Audit finds state reporting errors for NC schools' pandemic funds

The auditor's office found issues with the state's monitoring of the funds last year, as well.

Posted 5:24 p.m. Apr 12, 2023 — Updated 5:24 p.m. Apr 12, 2023

Emily Walkenhorst

, WRAL education reporter

RALEIGH, N.C. — The North Carolina Department of Public Instruction did not properly document millions of dollars in federal pandemic stimulus dollars or conduct enough site visits to monitor how the money was being used, state auditors found.

The audit is focused on federal funds. It examined the amount of money distributed to schools or for certain projects, called "subawards," and the reporting and monitoring of it.

North Carolina Audit Beth Wood released a report Wednesday for the 2021-22 fiscal year, finding the department:

Only visited 10 of 20 required sites receiving larger dollar amounts
Did not include information on how 51 subawards of the money, totaling $760.1 million, were used
Reported some subawards late, incorrectly or twice
Did not report nine subawards totaling $1.1 million at all
Reporting slightly varying amounts of 28 subawards, totaling $757 million, that resulted in the reports differing from the documentation by about $805,000.

The department blamed staffing shortages at the department and at local schools for the miscues. A response letter from Superintendent Catherine Truitt notes that the influx of more than $6 billion in stimulus funds in the state stretched administrative staff thin. Truitt also noted limitations with the federal software — namely, a limit to the number of reports that can be entered — prevented some timely reporting.

The Department of Public Instruction’s finance staff is also working on other required projects, the letter notes.

“As noted in the finding, ongoing investigations involving external agencies and reviews requiring expanded scope have demanded significantly more time than anticipated by any of the parties involved,” the letter from Truitt states. “Some of this work is ongoing and will continue to impact fiscal monitoring work for the Monitoring and Compliance section within the Office of School Business Services.”

In response to the audit’s findings, the department will look at adding more resources and adjusting responsibilities and operations to make sure turnover doesn’t affect compliance monitoring. It will also work with the federal government on software changes they need.

The auditor’s office found issues with the state’s monitoring of the funds last year, as well. Truitt had responded by saying the department would hire more staff, and positions were approved.

The auditor’s office has found issues with stimulus fund monitoring in other departments, as well, including the North Carolina Pandemic Recovery Office.

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