Federal Grant Oversight Missing NC

A recent report on federal grant oversight reveals that North Carolina law does not require public reporting or public access to information about how billions of dollars in federal funds are accepted or spent, despite those dollars accounting for more than a third of the state’s revenue.

The analysis, compiled by Ballotpedia using state statutes and federal finance data, found that North Carolina is among 39 states with “no defined public oversight” of federal grants. The report states that North Carolina law “does not mandate public reporting, public access, or public hearings related to federal grant activity.”

In fiscal year 2023, North Carolina received approximately $28.8 billion in federal funds, representing 35.5% of total state revenue, according to data from the U.S. Census Bureau. Those funds support programs ranging from Medicaid and transportation to education, housing, and disaster recovery — including services that affect Rutherford County and other parts of Western North Carolina.

State law does establish internal controls over federal money. Under North Carolina General Statutes § 143C-7-1, state agencies must notify the governor, acting as director of the budget, before applying for federal funds.

The statute reads in part: “A State agency…that submits to the federal government…an application for funds…shall first provide to the Director a copy of the application along with any related information the Director may require.”

The same law requires that federal funds be deposited in the state treasury and approved by lawmakers: “The expenditure of money deposited in the State treasury is subject to acts of appropriation by the General Assembly.”

Oversight after funds are received is assigned to the state auditor. G.S. § 143C-6-23(g) authorizes audits of any entity receiving federal grants and states: “The State Auditor has audit oversight…of every grantee or subgrantee that receives, uses, or expends grant funds.”

However, the report notes that none of these statutes require public disclosure of federal grant applications, awards, or expenditures. North Carolina law does not mandate public hearings, searchable online databases, or routine public reporting of federal grant activity.

By comparison, several states, including nearby Georgia, require public posting of grant data or public hearings before certain federal funds are spent.

For taxpayers in Rutherford County and Western North Carolina, the findings mean decisions about accepting and spending federal funds typically occur within state agencies and the General Assembly, with limited visibility for the public unless records are requested or audits later identify issues.

The report also found that North Carolina does not require state agencies to prepare contingency plans in the event federal funding is reduced or eliminated, a requirement in only a handful of states nationwide.

The research reflects laws and data current as of December 2025.