NC H122

Secretary of Local Government Commission shall issue noncompliance notice to counties or municipalities failing to submit annual audit reports within nine months of fiscal year end, sent by first-class mail within 30 days of the deadline.

Counties or municipalities failing to complete audits within 12 months of fiscal year end are deemed to consent to withholding of sales tax distributions equal to 150% of the audit cost.

Noncompliant entities may appeal in writing and appear before the Commission at its next regularly scheduled meeting; the Commission shall establish appeal guidelines prior to January 1, 2024.

Secretary of Revenue shall withhold 5% of one-twelfth of the annual general fund budget quarterly until the total cumulative withholding amount is reached, beginning at least 45 days after notification.

Withheld funds must be released within 30 days of audit acceptance or successful appeal, and in the county or municipality's first scheduled sales tax distribution at least 45 days after the earlier of: two years from withholding notification or receipt of compliant audit report.