The N.C. Local Government Commission (LGC) voted Tuesday to issue notices of warnings to the towns of Wilkesboro and Ronda for not submitting annual financial audit reports for 2018 and 2019.

State statutes require that each local government and public authority be audited annually and that a copy of the audit report be submitted to the LGC secretary as soon as possible after the end of the fiscal year. Audit reports for counties and municipalities are typically due by Oct. 31 under terms of local government contracts with auditors. The LGC offers a one-month grace period, after which a report is considered late

Wilkesboro, Ronda and Castalia, a Nash County town warned for not submitting audit reports for 2017, 2018 and 2019, will be given 30 days to show they are correcting the issues by hiring outside entities to complete and file the audits, stated a press release from the state treasurer’s office. The LGC is a division of the state treasurer’s office.

If not satisfied with progress made by the towns toward compliance after the initial 30 days, the LGC could next order that they submit audit reports. The LGC has fiscal responsibility oversight of local governments.

Bob Urness, Wilkesboro’s director of finance and assistant town manager, said Tuesday that Wilkesboro’s 2018 audit is in final stages of review by the firm doing the audit. Wilkesboro hired Lexington-based Rives & Associates LLP to conduct its 2017 and 2018 audits.

“I have been given every assurance (by Rives & Associates) that it will be delivered to the LGC by the 30th of November. I have maintained open communication with the LGC and they are aware of where we stand, currently and moving forward.”

The N.C. Board of Certified Accountant Examiners issued a press release in March saying it had suspended the certified public accountant certificate of Leon L. Rives II, owner of Rives & Associates.

The press release said the action was related to a lawsuit that accused Rives of acting fraudulently and breaching his fiduciary duty as an officer in Steel Tube Inc. The suit also accused Rives & Associates of acting negligently in preparing Steel Tube’s tax returns. A jury ruled against Rives and Rives & Associates and ordered that he and the company pay $2.2 million.

On Sept. 14, the Town of Wilkesboro hired Atlanta, Ga.-based Mauldin & Jenkins to conduct audits for the 2019 and 2020 fiscal years for $25,000 annually. This will be the firm’s first work for Wilkesboro.

“All aspects of the 2019 report are prepared for that report to be completed by (Mauldin & Jenkins) in short order once 2018 is approved,” said Urness. “We expect to be back on track with this function in early spring.”

Urness concluded, “The town’s finances are in fine shape and the (LGC) issue is in regards to our financial audit reporting, not financial status or cash flow.”

Ronda Mayor Victor Varela said Ronda’s failure to submit audit reports for 2018 and 2019 to the LGC resulted from the town’s accounting firm, also Rives & Associates, not completing the audits. He said Rives & Associates has a new name.

“They say they almost have the 2018 audit completed and that it will be done in the next two months,” said Varela. “They haven’t given us any reason for not getting it done. We have a new firm coming on because of this.”

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