NC state auditor’s new report on Cary finds ‘excessive’ spending, work climate issues

Following months of reports of mismanagement in the town of Cary, the State Auditor’s Office confirmed a lengthy list of “questionable expenses” and an “intimidating” work environment under former Town Manager Sean Stegall in a new report released Thursday.

Stegall resigned as town manager of North Carolina’s seventh-largest municipality in December, three weeks after he was placed on administrative leave. The town began scrutinizing Stegall following a public records request into what the mayor later called “over-the-top” spending.

“Over the course of our investigation, we learned that the general working environment of the town discouraged the questioning of leadership,” according to the more than 2,600-page report. “Multiple people spoke of having observed something they thought they should report, but that they had no one to report it to.”

Stegall did not respond to a phone call from The News & Observer following the release of the 2,603-page report.

State Auditor Dave Boliek formally presented the report and took questions at a Thursday news conference.

“It’s time for the people of Cary to understand exactly how their money is being spent,” Boliek said. “When government employees take executive van transportation to go 12 miles to a holiday dinner, and when they are going to fine dining steakhouse where the average meal comes out to be $102 a person, I don’t think it’s out of the realm of really common sense for taxpayers to start questioning how their government is spending their money.”

In addition to the state auditor’s investigation, Wake County District Attorney Lorrin Freeman and Cary Police Chief Terry Sult asked state investigators to launch a criminal investigation into whether town funds were misspent. That investigation is ongoing, Freeman told The N&O Thursday.

What report says about Cary spending

In the auditor’s report, there’s a page-and-a-half bulleted list of “food, travel and other questionable expenses,” that includes:

• $108,714 for mailing flyers to inform citizens of changes to council districts and election dates, which included a photo of each district representative.
• $120,314 on video production for its 2024 retreat.
• $65,656 for a ghostwriter to write about Sean Stegall’s management style.
• $9,626 a year as an annual car allowance for council members.
• $2,206 for a “bond watch party” for town staff.
• $1,600 for 10 pairs of Cary-branded Ray-Ban sunglasses
• $733 for an “executive van” to transport town employees 12 miles.
• $120 each for two 20-oz ribeye steaks

About 60% of town staff have procurement cards, or designated credit cards for town expenses, substantially higher than much larger cities like Raleigh and Charlotte, which have 16% and 10%, respectively. According to records from Cary’s p-card provider from Jan. 1, 2024, through Dec. 31, 2025, there were 59,131 purchases totalling $24.2 million.

“The town’s high number of p-cards increases the opportunity for fraud and wasteful spending,” according to the report.

The auditor’s office focused on spending of 22 employees close to the town manager’s office, of which 18 have procurement cards.

Those 18 staff members spent more than $700,000 over two years with about $600,000 of that on food, marketing, travel, education and “other concerns,” according to the report.

Most of the 619 transactions had receipts, but 76 had no receipts and 45 of the receipts were not itemized.

“What our team has concluded is, and there’s no better way to say it, that there’s a cultural problem in terms of extravagant spending of taxpayer dollars in the town of Cary,” Boleik said.

Cary’s response to state auditor

In a written response with the report, the town says Stegall was hired and began introducing “private-sector thinking” that made positive contributions, but “yet, over time, and especially toward the end of his tenure, he made questionable decisions.”

“The work of the (State Auditor’s office) and others has helped us identify gaps in oversight, process and culture,” according to the report. “And while these concerns are largely rooted in the former town manager’s actions, we recognize that as an organization, we have the responsibility to understand what happened, identify how we can strength the systems that failed to prevent it, and ensure our practices reflect the standards our employees and community expect.”

The statement said Stegall claimed he “thrived under pressure” and often waited on making decisions, which sometimes resulted in things like cancelling hotel rooms outside of a refund window.

The town said it has provided hundreds of thousands of documents to the auditor’s office and town staff have “fully cooperated” with the auditor’s staff.

The town is holding a news conference at 7:30 p.m. Thursday at town hall to outline the town’s response since Stegall resigned, and will release findings from the law firm the town hired to review its concerns.

The report makes 13 recommendations to the town including:

• Creating a policy outlining the types of purchases that can be made with procurement cards.
• Creating policy covering council training and education
• Strengthening internal controls over financial reporting and communication
• Having the town’s finance department provide training to all staff responsible for reviewing and approving procurement card transactions

High-end speakers, tuition payments

An N&O review of Stegall’s purchases since the fall found a high-end speaker system delivered to his home; an out-of-town dinner classified as a training expense; upgraded airline tickets and stays at four-star hotels in 2024 and 2025.

The N&O also reported:

• The town paid nearly $40,000 for Mayor Pro Tem Lori Bush’s tuition for a master’s degree in Northwestern University’s Public Policy Program. Bush repaid the money after the spending was reported, saying she wanted to “remove any concern or distraction.”
• The town spent $1 million to purchase land for future affordable housing without the Town Council’s full knowledge
• Stegall submitted a lost-receipt form for $3,400 spent at a hotel “for multiple staff” during a conference in Texas. Documents obtained by The N&O show that staff stayed at a different hotel.
• A book lauding Stegall as a visionary cost Cary at least $151,000 — 143 copies were sold between August and December 2025.

Stegall was hired by the Cary Town Council in 2016, making $210,000 when he was first hired. He is listed in state pension system records as making $366,054 last year.

He was scheduled to receive a severance package totalling $198,832, equal to six months pay, The N&O previously reported. The auditor’s report states he did not receive the severance because he did not return town property and provide access to his text messages for public records access.

This story was originally published July 16, 2026 at 10:13 AM with the headline "NC state auditor’s new report on Cary finds ‘excessive’ spending, work climate issues."

Anna Roman

The News & Observer

919-829-4807

Anna Roman is a service journalism reporter for the News & Observer. She has previously covered city government, crime and business for newspapers across North Carolina and received many North Carolina Press Association awards, including first place for investigative reporting.