NCDOT Earns Audit, Rescue Package After Overspending $2 billion in Taxpayer Money

RALEIGH – Isn’t it nice, that when a rainy day in state government happens — which seems to be a lot when Democrats are involved — the fiscal security from years of relatively conservative budget and tax policy is able to provide some shelter? The N.C. General Assembly offered the N.C. Department of Transportation an umbrella in the form of Senate Bill 356, after the state agency overspent around $2 billion and face calls for changes in leadership by the State Treasurer.

The bill has now become law, extending a financial lifeline to an NCDOT with an unenviable pile of financial woes stemming from a combination of outsized disaster spending and typical government mismanagement. Governor Roy Cooper hissed at suggestions NCDOT Secretary Jim Trogdon should be replaced, but the General Assembly made sure to incorporate financial controls and transparency measures. They’re getting audited; because even if storm repair spending is higher than predicted, taxpayers should never face the disrespect of such government profligacy and citizens deserve an agency that has the financial wherewithal to maintain services and projects in continuity.

The Carolina Journal‘s Julie Havlak breaks down the conglomeration of funding fixes to ease the NCDOT’s immediate troubles and why even though the bill is now law, it’s not without reservations.

From Carolina Journal:

“[…] The House adopted Senate Bill 356 100-2, and the Senate by 44-0, despite dissatisfaction with the conference report. The bill includes measures to control spending on the Map Act — a controversial 1987 law that once allowed the DOT to take private land without immediately compensating landowners — that attorneys promise to challenge immediately as unconstitutional.

“This may be the worst bill that I’m ever going to vote for,” Rep. Chuck McGrady, R-Henderson, said. His sentiment was echoed in the Senate. 

The bill immediately gives the DOT $36 million from the General Fund for recovery efforts from Hurricane Dorian, and it forgives a $90 million General Fund loan. It also gives the DOT an extra $100 million Build N.C. bond, and allows the department to use a $100 million one-time cash loan from the Highway Trust Fund to the Highway Fund.

The DOT must pay back the loan from the Highway Trust Fund according to a schedule set by the state treasurer. […]”

State Treasurer Dale Folwell called for a change in NCDOT leadership when his office discovered the department had racked up a bevy of troubling financial decisions, some in contravention of borrowing rules. Despite Governor Cooper’s petty response, this call for accountability likely contributed to parts of the law requiring public transparency and audits.

“[…] Each month the average cash balance strays from the desired perimeters, the DOT must report to the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division. The DOT is also required to publish a weekly financial report detailing its cash position called “NCDOT Cash Watch Numbers” on its website.

The department will undergo a performance audit. It must also send a financial management report to the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division.

“Nothing has happened over the last few days, weeks, months or years of overspending that convinces me that the N.C. Department of Transportation is focused on getting it right or keeping it right on behalf of taxpayers, DOT employees and road contractors,” State Treasurer Dale Folwell said. […]”

That’s why the law had to have enough teeth to force accountability consistent with the respect owed to state taxpayers, as well as everyone on the road. It’s not pretty; the NCDOT funding and cost streams are the epitome of bureaucratic overkill. Read more about the financial web at the NCDOT here.