The legislature promptly exonerated him following an inquiry, but an examination of the records after his death in 1827 disclosed that public funds in excess of $68,000 were, in fact, unaccounted for.

Haywood's heirs reimbursed the state nearly $48,000 for the missing money, but examiners shortly afterward discovered an additional shortage of almost $22,000 in Cherokee bonds, revenue from the sale of public lands in western North Carolina.

[3] Although banks were operating in Raleigh and throughout North Carolina, Haywood preferred to keep the state's money in a "Public Chest" in his office, dipping into it as necessary to pay governmental and perhaps personal expenses.

[3] Since he had posted no bond from 1826 to 1827, when the shortfall was discovered in his accounts, state officials had no practical means of recovering the missing money.

[3] When Haywood died in Raleigh in 1827, "a great procession was given in his honor and his funeral was conducted in the Presbyterian Church by Reverend Doctor McPheeters".