue following the recommendations and guidance issued by the NC League of Municipalities by adhering to the established timeline and required steps to voluntarily disband,” the audit concludes.
The town’s board has already adopted a resolution of intent to dissolve Speed’s charter by June 30, 2026. Neither Mayor Wilbert Harrison nor Speed’s commissioners offered a written response to the audit.
Auditor Boliek said Speed’s decline should serve as a cautionary tale.
“While larger cities have more staff and resources, places like Speed have no such luxury,” wrote the state auditor. “Nevertheless, large and small communities alike have to pay attention to financial realities and everyday accounting.”
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