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Audit: NC officials didn't check on how billions in pandemic relief aid was spent

Gov. Roy Cooper's administration didn't have the processes in place to monitor how state and local agencies spent more than $3 billion in federal coronavirus pandemic relief aid last year, increasing the potential for misuse, according to a state audit released Thursday.

Posted Updated
Coronavirus: North Carolina
By
Matthew Burns
, WRAL.com senior producer/politics editor
RALEIGH, N.C. — Gov. Roy Cooper's administration didn't have the processes in place to monitor how state and local agencies spent more than $3 billion in federal coronavirus pandemic relief aid last year, increasing the potential for misuse, according to a state audit released Thursday.

The audit didn't cite any instances of aid money being misspent, however.

State lawmakers last spring passed about $3.6 billion in CARES Act funding through to state agencies, schools, hospitals, nonprofits and local governments. The money was supposed to be spent by the end of 2020 to offset pandemic-related costs or to undertake specific projects, such as developing tests for the virus.

Auditors said the state Pandemic Recovery Office, a temporary office in the Office of State Management and Budget, did "limited monitoring" to ensure that the aid money was being spent according to rules spelled out in the CARES Act, noting that efforts to verify how the money was used didn't start until November.

"All of the information that NCPRO used for monitoring was self-reported by recipients. NCPRO did not independently verify that the spending information was accurate and in accordance with the Recovery Act," the audit states. "Without independent verification, NCPRO could not detect misuse of the funds that could occur due to misunderstandings, errors, or omissions."

Auditors also said state officials didn't press the groups receiving aid for performance measures to gauge whether the funds were achieving the desired impact.

State Budget Director Charlie Perusse and Stephanie McGarrah, executive director of the Pandemic Recovery Office, said in their response to the audit that they were more focused on getting the money to nearly 500 agencies and organizations quickly. Limited funding meant the recovery office didn't have adequate staff to also monitor them all, so the office set up a nine-part process to do what it could.

State Auditor Beth Wood noted in the report that the first of those nine steps was "independent verification and validation of self-reported documentation," but no one compared the invoices and payroll records submitted against the expenditures.

Perusse and McGarrah said the recovery office is hiring more staff and strengthening its processes in response to the audit. Because the Pandemic Recovery Office is scheduled to close at the end of this year, they said they are also seeking longer-term funding from the General Assembly.

“I am pleased that no findings were in that audit that said any money was misspent," Gov. Roy Cooper said Thursday during a visit to a coronavirus vaccination clinic. "Secondly, I am pleased the money was able to get out so quickly to people who needed it. Third, I think the state budget office is looking carefully at the auditor's recommendation on how much they need to do to make sure that money is not misspent.”

WRAL reporter Joe Fisher contributed to this report.

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