North Carolina Administrative Code

20 NCAC 03 .0207 APPROVAL OF GRANT ANTICIPATION NOTES (a) If a governmental unit wishes to apply for approval of grant anticipation notes, the officials of the unit shall arrange a conference with the staff of the Commission. The Secretary may waive the requirement for a prelimin…

20 NCAC 03 .0208 SPECIAL PURPOSE BONDS (a) This Rule is applicable to all special bonds required to be approved by the Local Government Commission under authority of statutes other than Chapter 159 of the North Carolina General Statutes. (b) Insofar as is practicable, the procedu…

SECTION .0300 - SALE AND DELIVERY OF BONDS AND NOTES 20 NCAC 03 .0301 PRESALE REQUIREMENTS (a) The Secretary may fix the date for the sale of any bonds or notes at any date after the Commission has approved the bonds or notes. Before fixing the date, the following may be consider…

20 NCAC 03 .0302 SALE OF BONDS OR NOTES (a) The following instructions apply to sealed bids of bonds or notes: (1) Bids shall be opened on the hour and date specified in the notice of sale or as soon thereafter as is practical. No bids may be accepted after such date and hour. (2…

20 NCAC 03 .0303 DELIVERY OF BONDS OR NOTES (a) The Secretary shall deliver, or cause to be delivered, the bonds or notes for the account of the State Treasurer to the place of delivery, designated in the accepted bid and shall provide the purchaser and bond counsel such document…

20 NCAC 03 .0304 FEES FOR SALE AND DELIVERY OF BONDS The Secretary shall submit to the governmental unit for payment an invoice or bill for the direct and indirect costs of sale and delivery of the bonds and notes. History Note: Authority G.S. 159-3(f); Eff. February 1, 1976; Rea…

20 NCAC 03 .0305 MATURITIES OF BONDS (a) The maximum period of usefulness of capital projects for which units of local government may issue bonds are as follows: (1) 10 years from the date of the bonds used to finance the following classes of improvements and properties: (A) vehi…

SECTION .0400 - ACCOUNTING AND INTERNAL CONTROLS 20 NCAC 03 .0401 ACCOUNTING AND INTERNAL CONTROL SYSTEMS (a) The standard for accounting systems and internal control systems for governmental units shall be the Uniform Accounting System for Local Government in North Carolina publ…

20 NCAC 03 .0402 REVENUES SUSCEPTIBLE TO ACCRUAL (a) The basis of accounting specified in this Rule shall apply only to the required treatment for the purposes of budgeting and accounting. For financial statement purposes, all revenues may be treated in the alternative as provide…

20 NCAC 03 .0403 APPROVAL TO USE ACCRUAL BASIS ACCOUNTING History Note: Authority G.S. 159-26(e); Eff. February 1, 1976; Readopted Eff. September 23, 1977; Expired Eff. February 1, 2018 pursuant to G.S. 150B-21.3A.

20 NCAC 03 .0404 COLLATERAL TO SECURE CASH DEPOSITS History Note: Authority G.S. 115-100.27(b); 159-31(b); Eff. February 1, 1976; Readopted Eff. September 23, 1977; Repealed Eff. August 1, 1980.

20 NCAC 03 .0405 COMMENTS TO FEDERAL AND STATE GRANTOR AGENCIES (a) A request from a federal or state agency requesting comment by the Commission on the accounting system and internal controls of a governmental unit which has applied to it for a grant or loan shall be presumed to…

20 NCAC 03 .0406 APPROVAL OF FINANCE OFFICER ACTING AS TAX COLLECTOR (a) Application for approval for the finance officer to serve concurrently as tax collector shall be made to the Commission at its mailing address. (b) The application shall include a letter from the chief execu…

20 NCAC 03 .0407 REPORT OF CASH BALANCE A form designated by the Secretary for this purpose shall be submitted by all governmental units on or before January 15, containing information as of December 31 next preceding. History Note: Authority G.S. 159-3(f); 159-33; Eff. February …

20 NCAC 03 .0408 REPORT OF FINANCIAL INFORMATION A form designated by the Secretary for this purpose shall be submitted by all governmental units which levy taxes or for whom another governmental unit levies a tax. The form shall be submitted on or before October 31 containing in…

20 NCAC 03 .0409 EXEMPTION FROM PREAUDIT CERTIFICATE REQUIREMENT FOR ELECTRONIC payments (a) To qualify for an exemption from the preaudit certificate requirement in G.S. 159-28(a1) or G.S. 115C-441(a1) for electronic payments, a local government, public authority, or local schoo…

20 NCAC 03 .0410 EXEMPTION FROM DISBURSEMENT CERTIFICATE REQUIREMENT FOR ELECTRONIC PaYMENTS (a) To qualify for an exemption from the disbursement certificate requirement in G.S. 159-28(d1) and G.S. 115C-441(d1) for electronic payments, a local government, public authority, or lo…

SECTION .0500 - AUDIT CONTRACTS 20 NCAC 03 .0501 APPLICATION FOR APPROVAL OF AUDIT CONTRACT Any governmental unit desiring to obtain approval of an audit contract shall submit the original and two copies of the audit contract and all attachments thereto to the Commission at its m…

20 NCAC 03 .0502 AUDIT CONTRACT (a) The Secretary may promulgate a standard audit contract designed to include the specific requirements in Paragraph (c) of this Rule. The Secretary may revise the standard audit contract provided that the contract continues to include the require…

20 NCAC 03 .0503 AUDIT ENGAGEMENTS DEFINED Audits for which a contract must be approved include both financial audits and compliance audits and include interim audits, special purpose or limited audits and the regular annual audit and include all work done as a part of or in conj…

20 NCAC 03 .0504 WHO MAY PERFORM AUDITS The following persons may perform audits under this Section: (1) Any person who holds a valid and unrevoked certificate to practice as a certified public accountant in North Carolina, provided that a non-resident holder of such a certificat…

20 NCAC 03 .0505 AUDIT BILLINGS (a) All invoices for services rendered in an audit engagement as defined in Rule .0503 of this Section shall be submitted to the Secretary for approval before any payment is made. Payment before approval is a violation of law pursuant to G.S. 159-3…

20 NCAC 03 .0506 WITHHOLDING OF APPROVAL (a) Whenever any of the following conditions exists, the Secretary may withhold approval under either 20 NCAC 3 .0502 or 20 NCAC 3 .0505: (1) The auditor has failed to furnish to the commission reports on any audit subject to the approval …

20 NCAC 03 .0507 NON-PROFIT CORPORATIONS History Note: Authority G.S. 159-3(f); 159-34; 159-40; Eff. September 23, 1977; Repealed Eff. August 1, 1987.

20 NCAC 03 .0508 RESPONSE TO THE INDEPENDENT AUDITOR'S FINDINGS, RECOMMENDATIONS, AND FISCAL MATTERS (a) If the governing body of a government unit is notified by its independent auditor that the audited financial statements presented to the governing body included one or more si…

SECTION .0600 - SCHOOL BUDGETING AND ACCOUNTING 20 NCAC 03 .0601 ENCUMBRANCE ACCOUNTING All school administrative units shall use the encumbrance method of accounting in any fiscal year in which its total membership is 6,000 or more, as defined in G.S. 115C-430. History Note: Aut…

20 NCAC 03 .0602 SCHOOL REVENUES SUSCEPTIBLE TO ACCRUAL History Note: Authority G.S. 115-440(d); Eff. February 1, 1976; Readopted Eff. September 23, 1977; Repealed Eff. April 1, 1985.

20 NCAC 03 .0710 GENERAL INFORMATION Correspondence required by the rules of this Section shall be addressed to: Secretary, Local Government Commission, Department of State Treasurer, 3200 Atlantic Avenue, Raleigh, North Carolina 27604 or emailed to SLGFD@nctreasurer.com. History…

20 NCAC 03 .0711 DEFINITION OF TERMS The following words and phrases used in this Section are defined as follows: (1) "Active Participants" means Eligible Participants that are currently invested in a Fund. (2) "Affiliate" means, with respect to a party, any person, entity, or or…

20 NCAC 03 .0712 MINIMUM FUND STANDARDS (a) A Fund may only invest in securities permitted by G.S. 159-30(c). A Fund shall not purchase any security with a maturity exceeding seven years. (b) A Fund shall be registered with the SEC as an investment company pursuant to the Investm…

20 NCAC 03 .0713 CERTIFICATION OF A FUND (a) A prospective Manager may request certification of a Fund by submitting a proposal to the Secretary containing the following information: (1) the name of the Fund; (2) the address of the Fund; (3) the Fund prospectus; (4) the most rece…

20 NCAC 03 .0714 REVIEW OF FUND and Attestation (a) Beginning one year after the effective date of the certification of a Fund, and by December 31 each year thereafter, the Manager shall submit an attestation to the Secretary: (1) attesting that the Fund continues to meet the min…

20 NCAC 03 .0715 TERMINATION OF CERTIFICATION (a) The Commission may adopt a resolution terminating the certification of a Fund due to one or more of the following: (1) A Manager or a Fund violates any of the rules in this Section and the Commission finds that there has been a ma…

SECTION .0800 - SYSTEM OF REGISTRATION 20 NCAC 03 .0801 APPROVAL OF A SYSTEM OF REGISTRATION (a) No requests for approval of a system of registration shall be brought before the Commission except as provided in this Rule. (b) If the issuer elects to use the system of registration…

20 NCAC 03 .0802 APPROVAL OF APPOINTMENT OF AGENTS (a) The Commission hereby delegates to the secretary the authority to approve any request for approval of the appointment of an agent which is a bank or trust company licensed to do corporate trust business in this state or, if n…

20 NCAC 03 .0803 MAXIMUM RATES FOR AGENCY SERVICES The maximum rates for agency services shall be the rates in effect from time to time for provisions of like services to the state. History Note: Authority G.S. 159-3(f); 159-134; Eff. August 1, 1983; Pursuant to G.S. 150B-21.3A, …

SECTION .0900 - OTHER REQUESTS FOR APPROVAL 20 NCAC 03 .0901 PROCESSING APPLICATIONS (a) All applications for approval shall be reviewed by the staff for completeness and responsiveness to the statutory requirements. The Secretary may require such additional information from the …

20 NCAC 03 .0902 HEARING ON CONFORMANCE TO PRIOR APPROVALS History Note: Authority G.S. 159-3(f); Eff. November 1, 1983; Expired Eff. February 1, 2018 pursuant to G.S. 150B-21.3A.

20 NCAC 03 .0903 APPLICATION TO AMEND: PRIOR APPROVALS (a) Whenever there is a substantial change in the economic environment or situation in which the governmental unit operates, the governing board of the governmental unit may make an application to amend a prior approval by th…

20 NCAC 03 .0904 COUNTY USE OF SALES TAXES PURSUANT TO G.S. 105-487(C) (a) Any county desiring to make application to the Commission under G.S. 105-487(c) shall submit Form LGC-101, Application to Use Allocated Additional Sales Tax Revenue for Other Than School Capital Outlay Pur…

20 NCAC 03 .0905 MUNICIPALITY USE OF SALES TAXES PURSUANT TO G.S.105-487(C) (a) Any municipality desiring to make application to the Commission under G.S. 105-487(c) shall submit Form LGC-102, Application to Use Allocated Additional Sales Tax Revenues for Other Than Water and Was…

20 NCAC 03 .0906 ANNEXATION: REQUESTS BY RURAL FIRE DEPARTMENT (a) A rural fire department may apply, pursuant to G.S. 160A-37.1 and 49.1, to the Commission for an order staying the operation of an annexation ordinance where it is alleged that no good faith offer of compensation …

20 NCAC 03 .0907 ANNEXATION: ASSUMPTION OF DEBT (a) A city and a rural fire department may request the approval of a payment schedule for a share of the debt of the rural fire department to be paid by the city. (b) The request shall be in letter form and shall be signed by the ch…

SECTION .1000 - EVIDENTIARY HEARING ON REFUNDING BONDS 20 NCAC 03 .1001 DEFINITIONS The words and phrases in this Section of the administrative rules will have the same meanings as set forth in G.S. 159-1 and G.S. 159B-3. History Note: Authority G.S. 159-3(f); 159B-25(b); Eff. No…

20 NCAC 03 .1002 WHO MAY REQUEST A HEARING Any municipality or joint agency that wishes to issue refunding bonds pursuant to G.S. 159B-25(b) and meets the time limits set forth in that subsection of the statute may request an evidentiary hearing before the Local Government Commis…

20 NCAC 03 .1003 PETITION FOR HEARING The municipality or joint agency shall file a petition with the Secretary of the Local Government Commission setting forth the facts upon which its desire to issue refunding bonds is based and any legal arguments supporting its view that issu…

20 NCAC 03 .1004 HEARING OFFICER The State Treasurer shall designate the hearing officer responsible for the conduct of the evidentiary hearing and for making a recommendation for decision to the Local Government Commission. History Note: Authority G.S. 159-3(f); 159B-25(b); Eff.…

20 NCAC 03 .1005 TIME FOR THE HEARING The evidentiary hearing shall be scheduled by the hearing officer within 30 days of the receipt by the Secretary of the Local Government Commission of a petition requesting the hearing. History Note: Authority G.S. 159-3(f); 159B-25(b); Eff. …

20 NCAC 03 .1006 NOTICE OF HEARING The hearing officer shall give notice by certified mail of the time, date and place of the hearing to the petitioner and its member municipalities at least 15 days prior thereto. History Note: Authority G.S. 159-3(f); 159B-25(b); Eff. November 1…

20 NCAC 03 .1007 CONDUCT OF THE HEARING (a) If a party or interested person fails to appear after notice was given, the hearing officer may proceed with the hearing and make its decision in the absence of the party or interested person. (b) The petitioner shall be given an opport…