North Carolina – April 23, 2009

Use of Funds

An estimated 90 percent of Recovery Act funding provided to states and localities nationwide in fiscal year 2009 (through Sept. 30, 2009) will be for health, transportation and education programs. The three largest programs in these categories are the Medicaid Federal Medical Assistance Percentage (FMAP) awards, the State Fiscal Stabilization Fund, and highways.

Medicaid Federal Medical Assistance Percentage (FMAP) Funds

  • As of April 3, 2009, Centers for Medicare & Medicaid Services (CMS) had made about $657 million in increased FMAP grant awards to North Carolina.
  • As of April 1, 2009, North Carolina had drawn down $414.6 million in increased FMAP grant awards, or 63 percent of its awards to date.
  • North Carolina officials reported that they plan to use funds made available as a result of the increased FMAP to maintain current populations and benefits and to offset the state's general fund deficit.

Transportation—Highway Infrastructure Investment

  • North Carolina was apportioned about $736 million for infrastructure investment on March 2, 2009, by the U.S. Department of Transportation.
  • As of April 16, 2009, the U.S. Department of Transportation had obligated about $165 million for 53 projects in North Carolina.
  • As of April 16, 2009 the North Carolina Department of Transportation had selected 138 projects estimated to utilize about 90 percent of its allocated Recovery Act funds.
  • These projects include activities such as repaving highways and replacing bridges.
  • North Carolina Department of Transportation officials told us they identified these projects based on Recovery Act criteria that priority is to be given to projects that are anticipated for completion within a 3-year time frame and that are located in economically distressed areas.

U.S. Department of Education State Fiscal Stabilization Fund (Initial Release)

  • North Carolina was allocated about $952 million from the initial release of these funds on April 2, 2009, by the U.S. Department of Education.
  • Before receiving the funds, states are required to submit an application that provides several assurances to the Department of Education. These include assurances that they will meet maintenance of effort requirements (or that they will be able to comply with waiver provisions) and that they will implement strategies to meet certain educational requirements, including increasing teacher effectiveness, addressing inequities in the distribution of highly qualified teachers, and improving the quality of state academic standards and assessments. North Carolina officials said that they would apply for fiscal stabilization funds by the end of April 2009.
  • The state had not yet determined how fiscal stabilization funds will be used.

North Carolina is also receiving additional Recovery Act funds under other programs, such as Edward Byrne Memorial Justice Assistance Grant program to improve the functioning of the criminal justice system; the Tax Credit Assistance Program for low-income housing; and Workforce Investment Act Youth, Adult, and Dislocated Worker Programs that provide employment and training services. The status of state plans for using these funds is described throughout this appendix.

Safeguarding & TransparencyBack to top

The state has set up the Office of Economic Recovery and Investment (OERI) to help agencies track, monitor, and report on Recovery Act funds, and the North Carolina Senate and House of Representatives have established committees to provide legislative oversight of these funds. In addition, the state has a number of initiatives under way that will improve accountability and transparency for Recovery Act funds, and the state will track Recovery Act funds separately to ensure accountability for those funds. North Carolina officials identified several potential concerns about the safeguarding of funds. For example, several officials said that they were concerned about whether there were enough staff members to meet additional management and oversight responsibilities under the Recovery Act.

Assessing the Effects of SpendingBack to top

North Carolina agencies are in the early stages of developing plans to assess the impact of Recovery Act expenditures. According to state officials, they have been awaiting guidance from the federal government, particularly related to measuring job creation.

For More InformationBack to top

The above excerpts are taken from GAO's April 23, 2009 Bimonthly Review of the Recovery Act:

Recovery Act: As Initial Implementation Unfolds in States and Localities, Continued Attention to Accountability Issues Is Essential
GAO-09-580, April 23, 2009
For more information on North Carolina within the report, please see the following pages:
Appendix XV: North Carolina pages: 229 – 240
GAO Contact
portrait of of Cornelia M. Ashby

Cornelia M. Ashby

Director, Education, Workforce, and Income Security

(202) 512-8403

portrait of of Paula M. Rascona

Paula M. Rascona

Director, Financial Management and Assurance

(202) 512-9508