North Carolina sent out billions of dollars to help inject money into the economy during the coronavirus pandemic last year. But the state did not monitor how companies were using those funds, leaving openings for people to misuse the money, according to a new audit.

The federal CARES Act gave $3.6 billion in relief funding to North Carolina, but most of that was "distributed with limited monitoring" and without making sure the recipients could actually measure results from the funding, the audit found.

Releasing the findings Thursday, North Carolina's Office of the State Auditor said the state's pandemic relief office should go back through $3.1 billion worth of funding and verify how the money was spent.


What You Need To Know

  • North Carolina received $3.6 billion in relief funding from the CARES Act last year

  • The state sent out $3.1 billion of that with "limited monitoring," leaving it open to misuse, a state audit found

  • The state budget director said the office in charge of the money was created quickly last summer and was understaffed

  • Read the full report from the North Carolina Office of the State Auditor

 

State Budget Director Charles Perusse, in his response to the audit, said the state created a brand new office to handling the relief funding last summer but left it understaffed to properly manage the billions of dollars flowing out across the state.

Congress passed the $2.2 trillion CARES Act in late March 2020 as the nation's economy was shutdown during the early waves of the COVID-19 pandemic. It was the first of several relief bills to get money out to states in an effort to prop up the economy.

Of the $3.6 billion sent to North Carolina, $1.67 billion went to state agencies, $524 million to education, $645 million to offset state spending, $341 million to nonprofits, $102 million to hospitals and $317 million to local governments.

The North Carolina Pandemic Relief Office did not independently verify the spending of $3.1 billion of that money until November, the audit found.

The office distributed the money without making sure the recipients had plans for what to do with the money, having goals for how they were spending it, and how they were able to measure progress toward hitting those goals, according to the audit.  

Looking at 490 recipients of the funding in North Carolina, auditors found 43 that did not say what they planned to spend the money on. Fifty-seven recipients did not report measuring progress toward their goals for the money.

"As the report states, NCPRO  did  not  independently  verify  recipient  spending by comparing the supporting documents (i.e. invoices, receipts, payroll records) to expenditures reported by recipients until November 2020, after the majority of funds were already spent," according to the report.  

"As a result, there was an increased risk that recipients could have misused the funds without the misuse being detected and corrected in a timely manner," the report said.

Perusse said the North Carolina Pandemic Recovery Office plans to hire more staff and ask for more funding from state lawmakers to oversee the federal recovery fund.

As of now, the temporary budget office is set to close up shop at the end of the year. Perusse said he plans to ask the General Assembly for longer-term funding to keep the oversight office running.