The Balance Sheet

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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.

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

ARPA Resources

Disclosure Information Associated with COVID-19

Thursday, July 9, 2020

LGC staff has recently issued disclosure  guidance for local governments that are issuers of municipal debt. Please visit our Continuing Disclosure webpage for details.

Proposed Changes to Administrative Code

Wednesday, July 1, 2020

The Local Government Commission has proposed changes to North Carolina Administrative Code related to the annual audit, and audit contracts and invoices. Information on the text of the proposed changes and on the public comment period may be found on the Department of State Treasurer’s Administrative Code web page.

LGC-203 Report Due July 25

Tuesday, June 30, 2020

The LGC-203 Cash and Investments report for the June 30, 2020 reporting period is due on or before July 25, 2020. You may initiate and submit your LGC-203 report for the June 30 reporting date beginning July 1, 2020. Note that this reporting requirement applies to all local governments and public authorities under G.S. 159-33 and G.S. 115C-446 but does not apply to charter schools.

If your unit has already established LOGOS accounts – you can access and use the system for the June 30, 2020 reporting period beginning July 1. All accounts already established are still active. If you need to request additional accounts, please email LOGOS@nctreasurer.com. Note that LGC-203 reports that were submitted via LOGOS may be accessed at any time by logging into the system.

If your unit has not yet set up LOGOS accounts – you must establish LOGOS accounts in order to prepare and submit LGC-203 reports (legally required by G.S. 159-33 and G.S. 115C-446). Please email ...

Audit Guidance for CARES Act Funding

Thursday, June 11, 2020

Local governments in North Carolina are currently receiving and expending funds from the Coronavirus Aid Relief, and Economic Security Act (CARES). CARES Act federal funding is from the US Department of State Treasury (Treasury). The predominant amount of funding from the CARES Act appropriated to the State and local governments in North Carolina is from the Coronavirus Relief Fund (CRF), that was created by the CARES Act. In addition, the General Assembly in Session Law 2020-4 appropriated CRF funds to State agencies; some will be passed to local governments to be used for expenditures related to COVID-19. Among the State agencies that will receive CFR funding are NC Dept. of Public Instruction, and NC Dept. of Health and Human Services.

CRF funding is considered federal financial assistance and subject to federal single audit requirements found in the 2 CFR 200 (Uniform Guidance), Subpart F. CRF is the federal program name and has a CFDA No. of 21.019. The Treasury is the granting agency. Uniform Guidance Subparts B, C, D, with exceptions, and Subpart E are not applicable. Subpart D sections on internal controls (§200.303) and subrecipient monitoring and management (§§200.330 to 332) are applicable. Procurement standards found in Subpart D (§§200.317 to 326) do not apply to CRF funds. CRF funds that are transferred from a government to another government, such as a state to a county or...

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...

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.

COVID-19: GAGAS CPE Alert

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-...

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...

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...