Several local government departments in Northwest North Carolina have been named in a state audit outlining what the N.C. Office of the State Auditor described as a kickback scheme involving the purchase of overpriced cleaning and maintenance supplies.

The audit showed that 44 agencies spent a total of $150,401 with Stone Cold Chemicals Inc., a telemarketer of industrial chemicals and cleaning products, between August 1998 and February 2003, Auditor Les Merritt reported.

In return, they received "premiums" worth $14,700, he wrote in a letter to Richard Moore, the state treasurer, who is also chairman of the Local Government Commission.

Of the companies on the list, the Denton Wastewater Treatment plant did the most business with the company in the state.

Sales reports show that Denton wastewater officials did business with the company 19 times between August 2000 and February 2003 and bought $37,887 in products. Stone Cold gave back $4,304 in gifts, which it listed as "premiums."

The gifts were mainly gift cards at various retailers, but also included golf balls and T-shirts.

A similar report last week on purchases by the state Transportation Department recommended disciplinary action for employees involved, who broke state law by accepting the gifts.

William Pless, Denton's town manager, did not immediately return a telephone message left late yesterday afternoon by The Associated Press.

Two Winston-Salem city departments - central maintenance and parks maintenance - placed one order each with the company. Central maintenance bought $254 worth of goods in October 2001 and received $25 in goods. The park-maintenance department placed a $282 order in March 2001 and received $20 in gifts.

Purchases were also made by Davie and Wilkes counties.

Stone Cold Chemicals was based in Loganville, Ga., and had big sales and distribution centers in Ponce Inlet, Fla. Top company executives were charged in September 2003 with bribing state and local government workers to buy millions of dollars worth of its products. In November, the state of Florida got a $1.2 million civil settlement from former executives of the company.

Merritt's investigation of the local North Carolina agencies stemmed from the review of Stone Cold Chemical's business with the state Department of Transportation, which then found similar purchases by employees at Appalachian State University.

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