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New Audit: Lack of Oversight Means an “Increased Risk” Covid Funds were Misused

Did North Carolina spend its $3.6 billion in Covid relief funds for their intended purpose? Did the spending yield positive results?

According to a newly-released audit by State Auditor Beth Wood’s office, we don’t know.

“The North Carolina Pandemic Recovery Office (NCPRO) performed limited monitoring,” according to the audit. More specifically, “NCPRO did not independently verify spending,” the audit found, and that was because NCPRO “stated it prioritized (1) coordinating and distributing funds and (2) providing technical assistance to recipients instead. However, federal regulations required NCPRO to monitor recipient spending of Coronavirus Relief Funds.”

NCPRO was established by the state budget office “to oversee and coordinate funds made available under Recovery Act legislation.”

As a result of this lack of oversight and follow up, “there was an increased risk that recipients could have misused the funds without
the misuse being detected and corrected timely,” the audit concludes. “Additionally, NCPRO was limited in its ability to know whether funds were achieving legislatively intended results and take timely corrective action if necessary.”

NCPRO did require recipients to submit monthly spending reports with documentation, however, the audit found that NCPRO “did not independently verify that the spending information was accurate and in accordance with the Recovery Act.

“Without independent verification, NCPRO could not detect misuse of the funds that could occur due to misunderstandings, errors, or omissions.”

Moreover, the audit found that NCPRO “distributed approximately $3.1 billion of Coronavirus Relief Funds to provide economic support in the wake of COVID-19 without ensuring that all recipients (1) had objectives for what they would do with the funds, (2) had goals for how they would accomplish their objectives, and (3) measured their progress towards meeting their goals.”

In short, a lack of oversight and verification means that we don’t know if the billions in Covid relief funds were spent appropriately, or if it achieved the intended results.

 

 

Brian Balfour / Senior Vice President of Research

Brian is Senior Vice President of Research at the John Locke Foundation