RALEIGH, N.C. — The North Carolina Office of the State Auditor has released its 2025 Statewide Single Audit, examining billions in federal funding distributed across North Carolina and identifying multiple findings involving state agencies, universities, and community colleges.
According to the report, North Carolina spent $43.9 billion in federal awards during the fiscal year ending June 30, 2025. Of that total, auditors reviewed $28 billion in federal grants, resulting in 19 findings and $342,093 in questioned costs.
More than half of the federal spending — $24.7 billion — flowed through Medicaid, making it the largest area of federal funding reviewed.
DHHS Receives Multiple Findings
The North Carolina Department of Health and Human Services received eight federal findings during the audit. In two cases, auditors determined that $138.8 million in subawards to counties were not reported as required.
Auditors also identified an improper payment of $113,115 made by DHHS. Officials said the agency has since recouped the full amount following the audit.
Other questioned costs identified in the report were referred to federal oversight agencies, which will determine whether additional funds should be recovered.
Department of Commerce Financial Reporting Issues
The audit also found issues within the North Carolina Department of Commerce, where auditors determined the agency lacked adequate internal controls to ensure accurate financial reporting.
According to the report, the deficiencies resulted in significant misstatements, including:
- $873 million in overstatements
- More than $260 million in understatements
- Additional adjustments required for cash flow statements and net position balances
Auditors said improvements to internal review procedures are needed to prevent similar reporting errors in the future.
State Auditor Emphasizes Oversight
Dave Boliek, North Carolina State Auditor, said the audit helps ensure federal funding is properly managed across the state.
“The federal government administers a massive amount of funding. Look no further than the $24.7 billion flowing through Medicaid,” Boliek said. “This annual audit gives us a chance to examine at a high level how federal grants are used in North Carolina and where there may be questionable expenditures.”
Boliek added that the findings will help guide further reviews into Medicaid and other areas of government spending.
“It’s our duty at the state level to make sure any funds directed to North Carolina are used properly and responsibly,” he said.
