State treasurer discovers $170M in unused state money
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Photo illustration: Axios Visuals. Photo: Courtesy of Brad Briner.
The N.C. State Treasurer's office has discovered $170 million of unused state money sitting in an institutional account, according to Brad Briner, the first-term Republican state treasurer.
Why it matters: The money, which was unknown to state officials, will now be used to pay down some of the state's debt and outstanding bonds, Briner told Axios.
- Briner said the state's debt currently sits at around $1.7 billion.
Zoom in: The state treasurer's office internally manages a significant amount of cash, currently around $50 billion used by the state and local governments and put into short-term investments.
- What Briner hadn't realized when he took office, however, was that the state also had been using a third-party financial institution to manage some of its cash for more than two decades.
- In that third-party account, Briner discovered, the state had $170 million worth of cash earning interest — and it had lost track of it.
Between the lines: The sum of money, while small compared to the state's $50 billion cash balance, had come from unused capital funds, Briner said.
- For example, if the state had set aside $200 million for a construction project, and it came in under budget, that remaining balance had been left in this third-party account earning interest.
- Briner said that the treasurer's office is currently reviewing whether to keep the cash with a third party rather than internally manage all of it.
What they're saying: "The punchline for all this is that we can reduce debt, which will take some pressure off the state budget in the future and give the General Assembly and voters more options around issuing debt," Briner said. "It's just good financial housekeeping that is overdue."
The big picture: Briner's reform of the state treasurer's office has continued to gain steam.
- He is close to announcing every nominated member of the North Carolina Investment Authority Board, which will turn over investment decisions from just the treasurer to a committee.
- He also recently moved to raise health insurance premiums for state employees, as part an effort to stabilize the state health plan and reduce its deficits.