NCSB Journal Summer 2026

IOLTA UPDATE

Performance Audit Finds NC IOLTA Complied with Rules and Policies, Recommends Enhanced Measurement and Reporting Processes

On April 21, 2026, the North Carolina Office of the State Auditor (OSA) released the report on a monthslong performance audit of NC IOLTA (North Carolina Interest on Lawyers’ Trust Accounts), the State Bar program that has funded civil legal aid for low-income residents since 1983. State Bar Executive Director Peter Bolac said, “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. 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.” The audit scope originally included the State Bar’s disciplinary program as well as the Bar’s overall finances. In December 2025, OSA narrowed the scope of this review to three areas of NC IOLTA’s oper ations: procedures for awarding grants to organizations that further access to justice across the state; oversight of how that fund ing is spent by grantees; and the financial processes of the program itself. That last area, NC IOLTA’s financial processes, was later also removed. Between August 2025 and April 2026, the State Bar and NC IOLTA provided tens of thousands of pages of records and docu mentation, and leadership and staff partici pated in multiple interviews with OSA’s engagement team. The review included records, policies, and procedures for the peri od of January 1, 2023, to June 30, 2025. “The audit found that IOLTA’s grant award process complied with applicable eligi bility requirements, such as limiting awards to organizations serving North Carolina res idents, meeting charitable organization crite ria under Section 501(c)(3) of the Internal

Revenue Code, and aligning funded activi ties to IOLTA’s authorized purposes,” the audit report states. The audit did not identify any instances of funds being improperly disbursed by the board or being misused by grantee organiza tions, which are prohibited from using IOLTA funding “for any political campaign or to support attempts to influence legisla tion or any governmental body.” The report offers two areas for improve ment—expansion of measurable outcomes based goals and stricter monitoring proce dures—and recommends NC IOLTA staff present proposed changes in procedures to the program’s Board of Trustees within six months. NC IOLTA and State Bar leadership said they appreciated the opportunity to share information about this vital philanthropic program and its impact across the state with OSA’s engagement team. “Since the program’s inception in 1983, our board and staff have strived to follow best practices as an IOLTA program and funder,” NC IOLTA Executive Director Mary Irvine said. “We were gratified to have the opportunity to demonstrate that commitment—and our adherence to all current NC IOLTA regulations—through out 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.” “We share the Office of State Auditor’s goal of ensuring that IOLTA funding goes exclusively toward providing civil legal serv ices to North Carolinians who can’t afford them,” Bolac 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 produc

tive audit process.” The audit report, including NC IOLTA’s formal statement in response to the reported findings and recommendations, is available online at bit.ly/4w0hY8O. Continued Legislative Freeze on NC IOLTA Grantmaking OSA’s report came as the North Carolina General Assembly’s one-year Other NC IOLTA News • 2025 Annual Report. Coming soon to nciolta.org/annual-report/. If you’d like to receive a printed copy, please contact iolta@ncbar.gov. • Board Service. NC IOLTA invites stakeholders to express interest in joining the Board of Trustees in the coming year. Two seats will open in September; of the nine-member board, six must be active members of the State Bar. Trustees may serve up to two three-year terms. Appointments are made by the State Bar Council, typi cally at the July council meeting. Visit our website for more information and the board service interest form. • Prime Partners. Support NC IOLTA’s mission by banking with Prime Partners and Benchmark Banks, which pay a more favorable rate on IOLTA accounts. The following banks maintain Prime Partner status: Roxboro Savings Bank, Wells Fargo. Settlement agent accounts only: Forbright Bank. The full list of eligible banks is available at nciolta.org.

SUMMER 2026

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