Dan Way writes for Carolina Journal that Ronald Penny, State Revenue Secretary, warns that small municipalities in rural counties may not survive due to losing residents and tax base. State Auditor, Beth Wood, is urging state officials to crack down on towns and counties with negligent finances.
Penny and Wood raised concerns at a July 10 meeting after hearing another monthly round of public project financing requests. Six of the 26 approvals involved towns and counties that overspent budgets, lacked appropriate fiscal controls, or failed to reconcile books and record transactions.
“The statute is on the books that cities and counties and school boards will not spend [money] they have not budgeted for. That’s a law,” Wood told Carolina Journal after the meeting. Yet some violate the law, and their accountants writes them up.
“You [must] hold commissioners and council members accountable for allowing a finance officer, or you [must] hold the finance officer accountable, for constantly writing checks, paying bills that have not been budgeted for, and then the budget’s not adjusted before year’s end,” Wood said.
Enforcing existing law is not enough, she said, and the commission’s small staff can’t continue fixing problems among 1,300 units of local government which annually submit audit reports.
Wood says that sloppy bookkeeping is typically more of a problem in rural areas because their budgets and smaller and there are fewer qualified individuals that understand government reporting rules. She wants the N.C. Local Government Commission to push for a new law that would prohibit a municipality from going more than three months without reconciling it’s books and to let a certified public accounting firm serve as the accountant.
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