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STATE OF NORTH CAROLINA 3333 3333333333333333
OFFICE OF THE STATE AUDITOR
BETH A. WOOD, CPA
STATE FISCAL RECOVERY FUND
PRELIMINARY FINANCIAL AUDIT
OFFICE OF STATE BUDGET AND MANAGEMENT
DECEMBER 2022
The k ey findings and recommendations in this summary may not be inclusive of all the findings and recommendations
in this report.
EXECUTIVE SUMMARY
OBJECTIVE
The objective of this audit was to determine whether the Office of State Budget and
Management (OSBM) accounted for, allocated, and disbursed amounts appropriated to the
State Fiscal Recovery Fund in accordance with State Fiscal Recovery Fund legislation. 1
BACKGROUND
On May 24, 2021, the North Carolina General Assembly enacted S.L. 2021-25 which
established the State Fiscal Recovery Fund. 2 The State Fiscal Recovery Fund was established
to respond to the COVID-19 public health emergency and its negative economic impacts; to
respond to workers performing essential work during the COVID-19 public health emergency;
to provide for government services, including revenue reductions due to the COVID-19 public
health emergency; and to make necessary investments in water, sewer, or broadband
infrastructure. 3
Through a series of legislation, the State Fiscal Recovery Fund provided a total of $5.4 billion
in assistance to various entities across the state.
S.L. 2021-25 required OSBM to administer the State Fiscal Recovery Fund to carry out the
provisions of the law, 4 and to ensure the proper reporting and accounting of the State Fiscal
Recovery Fund. 5
KEY F INDINGS
OSBM accounted for, allocated, and disbursed amounts appropriated to the State of North
Carolina’s State Fiscal Recovery Fund in accordance with State Fiscal Recovery Fund
legislation. As of June 30, 2022, OSBM allocated a total of $5.4 billion of State Fiscal Recovery
Funds and disbursed:
• $740 million to state agencies.
• $38 million to public schools and higher education.
• $524 million for employee bonuses and benefits.
The $4.1 billion remaining to be disbursed represents the balance for which recipients have
yet to request distribution. State Fiscal Recovery Funds must be obligated by
December 31, 2024, and expended by December 31, 2026.
1
See Appendix A for details regarding legislation affecting the State Fiscal Recovery Fund.
2
S.L. 2021-25, Section 2.2.
3
The intended purpose and use of State Fiscal Recovery Funds are contained in applicable sections of State
Fiscal Recovery Fund legislation. See Appendix B for summary of intended purpose and uses of funds.
4 S.L. 2021-25, Section 2.2.
5
S.L. 2021-180, Section 4.9.(d).
STATE OF NORTH CAROLINA
Office of the State Auditor
2 S. Salisbury Street
20601 Mail Service Center
Raleigh, NC 27699-0600
Telephone: (919) 807-7500
Fax: (919) 807-7647
Beth A. Wood, CPA https://www.auditor.nc.gov
State Auditor
AUDITOR’S T RANSMITTAL
The Honorable Roy Cooper, Governor
Members of the North Carolina General Assembly
Kristin Walker, State Budget Director
Stephanie McGarrah, Executive Director, North Carolina Pandemic Recovery Office
Ladies and Gentlemen:
We are pleased to submit this performance audit report titled State Fiscal Recovery
Fund – Preliminary Financial Audit. The objective of this audit was to determine whether the
Office of State Budget and Management accounted for, allocated, and disbursed amounts
appropriated to the State Fiscal Recovery Fund in accordance with State Fiscal Recovery Fund
legislation.
The State Budget Director reviewed a draft copy of this report. Her written comments are
included starting on page 17.
This audit was conducted in accordance with Chapter 147, Article 5A of the North Carolina
General Statutes.
We appreciate the courtesy and cooperation received from management and the employees
of the Office of State Budget and Management during our audit.
Respectfully submitted,
Beth A. Wood, CPA
State Auditor
T ABLE OF CONTENTS
PAGE
BACKGROUND ...................................................................................... 1
OBJECTIV E, S COPE, A ND METHODOLOGY ................................................ 4
RESULTS A ND C ONCLUSIONS ................................................................ 6
F INDINGS
Beth A. Wood, CPA 1. ALLOCA TIONS AND D ISBURSEMENTS TO S TATE A GENCIES ................ 7
State Auditor 2. ALLOCATIONS AND DISBURSEMENTS TO PUBLIC SCHOOLS AND
HIGHER E DUCA TION ...................................................................... 8
3. ALLOCATIONS AND DISBURSEMENTS TO LOCAL GOVERNMENT
CAPA CITY ASSISTANCE .................................................................. 9
4. ALLOCATIONS AND DISBURSEMENTS TO STATE INDIAN T RIBES AND
ASSOCIA TIONS ............................................................................ 10
5. ALLOCATIONS AND DISBURSEMENTS TO EMPLOYEE BONUSES AND
B ENEFITS ................................................................................... 11
APPENDICES
A PPENDIX A ..................................................................................... 13
A PPENDIX B ..................................................................................... 14
A PPENDIX C ..................................................................................... 16
RESPONSE FROM OFFICE OF S TATE B UDGET A ND MANA GEMENT ............ 17
ORDERING INFORMA TION..................................................................... 19
Chapter 147, Article 5A of the North Carolina General Statutes, gives the Auditor broad powers to examine all books,
records, files, papers, documents, and financial affairs of every state agency and any organization that receives public
funding. The Auditor also has the power to summon people to produce records and to answer questions under oath.
BACKGROUND
BACKGROUND
On March 11, 2021, the President of the United States signed into law the American Rescue
Plan Act (ARPA). 6 ARPA established the federal Coronavirus State and Local Fiscal Recovery
Fund and appropriated $350 billion to this fund for distribution to state, local, territorial, and
tribal governments. 7 The State of North Carolina received a total of $5.4 billion in financial
assistance for the State Fiscal Recovery Fund and $277 million for the Coronavirus Capital
Projects Fund through the federal Coronavirus State and Local Recovery Fund.
In addition, eligible North Carolina local governments received a total of $3.4 billion in ARPA
assistance. The state’s 100 counties and largest 26 municipalities received a total of
$2.7 billion directly from the U.S. Department of the Treasury and the state’s
525 Non-Entitlement Units 8 were appropriated $705 million to be provided through the state’s
Local Fiscal Recovery Fund.9
Federal American Rescue
Plan Act
Federal Coronavirus State and Eligible North Carolina Local
Local Fiscal Recovery Fund Governments
$350 Billion $2.7 Billion
Coronavirus Capital Projects $5.4
State Billion
of North Carolina State of North Carolina
Fund State Fiscal Recovery Fund Local Fiscal Recovery Fund to
$277 Million $5.4 Billion Non-Entitlement Units
$705 Million
The purpose of these funds is to provide financial assistance to be used to:
1. Respond to the public health emergency with respect to COVID-19.
2. Respond to workers performing essential work during the COVID-19 public health
emergency by providing premium pay to eligible workers of eligible employers who are
performing essential work.
3. Provide for government services, including revenue reductions due to the COVID-19
public health emergency.
4. Make necessary investments in water, sewer, or broadband infrastructure.
On May 24, 2021, the North Carolina General Assembly enacted S.L. 2021-25 which
established the State Fiscal Recovery Fund. 10 The State Fiscal Recovery Fund is a special
fund administered by the North Carolina Office of Budget and Management (OSBM), to carry
out the provisions of the law and subsequent acts necessitated as a result of the COVID-19
public health emergency.
6 U.S. Public Law 117-2.
7 https://home.treasury.gov/policy-issues/coronavirus/assistance-for-state-local-and-tribal-governments/state-
and-local-fiscal-recovery-funds.
8 Tow ns and cities of 50,000 residents or few er.
9 https://files.nc.gov/ncgov/documents/files/ncpro/Funding-totals-SLFRF_final.pdf.
10 S.L. 2021-25, Section 2.2.
1
BACKGROUND
The funds are to be used to respond to the public health emergency with respect to the
COVID-19 public health emergency and its negative economic impacts; to respond to workers
performing essential work during the COVID-19 public health emergency; to provide for
government services, including revenue reductions due to the COVID-19 public health
emergency; and to make necessary investments in water, sewer, or broadband
infrastructure. 11 North Carolina’s State Fiscal Recovery Fund does not include amounts
received directly from the U.S. Department of the Treasury by eligible North Carolina local
governments, amounts received through the state’s Local Fiscal Recovery Fund by the state’s
Non-Entitlement Units, 12 or the State’s Coronavirus Capital Projects Fund. Accordingly, these
funds are not included within the scope of this audit.
Through a series of legislation, 13 the state appropriated approximately $5.4 billion to various
entities across the state through the State Fiscal Recovery Fund as shown in the following
illustration:
State of North Carolina
State Fiscal Recovery
Fund
$5.4 Billion
Local Government Employee
Public Schools and State Indian Tribes
State Agencies Capacity Bonuses and
Higher Education and Associations
$4.4 Billion Assistance Benefits
$394 Million $10 Million
$54 Million $545 Million
OSBM disburses State Fiscal Recovery Funds to recipients by request based on timelines
agreed to with each recipient.
State Fiscal Recovery Fund legislation required OSBM to administer the State Fiscal Recovery
Fund to carry out the provisions of the law, 14 and to ensure the proper reporting and accounting
of the State Fiscal Recovery Fund. 15 Specifically, OSBM is required to:
• Allocate and disburse State Fiscal Recovery Funds as directed by the North Carolina
General Assembly.
• Ensure adherence with the compliance requirements established by the
U.S. Department of the Treasury.
• Account for the State Fiscal Recovery Fund in accordance with generally accepted
accounting principles and the requirements established by the North Carolina Office of
the State Controller. 16
• Adhere to the reporting requirements established by federal and state law.
11
S.L. 2021-25, Section 2.2.
12 Tow ns and cities of 50,000 residents or few er.
13 See Appendix A for details regarding legislation affecting the State Fiscal Recovery Fund.
14 S.L. 2021-25, Section 2.2
15 S.L. 2021-180, Section 4.9.(d).
16 North Carolina Office of State Budget and Management, Memorandum Budgeting American Rescue Plan Act
State Fiscal Recovery Funds.
2
BACKGROUND
The 2020 COVID-19 Recovery Act 17 created the temporary North Carolina Pandemic
Recovery Office (NCPRO) to oversee and coordinate funds made available under COVID-19
recovery legislation. NCPRO is responsible for:
• Providing technical assistance.
• Ensuring coordination of federal funds received by state agencies and local
governments.
• Ensuring proper reporting and accounting of all funds.
Unless stated otherwise, references to OSBM in this report also encompass the responsibilities
and activities of NCPRO.
S.L. 2021-180, Section 4.9.(j) required the Office of the State Auditor to conduct biennial
preliminary financial audits of the State Fiscal Recovery Fund.
Key terms discussed in this report include:
ARPA – The federal American Rescue Plan Act (U.S. Public Law 117-2) that established
the federal Coronavirus State and Local Fiscal Recovery Fund.
State Fiscal Recovery Fund legislation 18 – The series of legislation enacted by the State
of North Carolina to establish the State Fiscal Recovery Fund and provide assistance to
various entities across the state in response to the COVID-19 public health emergency
and its negative economic impacts.
State Fiscal Recovery Fund – The fund established by the State of North Carolina to
respond to the COVID-19 public health emergency and its negative economic impacts; to
respond to workers performing essential work during the COVID-19 public health
emergency; to provide for government services, including revenue reductions due to the
COVID-19 public health emergency; and to make necessary investments in water, sewer,
or broadband infrastructure.19
COVID-19 – The severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) that
emerged in December 2019.
Responsible parties discussed in this report include:
North Carolina Office of State Budget and Management (OSBM) – OSBM delivers budget
development and management services for the state. S.L. 2021-25 established the State
Fiscal Recovery Fund that is to be maintained as a special fund, administered by OSBM,
to carry out the provisions of the law.
North Carolina Pandemic Recovery Office (NCPRO) – The temporary North Carolina
Pandemic Recovery Office created to oversee and coordinate funds made available under
COVID-19 recovery legislation.
17 S.L. 2020-4, Section 4.3.
18 See Appendix A for details regarding legislation
affecting the State Fiscal Recovery Fund
19 The
intended purpose and use of State Fiscal Recovery Funds are contained in applicable sections of State
Fiscal Recovery Fund legislation. See Appendix B for summary of intended purpose and uses of funds.
3
OBJECTIVE, SCOPE,
AND METHODOLOGY
OBJECTIVE, SCOPE, AND METHODOLOGY
The audit objective was to determine whether the Office of State Budget and Management
(OSBM) accounted for, allocated, and disbursed amounts appropriated to the State Fiscal
Recovery Fund in accordance with State Fiscal Recovery Fund legislation.20
The audit scope included OSBM’s accounting, allocation, and disbursement transactions
related to the State Fiscal Recovery Fund for the period May 24, 2021, 21 through
June 30, 2022.
The audit scope did not include funds received by eligible North Carolina local governments
directly from the U.S. Department of the Treasury, funds received through the state’s Local
Fiscal Recovery Fund by the state’s Non-Entitlement Units, 22 or funds received through the
state’s Coronavirus Capital Projects Fund. Further, the following matters were not included
in the audit scope and objective:
• Compliance with requirements established by the U.S. Department of the Treasury.
• Adherence to reporting requirements established by ARPA or state law.
• Whether State Fiscal Recovery Funds were spent in accordance with ARPA.
• Whether programs that received State Fiscal Recovery Funds accomplished their
intended purpose.
• Disbursement of State Fiscal Recovery Funds to subrecipients, beneficiaries,
municipalities, or other secondary entities that did not receive funds directly from
OSBM.
S.L. 2021-180, Section 4.9.(j) also required the Office of the State Auditor to conduct a
performance audit of the State Fiscal Recovery Fund.
To accomplish the audit objective, auditors:
• Reviewed relevant laws and regulations.
• Interviewed OSBM and North Carolina Pandemic Recovery Office (NCPRO)
personnel.
• Reperformed all 242 (100%) allocations to state agencies, institutions of higher
education, local & tribal governments, using the criteria established in state law to
ensure amounts were allocated in accordance with the law.
• Reconciled OSBM’s accounting records for allocations and disbursements to the
authorizing legislation and accounting requirements established by the North Carolina
Office of the State Controller 23 to ensure the State Fiscal Recovery Fund was
accounted for, allocated, and disbursed in accordance with ARPA and state law.
20 See Appendix A for details regarding legislation affecting the State Fiscal Recovery Fund.
21 The date the State Fiscal Recovery Fund w as established.
22 Tow ns and cities of 50,000 residents or few er.
23 Office of State Budget Management,
Memorandum Budgeting American Rescue Plan Act State Fiscal Recovery
Funds
4
OBJECTIVE, SCOPE, AND METHODOLOGY
• Examined recipient 24 fund requests, memorandums, journal entries, and other
documentation supporting all 156 (100%) disbursements from the State Fiscal
Recovery Fund (through June 30, 2022) to ensure the funds were disbursed in
accordance State Fiscal Recovery Fund legislation.
Because of the test nature and other inherent limitations of an audit, together with limitations
of any system of internal and management controls, this audit would not necessarily disclose
all performance weaknesses or instances of noncompliance.
This audit was designed to identify, for those programs, activities, or functions included within
the scope of the audit, deficiencies in internal controls significant to our audit objectives. As a
basis for evaluating internal control, auditors applied the internal control guidance contained in
professional auditing standards. However, our audit does not provide a basis for rendering an
opinion on internal control, and consequently, we have not issued such an opinion.
We conducted this performance audit in accordance with generally accepted government
auditing standards. Those standards require that we plan and perform the audit to obtain
sufficient, appropriate evidence to provide a reasonable basis for our findings and conclusions
based on our audit objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
24 Included
state agencies, institutions of higher education, local government, and state Indian tribes and
associations.
5
RESULTS AND
CONCLUSIONS
RESULTS AND CONCLUSIONS
During the period May 24, 2021, to June 30, 2022, the Office of State Budget and Management
(OSBM) accounted for, allocated, and disbursed amounts appropriated to the State of North
Carolina’s State Fiscal Recovery Fund in accordance with State Fiscal Recovery Fund
legislation. 25
OSBM allocated a total of $5.4 billion of State Fiscal Recovery Funds. 26 As of June 30, 2022,
$1.3 billion (24%) was disbursed to recipients.
The $4.1 billion remaining to be disbursed represents the balance for which recipients have
yet to request distribution. State Fiscal Recovery Funds must be obligated by
December 31, 2024, and expended by December 31, 2026.
25 See Appendix A for details regarding legislation
affecting the State Fiscal Recovery Fund.
26 See Appendix B for details regarding allocations by major recipient type.
6
FINDINGS
FINDINGS
1. ALLOCATIONS AND DISBURSEMENTS TO STATE AGENCIES
The Office of State Budget and Management (OSBM) allocated $4.4 billion of State Fiscal
Recovery Funds to state agencies in accordance with State Fiscal Recovery Fund
legislation. Of this amount, $740 million (17%) was disbursed as of June 30, 2022.
State Fiscal Recovery Fund legislation required that OSBM allocate $4.4 billion to state
agencies as shown in the table below. State Fiscal Recovery Fund legislation required that
funds only be disbursed from the State Fiscal Recovery Fund to state agencies upon
justification from the agency and only as needed to implement the provisions of state law.27
Auditors tested 115 (100%) State Fiscal Recovery Fund allocations and 63 (100%) of
OSBM’s disbursements to state agencies through June 30, 2022. Auditors found that all
115 (100%) allocations and 63 (100%) disbursements were properly accounted for,
allocated, and disbursed in accordance with State Fiscal Recovery Fund legislation.
The following table illustrates the total amounts allocated, disbursed, and remaining to be
disbursed to state agencies as of June 30, 2022.
The $3.7 billion remaining to be disbursed represents the balance for which recipients have
yet to request distribution. For example:
• The Department of Environmental Quality has not requested $1 billion allocated to
provide infrastructure grants to water and sewer utilities throughout the state. Of
these funds, $317.5 million will be used to provide grants to utilities that are at risk
of becoming distressed according to criteria adopted by the State Water
Infrastructure Authority.
27 S.L. 2021-180, Section 4.9.(e).
7
FINDINGS
• The Department of Information Technology has not requested $400 million
allocated to provide funds to the Completing Access to Broadband Fund
(CAB Fund). The CAB Fund is a special revenue fund within the Department of
Information Technology used to award broadband grants to eligible recipients that
meet criteria specified in N.C.G.S. § 143B-1373.1.
• The Department of Health and Human Services has not requested $125 million
allocated to support lead and asbestos remediation in public schools and childcare
facilities.
• The Department of Commerce has not requested $50 million allocated to provide
Rural Economic Development Division grants to local governments. Of the funds,
$25 million will be used for neighborhood revitalization grants and $25 million will
be used for community development grants.
• The Department of Agriculture has not requested $30 million allocated to be
distributed to the state’s six food banks to meet the increased demand caused by
the COVID-19 pandemic.
State Fiscal Recovery Funds must be obligated by December 31, 2024, and expended by
December 31, 2026.
2. Allocations AND DISBURSEM ENTS TO PUBLIC SCHOOLS AND HIGHER EDUCATION
The Office of State Budget and Management (OSBM) allocated $394 million of State
Fiscal Recovery Funds to public schools and institutions of higher education in accordance
with State Fiscal Recovery Fund legislation. Of this amount, $38 million (10%) was
disbursed as of June 30, 2022.
State Fiscal Recovery Fund legislation required that OSBM allocate $394 million to public
schools and institutions of higher education as shown in the table on page 9. State Fiscal
Recovery Fund legislation required that funds only be disbursed from the State Fiscal
Recovery Fund to state agencies upon justification from the agency and only as needed to
implement the provisions of state law. 28
Auditors tested 57 (100%) State Fiscal Recovery Fund allocations and 24 (100%) of
OSBM’s disbursements to public schools and institutions of higher education through
June 30, 2022. Auditors found that all 57 (100%) allocations and 24 (100%) disbursements
were properly accounted for, allocated, and disbursed in accordance with State Fiscal
Recovery Fund legislation.
28 S.L. 2021-180, Section 4.9.(e).
8
FINDINGS
The following table illustrates the total amounts allocated, disbursed, and remaining to be
disbursed to public schools and institutions of higher education as of June 30, 2022.
The $355 million remaining to be disbursed represents the balance for which recipients
have yet to request distribution. For example:
• The University of North Carolina System has not requested $93 million allocated
to establish a public-private partnership for digital learning courses with the goal
of generating postsecondary learning and career advancement opportunities in
response to the COVID-19 pandemic.
• The North Carolina Community College System has not requested $63.5 million
allocated to provide funds to community colleges that experienced a decline in
enrollment due to the COVID-19 pandemic.
• The Department of Public Instruction has not requested any of the $18.6 million
allocated for the Smart School Bus Pilot Program. This program will allow for
enhanced safety protocols and Wi-Fi connectivity on school buses in response to
the COVID-19 pandemic.
State Fiscal Recovery Funds must be obligated by December 31, 2024, and expended by
December 31, 2026.
3. ALLOCATIONS AND DISBURSEMENTS TO LOCAL GOVERNMENT CAPACITY ASSISTANCE
The Office of State Budget and Management (OSBM) allocated $53.5 million of State
Fiscal Recovery Funds to local government capacity assistance in accordance with State
Fiscal Recovery Fund legislation. Of this amount, none (0%) was disbursed as of
June 30, 2022.
The State Fiscal Recovery Fund allocated these funds to the North Carolina League of
Municipalities, North Carolina Association of County Commissioners, and North Carolina
Association of Regional Councils of Government to provide guidance and technical
assistance to units of local government in administration of funds from the Local Fiscal
Recovery Fund. Funds were also allocated specifically to the Towns of Apex and
Huntersville for the same purpose.
9
FINDINGS
Auditors tested five (100%) State Fiscal Recovery Fund allocations to local government
capacity assistance through June 30, 2022. Auditors found that all five (100%) allocations
were properly accounted for and allocated in accordance with State Fiscal Recovery
Fund legislation.
The following table illustrates the total amounts allocated, disbursed, and remaining to be
disbursed for local government capacity assistance as of June 30, 2022.
The $53.5 million remaining to be disbursed represents the balance for which recipients
have yet to request distribution.
State Fiscal Recovery Funds must be obligated by December 31, 2024, and expended by
December 31, 2026.
4. ALLOCATIONS AND DISBURSEMENTS TO STATE INDIAN TRIBES AND ASSOCIATIONS
The Office of State Budget and Management (OSBM) allocated $10 million of State Fiscal
Recovery Funds to state Indian tribes and associations in accordance with State Fiscal
Recovery Fund legislation. Of this amount, none (0%) was disbursed as of June 30, 2022.
State Fiscal Recovery Fund legislation required OSBM to allocate $9 million to provide
grants to seven American Indian tribes named in N.C.G.S. Chapter 71A. State Fiscal
Recovery Fund legislation required a base allocation of $715,285 to each tribe, with the
remaining amount allocated to the seven tribes on a per-capita basis using tribal enrollment
totals. 29 An additional $1 million was required to be allocated equally to four
Native American associations. 30
Auditors tested 11 (100%) State Fiscal Recovery Fund allocations to state Indian tribes
and associations through June 30, 2022. Auditors found that all 11 (100%) allocations were
properly accounted for and allocated in accordance with State Fiscal Recovery Fund
legislation.
29 State Indian tribe enrollment
is based on resolutions from each tribal government.
30 S.L. 2021-180, Section 23.4. Included 1) Cumberland
County Association for Indian People, 2) Guildford Nativ e
American Association, 3) Metrolina Native American Association, and 4) Triangle Native American Society.
10
FINDINGS
The following table illustrates the total amounts allocated, disbursed, and remaining to be
disbursed to state Indian tribes and associations as of June 30, 2022.
The $10 million remaining to be disbursed represents the balance for which recipients have
yet to request distribution.
State Fiscal Recovery Funds must be obligated by December 31, 2024, and expended by
December 31, 2026.
5. ALLOCATIONS AND DISBURSEM ENTS TO EMPLOYEE BONUSES AND BENEFIT S
The Office of State Budget and Management (OSBM) allocated $545 million of State
Fiscal Recovery Funds for employee bonuses and benefits in accordance with State Fiscal
Recovery Fund legislation. Of this amount, $524 million (96%) was disbursed as of
June 30, 2022.
State Fiscal Recovery Fund Legislation required OSBM to allocate $545 million to provide
a bonus for full time state and local education employees who worked to continue the
operations and services of government during the pandemic. 31
Auditors tested 54 (100%) State Fiscal Recovery Fund allocations and 69 (100%) of
OSBM’s disbursements to employee bonuses and benefits through June 30, 2022.
Auditors found that all 54 (100%) allocations and 69 (100%) disbursements were properly
accounted for, allocated, and disbursed in accordance with State Fiscal Recovery Fund
legislation.
31 S.L. 2021-180, Section 39.2.(a)
11
FINDINGS
The following table illustrates the total amount allocated, disbursed, and remaining to be
disbursed for employee bonuses and benefits as of June 30, 2022. See Appendix C for a
detailed list of entities that were disbursed State Fiscal Recovery Funds for employee
bonuses and benefits.
The $21.4 million remaining to be disbursed represents the balance for which recipients
have yet to request distribution.
State Fiscal Recovery Funds must be obligated by December 31, 2024, and expended by
December 31, 2026.
12
APPENDICES
APPENDIX A
Appendix A
The State of North Carolina appropriated approximately $5.4 billion to the State Fiscal
Recovery Fund through the following series of legislation.
The following chart illustrates the cumulative disbursements by month from the State Fiscal
Recovery Fund for the period May 24, 2021, through June 30, 2022:
State Fiscal Recovery Fund
Cumulative Disbursements by Month
$1,400,000,000
$1,200,000,000
$1,000,000,000
$800,000,000
$600,000,000
$400,000,000
$200,000,000
$0
February March April May June
13
APPENDIX B
Appendix B
The following table illustrates the total amount allocated to each recipient and the intended
purpose and use of funds:
Recipient Allocation Intended Purpose and Use of Funds
State Agencies
Administrative $35,389,440 Provides funds for protective equipment and technology to support
Office of the remote access for courts, and funds for the Human Trafficking
Courts Commission.
Department of $20,750,000 Provides funds for small and historically underutilized businesses and
Administration a database for tracking the increased number of home schools.
Department of $128,800,000 Provides funds for food storage and distributions, food banks, farms,
Agriculture and for agricultural programs impacted by COVID-19, such as the
State Fair and the Western NC agricultural center.
Department of $187,710,000 Provides funds for community development, w ork force solutions,
Commerce small business development, economic assistance to nonprofits, and
tourism recovery.
Department of $1,690,000,000 Provides funds for grant programs for w ater and sew er utilities and
Environmental infrastructure and stormw ater infrastructure. Includes grants for
Quality projects to advance economic development or affordable housing as
w ell as Viable Utility Reserve and State Drinking Water, Wastew ater
Reserve grants for utilities that have been designated as distressed or
are at risk of becoming distressed.
Department of $502,785,232 Provides funds to DHHS programs and nonprofits directed at
Health and Human homelessness, nutrition services, hospitals, hospice care and
Services behavioral health, as w ell as bonuses for direct care w orkers.
Department of $739,939,144 Provides grants and funds to increase broadband availability in rural
Information areas, address local infrastructure needs and connect unserved and
Technology underserved households. Provides funds for a w orkforce development
netw ork to meet the talent needs of NC public agencies and private
businesses.
Department of $8,000,000 Provides funds for grants to volunteer fire departments due to the loss
Insurance of revenue from COVID-19.
Department of $96,200,000 Provides funds for state parks, museums, historic sites, and other
Natural and nonprofits impacted by COVID-19.
Cultural
Resources
Department of $108,925,000 Provides funds to update and modernize first responder and law
Public Safety enforcement communication services, to support programs for at-risk
youth and community supervision programs, cover medical cost
increases at state prisons due to the COVID-19 pandemic and to
upgrade HVAC at Department of Public Safety state facilities.
Department of $502,538,000 Provides funds for migration of data from the Department of
Revenue Information Technology's mainframe system, and for business
recovery grants.
Department of $101,000,000 Provides funds to reimburse the State Health Plan for COVID-19
State Treasurer testing, treatment, and vaccine administration.
Department of $3,000,000 Provides funds for driver’s license office extended operations.
Transportation
Housing Finance $170,000,000 Provides funds for the Workforce Housing Loan Program to develop
Agency multi-family affordable housing units across the state.
North Carolina $21,800,000 Provides funds to address the impact of the COVID-19 pandemic on
General Assembly the operations of the legislature.
14
APPENDIX B
Office of State $118,928,476 Provides funds for the continuity of operations across state
Budget and government, and for continued operations of the North Carolina
Management Pandemic Recovery Office through 2023. Provides funds to the CAGC
Foundation, Inc. for construction education programs and a
Construction Business Academy for Historically Underutilized
Businesses and to the City of Winston Salem and to Dare County for
construction of affordable housing. Provides funds to the NC Trucking
Association to address truck driver shortages, and for grants to
YMCA's statew ide to assist w ith economic impacts of COVID-19.
Office of the State $3,500,000 Provides funds to conduct audits of recipients of American Rescue
Auditor Plan funds.
Public Schools and Higher Education
Department of $18,648,000 Provides funds for smart school buses and scholarships for students in
Public Instruction Forsyth, Row an and Iredell counties.
North Carolina $114,304,422 Provides funds to assist community colleges that experienced
Community enrollment declines during the COVID-19 pandemic, to improve
College System broadband access for rural community colleges, expand
apprenticeship programs for high demand fields in Tier 1 and Tier 2
counties, and replace lost revenue for the Cape Fear Botanical
Gardens.
Private Colleges $51,000,000 Provides funds to NC private colleges and universities to assist w ith
and Universities revenue loss mitigation and capital improvements.
University of North $209,584,983 Provides funds for many programs including scholarship recovery
Carolina System programs for children of Armed forces members, need-based grants
for tuition and fees for community college students, research and pilot
programs on Antiviral Drug Development and Innovative Wastew ater
Treatment, stabilization funds for the NC Arboretum and for PBS North
Carolina, research grants to monitor and address public health and
economic impacts of the COVID-19 pandemic, and support of 4-H
centers and camps.
Other Governm ental Entities and Associations
Local Government $53,500,000 Provides funds equally to the North Carolina League of Municipalities,
Capacity North Carolina Association of County Commissioners, and North
Assistance Carolina Association of Regional Councils of Government to provide
guidance and technical assistance to units of local government in
administration of funds from the Local Fiscal Recovery Fund.
Also provided funds to the tow ns of Apex and Huntersville for the
same purpose.
State Indian Tribes $10,006,995 Funds to seven state-recognized American Indian Tribes and four
and Associations Native American associations.
Em ployee Bonuses and Benefits
Employee $545,000,000 Funds for bonuses for state employees and local education
Bonuses and employees.
Benefits
15
APPENDIX C
Appendix C
The following table illustrates the total amount of Employee Bonuses and Benefits disbursed
to each recipient.
Recipient Disbursed
Administrative Office of the Courts $ 10,207,276
Appalachian State University 4,236,408
Department of Administration 837,466
Department of Agriculture 2,911,529
Department of Commerce 2,412,653
Department of Environmental Quality 2,251,042
Department of Health and Human Services 23,393,085
Department of Information Technology 1,347,918
Department of Insurance 800,216
Department of Justice 1,026,201
Department of Labor 500,037
Department of Military and Veterans Affairs 154,478
Department of Natural and Cultural Resources 2,776,926
Department of Public Instruction 313,446,372
Department of Public Safety 32,733,415
Department of Revenue 1,961,148
Department of State Treasurer 1,363,684
Department of Transportation 13,299,487
East Carolina University 7,345,924
Elizabeth City State University 520,980
Fayetteville State University 1,107,928
NC Agricultural & Technical State University 2,364,532
NC Auctioneer and Licensing Board 2,693
NC Board of Opticians 1,615
NC Community College System Office 25,729,496
NC General Assembly 923,707
NC Governor's Office 155,287
NC Lieutenant Governor 9,689
NC Office of the State Controller 234,679
NC Psychology Board 6,997
NC School of Science and Math 361,153
NC Secretary of State 229,352
NC Wildlife Resources Commission 969,388
North Carolina Central University 1,765,347
North Carolina State University 12,337,585
Office of Administrative Hearings 64,590
Office of State Budget and Management 55,224
Office of the State Auditor 175,750
State Board of Elections 130,795
UNC Board of Barber Examiners 9,150
UNC Board of Cosmetic Arts 37,139
UNC Chapel Hill 17,481,402
UNC Chapel Hill Hospital 16,870,909
UNC School of the Arts 694,693
UNC System Office 552,432
University of North Carolina at Asheville 973,395
University of North Carolina at Charlotte 4,926,924
University of North Carolina at Greensboro 3,856,005
University of North Carolina at Pembroke 1,329,612
University of North Carolina at Wilmington 3,209,461
Western North Carolina University 2,383,106
Winston Salem State University 1,128,442
Total Em ployee Bonuses and Benefits $ 523,604,723
16
RESPONSE FROM
OFFICE OF STATE
BUDGET AND
MANAGEMENT
RESPONSE FROM OFFICE OF STATE BUDGET AND M ANAGEMENT
17
RESPONSE FROM OFFICE OF STATE BUDGET AND M ANAGEMENT
18
ORDERING INFORMATION
COPIES OF THIS REPORT MAY BE OBTAINED BY CONTACTING:
Office of the State Auditor
State of North Carolina
2 South Salisbury Street
20601 Mail Service Center
Raleigh, North Carolina 27699-0600
Telephone: 919-807-7500
Facsimile: 919-807-7647
Internet: http://www.auditor.nc.gov
To report alleged incidents of fraud, waste or abuse in state government contact the
Office of the State Auditor Fraud Hotline:
Telephone:1-800-730-8477
Internet: http://www.auditor.nc.gov/pub42/Hotline.aspx
For additional information contact the
North Carolina Office of the State Auditor at:
919-807-7666
This audit required 804.5 hours of auditor effort at an approximate cost of $96,540.
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