RALEIGH, N.C. (AP) — North Carolina officials are taking financial control of one of the country’s first towns established by freed slaves.

The state’s Local Government Commission stepped in to take over the accounts and assume responsibility for Princeville’s finances. Officials in the state treasurer’s office say town leaders were warned of problems for two years before the commission voted Tuesday.

It is just the fifth time since the 1930s that the state has assumed control of a North Carolina town’s finances, but Princeville is on the list twice. The commission also had to straighten out its books in 1997, WRAL reported.

“We don’t believe the town really has the adequate staff and capacity to address all the serious issues they are facing,” said Vance Holloman, the deputy state treasurer and the commission’s secretary.

Princeville is in danger of defaulting on a $310,000 loan to replace its water meters and has failed to comply with bookkeeping requirements, according to a memo prepared by the treasurer’s office.

The town of about 2,000 residents was settled by freed slaves in 1865 and is one of America’s oldest black-founded chartered towns. Allegations of mismanagement have been around for years. About 90 percent of the town was submerged under 20 feet of water from Hurricane Floyd in 1999.

Mayor Priscilla Everette-Oates wanted another 30 days for Princeville to get its finances in order, but other town leaders backed the takeover.

“The town is in a critical stage now. We really need your help,” Town Commissioner Gwendolyn Knight said.

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