First DAVE Report Shows DHHS Generated $386 Million In Lapsed Salaries

Today, the North Carolina Office of State Auditor (OSA) Division of Accountability, Value, and Efficiency released its first report, revealing hundreds of millions of tax dollars in lapsed salaries at the North Carolina Department of Health and Human Services (DHHS).  

If a state agency receives funds for a position for salary and benefits, but the position remains vacant those tax dollars are referred to as a lapse salary. For fiscal year 2024-25, DHHS generated $386 million in lapsed salary funds, with $151 million from state appropriations and $235 million from receipts and federal funding. That represented 30.6% of all lapsed salary funds in North Carolina for fiscal year 2024-25 and was the most of any state agency. From September 2025 through June 2026, DHHS could generate as much as $210 million in lapsed salary funds. 

“When a state agency is generating hundreds of millions of tax dollars from job openings it fails to fill, and then voluntarily enacts cuts to health care services, bureaucracy is being placed ahead of the needs of North Carolinians,” said State Auditor Dave Boliek. “Lapsed salary funds are not meant to be a permanent supplement to agency budgets. Taxpayers in North Carolina expect state agencies to provide services to the people, not let job openings stay vacant so budgets can be buoyed.” 

The report also found that for a whole year, 340 positions at DHHS were never advertised or posted. Those positions accounted for $16.5 million in lapsed salary funds, with $4.9 million from state appropriations and $11.6 million from receipts. Further, DHHS has routinely been late in publishing its statutorily mandated report on the uses of lapsed salary funds. The reports have been submitted an average of 296 days late since 2017.