The Balance Sheet

Person holding mobile phone with the word "Blog" on it and some other text. Laptop open in the background.

The Balance Sheet

The Balance Sheet is the blog of the Local Government Commission staff. Click below to sign up to receive email alerts when new blog posts are released.

Sign Up

For announcements and resources related to the impacts of COVID-19, visit our Local Government COVID-19 Resources page.

COVID-19 Resources

Accounting and Reporting Guidance for CARES Funding and the COVID-19 Pandemic

Thursday, June 4, 2020

Accounting and Reporting for CARES Act Funding:

The federal government passed the Coronavirus Aid, Relief, And Economic Security Act (CARES Act) on March 27, 2020. The Act provides funding to cover COVID-19 expenses for the public health emergency that were not budgeted as of March 27, 2020, and are incurred between March 1, 2020, and December 31, 2020. These funds are not intended to fill revenue gaps resulting from the global pandemic and the resulting economic shutdown. The funds provided by the Act are intended to help state and local governments cover costs directly associated with the emergency, such as medical and public health needs and effects of the emergency, for example, economic support of those suffering from unemployment or business interruptions caused by COVID-19.

Local governments with populations exceeding 500,000 were eligible for direct payment of CARES funding. Four local governments in North Carolina qualified: Guilford, Mecklenburg, and Wake Counties and the City of Charlotte each received a direct distribution. North Carolina also received a direct distribution (of just over $3.5 billion) as a part of the Act. In its ACT TO PROVIDE AID TO NORTH CAROLINIANS IN RESPONSE TO THE CORONAVIRUS DISEASE 2019 (COVID-19) CRISIS (Session Law 2020-04), the NC General Assembly allocated amounts to each county from the State’s CARES allocation. Each county...

SERCAP Water and Sewer Finance and Fiscal Health Workshops

Wednesday, June 3, 2020

SERCAP logoThe Southeast Rural Community Assistance Project (SERCAP) is offering two regional workshops on water and sewer finance and fiscal health in July. The first is Thursday, July 23, 2020, in Halifax, NC, and the second is Thursday, July 30, 2020, in Pembroke. Registration for the course is free. The workshops start at 8:00 am and wrap up by 4:00 pm. Lunch is on your own. Speakers include representatives from SERCAP, USDA, DEQ, and the LGC. The course offers 6 CEUs if you attend the full day. See the agenda and registration form for the course for details.

If you have questions please contact SERCAP at the numbers noted on the registration form, or contact us at (919) 814-4300 or at

NC Local Government and Public Authority Investment Challenges

Tuesday, June 2, 2020

Recently, more than one NC local government finance officer has been presented with an annuity investment as an allowable investment option. Annuity investments are not expressly specified in NC § 159-30 as allowable investments for NC Local Governments or public authorities and are therefore not permitted.

The regular turnover that occurs in finance officer positions around the State means that some finance officers may not be aware of all the requirements and boundaries set by the Local Government Budget and Fiscal Control Act (G.S. 159 Article 3). The person holding the position of finance officer needs to know those requirements. NC § 159-30 spells out those requirements and boundaries as they apply to local government and public authority investments. 

We understand that during times of declining interest rates, earnings for local governments take a heavy hit. A governing body may ask its finance officer to try and find ways to improve earnings. Investment brokers who work with NC local governments may offer various investments to as a way to do just that. Unfortunately, not all investment brokers are aware of the statutory requirements regarding what is an allowable investment for our local governments and public authorities. We encourage all...

Governor Cooper Extends Executive Order 124

Monday, June 1, 2020

Executive Order 142 was issued by Governor Cooper on May 30, 2020, and extends for another 60 days the requirements of Executive Order 124 (EO 124) concerning utilities operated by local governments and public authorities. What does this mean to you as providers of these services? You must continue to provide service to residential customers regardless of payment until the new order expires at 11:59 p.m. on July 29, 2020. You may not charge late fees or any other fees that were not permitted under EO 124. The six-month period during which residential customers must bring their accounts current will now begin on July 30, 2020. The new order says that service providers should “reasonably inform their customers” about this extension. We are trying to get more details about what is considered reasonable. Service providers may want to post a new notice, similar to the one required by EO 124, noting the extension of the payment period. We will update you when more information becomes available.


Friday, May 29, 2020

Government Accountability Office logoThe auditing community has expressed concern about its ability to complete CPE requirements due to the COVID-19 pandemic. The U.S. Government Accountability Office (GAO) has taken steps to allow for more time and flexibility to complete these requirements for Generally Accepted Government Auditing Standards (GAGAS) purposes. Please note that these changes only apply to CPE required by the 2018 Generally Accepted Government Auditing Standards (Yellow Book). As of May 18, 2020, the NC CPA Board has not made any changes to the annual CPE requirement as a result of COVID-19. The deadline for completing CPE to be eligible for license renewal next year (2021) is December 31, 2020.

To assist auditors, the GAO is providing the following flexibility:

  • 6-month grace period for completing CPE
  • Waiver of the 20-hour annual CPE requirement
  • Carryover of CPEs earned in this period

The alert does not remove the requirement for completion of the 80 hours of CPE (GAGAS paragraph 4.16) and the 2-year period for obtaining that CPE cannot has not changed because of the COVID-19 pandemic.

6-Month Grace Period for Completing CPE

For 2-year CPE periods that end February 29, 2020 through December 31, 2020, auditors who have not completed the 80-...

Updated Guidance on the Daily Deposit Requirement

Tuesday, May 26, 2020

Units should continue to comply with the daily deposit requirements of GS. 159-32(b). However, pursuant to the authority granted under NCGS 159-32(b) enacted in NC Session Law 2020-03 and following the issuance of Executive Order No. 116 declaring a state of emergency based on the public health emergency posed by COVID-19 for the State of North Carolina effective March 10, 2020, until rescinded, the Secretary of the Local Government Commission hereby announces that the deposits required under NCGS 159-32(a) are not required to be made daily if it is not possible for a unit to comply due to limitations such as limited staff availability or reduced office hours, but must be made at least weekly. Deposits must be maintained in a secure location and all requirements of 159-32(a) remain in effect other than this modification to the frequency of deposits. This modified deposit frequency requirement does not apply where a governing board has given its approval to allow deposits only when the moneys on hand amount to five hundred dollars ($500) or greater. This modified deposit frequency requirement shall remain in effect until Executive Order No. 116 is rescinded or is otherwise terminated.

If you have questions, please contact us at (919) 814-4300 or at slgfd...

Your New Favorite GASB Statement

Tuesday, May 26, 2020

GASB logoThe GASB recently released Statement 95 Postponement of the Effective Dates of Certain Authoritative Guidance, to be effective immediately. The statement formalizes what we already knew – the implementation date of many (but not all) new standards and implementation guides has been pushed back 12 to 18 months.

Implementation of the following pronouncements is delayed 12 months – we have noted the new implementation dates of the most impactful pronouncements:

  • Statement No. 83, Certain Asset Retirement Obligations, now effective for reporting periods beginning after June 15, 2019, meaning FYE June 30, 2020 for most local government agencies
  • Statement No. 84, Fiduciary Activities, now effective for reporting periods beginning after December 15, 2019, meaning FYE June 30, 2021 for most local government agencies
  • Statement No. 88, Certain Disclosures Related to Debt, including Direct Borrowings and Direct Placements
  • Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period
  • Statement No. 90, Majority Equity Interests
  • Statement No. 91, Conduit Debt Obligations...

Audit Deadline for June 30, 2020 Financial Statements

Friday, May 15, 2020

COVID-19 has impacted local governments in many ways, not the least of which is interfering with the timeline for completing a June 30, 2020 audit. After giving careful consideration to the limitations on local governments’ staff time and the availability of audit staff, we are extending the deadline for June 30, 2020 audits, both financial and compliance, to January 31, 2021.

What does that mean? If you have already submitted your audit contract with an October 31, 2020 deadline and submit your audit before January 31, 2021:

  • we will accept your audit as timely, and we will make no indication in our records that your audit was late
  • we will not require an amended contract form

If your audit report is submitted after 11:59 PM on January 31, 2021:

  • it will be considered late
  • you or your auditor will need to submit an amended contract form

If you have not yet submitted your audit contract for your June 30, 2021 audit, you may submit it with a January 31, 2021 due date instead of October 31, 2020 (or any date in between those two dates).

Again, units that have already submitted contracts do NOT need to send in contract amendment forms simply to change the due date to a date on or before January 31, 2021. We recommend that you consult with your auditor and your unit attorney to determine if you need to make changes to the contract you entered into with your auditor.

Note that these...

Registration Now Open – 19th Annual State Treasurer’s Conference

Thursday, May 7, 2020

As with most events recently, our annual State Treasurer’s Conference will be offered in a different format this year. Beginning on Tuesday, June 16, we will be offering four virtual sessions of two hours each on topics of interest to both local government finance officials and staff as well as local government auditors. We will not be holding a separate class for auditors this year. 

The schedule of sessions is as follows:

Date/Time Topic
Tuesday, June 16,  10:00 AM – 12:00 noon  Cybersecurity Issues with Shannon Tufts; Pre-Audit with Kara Millonzi
Thursday, June 18,  10:00 AM – 12:00 noon LGC and Single Audit update; Financial Issues Related to COVID-19
Tuesday, June 23,  10:00 AM – 12:00 noon State Auditor update with State Auditor Beth Wood; 2018 Revisions to Yellow Book Requirements
Thursday, June 25,  10:00 AM – 12:00 noon GAAP Update with David Bean, Director of Technical Resources at GASB

You must register for each session separately, and each will provide 120 minutes of CPE credit for CPAs. The fee for each two hour session is $75 after the discount currently being offered by the SOG for all courses.  

To register or get more information please...

Budgeting in Uncertain Times

Thursday, May 7, 2020

Short of having a crystal ball, finance and budget officers don’t have a lot to go on to determine the financial impact of COVID-19 on North Carolina local governments. That doesn’t mean, however, that there aren’t steps local finance and budget officials can take to begin to prepare for the inevitable decline in revenue.

Steps for 2019-2020 Budgets

Even though the 2019-2020 fiscal year is almost over, there are steps units can take to preserve cash and reserves.

  • Current year budgets should be carefully reviewed to see if there are cuts or deferrals that can be made.
  • Typical appropriations considered for cuts are travel, training, and maintenance, and units may implement hiring freezes or furloughs. Each unit will need to make these decisions based on their individual circumstances. The more you can add to reserves this year, the better off you will likely be in the 2020-2021 fiscal year.
  • Units need to account for any increases in expenditures that have occurred and may continue to occur in direct response to the pandemic, and make sure those costs are included in the budget. Also, recognize any additional grant or contribution revenues you may have realized during this time.
  • Be proactive in managing year end receivables, particularly with grant reimbursements and...