NC treasurer wants to tighten local government oversight. Read the proposed reforms
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Bettering troubled towns
Money poured into one North Carolina town. After audits and a failed land deal, much of that money went missing. But where? Just how often does the state step in and take over a municipality? And as the state’s treasurer tries to change the system and tighten government oversight so this doesn’t keep happening, can it even be fixed? Take a deep dive with The News & Observer into Spring Lake and other failed projects.
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NC treasurer wants to tighten local government oversight. Read the proposed reforms
See financial issues, corruption or worse in NC local governments? Tell us about it.
Here is a list of reforms being proposed to tighten up local government oversight. The first three are in Senate Bill 265 as passed by the Senate last year.
▪ If a local government is a year or more behind in turning in an annual audit, the Department of Revenue shall withhold sales tax revenues up to 150 percent of the cost of an audit until the Local Government Commission has received a copy, reviewed it and determined it meets state reporting requirements.
▪ Local governments on the commission’s distressed list would need LGC approval of loans that take three years or more to repay.
▪ Local governments on the commission’s distressed list would need LGC approval of loans $50,000 or more.
▪ Fiscal training for boards of local government on the LGC’s distressed list in areas such as debt issuance and hiring qualified staff.
▪ Local government finance officers would be required to carry a fidelity bond - insurance that protects against an employee who commits fraud - that’s indexed to the entity’s general fund budget . Currently, they are required to obtain a minimum $50,000 bond. That isn’t enough to cover, for example, the $430,000 Spring Lake’s finance director misspent, according to a state audit.
▪ The LGC would have the authority, after consulting with the state auditor, to refer evidence of fraud to the state attorney general for prosecution.
▪ The LGC must approve proposed annual budgets before local governments on the distressed list can adopt them.
This story was originally published June 8, 2022 at 6:00 AM with the headline "NC treasurer wants to tighten local government oversight. Read the proposed reforms."