Introduction
Government agencies need to be open and accountable to citizens. North Carolina government has several entities that support accountability, including the Rules Review Commission, the Joint Legislative Commission on Governmental Operations, and the Office of the State Auditor.
State agencies create rules to guide how they enforce North Carolina law and conduct their work. The Rules Review Commission (RRC) is the final step in that rulemaking process. Created by the General Assembly in 1986, the RRC reviews and approves rules before state agencies can adopt them. RRC meetings also give the general public a final opportunity to speak on proposed regulations before they go into effect. While the RCC has altered or outright rejected some proposed rules, most of the time it serves as a rubber stamp, approving a high percentage of those put before it.
State law also assigns the RRC the responsibility of the periodic review process, in which state agencies, boards, and commissions submit reports every ten years indicating whether previously established rules are still necessary or should be removed. Periodic review helps remove unnecessary or burdensome rules.
The Joint Legislative Commission on Government Operations (the commission) focuses on oversight and seeks more efficient use of taxpayer dollars. The commission’s purview includes state government agencies and programs, local governments, public authorities (such as water and sewer authorities, regional economic-development commissions, and regional libraries), and nongovernmental entities that receive government funds to conduct programs or provide a service to state or local government. The General Assembly established the commission in 1975.
The Office of the State Auditor (OSA) is an executive branch agency that annually audits over $100 billion in state government assets and expenditures. In addition to state and local government financial audits, the OSA undertakes performance audits of agency management practices and evaluates risks to government information systems. The OSA also investigates tips on suspected fraud, waste, and abuse of taxpayer money in state agencies or private organizations that use taxpayer money. In 2025, Dave Boliek became state auditor and implemented extensive modernization of OSA technology and practices.
One area of government notorious for lacking accountability is disaster recovery and relief. Gov. Roy Cooper established the North Carolina Office of Recovery and Resiliency (NCORR) in 2018 to manage disaster recovery and mitigation grants in the areas affected by hurricanes Matthew (2016) and Florence (2018). NCORR was plagued by waste and mismanagement. By late 2024, with some victims’ homes still not having been repaired or replaced, Cooper fired the head of NCORR. The immediate aftermath of a natural disaster clearly requires government spending to speed recovery, but frugal management of disaster relief funds is critical to ensure that those funds are not wasted.
One area ripe for improvement is government funding of work by private contractors or nonprofit organizations. Pay for Success (PFS) contracts, also known as Social Impact Bonds, are a different way to structure public/private partnerships. Government payments are made for concrete, measurable outcomes. Initial funding comes from a foundation, investors, or a mix of private sources. If the project meets or exceeds those targets, the government provides a “success payment” and renews the program. PFS models can improve efficiency when nonprofits can measure the impact of the programs they administer and trace them to government-provided funding.
Few agencies have meaningful measures of their results, and even fewer make those measures available online. Without such measures, policymakers and agency managers can only guess what works to develop better ways to spend scarce tax dollars. Gov. Josh Stein’s proposed 2025 budget included $20 million to create an Innovation and Modernization for Performance, Accountability, and Cost-Effective Transformation Center to “substantially improve government operations through applied research and private sector best practices.” An empirical approach, such as that or something similar, could help address the lack of internal accountability measures in most state agencies.
Key Facts
- Until 2009, the governor’s budget proposals included performance measures. Agencies still have strategic plans and measures, but they are not systematically collected, analyzed, or connected to spending decisions.
- Financial systems in state government were designed to produce specific reports, not to provide performance analytics for management.
- Few programs at any level of government have been evaluated for effectiveness. Performance-based contracts have led to disputes over measurement and outcomes.
- Pay for Success contracts have been used in other states to build accountability into criminal justice systems, social services, and water infrastructure. They could have positive impacts here in North Carolina.
- The Office of State Budget and Management maintains Open Budget, an online program containing data on state grants, contracts, vendor payments, and more.
- An OSA report found that the Community Care Station in Swannanoa, set up after Hurricane Helene in 2024, cost the state $220 per load of laundry washed during the five months it operated.
Recommendations
1. Develop meaningful outcome measures for state agencies and hold them accountable for their results.
Although state agencies have multiple missions that can seem disconnected from one another, each mission has programs with definable outcomes and performance measures. These measures should be considered when formulating budgets and should be presented with the budget.
2. Experiment with Pay for Success (PFS) contracts.
PFS contracts can more efficiently deliver some government services, especially those that are longer-term and in which successful outcomes are readily measurable, such as housing or recidivism reduction.
3. Improve disaster relief planning and management.
Conduct earlier and more frequent need and cost analyses of disaster recovery efforts, earlier tracking of relief service utilization, and fuller contingency planning for future disaster relief.
