Changes to the Local Government Budget and Fiscal Control Act – GS 159-24 and 25 (S.L. 2019-19)

Friday, February 7, 2020

Session Law 2019-19, adopted by the General Assembly during its 2019 session, makes some changes to the Local Government Budget and Fiscal Control Act, primarily with regard to the duties, responsibilities, and qualifications of the local government finance officer. Specifically, the law does the following:

  • Clarifies that local units must have a finance officer, and that they can contract out almost all responsibilities of the position (responsibility for fulfilling duties still lies with the finance officer) (159-24 and 159-25(a)(9))

    Please note: we are finding during our unit visits and by other means that not all units have an appointed finance officer; that person must be bonded in accordance with GS 159-29(a) [GS 159-42(h) for housing authorities, and GS115C-442 for schools]. Any entity that that is subject to GS 159-24, must have an appointed finance officer in order to disburse funds (GS 159-25(a)(2)) among other responsibilities; schools follow a similar statute – GS 115C-436(a)(3). If your appointed finance officer leaves the organization, another person must be appointed immediately, even if it’s an interim appointment. 

  • Authorizes the Local Government Commission (LGC) to adopt rules setting the minimum requirements to be a finance officer (159-25(c))
  • Gives the LGC the authority to require training for the finance officer in certain circumstances (159-25(d))
  • Gives the LGC the authority to require a local government to contract with a party external to the unit to perform some or all of the duties of the finance officer when the unit has received a letter of notification about deficiencies complying with the requirements of GS 159 or has an internal control finding in the most recently completed financial audit (159-25(e))

The State and Local Government Finance Division (SLGFD) staff will be implementing these requirements on behalf of the LGC. Staff will proceed immediately with implementing LGC’s authority to require a unit to contract for services (159-25(e)) if the staff finds that circumstances warrant this action. Staff will make these determinations after careful review of audit findings, a unit’s response to those findings, or responses to requests for information from SLGFD staff regarding other issues, including, but not limited to, the timeliness of filing the annual audit. It is important to note that any intent to impose the requirements of this statute on any local government or public authority will be communicated in advance to the officials of that government in writing, and only after attempts are made to address our concerns in a less formal manner.

Staff also will develop rules (via Administrative Code) that allow the LGC to:

  • Establish minimum qualifications for finance officer (159-25(c))
  • Require participation in training (159-25(d))

We will keep you updated on the changes to the Administrative Code as we move through the rule-making process.