State budget office approves waiver for State Fair expenses after audit

State auditor found that Agriculture dept exceeded state budget rules on lodging during fairs

N.C. Agriculture Commissioner Steve Troxler speaks to the crowd of farm families at the Ag Rally on June 25, 2018 in Raleigh. Lauren Rose, North State Journal

RALEIGH — A recent state audit alleged that officials from the N.C. Department of Agriculture and Consumer Services incurred expenses for travel and lodging expenses that exceeded what was allowed under state budget rules. The state budget office later approved a waiver for what the department called a “unique business need” for top staff to be in Raleigh throughout the State Fair.

The investigative report, based on a call to Democrat State Auditor Beth Wood’s waste and abuse hotline, alleged that Republican Agriculture Commissioner Steve Troxler, his chief of staff and the fair manager incurred $22,000 in cumulative expenses for hotel rooms, meals and other travel costs while working at the state fair over several years. The agriculture agency countered that the expenses were justified based on business and safety needs.

Nearly all the expenses were incurred by the commissioner and the chief of staff over a five-year period that the audit examined through 2018. The current fair manager was hired early last year.

The audit said the state budget manual restricts overnight travel to destinations at least 35 miles away from an employee’s home or duty station, whichever is less. All three of them live at least 60 miles from Raleigh.

In a written response attached to the audit, Chief Deputy Commissioner David Smith said he signed off on the expenses because it’s critical that fair leaders are nearby during the 11-day event each October, which can attract 1 million visitors. There are potential safety and security issues on site, and it would be dangerous for the leaders to drive back and forth from home on little sleep, he wrote.

“Department did and does consider hotel stays for these individuals to be necessary,” Smith wrote. “Not only is this a decision based on a unique business need of the department, but it is most importantly based on safety.”

The audit, however, warned that such singlehanded decision-making “sets a precedent for other state agencies to also ignore whichever policy or regulation they choose, which could cause a great cost to the taxpayer.”

Auditors said they suggested that Troxler’s department ask the state budget director to grant a waiver to the lodging rule. State Budget Director Charlie Perusse approved such a waiver last month, limiting it to a “few, critical employees” for the State Fair and Mountain State Fair held this month.

Auditors also provided data showing fair hotel stays by Troxler and Hedgecock exceeded the maximum allowable daily expenses for food and lodging expenses, with some hotel rates as high as $199 per night. Smith wrote the high costs of Raleigh hotels and security concerns for an elected official like Troxler prompted going over the maximum. Fair manager Kent Yelverton of Fremont stayed at a $70-per-night hotel last year, the audit said.

In an interview with the North State Journal, Troxler said the hotel selection was based primarily on security. Citing a previous incident where the windows in his state vehicle were knocked out, Troxler said a new hotel was selected that offered additional security for state property and for his late-night arrivals and early departures. Troxler also said that he selected a full-service hotel that allowed for on-site food service since he often arrived after 11pm or left early due to fair commitments or emergencies.

The audit represents a dust-up between two statewide elected officials in Wood, a Democrat, and Troxler, a Republican. While both have wider latitude in running their respective departments than Cabinet agencies led by a governor’s appointee, they still are expected to follow budget regulations.

The North Carolina State Fair begins Thursday, Oct. 17 at the State Fairgrounds in Raleigh.

The Associated Press contributed to this report.