LOCAL GOVERNMENT AUDITS.

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View NCGA Bill Details2023-2024 Session
House Bill 799 (Public) Filed Tuesday, April 18, 2023
AN ACT TO REQUIRE THAT ANNUAL AUDITS OF UNITS OF LOCAL GOVERNMENT, PUBLIC AUTHORITIES, AND LOCAL SCHOOL ADMINISTRATIVE UNITS BE CONDUCTED BY AN ACCOUNTANT CERTIFIED BY THE LOCAL GOVERNMENT COMMISSION; AND TO APPROPRIATE FUNDS TO THE NC ASSOCIATION OF REGIONAL COUNCILS OF GOVERNMENTS TO ASSIST LOCAL GOVERNMENTS WITH FINANCIAL RECORD KEEPING.
Intro. by Winslow, Setzer, Penny, Zenger.

Status: Re-ref Com On Appropriations (House action) (May 2 2023)

SOG comments (1):

Long title change

Committee substitute to the 1st edition changed the long title. Original long title was AN ACT TO REQUIRE THAT ANNUAL AUDITS OF UNITS OF LOCAL GOVERNMENT AND LOCAL SCHOOL ADMINISTRATIVE UNITS BE CONDUCTED BY AN ACCOUNTANT CERTIFIED BY THE STATE AUDITOR AND TO APPROPRIATE FUNDS TO THE COUNCIL OF STATE GOVERNMENTS TO ASSIST LOCAL GOVERNMENTS WITH FINANCIAL RECORD KEEPING.

H 799

Bill Summaries:

  • Summary date: May 2 2023 - View Summary

    House committee substitute to the 1st edition makes the following changes.

    Amends both GS 159-34 (annual independent audit of local governments) and GS 115C-447 (annual school independent audits) to change the entity certifying auditors back to the Local Government Commission (LGC) (was, State Auditor). Makes conforming changes to remove references to the State Auditor throughout both GS 159-34 and GS 115C-447. Requires both the CPA or the accountant conducting the audit to be certified by the LGC (was, CPA or accountant, who shall be certified by the State Auditor). Amends the sealed bid process for both entities to allow each entity, upon opening the sealed bid, to determine that the auditor cannot meet the audit schedule of entity or has performed inadequately on a prior audit of the entity, then entity may reject that sealed bid and solicit sealed bids again in accordance with the act.  Now allows each entity tp solicit sealed bids annually but requires it to be done at least once every five years. Makes technical changes. Makes conforming changes to the act’s long title.


  • Summary date: Apr 20 2023 - View Summary

    Amends GS 159-34 (annual independent audit of local governments) to change the entity that is certifying auditors from the Local Government Commission (LGC) to the State Auditor. Amends the process for selecting the auditor by requiring the State Auditor to solicit bids for conducting audit by sealed bids and by requiring the governing board to select the auditor from the sealed bids based solely on cost and time for completion of the audit and without information about the identity of the bidder. Requires the State Auditor to establish a process for certified public accountants and accountants to become certified to conduct annual audits under GS 159-34. Specifies that any certified public accountant or accountant certified to conduct annual audits may be removed for cause. Clarifies that the LGC may require the board of a unit of local government or public authority (currently, just refers to local government or public authority) that has been the subject of an investigative audit by the State Auditor to select the certified public accountant from a list of three individuals provided by the LGC for its annual audit, instead of the bid process described above. Requires the secretary to report annually to LGC and NCGA a list of units of local government and public authorities failing to complete and report to the LGC, in a timely fashion, two or more consecutive annual audits as required by GS 159-34. Makes technical changes and language gender neutral.

    Amends GS 115C-447 (annual school independent audits) to change the entity certifying the auditor from the LGC to the State Auditor. Implements the sealed bid process described above, but requires the board of education (not the local government unit) to select the auditor from the sealed bids based on time and cost, as described above. Makes technical change and language gender neutral. Implements the same annual reporting requirement described above, but for local school administrative units. Authorizes the State Auditor to implement a process for certified public accountants and accountants to become certified to conduct annual audits under GS 115C-447. Authorizes the LGC to issue rules and regulations for the purposes of improving the quality of auditing and the quality and comparability of reporting pursuant to GS 115C-447 or any similar section of the General Statutes.

    Appropriates $3.52 million to the NC Association of Regional Council of Governments in recurring funds to create a fiscal administrative program to implement specified goals related to bringing small local government and public authorities into compliance.

    Effective July 1, 2023, and applies to annual audits conducted on or after that date.