ORIENTATION FOR NEW CITY AND COUNTY MANAGERS
Fiscal Control
Local government revenues, borrowing, budgeting, expenditures, and reporting are all governed by state laws and policies in North Carolina. For data on local government finances see North Carolina County and Municipal Financial Information. For explanation of fiscal control procedures see the following articles from the School of Government’s publication, County and Municipal Government in North Carolina:
Article 13: Revenues
The major types of revenues available to North Carolina counties and cities are local taxes, state-shared taxes, user charges, other local fees and charges, and federal and state grants and aid. The most important taxes for North Carolina local governments are the property tax, the local-option sales tax, and a variety of taxes levied by the state and shared with local governments.
Article 14: The Property Tax
Article V of the North Carolina Constitution establishes the ground rules for the levying of any state or local tax. The Constitution permits the power of taxation to be used “for public purposes only.” Thus, a city or county wishing to pay for a program, function, or activity with property tax revenues must ensure that the program, function, or activity serves a public purpose. This article provides information on the different state requirements involved with property tax.
Article 15: Budget Preparation and Enactment
North Carolina counties and cities are required to budget and spend money in accordance with the Local Government Budget and Fiscal Control Act (LGBFCA) (G.S. Ch. 159, Art. 3). Revenues and expenditures for the provision of general services are authorized in the annual budget ordinance (G.S. 159-13). Revenues and expenditures for capital projects or for projects financed with grant proceeds are authorized in the annual budget ordinance or in a project ordinance (G. S. 159-13.1).
Article 17: Capital Planning, Budgeting, and Debt Financing
The North Carolina General Statutes give counties and cities specific powers that are important in capital budgeting and debt financing.
Article 18: Accounting, Fiscal Control, and Cash Management
The North Carolina Local Government Budget and Fiscal Control Act sets forth requirements for fiscal control that provide a framework for ensuring accountability in a local government’s budgetary and financial operations. This chapter focuses on these requirements, which are generally equally applicable both to county governments and city governments. They pertain to the appointment and the role of the finance officer, the accounting system, control of expenditures, cash management and investments, the annual audit, and audits of federal and state financial assistance.
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