• 9 Investigates: State government agencies spending millions over budget for projects

    By: Blair Miller


    CHARLOTTE, N.C. - A Channel 9 investigation into government spending is prompting state lawmakers to take quick action.

    Channel 9 found that some agencies are spending hundreds of millions of dollars more on projects than initially expected.

    The projects are designed to make government services easier for citizens to use, but some say there must be limits on the cost.

    The North Carolina Department of Revenue is undergoing a major upgrade to its online services so they are easier for taxpayers to use.

    Jerry Coble's in charge of it and said it will eventually save the state millions of dollars.

    The upgrade was supposed to be finished in March 2012, yet it still is not and likely won't be until the end of next year, more than two years past deadline.

    "Why has it taken so long to finish this project?" Channel 9 asked.

    "Well, this project is extremely complex," Coble said.

    The Department of Revenue said its initial budget was $79 million, but it revised it many times with the approval of state lawmakers, and it grew to $97 million.

    "Why would the cost go up from $79 million to $97 million?" Channel 9 asked.

    "That additional request came because we saw an opportunity to bring in additional revenue for the state with a little bit of automation," Coble said.

    But, according to a state audit obtained by Channel 9, the project resulted in millions of dollars in "unplanned spending."

    The auditor said the initial cost wasn't $79 million, as indicated in records by the Department of Revenue, but instead just $525,000.

    In a statement to Channel 9, auditor Beth Wood said, "The Department of Revenue stuck in $525,000 as their estimate for a new tax system to be approved by (the state) when in reality they knew it would cost much more. This is not how this system is supposed to work."

    The Department of Revenue said the $525,000 was meant for a separate project and not the baseline for upgrading the tax system.

    Coble defends their estimates.

    "I would encourage anybody to come and look at this project. Tell me, tell this agency, tell these employees how we could have done it better," Coble said.

    And it's not just the Department of Revenue mentioned in the audit.

    The state identified 84 technology projects in which the costs more than doubled the original estimate.

    Collectively, they went over by $356 million, all of it taxpayer money.

    Channel 9 showed the list of projects to state Rep. Jason Saine from
    Lincoln County who leads the state's new information technology committee.

    "I'm as shocked as anyone else to find out how great this really is," Saine said. "It's really a disservice to the taxpayer to waste their money, their hard-earned money. So what we want to do is correct that."

    Soon after Channel 9's interview, Saine worked on fast-tracking a bill to ensure more oversight.

    It would allow state officials to stop any project at any point if they feel the spending is out of line.

    Gov. Pat McCrory said the current system for technology projects is broken, and he is eager to change it.

    In fact, the bill mentioned by Saine has not been sent to the governor's office.

    As for the Department of Revenue, officials are quick to say their new system is already saving the state money.

    They estimate it has brought in $250 million and has more than paid for itself.

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