Special to IFN

RALEIGH — A new audit by the N.C. Office of the State Auditor (OSA) shows that while federal COVID-19 public emergency funds provided to North Carolina have been managed in accordance with State Fiscal Recovery Fund legislation, billions of dollars were not distributed for years.

State law requires OSA to conduct biennial financial audits of the State Fiscal Recovery Fund. The fund was allocated a total of $5.4 billion from the 2021 American Rescue Plan Act to respond to the COVID-19 impact in North Carolina. As of June 30, 2024, $2.5 billion (46%) of State Fiscal Recovery Funds were disbursed. Distribution of the remaining $2.95 billion has not been requested by state agencies.

“State agencies were allocated billions of dollars for COVID, but a lot of that money sat parked,” said State Auditor Dave Boliek. “With funds not expended by the end of 2026 going to the U.S. Treasury, state agencies should be proactive in making sure taxpayers realize a return on the investment of these funds.”

State agencies with State Fiscal Recovery Funds, as of June 30, 2024, include:

♦ The Department of Environmental Quality has not requested $1.7 billion (89%) of the $1.9 billion allocated, with $528 million in remaining funds for the State Drinking Water/Wastewater Reserve Infrastructure Grants and $326 million in remaining funds for the Viable Utility Reserve.

♦ The Department of Information Technology has not requested $687 million (94%) of the $734 million allocated, with $326 million in remaining funds for the NC GREAT Grant – Federal Broadband Funds and $126 million in remaining funds for Completing Access to Broadband.

♦ The Department of Health and Human Services has not requested $201 million (40%) of the $503 million allocated, with $120 million in remaining funds for the Lead & Asbestos – Remediation of Lead Paint and Asbestos in Schools & Childcare Facilities.

♦ The Department of Commerce has not requested $54 million (43%) of the $126 million allocated, with $39 million of remaining funds related to Rural Downtown Transformation Grants.

Any funds not expended by December 31, 2026, will be returned to the U.S. Treasury. A response from the North Carolina Office of State and Budget Management and the North Carolina Pandemic Recovery Office can be found at the end of the audit.