(The Center Square) – Coming off $386 million in lapsed salary in 2024-25, another $210 million is projected this year at the North Carolina Department of Health and Human Services.
No state agency, an audit says, was higher. And for a whole year, 340 vacant positions were never advertised or posted.
The findings are in a preliminary audit released by the office of first-term Republican state Auditor Dave Boliek. And the timing is intentional as the debate rachets up on funding for Medicaid.
“When a state agency is generating hundreds of millions of tax dollars from job openings it fails to fill, and then voluntarily enacts cuts to health care services, bureaucracy is being placed ahead of the needs of North Carolinians,” Boliek said. “Lapsed salary funds are not meant to be a permanent supplement to agency budgets. Taxpayers in North Carolina expect state agencies to provide services to the people, not let job openings stay vacant so budgets can be buoyed.”
The Health Department this year said it would make cuts to the Medicaid program if it did not receive an additional $819 million in funding, the audit says. In July, the General Assembly appropriated $600 million for the rebase.
Since then, both chambers have stalled in advancing more help to the rebase. And on Oct. 1, first-term Democratic Gov. Josh Stein’s administration announced provider rate cuts ranging from 3% to 10% due to what he says is a shortfall in funding.
Respective legislative leaders Sen. Phil Berger, R-Rockingham, and Rep. Destin Hall, R-Caldwell, said the Health Department has confirmed Medicaid is funded through April. They called Stein’s move self-inflicted crisis.
The audit expressly says it is not suggesting the lapsed salary can be diverted to the Medicaid funding gap; it is being offered for “insight into budget practices and their potential impact on Medicaid funding and overall fiscal transparency.”
A more comprehensive year-end report is expected.
For the 340 positions never advertised or posted, $16.5 million in lapsed salary funds included $4.9 million from state appropriations and $11.6 million from receipts, Boliek’s office said.
The audit said reports on the uses of lapsed salary funds, as mandated by state law, has averaged 296 days late since 2017.
The timeframe coincides with the two-term, eight-year run of Democratic U.S. Senate hopeful Roy Cooper serving as governor. Cooper tapped Dr. Mandy Cohen as secretary of the Health Department in 2017. She went on to become former President Joe Biden’s pick to run the U.S. Centers for Disease Control and Prevention, starting July 10, 2023. She was succeeded by Kody Kinsley (2022-24).
Stein tapped Dr. Dev Sangvai earlier this year.
In the audit, the Health Department’s response said in part, “it relies heavily on lapsed salary funds to ensure continuity of operations by covering needs that are not otherwise funded through recurring appropriations.”
The Health Department cited the needs of overtime, temporary workers, retirements, medical costs increase, and equipment.
