There are a great many “investments” Gov. Roy Cooper suggests the North Carolina General Assembly should make in their short session, according to his Recommended Budget Adjustments for the 2024-25 fiscal year — but NCInnovation (NCI) is not among them.

In fact, Cooper’s budget proposal, ‘Securing North Carolina’s Future,’ eliminates the $250 million appropriation to NCI for the fiscal year, and diverts the funds toward wealth redistribution focused on childcare.

Gov. Roy Cooper’s recommended Budget Adjustments FY 2024-25

NCI is a private nonprofit created by some of the state’s business leaders in 2018. The aim of the nonprofit is to provide grants to further applied research at select UNC-system universities in order to fill an observed gap in the local commercialization of public university research. The entity, which spent hundreds of thousands on lobbying lawmakers for funds during the late summer 2023 budget negotiations, was originally requesting $1.4 billion in taxpayer money to finance the leaders’ vision for an improved research-to-retail ecosystem.

Although proposed budget drafts from the North Carolina Senate in 2023 included the full $1.4 billion appropriation (a former chief budget writer and senior adviser to Senate Leader Phil Berger was later hired by NCI), budget drafts from the North Carolina House only penciled in a token amount of support for the nonprofit. In the end, however, the General Assembly awarded NCI $500 million in taxpayer funds, to be delivered in two $250 million tranches.

NCI has already received the first $250 million infusion; Cooper’s 2024-25 budget proposal seeks to divert the second $250 million to other policy priorities.

Gov. Roy Cooper’s recommended Budget Adjustments FY 2024-25

According to his proposal, Cooper would repurpose that $250 million of taxpayer money to fund childcare subsidies and infrastructure.

Though much of the governor’s top line budget recommendations are effectively dead-on-arrival at the Republican-dominated state legislature, Cooper’s elimination of further NCI funding could be foreboding for the nonprofit. Activists and stakeholders have been calling on lawmakers to boost funding levels for more pressing initiatives like the Opportunity Scholarship Program, teacher pay, or the anticipated funding cliff faced in childcare as federal money part of the federal American Rescue Plan Act is set to dry up.

NCI is required to raise private funds, too, among other requirements written in as part of the legislation conditionally awarding them the $500 million.

The accounting for such private capital commitments, though, has been a sore point for the NCI Board of Directors. While NCI executives at recently announced they have hit that milestone, but a member of their own board made an official request for an audit from the Office of State Auditor earlier this spring due to concerns regarding the group’s accounting practices. The board member, Art Pope, worried the pledges haven’t been treated appropriately according to the Generally Accepted Accounting Principles (GAAP) required of NCI in statute.

Pope is the owner and chairman of Variety Wholesalers Inc., which owns and operates a chain of discount retail stores spanning 17 states. He’s also a founding board member of the John Locke Foundation and chairman of the John William Pope Foundation, a family grant-making organization he has led since its creation in 1986. He was also a member of the North Carolina General Assembly and served as the state budget director from 2013-14.

The Office of State Auditor would neither confirm, nor deny any ongoing audit investigations when contacted by Carolina Journal following the news.