First Posted: 1/15/2009
PEMBROKE — The state Division of Alcohol Law Enforcement has closed the Pembroke ABC store to investigate more than 3,000 bottles of missing inventory, a state official said.
Signs posted on the door and a window indicate that the store, located at 203 N. Vance St., will be closed until further notice.
The state Alcoholic Beverage Control Commission asked the ALE to investigate the store in September after an audit showed more than 3,000 bottles of alcohol — valued at more than $20,000 — was missing, according to Michael Herring, the commission’s administrator.
A certified public accountant hired to do the store’s yearly audit reported the missing inventory to the commission.
In a letter dated Oct. 20, Herring told Pembroke ABC board Chairman James F. Maynor of the decision to close the store.
“Preliminary findings reveal a clear lack of fiscal controls to safeguard public monies and unacceptable management practices for conducting public business in accordance with state ABC laws,” the letter said.
The state ordered the store closed immediately because of “gross negligence and misconduct.”
Maynor could not be reached for comment.
The store has had problems with missing money and missing inventory before, Herring said. Between the years 2004 and 2007, more than $30,000 in inventory and $19,000 in cash went missing, he said.
“What we have here is a system that is not profitable and it appears that they have a lot of internal problems,” Herring told The Fayetteville Observer. “There has been a total breakdown of supervision from the local board, the appointed board, all the way down to management.”
The three-member board is appointed by the Pembroke Town Council. Mayor Milton Hunt referred questions to town attorney Grady Hunt. When contacted, Grady Hunt declined to comment. Town Manager McDuffie Cummings said he was made aware of the store closing Monday, but made no further comment.
In 2004, close to $10,000 worth of inventory was discovered missing following an audit. In 2005, about $19,000 was missing, and in 2007, more than $20,000 in inventory was missing, Herring said.
Herring said Tuesday that incidents that occurred in 2004 and 2005 were reported to the Pembroke Police Department. The results of those investigations are not known. Pembroke Police Chief Frank Hernandez could not be reached for comment.
“This year was the final straw, so we asked the Alcohol Law Enforcement to go in and get to the bottom of it,” Herring told the Fayetteville newspaper. “These are monies that could have been distributed locally to the town, but it went out the door in someone’s pocket.”
Herring said it does not appear that the Pembroke ABC board took any corrective action when it was made aware of the previous audit findings.
“We have 158 ABC boards in the state, and this has been the least profitable,” Herring told the Observer. “Now we know why.”
The Pembroke store reported a loss of $34,837 before any distributions to towns or agencies for the fiscal year ending June 30, 2007. For the same period, Lumberton, with two stores, reported a $181,907 profit; St. Pauls, $44,761; Fairmont $15,188; and Red Springs, $7,978. Maxton reported a $4,472 loss.
The ALE investigation is continuing and charges could be filed, Herring said.