An audit of the North Carolina Department of Transportation by the North Carolina state auditor resulted in a scathing report on the NCDOT giving $39 million more in employee raises than authorized by law.
According to another audit the NCDOT overspent its budget by about $742 million, and North Carolina State Treasurer Dale Folwell reported that the NCDOT had spent funds without authorization from his department as is required. So this isn’t the first bad financial news for NCDOT.
North Carolina State Auditor Beth Woods goes into great detail documenting the overspending for raises and notes that the NCDOT did not get an opinion from the attorney general’s office on its interpretation of the law, nor did it consult with the appropriate legislative bodies.
This passage of the law – “For the 2018-2019 fiscal year and the 2019-2020 fiscal year the sum equal too two percent (2%) of the total Highway Fund and Highway Trust Fund appropriation for applicable fiscal year for the payroll expenses of the Department may be used for the purposes of: (1) Salary adjustments” – was one over which the state auditor and the NCDOT disagreed.
The NCDOT interpreted that passage to mean 2 percent of the total Highway Fund and Highway Trust Fund budget. The state auditor claimed that the passage meant what it said and 2 percent of the department’s “payroll expenses” could be used for raises.
The result of the interpretation of the NCDOT was that 5,422 NCDOT employees received raises of greater than 10 percent and the NCDOT overspent the amount allocated for raises by $39 million according to the audit.
In another part of the law states that employees taking advantage of these raises had to give up their longevity pay and career status, but the NCDOT decided that part of the law did not apply to the employees receiving these large raises. Who the NCDOT determined that part of the state law did apply to was not clear in the NCDOT response to the audit.
The audit states that this improper interpretation of the law was unfair to state employees in other departments where the departments did follow state law and raises of over 10 percent were not handed out.