Some towns in this region recently learned they had been acting outside the law since 2015.
Fortunately for them, a petty-cash statute state lawmakers amended that year does not levy penalties for failure to comply, and the regulatory body for municipal finances is more interested in lending a hand than slapping a wrist.
“Our preferred approach is to work collaboratively with local governments to improve their business practices and overall fiscal health,” said Brad Young, spokesman for the Office of the State Treasurer. “Part of the role of the State and Local Government Finance Division, as staff to the Local Government Commission, is to provide guidance to local governments on changes in general statutes that affect them.”
The General Assembly in November 2015 amended the payment section of the statute on budgetary accounting for appropriations to allow use of petty cash “if the local government has adopted an ordinance authorizing the use of cash and specifying the limits of the use of cash.”
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For some towns, like Knightdale and Wendell, the rules didn’t apply simply because they choose not to use petty cash.
But other towns that do keep petty cash accounts have only recently discovered the statute amendment. Both Garner and Zebulon adopted changes to their own ordinances on March 6 to conform to the not-so-new rule.
Garner Finance Director Pam Wortham’s memo on the matter indicated the LGC notified the town of its missing requirements.
“Our staff does have finance officers on a mail list,” Young said. “We consider ourselves a resource for finance officers in that aspect and have a pretty consistent email.”
Zebulon Town Clerk Lisa Markland came across the changes in a UNC School of Government Listserv for town staff.
“Someone had asked about the ordinance,” Markland said. “I knew we had a policy in place; we adopted one years ago. But as we started talking, they referenced this and I said, ‘I need to look at it.’ It appeared there were others in the same situation that hadn’t done it.”
Young said it is up to municipalities to determine how to best comply with changes that affect them.
But Markland said that’s hard to do when the changes aren’t clearly communicated.
“Sometimes, (a Listserv) is where you find about about things,” she said. “There’s so much in a session of the General Assembly. There may be so many obscure things that get passed that you’ve never even heard. As soon as we realized, we did what we needed to be done to put us in compliance.”
Zebulon amended its policy to allow petty cash to be used for approved purchases of $50 or less that are clearly for a public purpose and for $50 or more with prior approval of the finance director.
Garner adopted an ordinance for a petty-cash fund not to exceed $2,000 and a cash-change fund not to exceed $1,500.
The petty-cash fund is to be used for purchases under $100. The cash-change fund will make change for residents and customers who pay in cash for town services.