Audit: Risk increased for misuse of Hurricane Florence recovery funds

Risk was increased for misuse of Hurricane Florence recovery funds and an inability to detect and correct because of failures by the North Carolina Department of Public Safety, a state audit says.

Florence, the second of four hurricanes to make landfall in the southeastern part of the state in a 47-month span in October 2018, was catastrophic to a number of communities. It came two years after Matthew, another major storm from which residents are still recovering.

In Elizabethtown, Florence brought a record 35.9 inches of rain.

Erik Hooks was the appointee of Democratic Gov. Roy Cooper leading the Department of Public Safety from 2017-21. Auditor Jessica Holmes, a Cooper appointee a year ago, released the analysis Thursday saying the Hurricane Florence Disaster Recovery Fund allocated $942.4 million to various entities and DPS, according to legislation, was required “to administer” the fund, carry out provisions of the law, “and ensure proper accounting.”

An April 2022 audit, under the direction of elected former Democratic Auditor Beth Wood, said the Department of Public Safety distributed $502 million of recovery funds with limited monitoring between Nov. 1, 2018, and Jan. 31, 2021. And, $783 million of recovery funds were distributed “without ensuring all recipients had a method to measure the results.”

Cooper appointed Eddie Buffaloe to lead the Department of Public Safety in late summer 2021.

Between Feb. 1, 2021, and Dec. 31, 2023, Holmes’ audit says another $18 million was distributed with limited monitoring, and $94 million was distributed “without ensuring all recipients had a method to measure the results.”

Recommendations from the audit to the Department of Public Safety involve monitoring and policies; and the General Assembly was recommended to include monitoring requirements in future legislation related to disaster relief.

The Department of Public Safety disagreed with findings related to “administering” funds. It also believed a document for scope of work satisfied use of money. Holmes’ office rebutted that with a Nov. 5, 2018, memo from Charles Perusse, Cooper's state budget director, transferring the responsibility directly to the department.

The department is inclusive of a range of sections, such as the ABC Commission, Communications, Emergency Management, Law Enforcement Services Section, State Bureau of Investigation and the State Highway Patrol. Recent legislation now in litigation would move the Highway Patrol to be independent of the department.

Laura Hogshead, another Cooper appointee, resigned her position leading the North Carolina Office of Recovery and Resiliency about a month ago. Her office, created after the back-to-back devastations of Matthew and Florence, was woefully out of budget – first estimated $175 million, then later up to $265 million – with completion of projects for only 2,800 of 4,200 families.

Facing recovery in the mountains from Hurricane Helene, Cooper sought a $3.9 billion appropriation from the General Assembly in an October 99-page proposal. Republican majorities leading the Legislature instead have opted for installment type appropriations so far totaling more than $1.1 billion.

Lawmakers on Oct. 9 approved $273 million and on Oct. 25 got Cooper’s signature on another $604 million. A $227 million package was approved through veto override earlier this week and has since entered litigation.