RALEIGH — A state audit of COVID funds shows the money was accounted for and had been allocated, but the audit also revealed $2.95 billion — more than half — of those funds is still undistributed.
“State agencies were allocated billions of dollars for COVID, but a lot of that money sat parked,” North Carolina State Auditor Dave Boliek said in a press release. “With funds not expended by the end of 2026 going to the U.S. Treasury, state agencies should be proactive in making sure taxpayers realize a return on the investment of these funds.”
The Office of the State Auditor’s (OSA) 30-page report found $2.5 billion, or 46%, of State Fiscal Recovery Funds have been disbursed as of June 30, 2024.
The remaining $2.95 billion was found to be undisbursed by various state agencies.
The North Carolina Department of Environmental Quality, which the audit says has $1.9 billion in allocations, has not requested 89% of those funds, which comes to $1.7 billion. The remaining balance includes $528 million for the State Drinking Water/Wastewater Reserve Infrastructure Grants and $326 million for the Viable Utility Reserve.
Other examples from the report include:
- The Department of Information Technology has not requested $687 million (94%) of the $734 million allocated, with $326 million in remaining funds for the NC GREAT Grant – Federal Broadband Funds and $126 million in remaining funds for Completing Access to Broadband.
- The Department of Health and Human Services has not requested $201 million (40%) of the $503 million allocated, with $120 million in remaining funds for the Lead and Asbestos – Remediation of Lead Paint and Asbestos in Schools and Childcare Facilities.
- The Department of Commerce has not requested $54 million (43%) of the $126 million allocated, with $39 million in remaining funds related to Rural Downtown Transformation Grants.
The OSA is required by law to do biennial financial audits of the State Fiscal Recovery Fund, and the purpose of the audit was to make sure the money had been allocated and accounted for.
The State Fiscal Recovery Fund includes $5.4 billion from the 2021 American Rescue Plan Act for COVID relief, with 100% of those funds allocated by the Office of State Budget and Management (OSBM) as of June 30, 2024, and the agency had disbursed $1.6 billion (36%) by that date.
Between July 1, 2022, and June 30, 2024, the OSBM disbursed $1.2 billion from the fund: $849 million to state agencies, $263 million to public schools and higher education, $35 million for local government capacity assistance, $10 million to state Indian tribes and associations, and $15.6 million for continuity of operations.
OSBM’s response, signed by State Budget Director Kristin Welker and North Carolina Pandemic Recovery Office Director Tommy Clark, reiterates much of the audit report’s findings. The response also notes that the remaining funds need to be spent by Dec. 31, 2026, or they revert to the U.S. Treasury unless Congress issues an extension.
