At their December meeting, the Concord City Council heard a very positive report on the adequacy of the City’s financial records by the independent auditor. The auditor issued an unqualified audit opinion meaning that the financial statements were prepared in conformity with generally accepted accounting principles (GAAP).
This required independent analysis, which is a part of the City’s Comprehensive Annual Financial Report, shows the City has been accountable in the way it has handled the revenues received to support the City’s many services.
These results reflect the City Council’s commitment to making sure funds are handled in appropriate ways and expenditures are made in accordance with both North Carolina laws and the annual budget. It is important to note that North Carolina has a very strong local government finance and oversight system dating back to the 1920’s and 1930’s that has limited the number of fiscal crises among local governments, while delivering municipal bond issues respected by credit rating agencies, investors and constituents.
The first oversight legislation adopted just before the start of the Great Depression was the Local Government Budget and Fiscal Control Act (LGBFCA). The LGBFCA governs all agencies of local government in the state of North Carolina. The LGBFCA dictates how all monies received or expended by local governments must be budgeted, disbursed, and accounted for. It requires that certain types of funds be maintained depending on the functions and activities performed by local governments and how those functions and activities are financed. The City budgets and accounts for its revenues and expenditures in accordance with the LGBFCA and maintains its various funds in compliance with this law. It also complies with all the independent audit provisions mandated by the Act.
A second major achievement in financial oversight was the creation of the North Carolina Local Government Commission (LGC) during the Great Depression. The General Assembly at that time became alarmed at the state of local government finances during this period of financial crisis and created a body to monitor the fiscal and accounting standards prescribed for units of local government by the LGBFCA. The LGC was also given the responsibility for the approval, sale, and delivery of substantially all North Carolina local government bonds and notes. As the LGC evolved through the years, it also began to provide assistance to local governments and developed educational programs and materials concerning finance and cash management.
These oversight efforts have helped North Carolina local governments gain nationwide recognition for strong and accountable financial practices. No doubt these regulations helped give rapid rise to the use of the Council/Manager form of government in North Carolina as governing bodies sought management support to comply with requirements. It has also enabled the LGC to target local governments not following such practices to avoid some of the disasters we have seen just recently in other states. While no North Carolina local government has been immune to the recent economic downturn, most are in better shape because they are required to adhere to the LGBFCA and follow the practices dictated by the LGC, particularly on borrowing money. North Carolina municipalities must also adopt balanced budgets on an annual basis.
Many local governments, like Concord, choose to go even further. The Government Finance Officers Association developed two awards to recognize local governments that go beyond minimum requirements and develop comprehensive annual financial reports and budget documents that provide additional information to the public they serve.
The Certificate of Achievement for Excellence in Financial Reporting is awarded to local governments that prepare and issue a comprehensive annual financial report of the “highest quality”. The local government “must publish an easily readable and efficiently organized comprehensive annual financial report, whose contents conform to program standards.” These reports are reviewed by members of the GFOA staff and individual reviewers. We are proud to report that the City of Concord Finance Department has received this award for 20 consecutive years.
The Distinguished Budget Presentation Awards Program was created later to similarly recognize annual “budget documents of the very highest quality that reflect both the guidelines established by the National Advisory Council on State and Local Budgeting and the GFOA’s recommended practices on budgeting …” Again the emphasis is on providing comprehensive information in a readable form with an emphasis on transparency. Concord has received this award for eight consecutive years.
One great benefit of technology is it makes these comprehensive documents more accessible to the public. For example, before the widespread availability of the internet, a citizen wishing to look at these extensive documents had to go to City Hall or visit the public library. Today, these are readily available, along with other financial information, on the City’s website at
www.ci.concord.nc.us on the Finance Department page.
