State audit of Cary details ‘questionable’ expenses and weaknesses in financial oversight

Cary’s former town manager made more than $1 million in questionable purchases using town money, exposing weaknesses in the town’s spending policies and a culture of lax oversight, a new state audit says.

The auditor says Stegall and other town employees made more than a dozen “questionable” expenses — ranging from expensive dinners with no apparent business purpose, unauthorized land purchases and graduate-school tuition for a councilwoman. And it highlighted other expenditures, such as $800-per-month car stipends for council members.

The report also provides a long list of recommendations for how the town can shore up its controls over employee spending and financial reporting, offering a new perspective on a town that has long been regarded as one of the best-run local governments in the country.

Cary is the state’s seventh-biggest municipality. And many of the expenses flagged by the auditor represent a small fraction of the town’s $573.5 million budget. But they represented a lack of financial discipline that warranted further investigation of compliance with town policies, the auditor said.

“The findings in this report present examples of spending public dollars in a manner that appears excessive and is not readily tied to identifiable government purposes,” Boliek said in the report. “Additionally, the report presents financial management decisions that contributed to violations of procedure and includes many instances of undocumented purchases.”

The auditor’s office launched the review after receiving “several reports of financial misconduct,” the report says. Boliek in January provided preliminary details of the investigation, noting at the time that he had shared the findings — including potentially fraudulent charges — with Wake County’s district attorney and officials at the State Bureau of Investigation.

Wake County District Attorney Lorrin Freeman said Wednesday that an investigation is ongoing.

“If our review of this report from the state auditor leads to the opening of a criminal investigation, that will be done by a request to the SBI from me and Cary Chief of Police Terry Sult," Freeman said in a statement in January. "As in all matters of public interest, we will exercise all due diligence in examining this matter.”

The auditor's office reviewed procurement card transactions and expense-approval policies. It found that almost two-thirds of employees had town-issued purchase cards, compared to 10% in Charlotte. And it said the town needs to improve policies over what kinds of purchases can be made, how expenses are improved, and what documentation needs to be submitted.

It also outlined recommendations for reporting on the town’s overall financial health.

A spokesperson for the town didn’t immediately respond to a request for comment.

An independent audit previously found material weaknesses in the town's internal controls over financial reporting. Auditors at Cherry Bekaert LLP in February said it found missing financial reports related to $2.1 million in grant expenses eligible for reimbursement. They also noted a reported fraudulent check for $1.3 million that was perpetrated against the town by an outside source in April 2025.

Town manager allegations

Stegall, who hasn't responded to multiple requests for comment, was placed on leave in November after public records revealed a series of major expenses that much of the town council said they were unaware of. Steagall resigned a month later, following allegations of over-the-top spending and inadequate financial reporting, creating an unhealthy work environment, and a lack of transparency with the full council, staff and citizens.

Public records indicate that Stegall spent thousands of dollars at a four-star hotel during a conference in Texas in 2023. During Stegall’s tenure, the town also paid more than $1 million for land near Cary Elementary School against the recommendation of the assistant town manager and without the knowledge of every town council member. He is also alleged to have encouraged the use of town money to pay for a councilmember's master's degree, which ended up costing more than $37,000. Many of those purchases were detailed in the audit report.

The auditor said Thursday that Stegall booked a hotel penthouse for himself during a conference trip. He noted the $3,419 charge was for "multiple staff," but other staff stayed at that hotel, the auditor said.

Stegall also purchased two properties totaling more than $1 million, records show. According to the state auditor, he did so without telling council members and against concerns raised by an assistant town manager. The town also paid a ghostwriter $65,653 to write a book about Stegall's management style, the auditor reported. 

The state audit summary also said Stegall “instituted an intimidating work environment that included erratic behavior and bullying.”

The independent audit that was detailed in February also found that Stegall didn’t emphasize the need for compliance or accountability, according to Lee Ann Watters, the audit director at Cherry Bekaert. “The former town manager did not always model or reinforce the ethical behavior that is laid out in your policy,” Watters told Cary officials at the time.

Cary Mayor Harold Weinbrecht previously said potential violations will be taken seriously and that the town has implemented new transparency measures and improved documentation processes.

“Following the laws that govern us, as a town and as individuals, is fundamental to everything we do," Weinbrecht said in a statement in January. "When one person violates the laws meant to protect taxpayers, it contradicts our commitment to serve our community with integrity. We will address any violations consistent with legal obligations and our values.”

This is a developing story. Check back for updates.