With the 2021 audit review season, we are continuing our transition to an automated risk-based approach to reviewing your audits. We are experiencing some delays in the 2021 reviews while we implement these changes. We ask for your patience as we transition to the new process.
Since the last audit review season, we have implemented changes to reflect updates to NC Administrative Code:
20 NCAC 02 .0508 (Response to the Independent Auditor’s Findings, Recommendations, and Fiscal Matters). This new rule requires units to respond to the LGC with a corrective action plan if a financial performance indicator of concern (FPIC) is identified or if the audit included one or more significant deficiencies, material weaknesses, or other findings.
Question 975 on the 2021 Unit Data Input Worksheet confirms if financial performance indicator(s) were identified. If “yes”, a follow-up Question 976 asks if the indicator(s) will be presented to the board.
20 NCAC 03 .0502 (Audit Contract). Changes to this rule require that a contract between an auditor and unit include that the auditor will present any FPICs or findings to the governing board.
If a FPIC is identified, the unit and the auditor are without a choice under the rule and the terms of the contract. All financial performance indicators of concern are required by the rule to be presented to the governing board. The presentation of FPICs to the board is not optional, it is required.
If Question 975 is answered “Yes”, then the follow up Question 976 should also be “Yes”.
We understand the significance of these process changes to units and their auditors and have developed a “2021 Audit Process” webpage to provide information and resources to help including a video overview of the changes, sample response text, and a link to the LGC File Portal to submit a response. Please visit the “2021 Audit Process” webpage for more information or feel free to email us at SLGFD@nctreasurer.com with questions or suggestions for other information we can make available to assist you in this new process.