NCACPA aligned with the Local Government Commission and the Office of the State Auditor this week to support a measure to hold local governments accountable for timely completion of audits.
Director of Advocacy Robert Broome joined State Auditor Beth Wood and Deputy Treasurer Sharon Edmundson—both of whom are NCACPA members—in testifying in favor of HB 122 before the House Local Government Committee on Tuesday, February 28.
Current law requires cities, towns, and counties to have their accounts audited by a CPA as soon as possible after the close of each fiscal year. Each local government unit must file a copy of the annual audit report with the Local Government Commission.
Audit reports for several of the state’s smaller counties and cities have been late due to deficiencies in the financial records provided to external auditors, and some local government units have ignored the audit requirement altogether.
“I have watched the Local Government Commission beg, send out letters, remind local governments of their responsibility to have an annual audit,” said Wood. “And they continue not to because there’s no teeth in the law.”
HB 122 would authorize the Local Government Commission to withhold a portion of sales tax distributions from cities and counties that fail to file their annual audit report on time. The withheld amount would be 150% of the cost of the audit, and the funds could be used to ensure that auditors are compensated for their work (read a full summary here).
“NCACPA supports this legislation because timely audits help ensure good stewardship of public resources, promote transparency in government finances, and provide accountability for local decision makers,” said Broome.
Despite opposition from the North Carolina League of Municipalities and the North Carolina Association of County Commissioners, the committee voted to advance HB 122. The bill’s next stop is the Finance Committee, which has not yet scheduled a vote.
If you have questions about this issue or other policy matters, please contact NCACPA Director of Advocacy Robert Broome, CAE.