LGC staff has recently issued disclosure guidance for local governments that are issuers of municipal debt. Please visit our Continuing Disclosure webpage for details.
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The Local Government Commission has proposed changes to North Carolina Administrative Code related to the annual audit, and audit contracts and invoices. Information on the text of the proposed changes and on the public comment period may be found on the Department of State Treasurer’s Administrative Code web page.
The LGC-203 Cash and Investments report for the June 30, 2020 reporting period is due on or before July 25, 2020. You may initiate and submit your LGC-203 report for the June 30 reporting date beginning July 1, 2020. Note that this reporting requirement applies to all local governments and public authorities under G.S. 159-33 and G.S.
Local governments in North Carolina are currently receiving and expending funds from the Coronavirus Aid Relief, and Economic Security Act (CARES). CARES Act federal funding is from the US Department of State Treasury (Treasury). The predominant amount of funding from the CARES Act appropriated to the State and local governments in North Carolina is from the Coronavirus Relief Fund (CRF), that was created by the CARES Act.
Accounting and Reporting for CARES Act Funding:
The federal government passed the Coronavirus Aid, Relief, And Economic Security Act (CARES Act) on March 27, 2020. The Act provides funding to cover COVID-19 expenses for the public health emergency that were not budgeted as of March 27, 2020, and are incurred between March 1, 2020, and December 31, 2020. These funds are not intended to fill revenue gaps resulting from the global pandemic and the resulting economic shutdown.
Recently, more than one NC local government finance officer has been presented with an annuity investment as an allowable investment option. Annuity investments are not expressly specified in NC § 159-30 as allowable investments for NC Local Governments or public authorities and are therefore not permitted.
Executive Order 142 was issued by Governor Cooper on May 30, 2020, and extends for another 60 days the requirements of Executive Order 124 (EO 124) concerning utilities operated by local governments and public authorities. What does this mean to you as providers of these services? You must continue to provide service to residential customers regardless of payment until the new order expires at 11:59 p.m. on July 29, 2020.
The auditing community has expressed concern about its ability to complete CPE requirements due to the COVID-19 pandemic. The U.S. Government Accountability Office (GAO) has taken steps to allow for more time and flexibility to complete these requirements for Generally Accepted Government Auditing Standards (GAGAS) purposes.
Units should continue to comply with the daily deposit requirements of GS. 159-32(b). However, pursuant to the authority granted under NCGS 159-32(b) enacted in NC Session Law 2020-03 and following the issuance of Executive Order No.
The GASB recently released Statement 95 Postponement of the Effective Dates of Certain Authoritative Guidance, to be effective immediately. The statement formalizes what we already knew – the implementation date of many (but not all) new standards and implementation guides has been pushed back 12 to 18 months.
COVID-19 has impacted local governments in many ways, not the least of which is interfering with the timeline for completing a June 30, 2020 audit. After giving careful consideration to the limitations on local governments’ staff time and the availability of audit staff, we are extending the deadline for June 30, 2020 audits, both financial and compliance, to January 31, 2021.
What does that mean? If you have already submitted your audit contract with an October 31, 2020 deadline and submit your audit before January 31, 2021:
As with most events recently, our annual State Treasurer’s Conference will be offered in a different format this year. Beginning on Tuesday, June 16, we will be offering four virtual sessions of two hours each on topics of interest to both local government finance officials and staff as well as local government auditors. We will not be holding a separate class for auditors this year.
The schedule of sessions is as follows:
Short of having a crystal ball, finance and budget officers don’t have a lot to go on to determine the financial impact of COVID-19 on North Carolina local governments. That doesn’t mean, however, that there aren’t steps local finance and budget officials can take to begin to prepare for the inevitable decline in revenue.
Steps for 2019-2020 Budgets
One of the General Assembly’s first two coronavirus pandemic response bills, SB 704 in Section 2.3, establishes the “Local Government Coronavirus Relief Reserve” (Local Reserve). The new law then transfers the sum of $300 million derived from the federal CARES Act, P.L. 116-136, to the new Local Reserve.