N.C. Administrative Code (Rules)

Proposed Rules for Revision and Adoption

Notice is hereby given in accordance with G.S. 150B-19.1(c) that the Local Government Commission proposes for revision the following rules:

20 NCAC 03 .0502 Audit Contract
20 NCAC 03 .0505 Audit Billings

In addition, notice is hereby given in accordance with G.S. 150B-19.1(c) that the Local Government Commission proposes for adoption the following new rule:

20 NCAC 03 .0508  Response to the Independent Auditor’s Findings, Recommendations, and Fiscal Matters

The Notice of Text containing these proposed changes can viewed here.

The Local Government Commission (LGC), which operates as a division of the Department of State Treasurer through the State and Local Government Finance Division, is proposing to revise and adopt rules that will  promote conformity to auditing best practices and improve financial transparency by ensuring that auditors will present findings and fiscal issues identified in an annual audit report to units and the public and by ensuring that all units receive relevant information in a consistent manner through the auditor’s presentation, regardless of the auditor employed. Additionally, the proposed rule changes will simplify the audit contract and audit fee business processes and streamline the responsibilities of the LGC in receiving and reviewing units’ responses to audit findings and corrective action plans. 

The LGC is proposing to revise rules updating:

  • the requirements related to the submission and presentation of audit reports to local governments and public authorities, and
  • the submission and approval of audit invoices.

The LGC is proposing a new rule regarding:

  • the process for units that are required to provide responses and corrective action plans to the LGC as a result of audit findings and financial indicators of concern.

A PUBLIC HEARING on the proposed rules will be held via conference call:
Tuesday July 21, 2020 2 pm – 3 pm

Conference Line / Access Code:  1-877-402-9757 / 4354283

Oral or written comments to the proposed rules can be submitted to:
Department of State Treasurer
ATTN:  Laura Rowe, Rulemaking Coordinator
3200 Atlantic Avenue
Raleigh, NC 27604

The Fiscal Note prepared by the Local Government Commission and approved by the Office of State Budget Management may be found here.

Procedure for Objection and Subjecting a Proposed Rule to Legislative Review: Any person who objects to the adoption of a permanent rule may submit written objections to dst.ncac@nctreasurer.com. If the objection is not resolved prior to the adoption of the rule, a person may also submit written objections to the Rules Review Commission. If the Rules Review Commission receives written and signed objections in accordance with G.S. 150B-21.3(b2) from 10 or more persons clearly requesting review by the legislature and the Rules Review Commission approves the rule, the rule will become effective as provided in G.S. 150B-21.3(b1). The Rules Review Commission will receive written objections until 5:00 p.m. on the day following the day the Rules Review Commission approves the rule. The Rules Review Commission will receive those objections by mail, delivery service, hand delivery, or facsimile transmission. If you have any further questions concerning the submission of objections to the Rules Review Commission, please contact a Rules Review Staff Attorney at 919-431-3000.

Federal Certification is not applicable to this set of proposed rules.

Department of State Treasurer Decennial Review of Existing Rules

N.C. General Statute §150B-21.3A adopted in 2013, requires state agencies to review existing rules every 10 years. The Department of State Treasurer rules are encompassed in the subchapters of Title 20 of the North Carolina Administrative Code.  Agency rules that do not complete the required decennial review expire, unless an exemption applies.  The Department's rules are reviewed on a schedule established by the Rules Review Commission. The rules currently due for review are provided below.

N.C. General Statutes §150B-21.3A(c) requires the Department to review each rule and make an initial determination from one of these three classifications:

  • Necessary with substantive public interest – the agency has received public comment on the rule within the past two years or the rule affects the property interest of the regulated public, and the agency knows or suspects that any person may object to the rule. 
  • Necessary without substantive public interest – the agency determines that the rule is needed, and the rule has not had public comment in the last two years. This category includes rules that identify information that is readily available to the public, such as an address or telephone number.
  • Unnecessary – the agency determines that the rule is obsolete, redundant or otherwise not needed.

The initial classifications of existing rules by an agency are subject to public review and comment for a period of sixty days.  N.C. General Statutes § 150B-21.3A(5) defines a “public comment” as “written comments objecting to the rule, in whole or in part, received by an agency from any member of the public, including an association or other organization representing the regulated community or other members of the public.”  Additionally, pursuant to G.S. 150B-21.3A(c)(2), in order for the Rules Review Commission to determine whether the public comment has merit, the public comment must address the specific substance of the rule and address any of the standards of Commission review, as set forth in G.S. 150B-21.9(a).   

Comments regarding the Department's initial determinations will be accepted by e-mail to dst.ncac@nctreasurer.com or by mail to:

DST NCAC Decennial Review
ATTN:  Rulemaking Coordinator
3200 Atlantic Avenue
Raleigh, NC 27604

Department of State Treasurer Proposed Rules

This website includes the following information: 

  • The text of the proposed rule 

  • An explanation and reason for the proposed rule

  • Any required federal certification 

  • Instructions on how and where to submit oral or written comments on the rule 

  • Any fiscal note that has been prepared for the proposed rule