Making Municipalities Fiscally Responsible
The current law gives municipalities thirteen months to turn in an audit after the end of the fiscal year. If they don’t turn it in by the end of the thirteen months, then the Treasurer is supposed to halt all payments to the municipality until they are in compliance.
Obviously, the system is not working and something needs to change.
In light of this problem, Reps. Goldfinch, Clemmons, Hardwick, H.A. Crawford, Loftis, Barfield, Bedingfield, Hamilton, V.S. Moss, Rivers and G.R. Smith are sponsoring H. 4031. This bill seeks to promote more fiscal accountability on the municipal level.
A common excuse that the municipalities use for not having an audit is lack of funding. The bill requires that all municipalities include funding for an annual audit in their budget; that takes care of that!
The bill keeps the thirteen month time frame until the Treasurer shall halt all state payments to the municipality until they comply. It adds a provision that once payments are halted, the municipality must conduct a forensic audit covering the delinquent fiscal year and the two preceding fiscal years. The municipality will then have thirteen months from the date of the halted payments to file both the delinquent fiscal and forensic audits with Office of the State Treasurer.
If this is not done, the Secretary of State must cancel the municipality’s incorporation certificate. This is simple if you can’t operate as a municipality within the law, then you shouldn’t be one!
These changes are absolutely necessary to promoting government that is accountable and transparent to its citizens. I commend these representatives on promoting accountability and transparency by sponsoring this bill!