NC treasurer finds $170M in state money sitting in previously unknown account

North Carolina’s state treasurer has discovered $170 million in state funds that were sitting in an account at an institutional cash management firm, unbeknownst to current state officials.

State Treasurer Brad Briner, who announced the discovery Thursday, said his office was informed early this year that the Department of State Treasurer was a large client of the firm. Briner declined to name the firm.

“Since we internally manage almost $50 billion of the NC government monies, we didn’t understand why we would have a cash management relationship with an external firm,” Briner said. “Once we started asking those questions, we eventually realized this $170 million could be put to better use.”

The account, which was opened about 25 years ago, was a catch-all for excess or unused capital funds, according to Briner. If a construction project came in under budget, or if interest accrued on state funds when building projects took longer than scheduled, that money would end up in the external account.

Briner emphasized that at no point did anyone misplace $170 million. The sum grew over time due to annual deposits and compounding interest.

Because the funds were appropriated for capital projects, Briner said, their use is restricted by state law. Paying off debt is one permitted use, and that’s what Briner says he’s doing with them.

“This will have a direct effect of lowering the amount of interest the state has to pay in the coming budget years,” Briner said. And should the General Assembly or the voters decide that future debt issues are required for any reason, the debt capacity of the state for those future issues will be at least $170 million higher.”