County finance director fired; claims manager, commissioners knew of late audit, disputed
- Chuck Thompson
- 3 days ago
- 6 min read
By Chuck Thompson | The Shelby Independent
In the wake of the March 2026 County Commissioners’ public meeting, where it was revealed that the county audit was extremely past due, the county finance director has since been terminated from his position.
During the March 17 meeting, the county commissioners seemed surprised to learn from an Local Government Commission (LGC) representative that the audit was past due.
The blame during the public meeting was unclear, with it shifting between the county manager, finance director, the CPA firm hired by the county and the LGC itself.
On Monday morning, March 30, Cleveland County Finance Director Philip Steffen was fired by County Manager David Cotton, due to “Unsatisfactory Job Performance and Unacceptable Personal Conduct as defined in Article VIl, Section 7 and 8 of the Cleveland County Personnel Ordinance.”
The termination was laid out in an official letter, signed by Cotton, explaining reasons behind the termination.
Cotton goes on to state that Steffen’s “willful violation of known or written work rules; or conduct unbecoming that is detrimental to the department's service…"
Cotton also stated that a meeting between him and Steffen occurred on March 27, noting “The concerns leading to this action relate to the management and oversight of Cleveland County's annual audit and financial account reconciliations."
On March 23, the Shelby Independent published a news story regarding the late audit, which was indirectly mentioned in the termination letter that is had been discussed between Cotton and Steffen on the 27th.
“These issues resulted in heightened public attention as well as unnecessary delays,” Cotton said in the letter. Cotton further noted that he had lost all confidence in Steffen to properly conduct the requirements expected of the finance director and dismissed him from the position effective immediately.
Cotton stated in the letter that Steffen chose not to “elevate or address them with me.”
Steffen’s comments
However, Steffen refutes the idea that the county leadership was caught by surprise during the March 17 meeting, claiming they knew of the late audit in advance of the public meeting.
Speaking via phone with the Shelby Independent on Tuesday, Steffen acknowledged the county audit was submitted late, taking responsibility for the discrepancy, but said it was not as a severe issue as many claimed - and everyone knew about it.
Steffen claimed that the county commissioners and administration were aware of the late audit. “That cannot be denied,” he stated.
“Probably at least of couple of months,” he alleged, when asked how long the county manager had been aware. Steffen allegedly met with Cotton months in advance and the county commissioners knew during agenda reviews, which Steffen said is the meeting prior to the public meeting – “Which was a week before,” alleges Steffen.
“The way I see it is the county leadership didn’t see eye to eye on everything. "Being late is partly my fault and I can only do better and learn from my mistakes,” Steffen noted. “I don’t think it’s as big of a deal as it’s been made out to be... We didn’t lose anything; we weren’t fined or anything and it wasn’t a surprise to leadership; they knew about it before that presentation.”
The presentation Steffen is referring to is the March 17 public meeting when a representative from the CPA firm spoke in front of the commissioners regarding how the county audit had yet to be fully submitted.
Steffen also said there’s no fees or penalties placed on the county for the late audit, adding, “There’s other counties that go through this as well. We knew about it ahead of time and were constantly working on it.”
“I care a lot of about this county; I care about the employees of the county and our continued success. I feel like we’ve made significant improvement over the last several years and it’s unfortunate that it comes to this,” he added. “I know The Lord is control and knows what’s best for me and the county, and I’m not worried about it.”
Steffen was hired by Cleveland County government in January 2024. He moved here from Washington state, where he served as a finance manager for the City of Anacortes, Washington.
But Cleveland County Commissioner Tony Berry the refutes Steffen’s claim of knowing about the late audit.
(County finance dir. termination continued below...)
“No, I did not realize until the meeting, when the public found out,” Berry said via phone to the Shelby Independent.
The December deadline for the audit was new for 2025, as in year’s past, all audits were due by October. However, even with the extended deadline, Cleveland County had not submitted their audit as of the March 17 public meeting, and as of March 24 there was no indication the audit had been submitted yet (by time of publication of the original news story).
When Cleveland County missed the standard deadline, an extension was granted to Cleveland County Government from the original date of Dec. 31 to Feb 12 and yet, the audit, still, was not submitted by the county by that first extended grace deadline a month later by the time of the March 2026 public meeting. As of the Shelby Independent’s publishing on March 23 the budget had yet to be submitted.
In other emails obtained by the Shelby Independent between Steffen and the CPA firm, it reveals that Steffen asks why certain information had to be submitted again, to which the response was that it was sent via email instead of being uploaded into a program as it is supposed to be.
The email chain begins at 8:50 a.m. on March 13, with the CPA firm emailing Steffen, waiting on additional information.
“Please review attached findings and provide a corrective action plan for each finding. I'm still waiting for your response regarding the ARPA expenditures,” the request noted.
Steffen replied, in part, at 9:46 a.m., “How is the late filing the County' s issue. We have submitted information to you as requested…”
The answer given explained the issue, as claimed by the CPA firm, rested on the finance director’s shoulders.
“We did not receive a final trial balance until 2/12/26, which was the audit due date, and until that total balance Is received, we cannot determine what questions we may have. That version still required a significant number of corrections to cash, AP, AR, and other accounts. In addition, certain required payroll information was not completed until 2/25/26….”
The email back to Steffen also explained it was allegedly incorrectly submitted to them, stating, “… I also apologize for the inconvenience of having to resend items. Unfortunately, that risk is always higher when documents are emailed rather than uploaded to the organizer. When items are added to the organizer, all team members have access, whereas individual email inboxes are not shared. We appreciate your understanding, and we apologize for any confusion this caused.”
The email exchange occurred four days before the LGC spoke to the county commissioners, explaining the audit was late, over a month past the extension deadline. The meeting between Cotton and Steffen occurred on March 27 and he was terminated form his position on March 30.
Steffen told S.I. on Tuesday, March 31, the audit was now complete and had been submitted to the LGC and "Doesn’t affect the county in any way."
However, according to the official website for the State Treasurer of North Carolina, late audits have the potential to cause the “withholding of a portion of the unit’s sales tax distributions. Counties and municipalities may appeal this withholding action.”
The termination letter sent to Steffen Monday morning concluded by stating, “After hearing and evaluating the information available to me, I have decided to terminate your employment. For your reference, I have attached Article VII, Section 7.1 (Dismissal for Grossly Inefficient Job Performance), Section 8 (Unacceptable Personal Conduct), and Article VIll (Grievance Procedures).”
A request for a direct comment from County Manager Cotton’s office was made by the Shelby Independent Tuesday morning, March 31, with no response as of time of this article’s publication, Wednesday, April 1, at 9:30 p.m.
The termination letter was obtained via a public record’s request.
Follow The Shelby Independent on Facebook, Instagram and TikTok. To contact Chuck about a story idea, send an email or visit the contact page.
Chuck Thompson is a reporter and columnist for The Shelby Independent.
Comments