The North Carolina Office of the State Auditor’s (OSA) investigation into the Town of Cary and the City of Rocky Mount shows that when financial oversight, internal controls, and independent financial analysis are weak, taxpayers bear the consequences.
In the reports, OSA identified weaknesses involving financial documentation, purchasing-card controls, required approvals, financial reporting, and segregation of duties.
The circumstances and severity of what was uncovered in North Carolina cities Cary and Rocky Mount vary, but the reports reveal a common theme: Internal controls often go overlooked until they fail. When approval processes are bypassed, documentation is incomplete, or oversight responsibilities become unclear, risks can accumulate unnoticed.
Internal controls are the first line of defense
Internal controls ensure that public funds are spent appropriately and that nonfinancial leaders can make more informed decisions.
When effective internal controls are in place, they help public-sector organizations:
Reduce the risk of error and misuse
Strengthen transparency
Clarify responsibility
Support reliable financial reporting
Reinforce public confidence
In Cary, OSA found that the town’s P-Card procedure had not been updated since 2009. Among 619 selected transactions, 45 had non-itemized receipts and 76 had no receipt showing what was purchased.
The findings highlight the essential responsibility finance professionals carry in helping leaders understand the long-term consequences of their decisions. Elected officials ultimately make policy decisions, but they rely on accurate financial analysis to understand the potential impacts for the years to come.
When oversight fails, citizens bear the cost
Oversight directly affects service levels, tax rates, utility rates, and a community’s quality of life. When financial oversight fails, real people suffer.
Rocky Mount presents a clear example of the effect on residents.
For example, between August 2023 and August 2025, Rocky Mount’s cash and investment balances fell 78%, from approximately $100 million to $21.8 million, according to OSA. From fiscal years 2023 through 2025, employee compensation increased 27%, while capital purchases rose 153% in fiscal year 2024 alone. Over the same three-year period, revenues declined 2%.
In Rocky Mount, financial mismanagement led to lost jobs, stalled projects, and higher bills for residents. Money absorbed by avoidable financial problems is money that cannot be spent to support priorities such as public safety, infrastructure, or economic development.
Accountability and public trust
Across the reports, OSA emphasized the importance of documented approvals, clear responsibilities, reliable financial information, and independent review. In the end, the findings from Cary and Rocky Mount are stories about accountability.
Strong internal controls rarely make headlines, and completed approval forms, documented spending decisions, or well-designed segregation of duties processes are not usually celebrated. However, those controls create the transparency and oversight that effective government depends on.
For CPAs working in or advising the public sector, these reports are an important reminder of the profession’s role. More than preparing reports and ensuring compliance, finance professionals strengthen governance, challenge assumptions, identify risks, and provide the independent analysis leaders need to make informed decisions.
Not only are these cases cautionary tales, but they also demonstrate the significance of accountability, governance, and the central role CPAs play in safeguarding and upholding public trust.