LGC staff is aware of the many challenges facing local governments in fulfilling their obligation under the Local Government Budget and Fiscal Control Act to submit an annual independent audit timely. We’re also aware of the importance of the audit in providing transparency and accountability for public funds entrusted to local governments. LGC staff is committed to continued discussions and collaboration with statewide stakeholders to address both of these important issues.
One way in which LGC staff believes we can offer flexibility is to extend the due date for counties, municipalities, and other units with June 30 fiscal year ends that are required to submit audit contracts to the LGC for approval. Beginning with the fiscal year 2025 audit, the audit due date will be December 31 (six months after fiscal year end), instead of the current due date of October 31 (four months after fiscal year end).
Beginning with fiscal year 2025 -
If your audit report is submitted on or by December 31:
- your audit will be considered on time.
If your audit report is submitted on or after January 1:
- Your audit will be considered late.
- A Financial Performance Indicator of Concern (FPIC) will be issued, requiring a response by the unit.
- An amended contract will be required. Note there will be no “grace period” for the submission of an amended contract. If a contract has a submission date of December 31 and the audit report is not submitted by that time, an amended contract will immediately be required.
The FY2025 audit contract form has been updated to reflect these changes and also includes other important updates. Please see the new contract form and the instructions (which include the changes made to the FY2025 audit contract form) on our “Submitting Your Audit” webpage.
Important notes regarding this change:
- This due date applies to the submission of your audit report to the Secretary of the Local Government Commission as required under North Carolina General Statute 159-34(a). Other entities may have different filing deadlines or requirements, and the changes described here apply only to the submission of the audit report to the LGC.
- Units requesting LGC approval of debt still must submit a current audit report two months prior to the LGC meeting at which they are requesting consideration. Application, audit, and FPIC response due dates for units seeking LGC approval of debt can be found on our “Applying for Debt” webpage.
- The dates associated with notices of noncompliance and the withholding of sales tax distributions for counties and municipalities that have not submitted audits are set in North Carolina General Statute 159-34 and remain unchanged.
Counties and municipalities that do not submit an audit by April 1 will receive a notice of noncompliance (159-34(e)).
Counties and municipalities that do not submit an audit by July 1 may have a portion of their sales tax distribution withheld by the LGC (159-34(g)).
See more information here.
- LGC staff will no longer accept compliance audits separate from financial statement audits. If your unit is required to submit a compliance audit, it must be submitted at the same time, and in the same file upload, as the financial statement audit.
Questions on this change or the contents of this post should be directed to Debbie Tomasko at 919-814-4300 or SLGFD@nctreasurer.com.