* State Health Plan officials are auditing payments to 15 North Carolina hospitals after learning they had not notified the plan of rate changes going as far back as 2003.

The audit is to determine whether the hospitals overcharged for out- patient medical services. The plan had negotiated contracts with the hospitals that set rates for those services, and it required the hospitals to tell the plan if rates changed. If those rates had increased beyond the contract terms, the health plan, which is supported by taxpayers, may have overpaid hospitals for their services

"The really important matter," said Lacey Barnes, the State Health Plan's deputy executive administrator, "is if they didn't tell us and it resulted in an overpayment. And that's what we don't know." (N&O)

* State mental hospitals and homes for the developmentally disabled are eliminating 354 jobs including 75 layoffs in the wake of budget cuts enacted by Gov. Beverly Perdue and legislators earlier this month.

Cherry Hospital in Goldsboro, cited for chronic understaffing by federal regulators last year following the death of a neglected patient, is cutting 123 full-time positions. All but 31 of the positions being eliminated are vacant. (N&O)

* A paperwork logjam has prevented auto dealers from receiving reimbursements from the federal government under the Cash for Clunkers program, and many have had enough. Local dealers say the delay is causing a cash-flow crunch, and some are no longer participating — despite the fact that it brought people back to showrooms.(N&O)

The budget prohibits the state from changing class size limits in kindergarten through third grades but tells districts to make the cuts and do the best they can in higher grades. That's probably going to mean bigger classes for the older students.

"They're passing the buck," said Anne Medenblik, Orange County school board chairwoman. She called the budget process mismanaged, with schools starting in a few weeks and no spending decision in place. By the time the district finds out how much money it will lose, she said, schools will face laying off teachers who have reported for work. (N&O)

* The Senate will approve another $2 billion for the popular "cash for clunkers" program, probably by the end of the week, Democrats predicted.

Some GOP lawmakers threatened on Monday to let the program expire. But many of the opponents were hit with a political reality: many consumers and auto dealers love the program. (McClatchy)

* Sara Coleman, owner of the Cupcake Shoppe in Glenwood South, is still enjoying buzz from her presidential endorsement. Coleman, who introduced President Barack Obama in his visit to Raleigh last week, had planned to send Obama some cupcakes, but she learned that the food items have to go through an awful lot of security including a taster. (.biz)