Midtown Raleigh News

After incubator probe, Raleigh auditor gets a raise

Months after uncovering major financial problems at a city-funded business incubator in Southeast Raleigh, Raleigh’s lead auditor is getting a raise.

The city council voted last month to reclassify Martin Petherbridge’s position, a move that increases his annual salary from $85,295 to $93,824. He headed the city’s audit of the troubled Raleigh Business and Technology Center, and his report prompted leaders to immediately cut the agency’s funding and attempt to evict it from its city-owned building.

Petherbridge’s raise is part of a restructuring for the city audit office, and interim city manager Perry James said he had other reasons for the pay change.

“As part of the organization review of the internal audit office, it became clear that the salary level of the internal audit manager position was lower than a number of our peer cities,” James wrote in an email.

The raise comes as James moves the three-person audit office out of the finance department; the group will now report directly to the city manager to make them more independent.

James said the change had been planned long before the city’s auditor probed the incubator and found unexplained cashier’s checks and payments to the incubator’s tenants as well as records showing that the agency’s nonprofit status had been revoked.

Bob Robinson, the incubator’s longtime director, resigned after auditors found he had drawn $65,000 in teller checks from the incubator. Police are now investigating possible fraud, and the city is fighting the agency in court to evict them.

Email records show that Petherbridge identified problems at the incubator more than a year before he got a green light to begin a full audit.

“The audit situation with the Raleigh Business and Technology Center was representative of the value of the internal audit efforts, but was not a determining factor in relocating the Internal Audit Office,” James said.

While Petherbridge will get a raise, he won’t yet get additional full-time auditors, as he’d requested in the last several budget cycles. That could come in next year’s budget, and James is already getting the office some outside help.

“I have added some budget to the internal audit office this year to provide them contract personnel who can assist in their audit work as we position ourselves for likely budget consideration of additional full-time positions” next year, James said.

More staff would bring the audit office closer to its counterparts in other North Carolina cities. Greensboro has five internal auditors, and Charlotte has 10.

New City Manager Ruffin Hall will oversee Raleigh’s next budget, which will be presented to the city council in the spring.