WQ0019665 State Treasurer Office Letter of Concern_20230706

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NORTH CAROLINA
DEPARTMENT OF STATE TREASURER
STATE AND LOCAL GOVERNMENT FINANCE DIVISION
AND THE LOCAL GOVERNMENT COMMISSION
July 6, 2023
The Honorable Earl Pugh, Jr., Chairperson
Hyde County Board of Commissioners
32 Nebraska Road
Engelhard, North Carolina 27824
SLATE TREAEOREAOF NORTH C LINA
DALE R. FOLWELL CPA
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SHARONEDMUNDSON
ENNrtVTRFAS &
RECEIVED/NCDENR/DWR
JUL 18 2023
Water Quality
Regional Operations Section
Washington Regional Office
Chairperson Pugh,
I am writing to you and the Board of Commissioners of Hyde County regarding two sanitary districts that are
wholly located within Hyde County — Engeehard Sanitary District and Swan Quarter Sanitary District. Both of
these districts were formed under N.C. Gen. Stat. §§ 130A-47 through 130A-85. Governance of their finances
falls under N.C. Gen. Stat. Chap. 159, Article 3 — The Local Government Budget and Fiscal Control Act
(LGBFCA). The LGBFCA also charges the Local Government Commission (LGC) with oversight of the fiscal
health of all units of government subject to the Act; the State and Local Government Finance Division serves
as staff to the LGC.
For at least the last three fiscal years, both Districts have been significantly out of compliance with the
LGBFCA. Swan Quarter has not turned in an annual audited financial statement since 2019. We have tried
several times to connect with District staff or representatives to offer our assistance, but to no avail. Because
of the missing audits, we have asked the District to submit to us a copy of their annual budget, again with no
response. Because of this lack of response, we are unable to know the financial condition of the District.
Engelhard Sanitary District submitted three years of audited statements (2000, 2021, and 2022) earlier this
calendar year, and is now current, with the June 30, 2023 report due by October 31, 2023. Each of these three
audits revealed serious deficiencies in the District's compliance with the General Statutes and the LGBFCA in
particular. The District had not adopted a budget, did not pre -audit its obligations, did not always have
documentation to support its payments, and had not cleaned up its billing receivables. None of the invoices on
3200 Atlantic Avenue • Raleigh, North Carolina 27604
Courier #56-20-45
Telephone: [phone] • Fax: [phone]
vmv.NCTreasureccom

(he Honorable Earl Pugh, Jr., Chairperson
Hyde County Board of Commissioners
July 6, 2023
Page 2
file indicated approval in any way. The District also had not reconciled its bank accounts for any of the three
years for which audits were completed.
I realize these are small organizations and that both struggle to find staff. However, it is critical that both of the
entities bring themselves back into compliance as soon as possible The boards of these districts have a
fiduciary responsibility to their customers to keep their books accurate and current. The districts' customers
deserve competent governance and stewardship of the districts' finances. We encourage you, as County
Commissioners, to take prompt appropriate action and assist both Districts in fulfilling their statutory and
fiduciary responsibilities.
I am happy to discuss this situation at any time. Please do not hesitate to contact me at [phone] or
[phone], or via email at Sharon. edm undson(o)nctreasurer. com.
Sincerely,
Sharon G. Edmundson, MPA, CPA
Deputy Treasurer and Director
State and Local Government Finance Division
cc: Dr. Ronald May, Chairperson, NC Commission for Public Health
Virginia R. Niehaus, JD, MPH, Director of Regulatory and Legal Affairs, NC Commission for Public Health
M. Shannon Swindell, Vice -Chairperson, Hyde County Board of Commissioners
Randal G. Mathews, Commissioner, Hyde County
Benjamin Simmons III, Commissioner, Hyde County
Jan Moore, Commissioner, Hyde County
Richard Mann, Clerk, Hyde County Board of Commissioners
David May, Regional Office Supervisor, Washington Regional Office, NCDEQ
Jo Ann Spencer, Chairperson, Engelhard Sanitary District
JC Williams, Chairperson, Swan Quarter Sanitary District