The NC Department of Transportation is not out of the woods just yet in its ongoing financial crisis. After a recent state audit of NCDOT, its findings showed that despite the DOT’s skyrocketing financial status since 2020, the department is still expected to exceed its budget. Furthermore, the audit determined that if there are no changes to its existing budgeting strategy, overspending is inevitable.
The Funding Predicaments
According to the state auditor’s office, with the abundance of cash that NCDOT gained in 2020 “largely due to chance,” it would seem unlikely that it would run out of money. However, with the gaps in its budgeting and monitoring practices, that will still likely be the case for 2021.
With $1.1 billion in its account by the end of 2020, NCDOT had hundreds of millions more in cash than the previous year when its funds fell below what was required by state law. Still, NCDOT continued to rely on its old budgeting strategy, and it’s speculated that its funds will fall near or below that threshold once again. Historically, NCDOT has poorly strategized its spending and budgeting internally and for construction projects. This is because it would base its spending on the past years’ precedent instead of adjusting it accordingly for forthcoming projects. In addition, an improperly calculated raise to workers’ wages caused further financial strain to the organization.
This irresponsible approach has materialized in ways such as delayed projects and layoffs of over 350 contract and temporary workers, which was only exacerbated during major events such as inclement weather and the COVID-19 pandemic. Unfortunately, NCDOT has been either unresponsive or slow to respond to calls to mitigate this issue. It wasn’t until the state audit towards the end of 2020 when it had no choice but to acknowledge and make up for its mishaps.
NCDOT’s Efforts To Avoid Another Financial Crisis
In response to the most recent audit findings and based on the financial crisis in 2019, NCDOT claims it has hired accountants to manage finances and implemented a new software to better budget construction spending. To date, “progress has been made and is continuing” in NCDOT’s approach to its finances, according to Department Secretary Eric Boyette.
The improvements stemming from these executive changes will be reflected in the next state audit, which will cover the last six months of 2021. This report will be ready by September of 2022. In addition, the General Assembly will now require NCDOT to disclose a “weekly snapshot” of its cash balance and finances to better understand and monitor its spending. According to NCDOT, its finances have since been stabilized and will continue to track below its spending plan as it works with the state. Still, only time will tell if this claim holds true.
Trusted Land Condemnation Attorneys in North Carolina
Has your property, commercial or residential, been unfairly condemned for public use? You may have an eminent domain case. Henson Fuerst Attorneys have been serving land condemnation clients in North Carolina since 1976. For a free consultation of your situation, submit an inquiry form on our website or call our office toll-free at 919-781-1107 today.