North Carolina government budget rules were broken when taxpayer funds paid for Agriculture Commissioner Steve Troxler and two of his top lieutenants to stay in Raleigh-area hotels during the annual State Fair, a state audit declared on Wednesday.
The investigative report, based on a tip to State Auditor Beth Wood's waste and abuse hotline, determined that Troxler, his chief of staff and the fair manager incurred $22,000 in cumulative expenses for hotel rooms, meals and other travel costs while working the fair over several years. Troxler's agency countered that the expenses were justified.
Nearly all the expenses were incurred by the commissioner and the chief of staff over a five-year period that the audit examined through 2018. The current fair manager was hired early last year.
The audit said the state budget manual restricts overnight travel to destinations at least 35 miles away from an employee's home or duty station, whichever is less. All three of them live at least 60 miles from Raleigh, with Troxler living in Browns Summit and Chief of Staff Zane Hedgecock in High Point. Wood's auditors suggest they reimburse the Agriculture Department for noncompliant expenses.
In a written response attached to the audit, Chief Deputy Commissioner David Smith said he signed off on the expenses because it's critical that fair leaders are nearby during the 11-day event each October, which can attract 1 million visitors. There are potential safety and security issues on site, and it would be dangerous for the leaders to drive back and forth from home on little sleep, he wrote.
"Department did and does consider hotel stays for these individuals to be necessary," Smith wrote. "Not only is this a decision based on a unique business need of the department, but it is most importantly based on safety."
The audit, however, warned that such singlehanded decision-making "sets a precedent for other state agencies to also ignore whichever policy or regulation they choose, which could cause a great cost to the taxpayer."
Auditors said they suggested that Troxler's department ask the state budget director to grant a waiver to the lodging rule going forward. Director Charlie Perusse approved such a waiver last month, limiting it to a "few, critical employees" for the State Fair and Mountain State Fair held this month.
Auditors also provided data showing fair hotel stays by Troxler and Hedgecock exceeded the maximum allowable daily expenses for food and lodging expenses, with some hotel rates as high as $199 per night. Smith wrote the high costs of Raleigh hotels and security concerns for an elected official like Troxler prompted going over the maximum. Fair manager Kent Yelverton of Fremont stayed at a $70-per-night hotel last year, the audit said.
The audit represents a dust-up between two statewide elected officials in Wood, a Democrat, and Troxler, a Republican. While both have wider latitude in running their respective departments than Cabinet agencies led by a governor's appointee, they still are expected to follow budget regulations.