Attorney General Jeff Jackson Challenges Lack of Transparency in Federal Spending

RALEIGH – Attorney General Jeff Jackson and 18 other attorneys general formally opposed the Office of Management and Budget (OMB) for unlawfully withholding money from federal agencies and the states and failing to follow the law in sharing how it’s spending federal dollars.

“OMB is deliberately breaking the law to conceal how they’re handling taxpayer money,” said Attorney General Jeff Jackson. “Their actions are designed to create secrecy and avoid accountability. The American people deserve transparency – especially when OMB engages in illegal conduct, as they recently did by unlawfully freezing education funding. This is a blatant attempt by the federal government to operate in the shadows to evade detection, and it must end now.”

When Congress appropriates money to federal agencies, OMB is the agency responsible for distributing those funds to the agencies. Under the law, OMB has to make public how and when it’s distributing federal dollars, so that people will know if funds are being withheld or the law is being violated. In several cases this year, OMB froze funds for various agencies without any warning to impacted states. As a result, states can’t identify whether funds were withheld, which agency withheld them, or if or when they will be released.

A screenshot of the OMB’s apportionments website in July 2024.

A screenshot of OMB’s apportionments website today.

On June 30, states were notified that almost $7 billion in federal education funding – including over $165 million for North Carolina — would be immediately frozen, even though states were expecting to receive the funding beginning the very next day. That notice came from the Department of Education, but it was OMB that refused to release the money. After Attorney General Jackson filed suit, OMB reversed course and released all $6.8 billion in funding back to the Ed Department, which has said it will release the money back to the states.

OMB has done similar funding freezes with AmeriCorps. In April, AmeriCorps programs nationwide were notified that nearly $400 million of their appropriated funds, which supported critical Helene recovery efforts in western North Carolina, would be terminated effective immediately. Attorney General Jackson sued, opposing the unlawful funding cuts and successfully secured a preliminary injunction that restored the frozen funding. But because OMB isn’t following the law and publicizing its apportionment decisions, North Carolina is left in the dark about when funding is turned off, who turned it off, and when it will be turned back on.

Last week, a federal judge ruled that OMB’s decision to take down its public website was illegal and ordered the government to restore it. Instead of complying with the law, OMB has appealed. Attorney General Jackson joined this amicus brief in that appeal to make sure OMB is transparent about when it is withholding or releasing Congressionally-mandated funds.

You can read a copy of the brief here.

Attorney General Jackson is joined in filing this amicus brief by the attorneys general of the District of Columbia, California, Colorado, Connecticut, Hawaii, Illinois, Maine, Maryland, Massachusetts, Michigan, Nevada, New Jersey, New York, Oregon, Rhode Island, Vermont, Washington, and Wisconsin.

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