Report of the Joint Legislative Commission on Governmental Operations
House Majority Staff
July 2025
Key points
- Lack of leadership: NCORR’s failures start with a lack of involvement, leadership, and accountability in the Governor’s Office.
- Risk aversion: NCORR designed its rules and processes to not risk having the federal government reclaim spent money, which led to local permitting problems, supply delays, and higher costs for individual homes.
- Mission creep: NCORR took on or was given tasks unrelated to the core mission of getting people home—from emergency rental assistance during the pandemic to resiliency planning for communities and upgrading the condition, energy efficiency, and storm resiliency of each new or rehabilitated home.
- Bad budgeting: NCORR failed to budget correctly, so pledged $209 million to affordable housing projects, buyouts of the most flood-prone homes, and community resiliency policy reports. Only in August 2024 did NCORR discover it needed more than $300 million to complete promised renovation and reconstruction projects for 1,759 unfinished homes.
- Far-reaching impact: The result has been universal frustration. Homeowners have lived in hotels or damaged homes for years waiting for work to be completed. Some of them will still not have work completed before NCORR closes shop in early 2026. The General Assembly provided $297 million between October 2024 and March 2025 amid pressing needs from Hurricane Helene’s devastation in western North Carolina.
Introduction
The North Carolina Office of Recovery and Resiliency (NCORR) was created to help repair or replace homes damaged by Hurricane Matthew in 2016 or Hurricane Florence in 2018. Lack of leadership and accountability, starting with Gov. Roy Cooper’s inattention, undermined good intentions. Applicants progressed in the program without a clear path to recovery. Director Laura Hogshead’s stated desire to ensure North Carolina did not risk having to repay funds by running afoul of federal rules led to the agency making promises it could not keep while failing on its fundamental duties.
Failing on fundamentals
Lack of leadership and accountability
GOVERNOR’S OFFICE: Gov. Cooper deliberately kept himself out of the process. For example, Hogshead could not provide examples of Cooper asking questions or otherwise engaging in meetings. On the crucial question of accepting applications until April 27, 2023, more than 4½ years after Hurricane Florence and 6½ years after Hurricane Matthew, Hogshead testified only that “someone in the Governor’s Office” demanded the extension. NCORR received 767 new applicants in the final three months between January 26 and April 27.
DEPARTMENT OF PUBLIC SAFETY: Secretary of Public Safety Erik Hooks also kept his distance. Hogshead worked with Emergency Management Director Mike Sprayberry, then with DPS Chief of Staff Jane Gilchrist, but Hooks had almost no involvement with NCORR. After Sprayberry left, nobody at DPS held NCORR accountable, assisted in its mission, or provided administrative support.
Without Sprayberry, Hogshead alienated colleagues in state government, including Stephanie McGarrah, who is now in charge of housing recovery in western North Carolina.
RENTAL ASSISTANCE: NCORR’s role expanded to include Emergency Rental Assistance through the first federal Covid package in 2020 and the American Rescue Plan Act in 2021 (ARPA). The amount of money in these two programs and the speed with which they needed to be completed distracted NCORR management attention from hurricane recovery, the main task for which it had been created.
SLOW COMPLETIONS: Between November 2021 and August 2022, NCORR completed fewer than ten houses per month. The Gov Ops Subcommittee on Hurricane Response and Recovery first met in September 2022, after which the pace of completions accelerated to roughly 60 per month through 2023. NCORR managed more than 100 completions per month from January 2024 through April 2025 before delays from its temporary lack of funding caught up to it.
BAD FAITH AND BAD WORK: The lack of accountability for NCORR and its lack of focus extended down to its monitoring of contractors and homeowners. NCORR awarded homes to vendors in large batches with few tools for accountability. It received more than 1,000 homeowner complaints for shoddy work including leaks, mold, electrical hazards, structural defects. There have been numerous complaints of poor workmanship, incomplete problem inspections, and acceptance of homes with unrelated damage. NCORR was hesitant to impose liquidated damages for fear of driving away contractors.
Poor process
FIRST THINGS LAST: At the start, NCORR attempted to rely on outside vendors instead of hiring a large staff. It selected Horne for project management and AECOM for construction management. NCORR restricted direct communication between the two firms, which meant important construction restraints were not discovered until homeowners were out of their homes and work was ready to start. Some families are still out of their homes due to septic system problems, local setback rules, heirship disputes, HOAs, and historic districts that likely would have been discovered and able to be resolved earlier. NCORR has warned that as many as 100 families may not be able to have work completed because of such complications, though some of them are still living in their storm-damaged homes.
HANDOFFS: Besides normal turnover in customer service positions, and especially high turnover from March 2020 through 2022, families in the NCORR system had to deal with another new case manager during the handoff between Horne and AECOM. In 2022, NCORR ended its contracts with both Horne and AECOM, eventually bringing its own staff to more than 250 people and entering a staff augmentation contract with HGA for more than 100 customer service and managerial positions. Homeowners frequently found themselves with new case managers, resulting in inaccurate or conflicting information when they were able to connect. Many felt trapped in bureaucratic limbo.
HIGH HOTEL COSTS: No other state had a similar TRA program to provide housing and storage while families were out of their homes. Emergency move-outs due to mold or other circumstances did not lead to greater observed urgency for home completion. Many families were in hotels for more than a year. As of January 31, NCORR’s most recent report on TRA expenditures, 66 projects had relocation costs in excess of $100,000. The most expensive was $278,981. NCORR eventually began paying stipends to families instead of directly paying hotels or landlords.
Numerous people also had their belongings ruined after storing them in NCORR-provided PODS that were never climate controlled and occasionally leaked.
ASSIGNMENTS: The agency asked the General Assembly, privately and in open committee, to change the law so it could assign higher value projects. Hogshead explained that the low limits prevented it from assigning many projects. Both chambers passed separate bills that indicated their support for higher assignment limits, and the clear legislative intent cleared the bureaucratic hurdles. Although NCORR did not assign many projects, the legislature’s actions removed an excuse for the agency’s lack of progress.
Missing forecasts
The final core function where NCORR failed was in forecasting its work and financials. This came to a head in October 2024 when NCORR asked the legislature for $175 million to complete the remaining 1,200 homes. By March 2025, the total amount of state funds needed had grown to $300 million even as the date for completing homes slipped from September to possibly December. Even with the additional funds, NCORR anticipates it will not be able to complete as many as 100 of the remaining projects because of permitting, ownership, or other issues.
Exceeding its mandate
“Resiliency”
STAFF: NCORR hired two people to research and recommend resiliency policies. As NCORR wound down in 2025, it tried to get those people transferred to the Department of Environmental Quality where the Flood Resiliency Blueprint is housed.
SPECIFICATIONS: NCORR added resiliency work to repair projects even in rooms reportedly undamaged by storms or flooding. The additional work led to higher costs and longer delays. It held all homes to a single standard for wind resistant siding, insulation, and windows, mandated electric appliances, and installed tankless electric water heaters. The water heaters in some cases required separate electrical installation with higher capacity, again increasing cost and time.
SIZE: Rather than matching the size and number of rooms in the original floorplan of homes, NCORR applied federal guidelines for new construction. Depending on the number of people in a home, the reconstructed property could become much smaller with fewer bedrooms or larger with more bedrooms than the home being replaced. Larger homes could exceed the capacity of the land for septic or municipal setback rules, meaning higher cost, more delays, and possibly exit from the program.
Excess customization
Although NCORR used a single standard for storm survival in homes, it offered families more than 26 floorplans, many of which it later attempted to have built as modular homes in factories but which the modular companies could not convert.
In addition to the choice of floor plans, families could initially choose among a variety of colors, appliances, and other options. NCORR did not honor all the stated preferences from families, adding to their frustrations with the program.
Conclusion
NCORR failed at basic tasks and took on more tasks than it could deliver. The result is a program that fell behind, took $300 million of state money to complete work that was supposed to be done entirely with federal grants, and still may not be able to complete all the projects in the queue. Responsibility falls not just on former NCORR Director Laura Hogshead, who resigned in December 2024, but extends to former Gov. Roy Cooper who ignored the problems through multiple legislative hearings and critical media reports.
NCORR failed at basic tasks and took on more tasks than it could deliver. The result is a program that fell behind, took $300 million of state money to complete work that was supposed to be done entirely with federal grants, and still may not be able to complete all the projects in the queue. Responsibility falls not just on former NCORR Director Laura Hogshead, who resigned in December 2024, but extends to former Gov. Roy Cooper who ignored the problems through multiple legislative hearings and critical media reports.
In a brief but contentious May 22 Hurricane Response and Recovery Subcommittee hearing, members pressed administration officials about the contracting process and potential conflicts of interest.
At issue during the 70-minute session with Division of Community Revitalization (DCR) Deputy Secretary Stephanie McGarrah, Western North Carolina Recovery Advisor Jonathan Krebs, and GROW NC Director Matt Calabria was how Horne won the $81.5 million housing recovery program contract. Further questions are likely when the subcommittee plans to meet again. Emergency Management Director Will Ray, who was also invited to testify, will address the subcommittee at the next meeting.
Krebs was a managing partner with Horne until April 2024 and made cash contributions to Josh Stein’s gubernatorial campaign. Members raised concerns about a $29,000 in-kind contribution from Krebs to the NC Democratic Leadership Committee reported in October, less than a month after Hurricane Helene. An invoice provided by the governor’s office showed the contribution was in March 2024. Krebs acknowledged that the fundraiser where he made that donation led to his further involvement with Stein and his current role.
McGarrah was very confident in the decision to select Horne and said, “It wasn’t even close—Horne was by far the best vendor selection.” She and Krebs gave conflicting answers about the timing and extent of his participation in the Request for Proposal (RFP) process.
Members asked how IEM was excluded for offering to provide financial information upon request. McGarrah said the 2024 court decision eDealer Servs., LLC. v. N.C. Dep’t of Transp. meant the agency could not ask for the information once the bids were opened.
DCR will ensure accountability on its own and with another vendor that will be hired to monitor Horne’s progress. “We’re not just going to take their word for it,” she said. “And that is another mistake I think NCORR made.”
The procurement process itself took “more than 1,000 hours” from 11 people just at the Department of Commerce, where DCR is housed. McGarrah complained, “There is a lot of red tape. It is one of the most tedious, difficult processes I’ve ever been through. I think we can make improvements to it.”
The House Oversight Committee will hold its third hearing in a series asking fundamental questions of agency secretaries and directors April 3 at 9 a.m.
The committee will hear first from Treasurer Brad Briner, then Secretary of State Elaine Marshall.
Co-Chair Harry Warren (R-Rowan) said, “Our members set the stage for this hearing series with thoughtful questions in the first two meetings. We look forward to carrying those through to each agency, giving us the opportunity to reset how we think about agencies and what they do.”
The House Oversight Committee continued to probe the core functions of state agencies on March 13. Information technology, human resources, and other enterprise-wide services took center stage in the morning. State Controller Nels Roseland discussed his agency’s central role in payments to vendors and employees.
DIT: “End of life” technology is a cybersecurity risk
Department of Secretary Teena Piccione said the has security vulnerabilities because “a lot of technology is end of life.” Co-Chair Jake Johnson (R-Polk) emphasized the importance of cybersecurity, saying, “It is very unlikely that an enemy combatant is going to storm the Outer Banks. I think it is very likely that every day we will see a foreign actor try to compromise North Carolina through a cyberattack.”
Piccione also emphasized DIT’s role in providing universal access to high-speed internet with satellite, cellular coverage, and fiber lines.
OSHR: It takes six months for state government to hire somebody
Committee members were surprised to hear State HR Director Staci Meyer declare, “It takes 182 days to hire an employee in state government.” Meyer pointed to the complicated application for state employment, and committee members pressed her on lapsed salaries from chronic position openings and the time it takes to reclassify newly opened positions.
Meyer said the State Personnel Act needs to be modernized. Until the governor approves them, however, she could not offer specific statutory changes for legislators to consider or rule changes that OSHR might pursue.
DOA: Currently underutilized office space and historically underutilized businesses
Secretary-designee Gabriel Esparza described DOA’s role as the business manager of state operations. He aims for the department to do its work quickly, efficiently, and on-budget.
In an example of how a single office can be pulled in different directions, Rep. Dean Arp (R-Union) questioned Esparza on the statutory requirement for agencies and local governments to “have a verifiable ten percent (10%) goal for participation by minority businesses in the total value” of building projects (G.S. 143-128.2). In his response, however, Esparza focused on the statewide uniform certification of historically underutilized businesses program (G.S. 143-128.4, G.S. 143-48.4), which he described as an outreach and education effort.
Rep. Mike Schietzelt (R-Wake) and Rep. Zech Hawkins (D-Durham) asked Esparza about under-utilized office space, particularly in the Triangle. Esparza offered selling the property and returning money to the taxpayer or making it available to local governments or nonprofits.
OSC: Responsible for the state’s “checkbook”
State Controller Nels Roseland cited the state’s AAA bond rating as evidence of financial strength. He said North Carolinians can have confidence in part because of his office’s record of paying the state’s bills and employees and its public reporting of the state’s financial condition.
Roseland pointed to Open Budget data available through DIT’s Government Data Analytics Center (GDAC) as an example of transparency, but Rep. Schietzelt asked if the State Controller’s Office could help provide transaction-level information online, like a check register.
Roseland reaffirmed for Rep. Allen Chesser (R-Nash) that his office only approves checks for funds appropriated by the General Assembly.
Up Next
The Oversight Committee will not meet March 20, but will resume its sessions with state agencies on March 27.
The House Oversight Committee kicked off a comprehensive agenda of basic questions for state agencies on February 27.
Up first were the Department of Revenue Secretary-designee McKinley Wooten, Jr., and State Budget Director Kristin Walker in the morning hearing, and Division of Motor Vehicles Commissioner Wayne Goodwin and Department of Transportation Secretary Joey Hopkins in the afternoon.
DOR: Measuring customer service in speed
Department of Revenue Secretary-designee McKinley Wooten said the agency aims to deliver refunds as quickly as possible. Co-Chair Brenden Jones (R-Columbus) emphasized that that also meant collecting taxes with minimal inconvenience. Wooten touted the department’s customer service and said it measures satisfaction through customer surveys.
Upon questioning from Rep. Brian Echevarria (R-Cabarrus), Wooten distanced DOR under his administration from its strategic plan for the 2023-25 biennium. “That was the strategic plan from the last administration that we will update for this new that we have not done yet,” Wooten said, adding that “it was DEI practices that were encouraged, and there was not a DEI program that was created in the department.” He also pointed out that the agency does not use diversity, equity, and inclusion (DEI) standards in hiring and does not require DEI training.
OSBM: Accountability for agency spending and outcomes
State Budget Director Kristin Walker said OSBM’s primary task is to maintain a balanced budget for state government. She spoke in broad terms about how the office accomplishes this task.
On the accountability front, every agency either uses OSBM internal auditors or OSBM training for its own internal auditors. Beyond that is a “coalition of the willing” who seek program evaluations through OSBM. For itself, OSBM has an internal dashboard for individual performance.
Walker reported that OSBM has complied with “mandatory” Office of State Human Resources DEI trainings and aims to hire the best and brightest for all positions.
DMV: Preparing for new leadership
A day after he announced he would not try to keep his job, DMV Commissioner Wayne Goodwin faced another round of grilling over issues that have plagued his tenure—questionable decisions on operating practices, wait-time measures, contracting, and legislative requests. To the frustration of more than one member, Goodwin reiterated his desire for DMV to be as efficient as the Transportation Safety Administration (TSA).
Rep. Grant Campbell (R-Cabarrus) asked if the problem at DMV was about work culture. Though Goodwin addressed leadership in his response and stated a reluctance to “disparage” staff, he did not seem to view work culture as a reflection of agency leadership.
Channeling the frustration of other legislators and many other people across North Carolina, Co-Chair Jake Johnson (R-Polk) suggested moving DMV from the Department of Transportation. “The reality is it’s not getting better,” he said. “We’ve got a stack of archived emails that … folks are not happy. I think it’s time we look at some drastic changes.”
DOT: Helene and measures
After the fireworks of DMV, Hopkins and committee members spoke mostly about the damage from Helene and DOT’s work to get western North Carolina moving again. Among the highlights was the reopening of I-40 to Tennessee, at reduced capacity and speeds.
Hopkins listed statistical measures and methods the agency uses to gauge public opinion of DOT’s work.
Up Next
The House Oversight Committee will continue to ask state agencies about their key results for North Carolina in its next hearing, Thursday, March 13.
Article One, Section 35, of the North Carolina constitution states, “A frequent recurrence to fundamental principles is absolutely necessary to preserve the blessings of liberty.” That is precisely what the House Oversight Committee aims to do by asking the fundamental purpose of each state agency and how it fulfills that purpose.
How can the General Assembly, as the board of directors for each state agency, set a direction for the agency and measure the agency’s performance?
The simple answer is “oversight.” The House Oversight Committee will seek more specific answers in these hearings.
The committee exists to ensure agencies are doing the right things the right way; that they are being effective and efficient. This is a nearly impossible task for government. State agencies do not have profits and losses to help guide their decisions. By law, they are mandated to supply their services, and, in some cases, the citizen is mandated to use their services, often without an alternative. While the price an agency pays for a good or service may be set in a more-or-less competitive process, the price it charges to users of its service is set by the legislature.
With prices, profits, and losses, agencies would know whether people liked the services and goods available and if the processes to provide those services and goods were efficient enough to continue as a concern in the future. Lost customers, departing workers, or lower profits would likely prompt a re-evaluation of government’s efforts. Without those, the legislature and state agencies need to specify the societal goal desired, then decide what tasks government can and ought to undertake to achieve that goal, how to go about those tasks, and measure whether those tasks really are contributing to the goal as expected. If the goal is not being achieved, the agency and legislature need to evaluate whether the problem was a poorly defined goal, choosing the wrong task to achieve the goal, or doing the task the wrong way.
The committee intends to call each agency secretary and director and ask them three questions:
- What is better about North Carolina if the agency does its job well?
- What measure does the agency use to know if it is successful?
- What programs and activities help the agency achieve its core outcome?
The House Oversight Committee will continue its series of hearings asking fundamental questions of agency secretaries and directors March 13 at 9 a.m.
The committee will hear first from Department of Information Technology Secretary-designee Teena Piccione, Office of State Human Resources Director Staci Meyer, and Department of Administration Secretary-designee Gabriel Esparza.
State Controller Nels Roseland, rescheduled from February 26, will testify in the afternoon.
“We learned a lot during our first Oversight hearing. As we drill down to the one primary mission of each agency, we want to hear how that makes a difference for our citizens,” Co-Chair Jake Johnson (R-Polk) said.
Members of the Joint Legislative Commission on Governmental Operations Subcommittee on Hurricane Response and Recovery will resume questioning Department of Commerce Deputy Secretary Stephanie McGarrah of the Division of Community Revitalization and Governor Stein’s Recovery Advisor Jonathan Krebs on Hurricane Helene recovery in a hearing Thursday, March 6 at 9 a.m.
This will be a follow-up hearing from January when McGarrah and Krebs had their testimony cut short due to time constraints. They will be expected to provide further details on what they have learned from the failings of the North Carolina Office of Recovery and Resiliency and outline GROW NC’s plans for Helene recovery.
“We have to make sure that the new agency in charge of Helene recovery does not repeat the mistakes of its predecessor. We want to set the GROW NC staff up for success from the get-go. We want to work together, but we want them to know that we’re paying attention.” said Co-Chair Rep. Brenden Jones (R-Columbus). “To those in Western North Carolina who have lost homes, businesses, or loved ones, we haven’t forgotten you, and we want the area to come back even better and stronger than before Helene.”
With a new gubernatorial administration comes the opportunity to take a fresh look at state agencies, why they exist, and what they do. Over the coming months, the House Oversight Committee will call on agency secretaries and directors to answer the question: “Does the agency make life in North Carolina better?”
The committee will hold a set of hearings in its February 27 meeting. At 10:30 a.m., Secretary-designee of Revenue McKinley Wooten, Jr., State Controller Nels Roseland, State Budget Director Kristin Walker, and Treasurer Brad Briner will explain what their agencies do and how they can help with accountability measures for others.
Department of Transportation Secretary Joey Hopkins and DMV Commissioner Wayne Goodwin will begin their testimony at 1:00 p.m.
“Government efficiency starts with defining the job of government in practical terms,” Co-Chair Brenden Jones (R-Columbus) said.
Co-Chair Jake Johnson (R-Polk) added, “It’s a fair question to ask every agency: How do we know our spending on an agency has any impact, good or bad, on the people of North Carolina?”
“Government should exist for the people,” Co-Chair Harry Warren (R-Rowan) said. “Our committee members want to assess where things stand and what can be accomplished.”
The North Carolina Office of Recovery and Resiliency (NCORR) expects it will take $220 million in additional state funds to complete work by the end of 2025 on 1,150 homes damaged by hurricanes Matthew and Florence. Another 39 homes might not be completed due to “atypical” circumstances.
NCORR Director Pryor Gibson testified before the Joint Commission on Governmental Operations Subcommittee on Hurricane Response and Recovery for nearly two and a half hours on January 30. Jonathan Krebs, advisor to Gov. Josh Stein on western North Carolina recovery, and Stephanie McGarrah, deputy secretary in the Division of Community Revitalization at the Department of Commerce, followed Gibson. They have been invited back before the committee to provide more details March 6.
The Subcommittee held its first hearing with NCORR in September 2022 when the agency was completing fewer than 10 homes per month. The federal government provided nearly $1 billion in three grants for NCORR to assist with the Eastern North Carolina storms. In October 2024, however, Gibson alerted legislators that NCORR had overcommitted funds by $175 million and would need state money to complete its work.
A more thorough accounting by the Office of State Budget and Management before the November 18, 2024, hearing showed NCORR had unmet needs of $320 million, which Gibson circuitously confirmed at the time. Legislators appropriated $30 million in November and another $50 million in December to get NCORR into February. Gibson said contractors may abandon the program without a firm commitment from the General Assembly before the end of February.
Co-chair Rep. Brenden Jones (R-Columbus) set an expectation for clear answers at the beginning of the hearing.
“No more excuses, no more delays, no more vague estimates, no more NCORR kicking the can down the road,” Rep. Jones said. “Today, as we go through this, we’re going to ask you how much money is actually needed to finish the operation. I’m going to ask you why we should believe you.”
Inconsistencies in the Gibson’s presentation over the number of employees, specific costs, and NCORR’s communication to general contractors further eroded subcommittee members’ trust and increased their frustration.
NCORR completed 143 homes in December and its latest report to Gov Ops staff showed 116 homes completed in the 30 days through January 29. In contrast, NCORR only issued 19 notices to proceed (NTPs) in that time and had not issued a contract since December 19 (see graph).