Time to account for state property, and purge what is unnecessary

North Carolina’s auditor, Beth Wood, recently attempted to assess how to better insure the state’s 15,000-odd properties. Unfortunately, this mission proved all-but-impossible, since a comprehensive list of state properties does not exist. Embarrassingly, NC’s Department of Administration lists 406 buildings not reported by the Risk Management Division, and the RMD lists 103 properties not reported by the DOA.

Wood said, given her professional auditing and accounting experience, the lack of any list is unbelievable.

When the executive branch can’t even work out how many properties it has, let alone the level to which they are all insured, it’s time for a clean up. As Wood points out, the state is likely paying insurance on properties no longer on its books, while others have simply gone under the radar and remain uninsured. She also noted disparate property values, stemming from inconsistent assessment methodologies.

To make matters worse, her full report highlighted that the RMD is violating state laws:

“North Carolina statutes require procurement of goods or services over $25,000 to be obtained by a competitive bidding process. RMD has utilized the same insurance  broker to purchase private insurance since 1952. Failure to use a competitive bidding process may result in the State not obtaining the best value for its private insurance coverage.”

Woods’ no-brainer recommendations include the creation of a single list of state property, with a feedback mechanism for inaccuracies. In addition, as the law requires, insurance ought to go through a competitive bidding process.

Although she didn’t raise this point, the presence of such a wide array of state property in-and-of-itself is a problem. When the state is simply leasing property and managing parking decks, it has gone beyond its legitimate functions and would be better to sell those off and return the funds to taxpayers.

Fergus Hodgson

Director of fiscal policy studies at the John Locke Foundation, policy advisor with The Future of Freedom Foundation, and host of The Sta...

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