The North Carolina Department of Transportation (NCDOT) has two weeks to submit a report to officials that shows its efforts to avoid financial mishaps.
The department must provide to the Joint Legislative Transportation Oversight Committee and the Fiscal Research Division its existing plan for spending, financial policies and new control measures.
The deadline is part of a bailout bill passed by lawmakers in November.
The General Assembly had to route hundreds of millions of dollars to the department to resume projects stalled because it failed to maintain its cash balance limit between $282 million and $1 billion.
The legislature awarded NCDOT $100 million for disaster recovery projects and another $100 million for infrastructure. The General Assembly will forgive $190 million worth of debt.
To curtail any further issues, the department is required to enact more cash balance reporting measures. Hence, lawmakers ordered the financial management report due on Jan. 15. It will follow an audit by outside consulting firm McKinsey & Company, which discovered the cash balance issue.
“While NCDOT has continued to complete projects and serve communities across North Carolina, we have been forced to respond to unprecedented natural disasters and financial pressures,” NCDOT Secretary Jim Trogdon said after the audit results in September. “While we have many points of pride as an agency, our state faces new challenges every day that we must ensure we are using our resources to address.”
The department must include in the report the actions it plans to take to avoid overspending based on the McKinsey & Company audit. The department must ensure that it improves its communication with the Financial Management Division and division engineers.
NCDOT officials must increase the base budget for the highway fund that controls funding for disaster-related expenses and road repairs. The report must also spell out the rationale behind all of its financial decisions and any regulatory obstacles that may get in the way of its proposed changes.
The recovery bill also calls for quicker federal reimbursements, relying more on reserve accounts and adding a cap to certain repair claims.