Performance Audit: Unchecked City Manager, Significant Overspending Led To Rocky Mount’s Financial Distress

ROCKY MOUNT, N.C. — The North Carolina Office of the State Auditor (OSA) has completed a performance audit of the City of Rocky Mount, finding that poor personnel decisions – including the hiring of a “stretch candidate” as City Manager – and significant overspending has led the City to the brink of financial collapse.

The audit was initiated in response to reports and concerns about the City’s financial mismanagement and significant financial distress experienced in recent years. OSA found that between August 2023 and August 2025, the City’s cash and investment balances decreased 78%, falling from about $100 million to $21.8 million. Between fiscal year 2023 and fiscal year 2025, City spending surged while revenues declined.

“OSA’s audit of Rocky Mount has uncovered serious financial failures, which culminate with an astonishing 78% decline in the city’s cash and investment balances in just two years,” said State Auditor Dave Boliek. “From the lack of due diligence in hiring the former City Manager, to cycling through five Finance Department directors, it’s clear that Rocky Mount has not been serious about resolving its financial issues.”

A key driver of the City’s financial distress was the hiring of the former City Manager. OSA found the former City Manager was previously the Town Manager in Dumfries, Virginia, where he oversaw a $1 million budget overspend. Even though the former City Manager was described as a “stretch candidate,” the City Council still voted unanimously to hire him.

On overspending, OSA found that from fiscal year 2023 through 2025, the City’s employee compensation increased by 27%, while capital purchases rose by 153% in fiscal year 2024 alone. This growth in spending coincided with a 2% decline in City revenues. Major capital project purchases included:

• $17.2 million for land intended for a casino and entertainment complex that has not materialized.
• $11.2 million for the redevelopment of Fire Station #2, nearly triple the original estimate.
• $6.8 million for a lump‑sum vehicle fleet lease.
• $6.6 million for additional equipment, including fire trucks and heavy machinery.

Purchases were made without thorough financial feasibility analysis, and auditors found evidence of attempts by the former City Manager to bypass City Council approval for financing equipment purchases. The City Council also had notable oversight shortcomings, including approving budgets without detailed financial data, missing statutory audit deadlines, and failing to hold City management accountable for a lack of transparency.

To address the financial crisis, the City paused projects, eliminated 86 full-time positions, decreased the budget for part-time staffing, and raised property taxes and utility rates for residents, resulting in an average increase of $20 per month for natural gas and $8 per month for electricity for a typical household.

“This mess is unfortunately costing local residents, who have experienced an uptick in their utility bills. My office has heard the overwhelming public concern and interest in this investigation, and I want to thank all those who have provided us with tips and information on this audit,” added Boliek.

In addition to the performance audit, OSA released an Investigative Special Report which found similar issues with the former City Manager and City Council. OSA found that in 2024, the same former City Manager entered a $795,500 consulting contract without a presentation to the City Council, a formal Request for Proposals for the consulting services, the City Council’s approval, or the City Council’s involvement in selecting stakeholders to serve on the project’s Steering Committee. The contract was eventually terminated. OSA determined that $385,610 was paid at the time the contract was terminated.

OSA is currently conducting additional reviews of utility bills and procurement-card purchases related to the City of Rocky Mount.