Hundreds of millions of dollars unaccounted for, department hasn’t filed report of funds on time since 2017
A “mini budget” bill passed this summer included the creation of the “Division of Accountability, Value, and Efficiency” in the State Auditor’s office. Called DAVE for short, after current Auditor Dave Boliek, the division was tasked with, among other things, requiring a report from each state government agency explaining how they spend their money, after which DAVE “shall assess the continued need for each State agency and the vacant positions within each agency.”
DAVE’s first report was released this week, and its focus was on North Carolina’s Department of Health and Human Services (NCDHHS).
According to the report, “DHHS generated $386 million in lapsed salary funds in SFY 2024-2025, with $151 million from state appropriations and $235 million from receipts and federal funding.”
Lapsed salary funds represent money that was budgeted for the agency for certain positions, but were not spent on those positions because they remained vacant for part or all of the fiscal year.
The report further notes that “The $386 million is the most lapsed salary generated by any state agency in North Carolina.”
NCDHHS claims that the lapsed salary funds were redirected for use on needs that are not otherwise funded through the budget bill, such as overtime and temporary workers to cover understaffing. Curiously, the report also notes that NCDHHS did not advertise or post 340 vacancies from August 2024 to August 2025, an odd choice for an agency dealing with understaffing.
NCDHHS said it routinely relies heavily on lapsed salary funds for various needs, however, the Auditor stated that “Leaving positions vacant to cover operational expenses and other department priorities detracts from financial transparency needed for decision-making.”
Also disturbing is NCDHHS’ unwillingness to report detailed use of its lapsed salaries, as required by statute. The agency is required to report such usage to its legislative oversight committee each year by Nov. 1, which it hasn’t done since 2017, according to the Auditor’s report. Indeed, these reports have been an average of 296 days late over the past eight years. Such a lack of transparency is especially concerning for an agency that spends nearly $40 billion in state and federal tax dollars a year.
We will be watching closely as DAVE continues to publish more reports.
