AGENDA Announcements Changes to GS 159 COVID Related ... · •Announcements •2020 Audit Reviews...

2020 State Treasurer's Auditing Reporting and Review

6/18/2020

1

LGC UpdateNCACPA Local Government Conference

June 9, 2020

1

State and Local Government Finance Division

2


AGENDA

•Announcements•2020 Audit Reviews•Changes to GS 159•COVID Related Resources and Guidance

3


6/18/2020

2


ANNOUNCEMENTS

4


ANNOUNCEMENTS•Staff changes:•In Fiscal Management•Kendra Boyle has rejoined staff•Tiffany Anderson has joined•In Debt Management•Biff McGilvray postponed his retirement

5


ANNOUNCEMENTS

•LOGOS system – first module was LGC 203•Will be launching June 30 reporting round of 203s on July 1•Next module will be user and unit management

6


6/18/2020

3


ANNOUNCEMENTS•2020 Contracts•Additional questions added for Yellow Book

compliance•https://www.nctreasurer.com/slg/lfm/forms-

instructions/Pages/Annual-Audit-Forms-and-Resources.aspx•Please be sure to submit contracts through the

contract portal and not the audit report portal

7


ANNOUNCEMENTS• Due to COVID-19 pandemic, due date for June 30, 2020 audits has

been extended to 11:59 PM January 31, 2021 with no grace period attached• If interested in being on the agenda for consideration of debt

approval by the LGC beginning in November of each year, you must have your current audit submitted and any findings addressed before we will consider placing you on the agenda• Receipt of audit and application not a guarantee you will be on the

agenda

8


LOGOTIN Ready to Roll!• After many delays, project is underway• Phase I will result in system requirements and RFP for

qualified system(s) and identification of those systems• Stakeholder group has been identified and units may be

contacted for input•Will include standardized chart of accounts

9


6/18/2020

4


ANNOUNCEMENTS• DST website was relaunched in December, 2019• https://www.nctreasurer.com/divisions/state-and-local-government-

finance-division

10

11


ANNOUNCEMENTS• Most recent year’s county and municipal audits now available on our

website:• https://www.nctreasurer.com/annual-audit-reports-submitted-local-

government-commission

12


6/18/2020

5

13

14

15


6/18/2020

6

New Funding Round for Loans and Grants to Units Affected by Recent Stormshttps://www.rebuild.nc.gov/recovery-assistance-programs/assistance-local-and-tribal-governments

16


2020 Audit Reviews

17


Brief Reporting Notes• Continue to see reports where transfers and due tos/from are not

adequately explained in notes• Continue to see reports where transfers are used to account for cost

allocations – this is not GAAP and we will send the report back if we see it• Should be expenditures/expenses in fund to which cost is being allocated and

contra expenditures/expenses in fund that originally paid for the item or service

18


6/18/2020

7


Illustratives, Tables, and Templates

•Pension tables and templates are out for periods ended September 30, 2019 through June 30, 2020 (Measurement date of June 30, 2019)•OPEB not updated at this time• Illustrated financials out this summer

19


Changes in 2020 Review Process• Data Input Sheet Changes• Finance Officer will certify that data was prepared in accordance with

instructions and matches audited financials

20


Changes in 2020 Review Process

•We are moving away from checking every data element and are relying on local governments and their auditors to make sure data entry is correct

•Capacity issue with Fiscal Management staff

21


6/18/2020

8


Changes in 2020 Review Process• Data input for cities and counties will include 3 years analysis tab

22


Changes in 2020 Review Process

•Tourism Development Authorities and Housing Authorities will no longer be required to submit data input forms• Substantial changes coming to transmittal document•Be on lookout for more detailed guidance coming

soon!

23

24


6/18/2020

9


Potential Changes for 2021• LGC is in process of asking for rule changes that will affect the 2021

audit process and beyond:• Classify all audit contracts as variable fee contracts, base 75% interim

invoice cap on total of previous year’s actual fees• Require auditors to present results of audit in public meeting,

including a discussion of all findings and unit’s financial performance as measured against benchmarks set by LGC staff – these calculations will be made for auditors at time the Unit Data From Audit form (FKA data input sheet) is submitted

25


Potential Changes for 2021

• Require units to respond in writing to LGC regarding findings and financial indicators as presented by auditor; LGC will no longer routinely issue unit letters• Public hearing on July 21 – phone hearing from 2:00 – 3:00

PM

26


Implementation of Changes to G.S. 159

27


6/18/2020

10


2019 Changes to LGBFCA – GS 159; SL 2019-19• Clarified that local units must have a finance officer, and that they can

contract out almost all of the responsibilities of the position (responsibility for fulfilling duties still lies with the finance officer) (159-24 and 159-25(a)(9))• Authorized the LGC to adopt rules setting the minimum requirements to be

a finance officer (159-25(c))

28


2019 Changes to LGBFCA – GS 159; SL 2019-19

• Gives the LGC the authority to require training for the finance officer in certain circumstances (159-25(d))

• Gives the LGC the authority to require a local government to contract with a party external to the unit to perform some or all of the duties of the finance officer when the unit has received a letter of notification about deficiencies with the requirements of GS 159 (159-25(e))

29



•How Will We Implement?•Proceed immediately with implementing LGC’s

authority to require a unit to contract for services (159-25(e))

•Develop rules (via Administrative Code) that allow the LGC to:• Establish minimum qualifications for finance officer (159-25(c))

• Require participation in training (159-25(d))

30


6/18/2020

11



• How Will We Implement 159-25(e)? (LGC authority to require units to contract for services)

• Original plan was to implement with 17 municipalities two or more years delinquent with annual audits• January - Initial letter to unit, management, full board, attorney,

and appropriate advocacy group, requesting detailed explanation and plan to address, including timetable• February - Evaluate responses for adequacy and monitor units

with acceptable responses; 4 units sent notices of intent in early March to implement the statute

31


2019 Changes to LGBFCA – GS 159; SL 2019-19•Once pandemic arrived in NC, placed project on hold

temporarily

• June LGC meeting issued two more notices of intent

32


2019 Changes to LGBFCA – GS 159; SL 2019-19•Why is this important?•Critical that units and LGC staff have current financial

information to assess financial condition•Without functioning accounting systems, units are

susceptible to poor financial decisions, lack of compliance with other requirements of the LGBFCA, or worse, fraud•Audits that are stale lose their usefulness

33


6/18/2020

12


COVID-19 Related Changes and Guidance

34


COVID Specific Guidance and Resources

• The Balance Sheet – LGC staff blog:• Best way to keep up with current guidance

https://www.nctreasurer.com/state-and-local-government-finance-division/local-government-commission/balance-sheet

• COVID-19 Resource Page• Best page for links to all think related to financial impacts of COVID-19

https://www.nctreasurer.com/local-government-covid-19-resources

35


COVID Specific Guidance and Resources

• Session Law 2020-3 included provisions related to COVID-19•Modified daily deposit requirement during emergency

declaration issued under G.S.166A-19.20 ONLY• 159-32(a) modified to allow units some relief from daily

deposit requirement if it is not possible for them to meet the requirement. •Must deposit at least weekly and in the interim hold funds

in a secure location

36


6/18/2020

13


COVID Specific Guidance and Resources• New reporting requirement, modifying G.S. 159-33.1, AFIR statute• Required report will not be part of AFIR; will design separate report

template• Statement of financial information concerning the impact of COVID-19• Due 2/15/2021 and shall include monthly data for the time period of July 1,

2019,through December 31, 2020,on the following:• utility payments, including water, sewer, and electric, • reductions in tax revenue,• reductions in services due to reductions in tax revenue,• total revenues received from building inspections, by type,• the ability to meet debt service obligations,• the balances of any capital reserve funds, • the purpose of any withdrawals from capital reserve funds and• any other information prescribed by the secretary.

37


Accounting Guidance for COVID-19 Funds• CARES Act (CRF) Funding:• Best to keep in Special Revenue Fund to keep segregated• Separate functions should be accounted for separately using account

structure• Must be budgeted• Investment earnings follow grant funds• Anything not spent by December 30, 2020 will be returned to Department of

Treasury• Use is restricted to specific public health emergencies as detailed in the

federal Social Security Act• CANNOT be used to backfill lost revenue at this time

38


Accounting Guidance for COVID-19 Funds• CARES Act funds are considered federal financial assistance • Assigned a CFDA No. 21.019• Program name “Coronavirus Relief Fund” • Granting agency is the US Department of Treasury. • CARES Act funds are subject to federal single audit requirements found in

subpart F of the Uniform Guidance (2 CFR 200)• Payments are subject to Uniform Guidance sections regarding internal

controls (§200.303) and subrecipients monitoring and management (§§200.330 to 332). • Other subparts of the Uniform Guidance are excluded, including 2 CRF Part

200 Subpart D procurement requirements found in 2 CFR §§ 200.317-326

39


6/18/2020

14


Accounting Guidance for COVID-19 Funds•Modified Accrual Revenues:• Accrual of shared revenues – no change – still accrue for

60-90 days depending on your determined availability period•Motor vehicle registration renewals and related property

taxes are deferred but units should not accrue as receivable since not receivable until the owner renews registration• Still accrue anything collected by June 30 but not paid to

unit until July or August

40


Accounting Guidance for COVID-19 Funds

•Modified Accrual Expenditures:• Some deferrals and effective deferral of due dates on

payroll taxes• Effective deferral by NCDOR of remittance of employer

share of withholding taxes by eliminating penalties but actual due date for the tax did not change so should be accrued at June 30 if owed• Actual deferral in CARES Act of employer share of social

security tax but any amount owed at June 30 also should be accrued

41


Accounting Guidance for COVID-19 Funds• Utility Revenues:• EO 124 and EO 142 are expected to negatively impact revenues for

utility operations including charges for services and late/disconnect/reconnect fees• Units will need to evaluate allowances for doubtful accounts to

ensure that estimates are reasonable• If material, accounts receivable should be recognized for amounts

that have been deferred under these orders

42


6/18/2020

15


Accounting Guidance for COVID-19 Funds• Other resources:• GASB Emergency Toolbox • https://www.gasb.org/cs/Satellite?c=Page&cid=1176174469582&pagename=

GASB%2FPage%2FGASB%2FSectionPage

• GFOA Coronavirus Resource Center• https://www.gfoa.org/covid-19-response-resources• Fiscal Resources Center• https://www.gfoa.org/fiscal-first-aid

43


Sharon Edmundson919-814-4289

[email protected]

Sign up for our blog –The Balance Sheethttps://www.nctreasurer.com/slg/lgcblog/Pages/default.aspxClick on “Sign Up” at top of page

Division Phone (919) 814-4300Division email [email protected]

This Photo by Unknown Author is licensed under CC BY-NC

44

Date post:	22-Jun-2020
Category:	Documents
Upload:	others
View:	2 times
Download:	0 times

AGENDA Announcements Changes to GS 159 COVID Related ... · •Announcements •2020 Audit Reviews...

Documents