Raleigh, NC – A recent performance audit of the North Carolina State Bar’s Interest on Lawyers’ Trust Accounts (IOLTA) program found that IOLTA funds were awarded to qualified nonprofit organizations serving North Carolina residents and supported civil legal services for low-income individuals, consistent with IOLTA’s statutory purpose.
“The audit found that IOLTA’s grant award process complied with applicable eligibility requirements, such as limiting awards to organizations serving North Carolina residents, meeting charitable organization criteria under Section 501(c)(3) of the Internal Revenue Code, and aligning funded activities to IOLTA’s authorized purposes.” (State Auditor Report, Executive Summary, p. 4).
IOLTA’s largest grantee, Legal Aid of North Carolina, responded today indicating that it appreciates the independent Auditor’s recognition that IOLTA funding has been properly directed to organizations providing critical civil legal aid across the state.
The audit report noted that some IOLTA grantees did not include specific outcome goals in their grant applications. The report did not identify which grantees were referenced.
Legal Aid of North Carolina shared that it does include outcome goals and measurable results in its grant reporting and has consistently demonstrated that it is a responsible steward of IOLTA funds. Recent reporting reflects:
- In 2025, more than 21,000 clients served and over 53,000 household members impacted
- 5,900+ evictions prevented and 2,500+ domestic violence protective orders secured
- Hundreds of homeowners protected from foreclosure and loss of housing
- Thousands of North Carolinians reached through community legal education and outreach
- Significant positive impact for North Carolinians living in rural areas and those recovering from Hurricane Helene.
These outcomes reflect Legal Aid’s decades of focus on delivering concrete, measurable results for low-income North Carolinians in every region of the state.
The State Auditor also recommended enhanced oversight practices for the IOLTA program. Legal Aid of North Carolina stated that it supports oversight and grant monitoring and noted that it already operates under extensive oversight and accountability measures. The organization undergoes regular independent financial audits and recently received a clean opinion in its FY2025 audit.
In addition to independent audits, Legal Aid of North Carolina maintains strong internal controls to ensure IOLTA funds are used for their intended purposes. The organization tracks cases, clients, outcomes, and service delivery through centralized case management systems; allocates costs proportionally based on IOLTA’s share of overall funding; and provides program level supervision across its offices and initiatives.
“IOLTA funding is essential to ensuring access to justice for people who otherwise could not afford legal help,” said Ashley Campbell, CEO of Legal Aid of North Carolina. “Our recent independent audit confirms that Legal Aid of North Carolina manages resources responsibly, complies fully with all requirements, and delivers meaningful results for the people we serve.”
As a condition of receiving IOLTA funding, Legal Aid of North Carolina submits regular, detailed reports to the NC State Bar’s IOLTA program. These reports include quantitative case and client data, geographic service information, case type breakdowns, narrative explanations of services delivered, staffing updates, and documentation of how IOLTA funds are allocated and used.
IOLTA funding supports critical civil legal services for low‑income North Carolinians, including assistance with housing stability, domestic violence protection, and legal services for seniors and veterans, particularly in rural and underserved communities.
In recent years, shifts in funding availability, including a legislative freeze on IOLTA grantmaking and declines in other key funding sources such as domestic violence services, have significantly constrained civil legal aid resources statewide. As a result, Legal Aid of North Carolina was forced to close several offices, primarily in rural areas, and lay off nearly 50 employees. The organization estimates that approximately 8,000 fewer people will be served in 2026.
“We take our obligations to our clients, funders, and the public seriously,” said Ashley Campbell, CEO of Legal Aid of North Carolina. “Our independent audit confirms that Legal Aid of North Carolina operates with integrity, complies fully with legal and financial requirements, and delivers services consistent with our mission.”
Legal Aid of North Carolina remains committed to transparency, accountability, and responsible stewardship of all funding received in support of its mission. As a federally funded legal services provider, the organization is prohibited from engaging in any partisan or political activity and remains focused solely on delivering direct civil legal services to low-income North Carolinians.
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