State audit finds $80 million in lawmaker earmarks not properly monitored

jfrank@newsobserver.comNovember 15, 2012 

An audit released Thursday discovered that state officials failed to adequately monitor $80 million that lawmakers earmarked in the fiscal year 2011 budget for economic development projects.

The 13-page report blamed N.C. Department of Commerce’s fiscal management officials for the oversight. The agency did not follow its own procedures to assess 20 nonprofits and governmental entities that received the state money to determine whether it was being used for its intended purpose.

Commerce officials pledged to make changes to comply but at the same time pointed the finger at state lawmakers who designated the money for the entities in the 2010-2011 state budget. In a response to the audit, the agency said the N.C. General Assembly received reports about whether the grants met their authorized purpose, suggesting they also held some authority.

“The Department does not make the funding decisions,” Commerce spokesman Tim Crowley said.

In the audit, commerce officials agreed to implement auditors’ recommendations to complete risk assessments before the money is issued, make at least two site visits each year and require more accounting from other entities that give the money to other organizations. The agency told auditors it would complete follow-up reports on how the money was spent.

Of the entities under scrutiny, the N.C. Rural Economic Development Center received the largest amount at $27.2 million. Other recipients included $18.8 million for the N.C. Biotechnology Center, $9.7 million for Wake Forest University Health and $4.8 million for the Biofuels Center of North Carolina. Most of the grants were less than $1 million.

The money was appropriated by the Democratic-led legislature in developing the fiscal year 2011 budget.

Aides to the current Republican leaders did not respond to questions about whether the groups filed the required legislative reports and whether they were reviewed. But a spokesman for Senate leader Phil Berger said the agency is responsible for overseeing the grants.

Since the audit began earlier this year, commerce officials began to account for the money and so far found no examples of misuse, a spokesman said.

Frank: 919-829-4698

News & Observer is pleased to provide this opportunity to share information, experiences and observations about what's in the news. Some of the comments may be reprinted elsewhere in the site or in the newspaper. We encourage lively, open debate on the issues of the day, and ask that you refrain from profanity, hate speech, personal comments and remarks that are off point. Thank you for taking the time to offer your thoughts.

Commenting FAQs | Terms of Service