Audit shows accurate list of state property doesn't exist
North Carolina cannot adequately insure buildings like the North Carolina Museum of History or the Capitol because there is no accurate inventory of all state-owned properties, according to an audit released Wednesday.
Posted — UpdatedState Auditor Beth Wood recently had a team of investigators try to evaluate whether the state is providing the most cost-effective insurance coverage for its properties. She said that turned out to be impossible because there wasn't a comprehensive list off which to work.
"As an auditor, as an accountant, as a CPA, it's unbelievable to me," Wood said.
The state Department of Administration, which oversees the State Property Office, has 406 buildings on its list not found on a list from the Department of Insurance's Risk Management Division. Wood said those buildings are likely under-insured or not insured at all.
The Risk Management Division has 113 buildings not found on the State Property Office list. Wood said that means the state could be paying premiums on properties no longer on its books.
"(The property) has been transferred to a local government or the building's actually been demolished," she said.
Wood said she suspects the different building inventories have been used for decades, and she blamed the Department of Administration for the problem.
"They are who is really responsible for the inventory of our state property," she said.
Department spokeswoman Jill Lucas said the State Property Office inventory is based on information received from state agencies. Officials have to trust that agencies are giving them an accurate list, she said.
Likewise, the Department of Insurance compiled its list of state properties from information gathered from state agencies, Insurance Commissioner Wayne Goodwin said.
It's suspected that North Carolina taxpayers own more than 15,000 properties statewide.
The audit called for lawmakers to require the use of a single property inventory and for the Risk Management Division to require agencies to justify any discrepancies. The division also should seek competitive bids on insuring state property and routinely review deductibles and replacement values of buildings, according to the audit.
"(The problem) is mind-boggling, and it's something that the leaders of North Carolina need to get their arms around and get fixed," Wood said.
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