NC IOLTA responds to state auditor’s performance audit, says program meets all eligibility requirements

The North Carolina State Bar and NC IOLTA have responded to a performance audit released by the North Carolina Office of the State Auditor, affirming the program’s compliance with grant eligibility requirements and committing to further strengthen its oversight procedures, according to an April 22, 2026 press release from NC IOLTA.

The audit, which began in August 2025 and concluded in April 2026, originally encompassed the State Bar’s disciplinary program and overall finances before being narrowed to focus solely on NC IOLTA’s grantmaking procedures and oversight of grantees’ use of funds. The report identified two areas for improvement: expanding measurable outcomes-based goals in grant applications and implementing stricter monitoring of how grantees use IOLTA funds. It recommends that NC IOLTA staff present proposed procedural changes to the program’s Board of Trustees within six months.

State Bar Executive Director Peter Bolac said the audit’s findings affirmed the program’s commitment to its mission. “We’re pleased to share that the report demonstrates NC IOLTA’s steady, focused commitment to achieving our mission with the highest standards for how we work,” Bolac said. “The audit affirms that our grantmaking meets all eligibility requirements. We welcome opportunities to further strengthen how we measure and report the impact of this important work.”

NC IOLTA Executive Director Mary L. Irvine said the audit provided an opportunity to demonstrate the program’s adherence to regulations. “Since the program’s inception in 1983, our board and staff have strived to follow best practices as an IOLTA program and funder,” Irvine said. “We were gratified to have the opportunity to demonstrate that commitment — and our adherence to all current NC IOLTA regulations — throughout the audit. We believe this transparent and open process has provided the Office of State Auditor with a clear and thorough understanding of our important work and will result in an even stronger program going forward.”

Bolac emphasized that the State Bar and NC IOLTA share the auditor’s goal of ensuring funds reach those who need them. “We share the Office of State Auditor’s goal of ensuring that IOLTA funding goes exclusively toward providing civil legal services to North Carolinians who can’t afford them,” he said. “With this shared goal in mind, we’re looking forward to making updates and thank the Office of State Auditor for their partnership in this productive audit process.”

The NC IOLTA program has funded civil legal aid in North Carolina since 1983, using revenue generated from lawyers’ trust accounts to award grants to legal aid organizations. The State Bar and NC IOLTA’s formal response to the auditor’s findings is included in the report, which is available online, and identifies specific proposals to build on existing processes.

The release of the audit comes as the program faces a separate challenge, the press release noted. The North Carolina General Assembly enacted a one-year freeze on NC IOLTA grantmaking in July 2025, and that freeze has now stretched into the second quarter of the funding year. The loss of anticipated 2026 funding has created budget shortfalls for legal aid organizations, which the press release described as often the only providers of free civil legal services in rural and high-poverty communities. NC IOLTA and State Bar leadership said they continue to seek a resolution to reopen funding for those providers.