North Carolina audit shows state agencies mismanaged federal programs
(The Center Square) – North Carolina’s state auditor has found numerous issues with the way state agencies managed more than $29 billion in federal aid.
The state’s audit report found inconsistencies and noncompliance in a host of federal programs administered by the state, including federal student loan and grants, crime assistance, medical assistance and adoption assistance.
The 250-page report, which was published last week, reviewed state agencies’ procedures in fiscal year 2020, which ran from July 1, 2019, to June 30, 2020.
“This report includes significant deficiencies and material weaknesses in internal control relating to major federal programs and instances of noncompliance, including several that we believe constitute material noncompliance, that meet the criteria of the Uniform Guidance,” State Auditor Beth Wood wrote.
The North Carolina Department of Public Instruction (NCDPI) and the state’s colleges and universities, at times, did not follow the appropriate safeguards to protect student information, did not accurately track how some of the funds were distributed and held on to grants that could have been awarded to more students, among other things.
For instance, Elizabeth City State University did not have a delegate to protect student’s financial aid information or document the risk of keeping it secure. During the fiscal year, the school disbursed more than $15 million in federal financial assistance to 1,560 students. Elizabeth City State University said employees were unaware of the requirements.
The report also said Fayetteville State University, North Carolina Agricultural and Technical State University and Roanoke-Chowan Community College had deficiencies in the way Federal Pell Grant and Federal Direct Loan funds were handled.
The NCDPI used $1.8 million in federal funds meant for school improvement activities on other activities. NCDPI officials said finance employees did not update budget status reports in a timely manner, which “prevented the cash management section from correctly reconciling spending across the various open award years.”
The audit also showed the North Carolina Department of Public Safety (NCDPS) failed to keep track of $68.9 million it issued to other state agencies, nonprofits and other organizations to help crime victims. The NCDPS blamed the error on trainees who were learning the requirements of the job. However, officials also said they did not have set policies to verify that the employees conducted the screenings.
Most of the deficiencies Wood found have been fixed or in the process of being rectified by February 2022, the report said.
Wood said the report does not “provide an opinion on the effectiveness of the entity’s internal control or on compliance,” but “to describe the scope of our testing of internal control and compliance and the results of that testing.”
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