The North Carolina Office of the State Auditor (OSA) released a performance audit of the State Bar’s Interest on Lawyers’ Trust Accounts (IOLTA) program, finding a lack of reasonable assurance that $30.3 million in grant funds awarded by IOLTA, including payments to top recipients like Legal Aid of North Carolina and the North Carolina Justice Center, were spent as intended.
IOLTA uses revenue generated from lawyers’ trust accounts to award millions of dollars in grants to select nonprofit organizations and other justice-related programs. The audit concluded that while IOLTA awarded grants in compliance with eligibility requirements, it did not have adequate oversight controls implemented.
“Attorneys in North Carolina have no choice but to allow the North Carolina State Bar’s IOLTA program to take interest from their trust accounts,” said State Auditor Dave Boliek. “As our audit shows, IOLTA grants are going to organizations with clearly partisan, political agendas. With IOLTA’s revenues and grant payments surging, it’s incumbent that the flow of dollars is met with additional scrutiny to ensure proper use.”
The lack of adequate monitoring practices comes as IOLTA’s revenues and grant awards have risen significantly. IOLTA’s revenues increased from $3 million in 2018 to $16.7 million in 2024, and grant payments nearly doubled from $6 million in 2023 to $11.9 million in 2025. Examples of grants awarded by IOLTA in 2024 that were not subject to independent verification include:
- $4.5 million to Legal Aid of North Carolina for various programs.
- More than $1 million to the North Carolina Justice Center.
- More than $1 million to Pisgah Legal Services.
- $555,000 to the Charlotte Center for Legal Advocacy.
OSA’s report provided recommendations to strengthen oversight and provide reasonable assurance that grantees use grant funds appropriately. The audit also includes a breakdown of IOLTA grant recipients and award payment amounts for 2023 through 2025. The North Carolina State Bar and IOLTA’s response is included, and states that policies will be implemented to address concerns identified in our audit.