State government has unpaid bills of more than $37 million for completed projects rebuilding the homes of hurricane survivors in eastern North Carolina, according to newly released documents.

The head of the state’s Office of Recovery and Resilience addressed unpaid bills Monday when she testified before state lawmakers, explaining that without new funding from lawmakers, the money would have to be transferred from other commitments to cover them.

“We just haven’t been watching carefully enough,” Laura Hogshead said when asked why the money wasn’t available. “We were moving quickly and not monitoring the charges carefully enough” or the contractors’ promises of payment.

North Carolina lawmakers have come together to question the leadership of the state agency responsible for rebuilding efforts after Hurricanes Florence and Matthew. They asked for details on how much additional funding the agency needs to rebuild survivors’ homes and why it is facing a budget shortfall.

It remains unclear after the hearing whether the Republican-led Legislature, which meets Tuesday, will provide additional funding. Lawmakers are expected to allocate additional funding for recovery efforts following Hurricane Helene, the remnants of which struck western North Carolina in September.

The state is also expected to receive federal money in the future to rebuild homes damaged by Helene. Lawmakers expressed concern that NCORR, also known as Rebuild NC, the agency responsible for hurricane reconstruction efforts in eastern North Carolina, would take on this new role.

Funding request

NCORR received approximately $779 million in funding for Florence and Matthew from the U.S. Department of Housing and Urban Development. This funding for recovery efforts after the two hurricanes is distributed among programs, with the majority allocated to the home rebuilding program.

The agency has been criticized for delays in getting eastern North Carolina residents home. Scrutiny intensified recently after the agency announced a $175 million funding gap. Following this announcement, state lawmakers, through a bill funding recovery efforts after Hurricane Helene, provided an additional $30 million for NCORR.

On Monday, Hogshead, NCORR’s director of operations, and Pryor Gibson, deputy legislative counsel to Democratic Gov. Roy Cooper, clarified their funding needs before a subcommittee of the legislature’s Joint Legislative Committee on Government Operations.

Known as Gov Ops, the committee is chaired by Senate Leader Phil Berger and House Speaker Tim Moore. NCORR was created by the legislature but is overseen by Cooper.

Documents on the subcommittee’s webpage, uploaded after a request from The News & Observer, show that the Office of State Budget and Management (OSBM) estimates about $324.3 million is needed to complete and pay all amounts due for projects. However, because the estimate is based on past data, costs may differ in reality, the documents state.

One of the documents, mentioned during the meeting as having been shared by NCORR with lawmakers, shows that the agency will need $264 million in funding from the Legislature without reallocating other funds and without taking into account the unforeseen expenses to complete the owners’ recovery program. The filing also indicates that the financing requirement would rise to $289 million if unforeseen circumstances are taken into account.

Gibson said Monday: “What we’re asking the General Assembly to do at least — if they can — is (provide) about $40 million a month for the next three months. » He said this funding would cover necessities and help NCORR catch up on its arrears.

However, Hogshead said the “worst-case scenario” funding needed for NCORR would be about $265 million.

Gibson, a former state representative assigned to assist NCORR in January, said, “It’s my opinion that (the work) can be done for a lot less than the $265 (million), but frankly, we have already exhausted our budget. welcome, and we don’t deserve to have confidence that we can do it for what we say we do. We need to tell this legislature what the outer limit is.

Accounting errors

Robeson County Republican Sen. Danny Britt said during the hearing that some contractors in his district have told him they haven’t been paid for completed work.

When asked how many contractors currently owe money, Hogshead said the state works with 57 general contractors and “most of them have an invoice with us,” adding, “We have slowed down payments” but “we continue to make payments”. .”

NCORR has approximately $37.6 million in unpaid project costs for completed projects, according to documents uploaded to the website.

The documents also reveal that NCORR plans to add $44.2 million to its budget through an upcoming “substantial action plan amendment” to its HUD grant. This amendment would reallocate funds from “Planning, Strategic Buyout, Public Housing Recovery and Infrastructure.”

Rep. Sarah Stevens, a Mount Airy Republican, asked Hogshead about the amount of money NCORR has committed.

Hogshead said the agency has $981 million in grants and has obligated all but $44 million. She said committed funds are those committed to a project and that NCORR encumbers (or promises) funds when it signs contracts with general contractors.

Stevens cited the documents and told Hogshead: “You said there was not $37.6 million not available to pay for things that have already been built. »

Hogshead said the $37.6 million figure represents unpaid invoices submitted over the past few months.

Stevens pressed further, asking why, if NCORR had encumbered the money when signing the contracts, the $37.6 million was not available.

That’s when Hogshead described “going fast” and “not looking hard enough.”

She said the program had money to cover obligations, but would have to transfer funds and “break commitments.” So far, she said, the agency has avoided doing so.

“We clearly need to do a better job in conversations between — communication between budget and programmatic areas needs to be strengthened going forward, so that we understand what and when we’re making these commitments,” she said.

Asked by Sen. Brent Jackson, co-chair of the committee, when the agency could complete the remaining homes if it received the requested funding, Hogshead said they could be finished by next fall.

The two-hour hearing ended without a clear resolution.

Rep. Brenden Jones, a Columbus County Republican who chaired the committee, concluded by saying, “It’s going to be difficult for this committee” to “go back to our respective chambers and ask for this money.”

“I hope you can come back with something realistic that we can put our hands on,” he said.

Jones also asked Hogshead if she accepted responsibility for the agency’s woes. She answered yes. He then asked her if she would tender her “resignation today”. She said she wouldn’t.

Under the Dome

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