- The audit found as of June 30, OSBM disbursed $740 million to state agencies, $38 million to public schools and higher education, and $524 million for employee bonuses and benefits
- $4.1 billion remains to be disbursed, but recipients have yet to request distribution.
A recent audit performed by the N.C. Office of the State Auditor shows that the North Carolina Office of State Budget and Management (OSBM) properly accounted for, allocated, and disbursed State Fiscal Recovery Funds in accordance with State Fiscal Recovery Fund legislation. Auditor Beth Wood’s office released a report on the findings Tuesday.
The American Rescue Plan Act was signed into law in March 2021, and the act established the Federal Coronavirus State and Local Fiscal Recovery Fund. North Carolina received a total of $5.4 billion in federal taxpayer money for the State Fiscal Recovery Fund, which was established under a law enacted by the General Assembly on May 24, 2021.
It enabled the state to respond to the COVID-19 public health emergency and its negative economic impacts and to workers performing essential work during the pandemic. It also provided for government services, including revenue reductions due to the pandemic, and to make investments in water, sewer, or broadband infrastructure.
In addition, the 2020 COVID-19 Recovery Act 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, and ensuring proper reporting and accounting of all funds. References to OSBM in the report also encompass the responsibilities and activities of NCPRO.
The legislation required OSBM to account for, allocate and disburse the $5.4 billion in assistance to various entities across the state.
As a side note and not included in the audit, $277 million was given to the state for the Coronavirus Capital Projects Fund through the federal Coronavirus State and Local Recovery Fund.
In addition, eligible North Carolina local governments received $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. The state’s 525 Non-Entitlement Units were appropriated $705 million to be provided through the state’s Local Fiscal Recovery Fund. These funds were also not included in the audit.
The audit found as of June 30, OSBM disbursed $740 million to state agencies ($4.4 billion allocated), $38 million to public schools and higher education ($394 million allocated), and $524 million for employee bonuses and benefits, ($545 million allocated),
Local Government Capacity Assistance had $54 million allocated, and State Indian Tribes and Associations had $10 million allocated, but the two entities have not requested funds.
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 Dec. 31, 2024, and expended by Dec. 31, 2026.
Auditors performed the audit on OSBM by reviewing relevant laws and regulations and interviewing OSBM and North Carolina Pandemic Recovery Office (NCPRO) personnel.
They also reperformed all 242 (100%) allocations to state agencies, institutions of higher education, and local & tribal governments and 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.
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.
Wood’s office concluded that from May 24, 2021, to June 30, 2022, OSBM accounted for, allocated, and appropriated the funds correctly. As of June 30, 2022, $1.3 billion (24%) of the $5.4 billion 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 Dec. 31, 2024, and expended by Dec. 31, 2026.
State Budget Director Kristin Walker sent Wood’s office a letter saying OSBM and the North Carolina Pandemic Recovery Office (NCPRO) agreed with the findings.