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State Local Government Commission places Lewisburg on assistance list over missing audits
Summary
State Local Government Commission staff told the Lewisburg Town Council on Dec. 10 that the town is on the commission's Unit Assistance List because it has not submitted required audited financial statements, and described consequences and available support.
Kendra Boyle, director of the Fiscal Management Section for the State Local Government Finance Division at the North Carolina Department of State Treasurer, told the Lewisburg Town Council on Dec. 10 that the town is on the Local Government Commission's Unit Assistance List because it has not provided required audited financial statements.
Boyle said the Local Government Commission operates under the Local Government Budget and Fiscal Control Act (General Statute 159) and that the commission can require finance officers to take training, require a unit to hire a third-party accountant in limited circumstances and, as a last resort, assume control of a unit's financial affairs. "We don't take that authority lightly and we have no desire to take control of town's finances and operations," Boyle said.
Why it matters: being on the Unit Assistance List can limit a town's ability to issue certain types of debt without LGC approval and, if audits are more than 12 months late, can lead to withholding a portion of a unit's sales tax distribution under state law. Boyle said Lewisburg was placed on the list in November primarily because audited financial statements for recent fiscal years had not been submitted to the commission.
Boyle said the commission assigns a coach-team staff member to every unit on the list to work with local staff to identify issues and develop a plan to restore fiscal health. She said the coach team has been meeting weekly with "Mr. Medlin" and requested interim financial reports and a draft budget so staff can review compliance with General Statute 159.
Boyle outlined typical steps and consequences: review of audited statements, calculation of financial performance indicators, a required board response to any items of concern and possible restrictions on debt issuance if a unit remains on the list. She described the bonding changes for finance officers that took effect Jan. 1 (a bond at the greater of $50,000 or 10% of annual expenditures, up to $1,000,000), and said finance officers who cannot be bonded may not be appointed.
Council members asked whether enterprise funds (water, sewer and electric) would be reviewed; Boyle said those funds are part of the commission's overall review though only certain funds factor into the Unit Assistance List score. She also said submitting the town's fiscal 2023 audit and the overdue 2024 audit would begin the process of reassessing the town's status on the list.
Boyle and the commission staff emphasized assistance alongside restrictions: units on the list receive more hands-on support, including requests for budget-to-actual reports. Boyle also warned that failure to get audits in could trigger the statutorily authorized withholding actions tied to Senate Bill 299 as referenced by staff.
Ending: Council members acknowledged the LGC guidance and said staff and the coach team would continue weekly work to produce the outstanding audits and interim reports.
