North Carolina Has $1.2 Billion in COVID Aid Left to Spend

In spring 2021, the American Rescue Plan Act sent North Carolina's state government $5.4 billion for a State Fiscal Recovery Fund -- money the legislature parceled out to state agencies for water, sewer, and broadband infrastructure, school lead-and-asbestos remediation, local-government support, and pandemic-era employee bonuses.▸ Every two years, state law requires the North Carolina Office of the State Auditor⧉ -- the constitutional office that checks whether state government spent public money the way the legislature said to -- to audit how that fund moves. Its second audit, released November 17, 2025, found only 46% disbursed as of June 30, 2024, meaning $2.95 billion remained unclaimed by the agencies it was assigned to. Reporting about three weeks later⧉ found the state's own live tracking dashboard put the disbursed share at 78% by December 2025 -- about $1.2 billion still to go, with one year less to spend it.

Two federal deadlines govern this money, and they are not the same thing.▸ Funds had to be obligated -- legally committed to a specific contract or grant -- by December 31, 2024; the state auditor's report confirms that happened. But obligated money still has to be expended -- actually paid out against completed work -- by December 31, 2026, or it reverts to the U.S. Treasury automatically, with no state-level appeal, unless Congress extends the window. A community promised a new water line under a grant that was obligated on time can still lose that money if the pipe isn't in the ground and reimbursed before the deadline.

The audit's June 2024 snapshot shows why the state agencies as a group -- $4.4 billion allocated, only $1.6 billion (36%) disbursed -- dragged down the whole fund's pace.▸ The Department of Environmental Quality had not yet requested $1.7 billion, 89% of its $1.9 billion allocation, most of it earmarked for drinking-water and wastewater infrastructure grants to towns with distressed systems. The Department of Information Technology had not requested $687 million, 94% of its $734 million, mostly broadband build-out money.

By contrast, the state's $10 million set-aside for Indian tribes and associations was 100% disbursed by June 30, 2024, and its $524 million for pandemic-era employee bonuses was 100% disbursed even earlier, before the audit period began in July 2022.▸ Both were one-time payments with no construction attached -- nothing stood between allocation and a check, which is why neither dragged down the fund's pace the way DEQ's and DIT's multi-year infrastructure grants did.

ARPA money is reimbursed, not advanced: an agency has to spend on an approved project first and draw the federal dollars after.▸ A Pandemic Recovery Office spokesperson told reporters⧉ that construction and technology projects run this way by nature -- "disbursements are higher in the final years of those projects than in the early stages" -- which is exactly why DEQ and DIT, the agencies overseeing the biggest capital projects, carried most of the unspent balance in the June 2024 audit.

It also explains the gap between the audit and the dashboard: DEQ's unexpended balance fell from $1.7 billion to $359 million in about eighteen months as its water and sewer grants moved from paperwork into billable construction, with reimbursement continuing through 2026.▸ DIT's balance moved less, from $687 million to $565 million, because a DIT spokesperson said most of what remains is already under contract -- committed, just not yet paid -- and slated for three new grant rounds repairing broadband knocked out by Tropical Storm Helene, replacing utility poles, and extending broadband lines.

State Auditor Dave Boliek framed the finding starkly: "State agencies were allocated billions of dollars for COVID, but a lot of that money sat parked."▸ Carolina Public Press's follow-up reporting⧉ found the audit itself wasn't wrong -- but, because its scope ended at June 30, 2024, a cutoff a state auditor spokesperson said reflected the prior administration's audit plan, it overstated how much money was genuinely stuck by the time it was published roughly seventeen months later.

One thread of the story runs through the Department of Health and Human Services' lead-and-asbestos remediation program: of the $150 million it received to test and remediate hazards in schools and child care centers, $120 million was still unrequested as of the June 2024 audit, but by December 2025 the state's dashboard showed $55 million spent -- about $95 million left -- against a program that had already tested water at 1,784 schools and 3,342 child care centers, remediated hazards at nearly 2,000 taps, and flagged lead paint at 68 public schools and asbestos at 10.

Agencies holding the largest remaining balances told reporters they expect to fully spend their allocations by the December 2026 deadline, with few exceptions -- a claim no one, including the state auditor, will be able to confirm until the money either moves or doesn't.