Thursday, March 17, 2022

Treasurer Folwell Announces Department of State Treasurer Wins “Sunshine Award” from the N.C. Open Government Coalition Honor Bestowed for Transparency in Providing Information Exposing Fraud in State’s HOPE Program

Honor Bestowed for Transparency in Providing Information Exposing Fraud in State’s HOPE Program
Raleigh, NC
Mar 17, 2022

(Elon, N.C.) – North Carolina State Treasurer Dale R. Folwell, CPA, today accepted the N.C. Open Government Coalition’s Government Award that recognizes individuals as well as agencies within government that have provided outstanding access to public information.

The award was presented to the Department of State Treasurer (DST) as part of Elon University’s Open Government Coalition’s celebration of Sunshine Week 2022. It is the eighth annual awards program from the Sunshine Center recognizing individuals from across North Carolina whose work exemplifies the value placed on keeping citizens informed about public business.

DST was given the honor for its transparency in providing information exposing potential fraud in the state’s Housing Opportunities and Prevention of Evictions Program (HOPE). The program was originally conceived to provide rent and utility assistance to low-income renters experiencing financial hardship due to the economic impacts of COVID-19. DST was contacted by an investigative journalist requesting information on the potential fraud. The department promptly provided copies of checks resulting in a story that highlighted irregularities that could have cost taxpayers tens of millions of dollars.

“As keepers of the public purse, we have a culture that people are entitled to this information. To be transparent, we treat all media this way,” Treasurer Folwell said. “But the real heroes here are the incredible state employees we have at the treasurer’s office. I’d like to especially thank members of the Communications staff and the Financial Operations Division here at DST who identified the potential fraud and let HOPE know of the problems. I’m sure that their quick action helped prevent more taxpayer money from being stolen.”

As part of the Financial Operations Division (FOD) the Banking Operations processes all “checks” or warrants that it receives from the North Carolina Office of State Controller. During the processing of checks from the HOPE program alert members of FOD started recognizing a pattern that led them to believe that irregularities were occurring. They subsequently let the appropriate authorities know of their concerns.

The total dollar amount of the fraud cases that have been submitted to DST from the N.C. Office of Recovery and Resiliency (NCORR) for HOPE Program checks is $1,268,861.44. The fraud cases are predominantly due to fraudulently induced warrants, meaning that the warrants (or checks) were valid, but the applications to NCORR that resulted in the checks contained fraudulent information.

“I could not be prouder of the employees in Banking Operations,” said Treasurer Folwell. “They exemplify the very best in what a state employee should be. Not only do they do their jobs with efficiency and professionalism, but they are watching out for taxpayers’ money every day.”

As the state’s bank, FOD (Banking Operations) manages the deposits and disbursements for the state. At the end of the 2021 fiscal year, total deposits of $199 million were held in 29 banks across the state. During the fiscal year ended June 30, 2021, more than 4 million warrants were processed, representing approximately $20.8 billion in payments. In addition, Banking Operations initiated approximately 25,900 wires in the amount of $224.6 billion on behalf of the state.