2005 North Carolina Code - General Statutes Article 1 - Executive Budget Act.
Chapter 143.
State Departments, Institutions, and Commissions
Article 1.
Executive Budget Act.
§ 143‑1. Scope and definitions.
This Article shall be known, and may be cited, as "The Executive Budget Act." Whenever the word "Director" is used herein, it shall be construed to mean "Director of the Budget." Whenever the word "Commission" is used herein, it shall be construed to mean "Advisory Budget Commission," if the context shows that it is used with reference to any power or duty belonging to the Office of State Budget and Management and to be performed by it, but it shall mean when used otherwise any State agency, and any other agency, person or commission by whatever name called, that uses or expends or receives any State funds. "State funds" are hereby defined to mean any and all moneys appropriated by the General Assembly of North Carolina, or moneys collected by or for the State, or any agency thereof, pursuant to the authority granted in any of its laws. (1925, c. 89, s. 1; 1929, c. 100, s. 1; 1957, c. 269, s. 2; 1979, 2nd Sess., c. 1137, s. 37; 2000‑140, s. 93.1(a); 2001‑424, s. 12.2(b).)
§ 143‑2. Purposes.
It is the purpose of this Article to vest in the Governor of the State a direct and effective supervision of all agencies, institutions, departments, bureaus, boards, commissions, and every State agency by whatsoever name now or hereafter called, including the same power and supervision over such private corporations and persons and organizations of all kinds that may receive, pursuant to statute, any funds either appropriated by, or collected for, the State of North Carolina, or any of its departments, boards, divisions, agencies, institutions and commissions; for the efficient and economical administration of all agencies, institutions, departments, bureaus, boards, commissions, persons or corporations that receive or use State funds; and for the initiation and preparation of a balanced budget of any and all revenues and expenditures for each session of the General Assembly.
The Governor shall be ex officio Director of the Budget. The purpose of this Article is to include within the powers of the Office of State Budget and Management all agencies, institutions, departments, bureaus, boards, and commissions of the State of North Carolina under whatever name now or hereafter known, and the change of the name of such agencies hereafter shall not affect or lessen the powers and duties of the Office of State Budget and Management in respect thereto.
The test as to whether an institution, department, agency, board, commission, or corporation or person is included within the purpose and powers and duties of the Director of the Budget shall be whether such agency or person receives for use, or expends, any of the funds of the State of North Carolina, including funds appropriated by the General Assembly and funds arising from the collection of fees, taxes, donations appropriative, or otherwise. (1925, c. 89, s. 2; 1929, c. 100, s. 2; 1955, c. 578, s. 1; c. 743; 1957, c. 269, ss. 1, 2; 1979, 2nd Sess., c. 1137, s. 37; 1981, c. 859, s. 47.1; 1983 (Reg. Sess., 1984), c. 1109, s. 10; 1985, c. 290, s. 1; 2000‑140, s. 93.1(a); 2001‑424, s. 12.2(b).)
§ 143‑3. Examination of officers and agencies; disbursements.
The Director shall have power to examine under oath any officer or any head, any clerk or employee, of any department, institution, bureau, division, board, commission, corporation, association, or any agency; to cause the attendance of all such persons, requiring such persons to furnish any and all information desired relating to the affairs of such agency; to compel the production of books, papers, accounts, or other documents in the possession or under the control of such person so required to attend. The Director or his authorized representative shall have the right and the power to examine any State institution or agency, board, bureau, division, commission, corporation, person, and to inspect its property, and inquire into the method of operation and management.
The Director shall have power to have the books and accounts of any of such agencies or persons audited, and supervise generally the budget accounts of such departments, institutions and agencies within the terms of this Article. The Director may require that the cost of making all audits shall be paid from the regular maintenance appropriation made by the General Assembly for such department, institution or agency which may be thus audited.
It shall be the duty of the Director to recommend to the General Assembly at each session such changes in the organization, management and general conduct of the various departments, institutions and other agencies of the State, and included within the terms of this Article, as in his judgment will promote the more efficient and economical operation and management thereof.
The State Controller under the provisions of the Executive Budget Act shall prescribe the manner in which disbursements of the several institutions and departments shall be made and may require that all warrants, vouchers or checks, except those drawn by the State Auditor, State Treasurer, and Administrative Officer of the Courts shall bear two signatures of such officers as will be designated by the State Controller. (1925, c. 89, s. 3; 1929, c. 100, s. 3; c. 337, s. 4; 1969, c. 458, s. 3; 1981, c. 859, s. 47.1; 1985 (Reg. Sess., 1986), c. 1024, s. 2.)
§ 143‑3.1. Transfers of functions.
The functions of preaudit of State agency expenditures, issuance of warrants on the State Treasurer for State agency expenditures, and maintenance of records pertaining to these functions shall be transferred from the Director of the Budget to the Office of the State Controller. All statutory authority, personnel, unexpended balances of appropriations or other funds, books, papers, reports, files and other records of the Office of State Budget and Management pertaining to and used in the performance of these functions shall be transferred to the Office of the State Controller; office machinery and equipment used primarily in the performance of these functions shall also be transferred to the Office of the State Controller. The Governor is authorized to do all things necessary to effect an orderly and efficient transfer.
The functions of accounting systems development, maintenance, and coordination shall be transferred from the Office of the State Auditor to the Office of the State Controller. All statutory authority, personnel, unexpended balances of appropriations or other funds, books, papers, reports, files, software, documentation, and other records of the Auditor's Office pertaining to and used in the performance of these functions shall be transferred to the Office of the State Controller; office machinery, equipment, terminals and the like used primarily in the performance of these functions shall also be transferred to the Office of the State Controller. The State Auditor, with the advice and consent of the Governor, is authorized to do all things necessary to effect an orderly and efficient transfer. (1955, c. 578, s. 2; 1957, c. 269, s. 2; 1979, 2nd Sess., c. 1137, s. 37; 1985 (Reg. Sess., 1986), c. 1024, s. 3; 2000‑140, c. 93.1(i).)
§ 143‑3.2. Issuance of warrants upon State Treasurer; delivery of warrants and disbursements for non‑State entities.
(a) The State Controller shall have the exclusive responsibility for the issuance of all warrants for the payment of money upon the State Treasurer. All warrants upon the State Treasurer shall be signed by the State Controller, who before issuing them shall determine the legality of payment and the correctness of the accounts. All warrants issued for non‑State entities shall be delivered by the appropriate agency to the entity's legally designated recipient by United States mail or its equivalent, including electronic funds transfer.
When the State Controller finds it expedient to do so because of a State agency's size and location, the State Controller may authorize a State agency to make expenditures through a disbursing account with the State Treasurer. The State Controller shall authorize the Judicial Department and the General Assembly to make expenditures through such disbursing accounts. All disbursements made to non‑State entities shall be delivered by the appropriate agency to the entity's legally designated recipient by United States mail or its equivalent, including electronic funds transfer. All deposits in these disbursing accounts shall be by the State Controller's warrant. A copy of each voucher making withdrawals from these disbursing accounts and any supporting data required by the State Controller shall be forwarded to the Office of the State Controller monthly or as otherwise required by the State Controller. Supporting data for a voucher making a withdrawal from one of these disbursing accounts to meet a payroll shall include the amount of the payroll and the employees whose compensation is part of the payroll.
A central payroll unit operating under the Office of the State Controller may make deposits and withdrawals directly to and from a disbursing account. The disbursing account shall constitute a revolving fund for servicing payrolls passed through the central payroll unit.
The State Controller may use a facsimile signature machine in affixing his signature to warrants.
(b) The State Treasurer may impose on an agency a fee of fifteen dollars ($15.00) for each check drawn against the agency's disbursing account that causes the balance in the account to be in overdraft or while the account is in overdraft. The financial officer shall pay the fee from non‑State or personal funds to the General Fund to the credit of the miscellaneous non‑tax revenue account by the agency. (1955, c. 578, s. 2; 1957, c. 269, s. 2; 1961, c. 1194; 1969, c. 844, s. 12; 1979, 2nd Sess., c. 1137, s. 37; 1981, c. 859, s. 47.1; c. 884, s. 10; 1985, c. 290, s. 2; 1985 (Reg. Sess., 1986), c. 1024, s. 4; 1989 (Reg. Sess., 1990), c. 1074, s. 17; 1991, c. 542, s. 5; 1995, c. 507, s. 27.4.)
§ 143‑3.3. Assignments of claims against State.
(a) Definitions. The following definitions apply in this section:
(1) Assignment. An assignment or transfer of a claim, or a power of attorney, an order, or another authority for receiving payment of a claim.
(2) Claim. A claim, a part or a share of a claim, or an interest in a claim, whether absolute or conditional.
(3) Qualified charitable organization. A charitable organization that is exempt from federal income tax pursuant to section 501(c)(3) of the Internal Revenue Code.
(4) State employee credit union. A credit union organized under Chapter 54 of the General Statutes whose membership is at least one‑half employees of the State.
(5) The State. The State of North Carolina and any department, bureau, or institution of the State of North Carolina.
(b) Assignments Prohibited. Except as otherwise provided in this section, any assignment of a claim against the State is void, regardless of the consideration given for the assignment, unless the claim has been duly audited and allowed by the State and the State has issued a warrant for payment of the claim. Except as otherwise provided in this section, the State shall not issue a warrant to an assignee of a claim against the State.
(c) Assignments in Favor of Certain Entities Allowed. This section does not apply to an assignment in favor of:
(1) A hospital.
(2) A building and loan association.
(3) A uniform rental firm in order to allow an employee of the Department of Transportation to rent uniforms that include day‑glo orange shirts or vests as required by federal and State law.
(4) An insurance company for medical, hospital, disability, or life insurance.
(d) Assignments to Meet Child Support Obligations Allowed. This section does not apply to assignments made to meet child support obligations pursuant to G.S. 110‑136.1.
(e) Assignments for Prepaid Legal Services Allowed. This section does not apply to an assignment for payment for prepaid legal services.
(f) Payroll Deduction for State Employee Credit Union Accounts Allowed. An employee of the State who is a member of a State employee credit union may authorize, in writing, the periodic deduction from the employee's salary or wages paid for employment by the State of a designated lump sum for deposit to any credit union accounts, purchase of any credit union shares, or payment of any credit union obligations agreed to by the employee and the State employee credit union.
(f1) Payroll Deduction for Contributions to the Parental Savings Fund Allowed. An employee of the State may authorize, in writing, the periodic deduction from the employee's salary or wages paid for employment by the State of a designated lump sum for deposit in the Parental Savings Trust Fund administered by the State Education Assistance Authority.
(g) Payroll Deduction for Payments to Certain Employees' Associations Allowed. An employee of the State or any of its political subdivisions, institutions, departments, bureaus, agencies or commissions, or any of its local boards of education or community colleges, who is a member of a domiciled employees' association that has at least 2,000 members, 500 of whom are employees of the State, a political subdivision of the State, or public school employees, may authorize, in writing, the periodic deduction each payroll period from the employee's salary or wages a designated lump sum to be paid to the employees' association.
An employee of any local board of education who is a member of a domiciled employees' association that has at least 40,000 members, the majority of whom are public school teachers, may authorize in writing the periodic deduction each payroll period from the employee's salary or wages a designated lump sum or sums to be paid for dues and voluntary contributions for the employees' association.
An authorization under this subsection shall remain in effect until revoked by the employee. A plan of payroll deductions pursuant to this subsection for employees of the State and other association members shall become void if the employees' association engages in collective bargaining with the State, any political subdivision of the State, or any local school administrative unit. This subsection does not apply to county or municipal governments or any local governmental unit, except for local boards of education.
(h) Payroll Deduction for State Employees Combined Campaign Allowed. Subject to rules adopted by the State Controller, an employee of the State may authorize, in writing, the periodic deduction from the employee's salary or wages paid for employment by the State of a designated lump sum to be paid to satisfy the employee's pledge to the State Employees Combined Campaign.
(i) Payroll Deduction for Public School and Community College Employees' Contributions to Charitable Organizations Allowed. Subject to rules adopted by the State Controller, an employee of a local board of education or community college may authorize, in writing, the periodic deduction from the employee's salary or wages paid for employment by the board of education or community college of a designated lump sum to be contributed to a qualified charitable organization that has first been approved by the employee's board of education or community college board.
(j) Payroll Deduction for University of North Carolina System Employees' Contributions to Certain Charitable Organizations Allowed. Subject to rules adopted by the State Controller, if a constituent institution of The University of North Carolina approves a payroll deduction plan under this subsection, an employee of the constituent institution may authorize, in writing, the periodic deduction from the employee's salary or wages paid for employment by the constituent institution of a designated lump sum to be contributed to a qualified charitable organization that exists to support athletic or charitable programs of the constituent institution and that has first been approved by the President of The University of North Carolina as existing to support athletic or charitable programs. If a payroll deduction plan under this subsection results in additional costs to a constituent institution, these costs shall be paid by the qualified charitable organizations receiving contributions under the plan.
(k) Payroll Deduction for University of North Carolina System Employees to Pay for Discretionary Privileges of University Service. Subject to rules adopted by the State Controller, if a constituent institution of The University of North Carolina approves a payroll deduction plan under this subsection, an employee of the constituent institution may authorize, in writing, the periodic deduction from the employee's salary or wages paid for employment by the constituent institution, of one or more designated lump sums to be applied to the cost of corresponding discretionary privileges available at employee expense from the employing institution. Discretionary privileges from the employing institution that may be paid for through this subsection include parking privileges, athletic passes, use of recreational facilities, admission to campus concert series, and access to other institutionally hosted or provided entertainments, events, and facilities.
(l) Assignment of Payments From the Underground Storage Tank Cleanup Funds. This section does not apply to an assignment of any claim for payment or reimbursement from the Commercial Leaking Petroleum Underground Storage Tank Cleanup Fund established by G.S. 143‑215.94B or the Noncommercial Leaking Petroleum Underground Storage Tank Cleanup Fund established by G.S. 143‑215.94D. (1925, c. 249; 1935, c. 19; 1939, c. 61; 1941, c. 128; 1965, c. 1179; 1969, c. 625; 1977, c. 88; 1981, c. 869; 1981 (Reg. Sess., 1982), c. 1282, ss. 14, 15; 1983, c. 680; c. 913, s. 49; 1983 (Reg. Sess., 1984), c. 1034, s. 147; c. 1036, s. 1; 1985 (Reg. Sess., 1986), c. 1024, s. 5; 1987, c. 738, s. 223; 1989, c. 215; 1989 (Reg. Sess., 1990), c. 1066, s. 82; 1991, c. 688, s. 1; 1993, c. 561, s. 63(a); 1997‑412, s. 9; 1998‑161, s. 7; 2002‑126, s. 6.4(a); 2003‑224, s. 1; 2005‑276, s. 6.35.)
§ 143‑3.4. Warrants for money paid into treasury by mistake.
(a) Whenever the Governor and Council of State are satisfied that moneys have been paid into the treasury through mistake, they may direct a warrant be drawn therefor on the Treasurer, in favor of the person who made such payment; but this provision shall not extend to payments on account of taxes nor to payments on bonds and mortgages.
(b) Whenever any real property mortgaged to the State, or bought in for the benefit of the State, of which a certificate shall have been given to a former purchaser, is sold by the Attorney General on a foreclosure by notice, or under a judgment, for a greater sum than the amount due to the State, with costs and expenses, the surplus money received into the treasury, after a conveyance has been executed to the purchaser, shall be paid to the person legally entitled to such real property at the time of the foreclosure on the forfeiture of the original contract. A warrant shall not be drawn for such surplus money but upon satisfactory proof, by affidavit or otherwise, of the legal rights of such person. (1868‑9, c. 270, ss. 66, 68; Code, ss. 3351, 3352; Rev., ss. 5366, 5368; C.S., ss. 7676, 7678; 1983, c. 913, ss. 50, 51.)
§ 143‑3.5. Coordination of statistics; fiscal analysis required for any bill proposed by a State agency that affects the budget.
(a) It shall be the duty of the Director, through the Office of State Budget and Management to coordinate the efforts of governmental agencies in the collection, development, dissemination and analysis of official economic, demographic and social statistics pertinent to State budgeting. The Director shall:
(1) Prepare and release the official demographic and economic estimates and projections for the State;
(2) Conduct special economic and demographic analyses and studies to support statewide budgeting;
(3) Develop and coordinate cooperative arrangements with federal, State and local governmental agencies to facilitate the exchange of data to support State budgeting;
(4) Compile, maintain, and disseminate information about State programs which involve the distribution of State aid funds to local governments including those variables used in their allocation;
(5) Develop and maintain in cooperation with other State and local governmental agencies, an information system providing comparative data on resources and expenditures of local governments; and
(6) Report major trends that influence revenues and expenditures in the State budget in the current fiscal year and that may influence revenues and expenditures over the next five fiscal years.
Every fiscal analysis prepared by the Director or the Office of State Budget and Management addressing the State budget outlook shall encompass the upcoming five‑year period. Every fiscal analysis prepared by the Director or the Office of State Budget and Management addressing the impact of proposed legislation on the State budget shall estimate the impact for the first five fiscal years the legislation would be in effect. To minimize duplication of effort in collecting or developing new statistical series pertinent to State planning and budgeting, including contractual arrangements, State agencies must submit to the Director proposed procedures and funding requirements.
(b) Any bill proposed by an executive or judicial department, agency, institution, board, or commission that affects the State budget shall be accompanied by a fiscal analysis. The fiscal analysis shall estimate the impact of the legislation on the State budget for the first five fiscal years the legislation would be in effect.
(c) This section shall not apply to the General Assembly, any of its committees and subcommittees, the Legislative Research Commission, the Legislative Services Commission, or any other committee or commission in the legislative branch. (1979, 2nd Sess., c. 1137, s. 41; 1991, c. 689, s. 341; 1993 (Reg. Sess., 1994), c. 769, s. 11.1(b); 2000‑140, s. 93.1(f); 2001‑424, s. 12.2(b).)
§ 143‑3.6: Expired.
§ 143‑3.7: Repealed by Session Laws 1997‑443, s. 23(b).
§ 143‑4. Advisory Budget Commission.
(a) Five Senators appointed by the President Pro Tempore of the Senate, five Representatives appointed by the Speaker of the House and five persons appointed by the Governor shall constitute the Advisory Budget Commission. If the Governor appoints any members of the General Assembly to the Advisory Budget Commission, he must appoint an equal number from the Senate and House of Representatives.
(b) The Chairman of the Advisory Budget Commission shall also receive an additional two thousand five hundred dollars ($2,500) payable in quarterly installments, for expenses.
The members of the Advisory Budget Commission shall receive no per diem compensation for their services, but shall receive the same subsistence and travel allowance as are provided for members of the General Assembly for services on interim legislative committees.
(c) The Governor may call a meeting of the Commission during the period beginning with the convening of each regular session and ending 30 days later. Otherwise, meetings of the Commission may be called by the Governor or by the chairman.
Members of the Commission shall take the oath of office at or before the first meeting of the Commission they attend.
The Office of State Budget and Management, under the direction of the State Budget Officer, may serve as staff to the Commission. The State Budget Officer shall designate a secretary to the Commission.
(d) After the agenda for a meeting has been delivered to the members of the Commission, no other item shall be considered at that meeting except upon the approval of a majority of the members present and voting.
Except for the Governor, persons who are not members of the Commission may address the Commission only at the invitation of the Governor, the chairman, or a majority of the members present and voting.
A vacancy in one of the seats on the Commission shall be filled by appointment by the officer who appointed the person causing the vacancy.
(e) Before the end of each fiscal year or as soon thereafter as practicable, the Advisory Budget Commission shall contract with a competent certified public accountant who is in no way otherwise affiliated with the State or with any agency thereof to conduct a thorough and complete audit of the receipts and expenditures of the State Auditor's office during the immediate fiscal year just ended, and to report to the Advisory Budget Commission on such audit not later than the following October first. A sufficient number of copies of such audit shall be provided so that at least one copy is filed with the Governor's Office, one copy with the Office of State Budget and Management and at least two copies filed with the Secretary of State.
(f) In all matters where action on the part of the Advisory Budget Commission is required by this Article, 10 members of the Commission shall constitute a quorum for performing the duties or acts required by the Commission. (1925, c. 89, s. 4; 1929, c. 100, s. 4; 1931, c. 295; 1951, c. 768; 1955, c. 578, s. 3; 1957, c. 269, s. 2; 1973, c. 820, ss. 1‑3; 1979, 2nd Sess., c. 1137, ss. 25, 29.1, 37; 1981, c. 859, s. 47.1; 1983, c. 48, ss. 1‑3; 1983 (Reg. Sess., 1984), c. 1034, s. 148; 1985, c. 3, ss. 1‑2.1; c. 290, s. 3; 1985 (Reg. Sess., 1986), c. 955, ss. 56, 57; 1989, c. 781, s. 41; 1991, c. 739, s. 22; 2000‑140, s. 93.1(a); 2001‑424, s. 12.2(b).)
§ 143‑4.1. Biennial inspection.
The Commission shall make a biennial inspection of those physical facilities of the State it deems necessary. The Governor may make a biennial inspection of those facilities of the State he deems necessary. (1983, (Reg. Sess., 1984), c. 1034, s. 149; 1985 (Reg. Sess., 1986), c. 955, s. 59.)
§ 143‑5. Appropriation rules.
All moneys heretofore and hereafter appropriated shall be deemed and held to be within the terms of this Article and subject to its provisions unless it shall be otherwise provided in the act appropriating the same; and no money shall be disbursed from the State treasury except as herein provided. (1925, c. 89, s. 5; 1929, c. 100, s. 5.)
§ 143‑6. Information from departments and agencies asking State aid.
(a) On or before the first day of September in the even‑numbered years, each of the departments, bureaus, divisions, officers, boards, commissions, institutions, and other State agencies and undertakings receiving or asking financial aid from the State, or receiving or collecting funds under the authority of any general law of the State, shall furnish the Director all the information, data and estimates which he may request with reference to past, present and future appropriations and expenditures, receipts, revenue, and income.
(b) Any department, bureau, division, officer, board, commission, institution, or other State agency or undertaking desiring to request financial aid from the State for the purpose of constructing or renovating any State building, utility, or other property development (except a railroad, highway, or bridge structure) shall, before making any such request for State financial aid, submit to the Department of Administration a statement of its needs in terms of space and other physical requirements, and shall furnish the Department with such additional information as it may request. The Department of Administration shall then review the statement of needs submitted by the requesting department, bureau, division, officer, board, commission, institution, or other State agency or undertaking and perform additional analysis, as necessary, to comply with G.S. 143‑341.
(b1) All requests for financial aid for the purpose of constructing or renovating any State building, utility, or other property development (except a railroad, highway, or bridge structure) shall be accompanied by a certification from the Department of Administration as outlined in G.S. 143‑341. The General Assembly may provide advanced planning funds but shall only provide construction funds when the requirements of this subsection have been met. This subsection shall not apply to requests for appropriations of less than one hundred thousand dollars ($100,000).
(b2) Any department, bureau, division, officer, board, commission, institution, or other State agency or undertaking desiring to request financial aid from the State for the purpose of acquiring or maintaining information technology as defined by G.S. 147‑33.81(2) shall, before making the request for State financial aid, submit to the State Chief Information Officer (State CIO) a statement of its needs in terms of information technology and other related requirements and shall furnish the State CIO with any additional information requested by the State CIO. The CIO shall then review the statement of needs and perform additional analysis, as necessary, to comply with Article 3D of Chapter 147 of the General Statutes. All requests for financial aid for the purpose of acquiring or maintaining information technology shall be accompanied by a certification from the State CIO deeming the request for financial aid to be consistent with Article 3D of Chapter 147 of the General Statutes. The State CIO shall make recommendations to the Governor regarding the merits of requests for financial aid for the purpose of acquiring or maintaining information technology. This subsection shall not apply to requests for appropriations of less than one hundred thousand dollars ($100,000).
(c) On or before the first day of September in the even‑numbered years, each of the departments, bureaus, divisions, officers, boards, commissions, institutions, and other State agencies receiving or asking financial aid or support from the State, under the authority of any general law of the State, shall furnish the Director with the following information:
(1) The amount of State funds disbursed in the immediately preceding two fiscal years and the purpose for which the funds were disbursed and used, the amount being requested as continuation funds for the upcoming fiscal year, and the justification for continued State support; and
(2) Justification for continued State support shall include information on the extent of the public benefit being derived from State support.
(d) The Office of State Budget and Management and the Director of the Budget shall provide to the General Assembly, on or before January 15 of each odd‑numbered year, a report that adequately and fairly presents the information required in this section. (1925, c. 89, s. 6; 1929, c. 100, s. 6; 1957, c. 584, s. 4; 1965, c. 310, s. 4; 1991, c. 689, s. 190(b); 1998‑45, s. 2; 2000‑140, s. 93.1(a); 2001‑424, ss. 12.2(b), 15.3(a); 2004‑129, s. 39.)
§ 143‑6.1. (Repealed effective July 1, 2005 See editor's note) Report on use of State funds by non‑State entities.
(a) Disbursement and Use of State Funds. Every non‑State entity that receives, uses, or expends any State funds shall use or expend the funds only for the purposes for which they were appropriated by the General Assembly or collected by the State. For purposes of this section, the term "non‑State entity" means a firm, organization, corporation, partnership, association, institution, unit of local government, or any other organization that is not a State agency, department, or institution. State funds include federal funds that flow through the State. For the purposes of this section, the term "grantee" means a non‑State entity other than a unit of local government that receives a grant of State funds from a State agency, department, or institution.
The State shall not disburse State funds appropriated by the General Assembly to any grantee or collected by the State for use by any grantee unless that grantee:
(1) Provides all reports and financial information required under this section to the appropriate State agencies and officials; and
(2) Provides any additional information that the Office of State Budget and Management deems necessary demonstrating that such grantee is capable of managing the funds in accordance with law and has established adequate financial procedures and controls.
All financial statements furnished to the State Auditor pursuant to this section, and any audits or other reports prepared by the State Auditor, are public records.
(a1) Compliance by Non‑State Entities. If the Director of the Budget finds that a non‑State entity has spent or encumbered State funds for an unauthorized purpose, the Director shall take appropriate administrative action to ensure that no further irregularities occur and shall report to the Attorney General any facts that pertain to an apparent violation of a criminal law or an apparent instance of malfeasance, misfeasance, or nonfeasance in connection with the use of State funds.
(b) State Agency Responsibilities. A State agency that receives State funds and then disburses the State funds to a grantee shall:
(1) Submit documents to the State Auditor in a prescribed format describing standards of compliance and suggested audit procedures sufficient to give adequate direction to independent auditors performing audits.
(2) Annually, at the time the grant is made, notify each grantee, in writing, of the reporting requirements set forth in this section and that the State agency is not authorized to disburse funds to grantees that fail to comply with the reporting requirements for funds received during the prior fiscal year.
(3) Provide each grantee with the accounting form and other requirements prescribed by the State Auditor.
(4) Submit a list to the State Auditor by October 31 each year of every grantee to which the agency disbursed State funds in the prior fiscal year, the amount disbursed to each grantee, the funding source of each grant, and other such information as required by the State Auditor to comply with the requirements set forth in this section.
(5) Submit a list to the Office of State Budget and Management by January 31 each year of every grantee to which the agency disbursed State funds in the prior fiscal year and, for each grantee, whether that grantee has filed the sworn accounting required by subsection (c) of this section and whether the sworn accounting is in compliance with subsection (c) of this section.
(6) Ensure funds are spent in accordance with the purposes for which they were granted and hold the grantees accountable for the legal and appropriate expenditure of State grant funds.
(7) Provide for adequate oversight and monitoring to prevent the misuse of State funds.
(b1) Grantee Responsibilities. A grantee that receives a grant of State funds shall:
(1) Ensure funds are spent in accordance with the purposes for which they were granted and be accountable for the legal and appropriate expenditure of State grant funds.
(2) Maintain reports, records, and other information to properly account for the expenditure of all State grant funds received by the grantee and to make the reports, records, and other information available to the grantor State agency or the State Auditor for oversight, monitoring, and evaluation purposes.
(3) Hold any non‑State entity to which the grantee provides a grant of State funds accountable for the legal and appropriate expenditure of State grant funds.
(4) Adhere to the reporting requirements mandated by this section.
(c) Grantee Receipt and Expenditure Reports. A grantee that receives, uses, or expends between fifteen thousand dollars ($15,000) and three hundred thousand dollars ($300,000) in State funds annually must file annually with the State Auditor and the State agency that disbursed the funds a sworn accounting of receipts and expenditures of the State funds and a description of activities and accomplishments undertaken by the grantee with State funds. This accounting must be attested to by the treasurer of the grantee and one other authorizing officer of the grantee. The accounting must be filed within six months after the end of the grantee's fiscal year in which the State funds were received. The accounting and the description of activities and accomplishments shall be in the formats, including electronic filings, required by the State Auditor and provided to the grantee by the disbursing agency.
(d) Grantee Audit Reports. A grantee that receives, uses, or expends State funds in the amount of three hundred thousand dollars ($300,000) or more annually must file annually with the State Auditor a financial statement in the form and on the schedule prescribed by the State Auditor. These audit reports shall be filed no later than nine months after the close of the grantee's fiscal year. The financial statement must be audited in accordance with standards prescribed by the State Auditor to assure that State funds are used for the purposes provided by law.
A grantee that receives, uses, or expends State funds in the amount of three hundred thousand dollars ($300,000) or more annually must file annually with the State Auditor and the State agency that disbursed the funds a description of activities and accomplishments undertaken by the grantee with State funds. This description must be filed within 90 days after the end of the grantee's fiscal year in which the State funds were received. The description of activities and accomplishments shall be in a format, including electronic filings, required by the State Auditor.
(d1) State Auditor's Responsibilities. The State Auditor shall:
(1) Review each audit submitted pursuant to subsection (d) of this section and determine that it has been conducted in accordance with generally accepted audit standards and that the grantee has received a clean audit opinion.
(2) Notify disbursing agencies by January 31 each year of all grantees that are not in compliance with the reporting requirements set forth in this section.
(3) Notify disbursing agencies of any material audit findings in the audits of their grantees.
(4) Submit a list to the Office of State Budget and Management by January 31 each year of every grantee that received State funds in the prior fiscal year and, for each grantee, whether that grantee has complied with this subsection.
(d2) Before a State agency disburses any funds for the fourth quarter of a fiscal year, the agency shall, in consultation with the Office of State Budget and Management, verify that the grantee has complied with the reporting requirements of this section. A State agency shall not disburse funds during the fourth quarter of the fiscal year to any grantee that has not complied with this section by March 31 of each year.
(d3) The Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division by May 1 of each year on all grantees that failed to comply with this section for the prior fiscal year, the amount of State funds that were disbursed to each of those grantees during that fiscal year, and the amount of State funds that were withheld.
(e) Federal Reporting Requirements. Federal law may require a grantee to make additional reports with respect to funds for which reports are required under this section. Notwithstanding the provisions of this section, a grantee may satisfy the reporting requirements of subsection (c) of this section by submitting a copy of the report required under federal law with respect to the same funds or by submitting a copy of the report described in subsection (d) of this section.
(f) Audit Oversight. The State Auditor has audit oversight, pursuant to Article 5A of Chapter 147 of the General Statutes, of every grantee that receives, uses, or expends State funds. Such a grantee must, upon request, furnish to the State Auditor for audit all books, records, and other information necessary for the State Auditor to account fully for the use and expenditure of State funds. The grantee must furnish any additional financial or budgetary information requested by the State Auditor. Grantees shall ensure that work papers in the possession of their auditors are available to the State Auditor and provide the work papers upon request. Audit work papers furnished by an auditor of a grantee are not public records and are exempt from G.S. 132‑1. (1989, c. 752, s. 54; 1991, c. 689, ss. 12, 190(a); 1993, c. 321, s. 45; 1995 (Reg. Sess., 1996), c. 748, s. 2.1; 1997‑443, s. 34.11; 2000‑140, s. 93.1(a); 2001‑424, s. 12.2(b); 2003‑284, s. 6.21; 2004‑123, 6.24.)
§ 143‑6.2. Use of State funds by non‑State entities.
(a) Disbursement and Use of State Funds. Every non‑State entity that receives, uses, or expends any State funds shall use or expend the funds only for the purposes for which they were appropriated by the General Assembly. State funds include federal funds that flow through the State. For the purposes of this section, the following definitions apply:
(1) Non‑State entity. A firm, corporation, partnership, association, county, unit of local government, public authority, or any other person, organization, group, or governmental entity that is not a State agency, department, or institution.
(2) Public authority. A municipal corporation that is not a unit of local government or a local governmental authority, board, commission, council, or agency that (i) is not a municipal corporation and (ii) operates on an area, regional, or multiunit basis, and the budgeting and accounting systems of which are not fully a part of the budgeting and accounting systems of a unit of local government.
(3) Unit of local government. A municipal corporation that has the power to levy taxes, including a consolidated city‑county as defined by G.S. 160B‑2(1), and all boards, agencies, commissions, authorities, and institutions thereof that are not municipal corporations.
(b) For the purposes of this section, the term "grantee" means a non‑State entity that receives a grant of State funds from a State agency, department, or institution but does not include any non‑State entity subject to the audit and other reporting requirements of the Local Government Commission. The term "subgrantee" means a non‑State entity that receives a grant of State funds from a grantee or from another subgrantee but does not include any non‑State entity subject to the audit and other reporting requirements of the Local Government Commission. The terms "State grant funds" and "State grants" do not include any payment made by the Medicaid program, the Teachers' and State Employees' Comprehensive Major Medical Plan, or other similar medical programs.
(b1) Conflict of Interest Policy. Every grantee shall file with the State agency or department disbursing funds to the grantee a copy of that grantee's policy addressing conflicts of interest that may arise involving the grantee's management employees and the members of its board of directors or other governing body. The policy shall address situations in which any of these individuals may directly or indirectly benefit, except as the grantee's employees or members of its board or other governing body, from the grantee's disbursing of State funds and shall include actions to be taken by the grantee or the individual, or both to avoid conflicts of interest and the appearance of impropriety. The policy shall be filed before the disbursing State department or agency may disburse the grant funds.
(b2) No Overdue Tax Debts. Every grantee shall file with the State agency or department disbursing funds to the grantee a written statement completed by that grantee's board of directors or other governing body stating that the grantee does not have any overdue tax debts, as defined by G.S. 105‑243.1, at the federal, State, or local level. The written statement shall be made under oath and shall be filed before the disbursing State agency or department may disburse the grant funds. A person who makes a false statement in violation of this subsection is guilty of a criminal offense punishable as provided by G.S. 143‑34(b).
(c) Compliance by Non‑State Entities. If the Director of the Budget finds that a non‑State entity has spent or encumbered State funds for an unauthorized purpose, or fails to submit or falsifies any information required by this section or any other provision of law, the Director shall take appropriate administrative action to ensure that no further irregularities or violations of law occur and shall report to the Attorney General any facts that pertain to an apparent violation of a criminal law or an apparent instance of malfeasance, misfeasance, or nonfeasance in connection with the use of State funds. Appropriate administrative action includes suspending or withholding the disbursement of State funds and recovering State funds previously disbursed.
(d) The Office of State Budget and Management shall adopt rules to ensure the uniform administration of State grants by all grantor State agencies and grantees or subgrantees. The rules shall establish policies and procedures for disbursements of grants and for State agency oversight, monitoring, and evaluation of grantees and subgrantees. Such policies and procedures shall:
(1) Ensure that the purpose and reporting requirements of each grant are specified to the grantee.
(2) Ensure that grantees specify the purpose and reporting requirements for grants made to subgrantees.
(3) Ensure that funds are spent in accordance with the purposes for which they were granted.
(4) Hold the grantees and subgrantees accountable for the legal and appropriate expenditure of State grant funds.
(5) Provide for adequate oversight and monitoring to prevent the misuse of State funds.
(6) Establish mandatory periodic reporting requirements for grantees and subgrantees, including methods of reporting, to provide financial and program performance information. The mandatory periodic reporting requirements shall require grantees and subgrantees to file with the State Auditor copies of reports and statements that are filed with State agencies pursuant to this subsection. Compliance with the mandatory periodic reporting requirements of this subdivision shall not require grantees and subgrantees to file with the State Auditor the information described in subsections (b1) and (b2) of this section.
(7) Require grantees and subgrantees to maintain reports, records, and other information to properly account for the expenditure of all State grant funds and to make such reports, records, and other information available to the grantor State agency for oversight, monitoring, and evaluation purposes.
(8) Require grantees and subgrantees to ensure that work papers in the possession of their auditors are available to the State Auditor for the purposes set out in subsection (h) of this section.
(9) Require grantees to be responsible for managing and monitoring each project, program, or activity supported by State grant funds and each subgrantee project, program, or activity supported by State grant funds.
(10) Provide procedures for the suspension of further disbursements or use of State grant funds for noncompliance with these rules or other inappropriate use of the funds.
(11) Provide procedures for use in appropriate circumstances for reinstatement of disbursements that have been suspended for noncompliance with these rules or other inappropriate use of State grant funds.
(12) Provide procedures for the recovery and return to the grantor State agency of unexpended State grant funds from a grantee or subgrantee if the grantee or subgrantee is unable to fulfill the purposes of the grant.
(e) Notwithstanding the provisions of G.S. 150B‑2(8a)b, rules adopted pursuant to subsection (d) of this section are subject to the provisions of Chapter 150B of the General Statutes.
(f) The Office of State Budget and Management shall consult with the Office of the State Auditor and the Attorney General in establishing the rules required by subsection (d) of this section.
(g) The Office of State Budget and Management, after consultation with the administering agency, shall have the power to suspend disbursement of State grant funds to grantees or subgrantees, to prevent further use of State grant funds already disbursed, and to recover State grant funds already disbursed for noncompliance with rules adopted pursuant to subsection (d) of this section. If the grant funds are a pass‑through of funds granted by an agency of the United States, then the Office of State Budget and Management must consult with the granting agency of the United States and the State agency that is the recipient of the pass‑through funds prior to taking the actions authorized by this subsection.
(h) Audit Oversight. The State Auditor has audit oversight, with respect to State grant funds received by the grantee or subgrantee, pursuant to Article 5A of Chapter 147 of the General Statutes, of every grantee or subgrantee that receives, uses, or expends State grant funds. A grantee or subgrantee must, upon request, furnish to the State Auditor for audit all books, records, and other information necessary for the State Auditor to account fully for the use and expenditure of State grant funds received by the grantee or subgrantee. The grantee or subgrantee must furnish any additional financial or budgetary information requested by the State Auditor, including audit work papers in the possession of any auditor of a grantee or subgrantee directly related to the use and expenditure of State grant funds.
(i) Not later than May 1, 2007, and by May 1 of every succeeding year, the Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division on all grantees or subgrantees that failed to comply with this section during the prior fiscal year, including the amount of State funds that were disbursed to each of those grantees or subgrantees during that fiscal year and the amount of State funds that were withheld.
(j) Grantor State agencies shall submit a list to the State Auditor, in the format prescribed by the State Auditor, by October 31 each year of every grantee to which the agency disbursed State funds in the prior fiscal year, the amount disbursed, the amount disbursed to each grantee, and other such information as required by the State Auditor to comply with the requirements set forth in this section.
(k) Civil Actions. Civil actions to recover State funds or to obtain other mandatory orders in the name of the State on relation of the Attorney General, or in the name of the Office of State Budget and Management, shall be filed in the General Court of Justice in Wake County. (2004‑196, s. 2; 2005‑276, s. 6.9(a).)
§ 143‑7. Itemized statements and forms.
(a) The statements and estimates required under G.S. 143‑6 shall be itemized in accordance with the budget classification adopted by the State Controller, and upon forms prescribed by the Director, and shall be approved and certified by the respective heads or responsible officer of each department, bureau, board, commission, institution, or agency submitting same. Official estimate blanks which shall be used in making these reports shall be furnished by the Director of the Budget.
(b) The budget classification adopted by the State Controller and the forms prescribed by the Director shall include budget account codes relating specifically to information technology to allow reliable and meaningful analysis of information technology funding and expenditures throughout State government. (1925, c. 89, s. 7; 1929, c. 100, s. 7; 1957, c. 269, s. 2; 1983, c. 761, s. 19; 1985 (Reg. Sess., 1986), c. 1024, ss. 6, 7; 2001‑424, s. 15.3(b).)
§ 143‑8. Reporting of legislative and judicial expenditures and financial needs.
On or before the first day of September, biennially, in the even‑numbered years, the Legislative Services Officer shall furnish the Director a detailed statement of expenditures of the General Assembly for the current fiscal biennium, and an estimate of its financial needs, itemized in accordance with the budget classification adopted by the Director and approved and certified by the President Pro Tempore of the Senate and the Speaker of the House of Representatives for each year of the ensuing biennium, beginning with the first day of July thereafter. The Administrative Officer of the Courts shall furnish the Director a detailed statement of expenditures of the judiciary, and for each year of the current fiscal biennium an estimate of its financial needs as provided by law, itemized in accordance with the budget classification adopted by the Director and approved and certified by the Chief Justice for each year of the ensuing biennium, beginning with the first day of July thereafter. The Director shall include these estimates and accompanying explanations in the budget submitted with such recommendations as the Director may desire to make in reference thereto. (1925, c. 89, s. 8; 1929, c. 100, s. 8; 1961, c. 1181, s. 1; 1971, c. 1200, s. 7; 1985 (Reg. Sess., 1986), c. 1024, ss. 8, 9; 1987, c. 738, s. 61; 1996, 2nd Ex. Sess., c. 18, s. 8(m).)
§ 143‑9. Information to be furnished upon request.
The departments, bureaus, divisions, officers, commissions, institutions, or other State agencies or undertakings of the State, upon request, shall furnish the Director, in such form and at such time as he may direct, any information desired by him in relation to their respective activities or fiscal affairs. The State Auditor and the State Controller shall also furnish the Director any special, periodic, or other financial statements as the Director may request. (1925, c. 89, s. 10; 1929, c. 100, s. 9; 1985 (Reg. Sess., 1986), c. 1024, s. 10.)
§ 143‑10. Preparation of budget and public hearing.
The members of the Commission shall, at the request of the Director, attend such public hearing and other meeting as may be held in the preparation of the budget. Said Commission shall act at all times in an advisory capacity to the Director on matters relating to the plan of proposed expenditures of the State government and the means of financing the same.
The Director shall provide for public hearings on any and all estimates to be included in the budget, which shall be held during the months of October and/or November and/or such other times as the Director may fix in the even‑numbered years, and may require the attendance at these hearings of the heads or responsible representatives of all State departments, bureaus, divisions, officers, boards, commissions, institutions, or other State agencies or undertakings, and such other persons, corporations and associations, using or receiving or asking for any State funds. Prior to taking any action under this subsection to provide for public hearings, the Governor may consult with the Advisory Budget Commission. (1925, c. 89, s. 11; 1929, c. 100, s. 10; 1985 (Reg. Sess., 1986), c. 955, ss. 60, 61; 2004‑124, s. 21.1.)
§ 143‑10.1: Repealed by Session Laws 1991, c. 689, s. 342.
§ 143‑10.1A. Budget required to include State cost of local programs Continuation and expansion costs.
Effective July 1, 1991, the Office of State Budget and Management and the Director of the Budget, with the advice of the Advisory Budget Commission, shall prepare the State budget in a format that adequately and fairly reflects the continuation costs for the State's share of locally operated programs established by statute or State appropriation. These continuation costs shall be computed using the same budget preparation guidelines and rules prepared by the Office of State Budget and Management for use in State agency and institution budgets. Furthermore, in the projections for the expansion costs related to employee compensation, the budget shall include the expansion costs necessary to cover the State's share of salary and salary‑related items for employees in locally operated State‑funded programs. Local governments or organizations spending State funds to operate local programs shall provide necessary information to the Office of State Budget and Management to establish the necessary continuation and expansion costs. (1989 (Reg. Sess., 1990), c. 1066, s. 75; 2000‑140, s. 93.1(a); 2001‑424, s. 12.2(b).)
§ 143‑10.2. Limit on number of State employees.
The total number of permanent State‑funded employees, excluding employees in the State's public school system funded by way of State aid to local public school units, shall not be increased by the end of any State fiscal year by a greater percentage than the percentage rate of the residential population growth for the State of North Carolina. The percentage rates shall be computed by the Office of State Budget and Management. The population growth shall be computed by averaging the rate of residential population growth in each of the preceding 10 fiscal years as stated in the annual estimates of residential population in North Carolina made by the United States Census Bureau. The growth rate of the number of employees shall be computed by averaging the rate of growth of State employees in each of the preceding 10 fiscal years as of July 1 of each fiscal year as stated in the State Budget. (1989, c. 752, s. 46(a); 1991, c. 689, s. 343; 2000‑140, s. 93.1(a); 2001‑424, s. 12.2(b).)
§§ 143‑10.3 through 143‑10.6: Repealed by Session Laws 2001‑424, s. 12.2(a), effective July 1, 2001.
§ 143‑10.7. Review of department forms and reports.
The Director, through the Office of State Budget and Management, shall review on three‑year cycles all internal and external forms and reports in use by State departments and institutions to confirm whether these forms and reports continue to be needed. If, during the review process, it is determined that these forms and reports are no longer necessary, or that they duplicate other forms or reports either in whole or in part, the Director shall have these forms and reports modified or eliminated. All departments shall provide the Director with copies of all forms and reports used, together with any additional information necessary for the review of these reports. (1995, c. 324, s. 10.2; 2000‑140, s. 93.1(a); 2001‑424, s. 12.2(b).)
§ 143‑11. Survey of departments and recommended budget report.
(a) On or before the fifteenth day of December, biennially in the even‑numbered years, the Director shall make a complete, careful survey of the operation and management of all the departments, bureaus, divisions, officers, boards, commissions, institutions, and agencies and undertakings of the State and all persons or corporations who use or expend State funds, in the interest of economy and efficiency, and of obtaining a working knowledge upon which to base recommendations to the General Assembly as to appropriations for maintenance and special funds and capital expenditures for the succeeding biennium. If the Director and the Commission shall agree in their recommendations for the budget for the next biennial period, he shall prepare their report in the form of a proposed budget, together with such comment and recommendations as they may deem proper to make. If the Director and Commission shall not agree in substantial particulars, the Director shall prepare the proposed budget based on his own conclusions and judgment, and the Commission or any of its members retain the right to submit separately to the General Assembly such statement of disagreement and the particulars thereof as representing their views. The budget report shall contain a complete and itemized plan of all proposed expenditures for each State department, bureau, board, division, institution, commission, State agency or undertaking, person or corporation who receives or may receive for use and expenditure any State funds, in accordance with the classification of funds and accounts adopted by the State Controller, and of the estimated revenues and borrowings for each year in the ensuing biennial period beginning with the first day of July thereafter. Opposite each line item of the proposed expenditures, the budget shall show in separate parallel columns:
(1) Proposed expenditures and receipts for each fiscal year of the biennium;
(2) The certified budget for the preceding fiscal year;
(3) The currently authorized budget for the preceding fiscal year;
(4) Actual expenditures and receipts for the most recent fiscal year for which actual expenditure information is available; and
(5) Proposed increases and decreases.
Revenue and expenditure information shall be no less specific than the two‑digit level in the State Accounting System Chart of Accounts as prescribed by the State Controller. The budget shall clearly differentiate between general fund expenditures for operating and maintenance, special fund expenditures for any purpose, and proposed capital improvements. The budget report shall include accurate projections of receipts, expenditures, and fund balances for all budget codes, funds, and accounts. Estimated receipts, including tuition collected by university or community college institutions, shall be adjusted to reflect actual collections from the previous fiscal year, unless the Director either (i) recommends a change that will result in collections in the budget year that differ from the actual collections of the prior year or (ii) otherwise determines there is a more reasonable basis upon which to accurately project receipts.
(b) The Director shall accompany the budget with:
(1) A budget message supporting his recommendations and outlining a financial policy and program for the ensuing biennium. The message will include an explanation of increase or decrease over past expenditures, a discussion of proposed changes in existing revenue laws and proposed bond issues, their purpose, the amount, rate of interest, term, the requirements to be attached to their issuance and the effect such issues will have upon the redemption and annual interest charges of the State debt.
(2) State Controller reports including:
a. An itemized and complete financial statement for the State at the close of the last preceding fiscal year ending June 30.
b. A statement of special funds.
(2a) A statement showing the itemized estimates of the condition of the State treasury as of the beginning and end of each of the next two fiscal years.
(3) A report on the fees charged by each State department, bureau, division, board, commission, institution, and agency during the previous fiscal year, the statutory or regulatory authority for each fee, the amount of the fee, when the amount of the fee was last changed, the number of times the fee was collected during the prior fiscal year, and the total receipts from the fee during the prior fiscal year.
(4) A statement showing the State Board of Education's request, in accordance with G.S. 115C‑96, for sufficient funds to provide textbooks to public school students.
(5) A proposal for expenditure of the funds in the Repairs and Renovations Reserve Account, which is established in G.S. 143‑15.3A. The Director shall consider the data from the Facilities Condition and Assessment Program in the Office of State Construction when establishing priorities for the proposed expenditure of these funds.
(6) Statements of the objections of members of the Council of State received pursuant to G.S. 143‑10.3(b) to the performance measures, departmental operations plans, and indicators of program impact prepared in accordance with G.S. 143‑10.3, 143‑10.4, and 143‑10.5.
(7) A list of the budget requests of members of the Council of State that are not included in the proposed budget.
(8) An estimate of the equipment replacement costs within the Judicial Department for the period covered by that budget.
It shall be a compliance with this section by each incoming Governor, at the first session of the General Assembly in his term, to submit the budget report with the message of the outgoing Governor, if he shall deem it proper to prepare such message, together with any comments or recommendations thereon that he may see fit to make, either at the time of the submission of the said report to the General Assembly, or at such other time, or times, as he may elect and fix.
The function of the Advisory Budget Commission under this section applies only if the Director of the Budget consults with the Commission in preparation of the budget. (1925, c. 89, s. 12; 1929, c. 100, s. 11; 1983, c. 717, s. 54; 1985 (Reg. Sess., 1986), c. 955, s. 62; c. 1024, ss. 11‑13; 1989, c. 752, s. 49; 1991, c. 542, s. 6; 1991 (Reg. Sess., 1992), c. 900, s. 81(b); 1993, c. 321, s. 17.1(d); 1993 (Reg. Sess., 1994), c. 769, s. 11.1(d); 1995, c. 324, s. 10(a); 2000‑67, s. 15.7; 2005‑276, s. 6.4.)
§ 143‑11.1: Repealed by Session Laws 1983, c. 717, s. 55.
§ 143‑12. Bills containing proposed appropriations.
(a) The Director shall cause to be prepared and submitted to the General Assembly the following bills:
(1) A bill containing all proposed current operations appropriations of the budget for each year in the ensuing biennium, which shall be known as the "Current Operations Appropriations Bill", and a bill containing all proposed capital appropriations of the budget for each year in the ensuing biennium, which shall be known as the "Capital Improvement Appropriations Bill".
(2) If necessary, a bill containing the Director of the Budget's views on revenue for the ensuing biennium, which shall be known as the "Budget Revenue Bill", and shall provide an amount of revenue for the ensuing biennium sufficient, in the opinion of the Director and the Commission, to meet the appropriations contained in the Current Operations Appropriations Bill and the Capital Improvement Appropriations Bill.
(3) Repealed by Session Laws 1983 (Regular Session, 1984), c. 1034, s. 153.
(b) To the end that all expenses of the State may be brought and kept within the budget, the Current Operations Appropriations Bill shall contain a specific sum as a contingent or emergency appropriation, and shall allocate a specific portion of that sum to a special reserve to be used solely for purposes as outlined in G.S. 143‑23(a1)(2). Notwithstanding any other provision of law, the manner of the allocation of such contingent or emergency appropriation shall be as follows: Any institution, department, commission, or other agency or activity of the State, or other activity in which the State is interested, desiring an allotment out of such contingent or emergency appropriation, shall upon forms prescribed and furnished by the Director of the Budget, present such request in writing to the Director of the Budget, with such information as he may require, and if the Director of the Budget shall approve such request, in whole or in part, and after consulting with the Joint Legislative Commission on Governmental Operations, he shall forthwith present the same to the Governor and Council of State, and upon their order only shall such allotment be made. If the Director shall disapprove the request of such an allotment out of the emergency or contingent appropriation, he shall transmit his refusal and his reason therefor to the Governor and Council of State for their information.
Funds allocated from the contingent or emergency appropriation may be used only for the purpose for which they were allocated and may not be reallocated for another purpose by the Governor and the Council of State. If the funds are not spent or encumbered for the purpose for which they were allocated by the end of the fiscal biennium and if the Governor and the Council of State do not reallocate them for that same purpose, the funds shall revert to the fund from which the contingent or emergency appropriation was made. Also, if the funds are not needed for the purpose for which they were allocated, the funds shall revert to the fund from which the contingent or emergency appropriation was made.
(c) The Director of the Budget may, in preparation of the Appropriations and Revenue Bills, seek the advice of the Advisory Budget Commission. If the Director and the Commission shall not agree as to the Appropriations and Revenue Bills in substantial particulars, the Director shall prepare the same, based on his conclusions and judgment, and the Commission or any of its members retain the right to submit separately to the General Assembly such statement of disagreement and the particulars thereof as they shall find proper to submit as representing their own views. (1925, c. 89, s. 13; 1929, c. 100, ss. 12, 13, 14; 1957, c. 269, s. 2; 1983 (Reg. Sess., 1984), c. 1034, ss. 150, 151, 153, 154; 1985, c. 290, s. 7; 1985 (Reg. Sess., 1986), c. 955, ss. 63, 64; c. 1014, s. 179; 1989, c. 752, s. 20; 1996, 2nd Ex. Sess., c. 18, s. 7.4(c).)
§ 143‑12.1. Vending facilities.
(a) The receipts from vending facilities operated by State agencies, institutions, departments, boards, and commissions are State funds. The payments received by a State agency, institution, department, board or commission by contract under which another party operates vending facilities and pays a sum to the State, whether computed as a percentage of gross or net receipts or gross or net profits, or as a fixed or variable fee, are State funds.
(b) The receipts or payments described in subsection (a) of this section from vending facilities shall be deposited as provided by law in the appropriate fund to be determined by the Office of State Budget and Management.
(c) The net proceeds from vending facilities are subject to appropriation by the General Assembly.
(d) The Office of State Budget and Management shall submit to the General Assembly along with or as a part of the biennial budget (and along with or as a part of any second‑year budget requests) budgets for vending facilities operated by General Fund, Highway Fund, and Wildlife Fund departments' and institutions' operating budgets.
(e) Budgets for vending facilities prepared under subsection (d) of this section shall reflect total receipts from the facilities, and the total costs to staff, stock, and operate the vending facilities, shall set out the total net proceeds, and shall contain, in line‑item detail, requests the departments and institutions have submitted to expend the net proceeds. If a State agency or institution receives payments on account of vending facilities but does not actually operate the facilities, the budget shall contain a statement of the payments and shall contain, in line‑item detail, requests the departments and institutions have submitted to expend the net proceeds.
(f) The net proceeds that the General Assembly approves for expenditure by the department or institution shall be retained in the appropriate fund budget code for the purposes approved by the General Assembly.
(f1) The net proceeds of the vending operations at the University of North Carolina Hospitals at Chapel Hill shall be used at the beginning of each fiscal year to cover any deficits incurred by the Hospital's cafeteria operation during the prior fiscal year. The amount transferred from the net proceeds of the vending operations may not be available for expenditure but shall revert to the General Fund at the end of the fiscal year.
(g) For the purposes of this section "vending facilities" has the same meaning as provided in G.S. 111‑42(d), but also means any mechanical or electronic device dispensing items or something of value or entertainment or services for a fee, regardless of the method of activation, and regardless of the means of payment, whether by coin, currency, tokens, or other means.
(h) The provisions of subsections (c) through (f1) of this section shall not supersede or apply to operations under the provisions of Article 3 of Chapter 111 of the General Statutes, G.S. 127A‑138(b), or G.S. 116‑36.1 through G.S. 116‑36.2, or to the operation of any vending facility by a community college or local school administrative unit, but they shall apply to the operations of the University of North Carolina Hospitals at Chapel Hill. (1983 (Reg. Sess., 1984), c. 1034, s. 166; 1985, c. 479, s. 77; 1987, c. 564, s. 25; c. 738, s. 233(a); 1989, c. 141, s. 17; 2000‑140, s. 93.1(a); 2001‑424, s. 12.2(b).)
§ 143‑13. Printing copies of budget report and bills and rules for the introduction of the same.
The Director shall cause to be printed one thousand copies each of the budget report, the Current Operations Appropriations Bill, Capital Improvement Appropriations Bill, and the Budget Revenue Bill. The Governor shall present copies thereof to the General Assembly, together with the biennial message, except incoming Governors may, at the first session of the General Assembly in their respective terms, submit the same after the biennial message has been presented to the General Assembly. The Current Operations Appropriations Bill and the Capital Improvement Appropriations Bill shall be introduced by the chairman of the committee on appropriations in each house of the General Assembly, and the Budget Revenue Bill shall be introduced by the chairmen of the finance committees in each branch of the General Assembly: Provided, that for the years in which the Governor is elected, other than when a Governor is elected for a second successive term the Director shall deliver the budget report and the Current Operations Appropriations Bill and the Capital Improvement Appropriations Bill and the Budget Revenue Bill to the Governor‑elect, on or before the fifteenth day of December, and the said budget report, Appropriations, and Revenue Bills, shall be presented by the Governor to the General Assembly with such recommendations in the way of amendments, or other modifications, together with such criticism as he may determine. The provisions herein contained as to the introduction of the bills mentioned in this section shall be considered and treated as a rule of procedure in the Senate and House of Representatives until otherwise expressly provided for by a rule in either, or both, of said branches of the General Assembly. (1925, c. 89, s. 14; 1929, c. 100, s. 15; 1983 (Reg. Sess., 1984), c. 1034, ss. 152, 155‑158; 1985, c. 61, s. 4; 1985 (Reg. Sess., 1986), c. 1010.)
§ 143‑14. Joint meetings of committees considering the budget report and appropriation bill.
The appropriations committees of the House of Representatives and the Senate and subcommittees thereof shall sit jointly in open sessions while considering the budget and such consideration shall embrace the entire budget plan, including appropriations for all purposes, revenue, borrowings and other means of financing expenditures. Such joint meetings shall begin within five days after the budget has been presented to the General Assembly by the Governor. This joint committee shall have power to examine under oath any officer or head of any department or any clerk or employee thereof; and to compel the production of papers, books of account, and other documents in the possession or under the control of such officer or head of department. This joint committee may also cause the attendance of heads or responsible representatives of a department, institution, division, board, commission, and agency of the State, to furnish such information and answer such questions as the joint committee shall require. To these sessions of the joint committee or subcommittees shall be admitted, with the right to be heard, all taxpayers or other persons interested in the estimates under consideration. The Director or a designated representative shall have the right to sit at these public hearings and to be heard on all matters coming before the joint committee or subcommittees thereof. The said joint committee or any subcommittee thereof shall have full power and authority to punish for disobedience of its writs or orders requiring persons to attend such hearings and to answer under oath such questions as may be put to them by such committee or anyone acting in its behalf; such punishment shall be as is now, or may hereafter be prescribed for direct contempt, but with the right of such offender to appeal from the judgment of such committee to the Superior Court of Wake County, upon the giving of such bond as may be required by such committee. Insofar as this section prescribes the method and manner of hearings before such committees this section shall be considered and have the force of a rule of each branch of the General Assembly until and unless a change has been made by an express rule of such branch thereof. (1925, c. 89, s. 15; 1929, c. 100, s. 16; 1953, c. 501; 1955, c. 5.)
§ 143‑15. Reduction and increase of items by General Assembly.
The provisions of this Article shall continue to be the legislative policy with reference to the making of appropriations and shall be treated as rules of both branches of the General Assembly until and unless the same may be changed by the General Assembly either by express enactment or by rules adopted by either branch of the General Assembly.
The General Assembly may reduce or strike out such item in the Current Operations Appropriations Bill and the Capital Improvement Appropriations Bill as it may deem to be the interest of the public service, but neither House shall consider further or special appropriations until the Current Operations Appropriations Bill shall have been enacted in whole or part or rejected, unless the Governor shall submit and recommend an emergency appropriation bill or emergency appropriation bills, which may be amended in the manner set out herein, and such emergency appropriation bill, or bills, when enacted, shall continue in force only until the Current Operations Appropriations Bill and the Capital Improvement Appropriations Bill shall become effective, unless otherwise provided by the General Assembly. Provided that the Capital Improvement Appropriations Bill may be considered before the Current Operations Appropriations Bill has been adopted in whole or part or rejected.
The General Assembly may also increase any appropriation set out in the Current Operations Appropriations Bill and the Capital Improvement Appropriations Bill and may provide additional appropriations for other purposes if additional revenue or revenues, equal to the amount of such additional appropriations and increases, are provided for by corresponding amendment to the Budget Revenue Bill. No bill carrying an appropriation shall thereafter be enacted by the General Assembly, unless it be for an object or objects therein described and shall provide an adequate source of revenue for defraying such appropriation, or unless it appears from the budget report or the Budget Revenue Bill that there is sufficient revenue available therefor. The appropriation, or appropriations, in such bills shall be in accordance with the classification used in the budget.
Reports to or of the appropriations committees or their subcommittees indicate action by the general Assembly when they are used in preparation of or amendment to appropriations acts. (1925, c. 89, s. 16; 1929, c. 100, s. 17; 1983 (Reg. Sess., 1984), c. 1034, ss. 159‑161; 1987, c. 876, s. 12.)
§ 143‑15.1. Current Operations Appropriations Act; General Fund Financial Model.
(a) The General Assembly shall enact the Current Operations Appropriations Act by June 15 of odd‑numbered years and by June 30 of even‑numbered years in which a Current Operations Appropriations Act is enacted. The Current Operations Appropriations Act shall state the amount of General Fund appropriations availability upon which the General Fund budget is based. The statement of availability shall list separately the beginning General Fund credit balance, General Fund revenues, and any other components of the availability amount.
The General Fund operating budget appropriations, including appropriations for local tax reimbursements and local tax sharing, for the second year in a Current Operations Appropriations Act that contains a biennial budget shall not be more than two percent (2%) greater than the General Fund operating budget appropriations for the first year of the biennial budget.
(b) The General Assembly shall review the results of the General Fund Financial model, a computer‑based financial model used to project long‑term expenditure and revenue trends under various simulations, in its budget deliberations. The model shall be maintained and, from time to time, updated by the Fiscal Research Division of the General Assembly. (1991, c. 689, s. 346; 1991 (Reg. Sess., 1992), c. 993, s. 11; 1993 (Reg. Sess., 1994), c. 769, s. 11.3.)
§ 143‑15.2. Use of General Fund credit balance; priority uses.
(a) As used in G.S. 143‑15.3, 143‑15.3A, and 143‑15.3B, the term "unreserved credit balance" means the credit balance amount, as determined on a cash basis, before funds are reserved by the State Controller to the Savings Reserve Account or the Repairs and Renovations Reserve Account pursuant to G.S. 143‑15.3 and G.S. 143‑15.3A.
(b) The State Controller shall transfer funds from the unreserved credit balance to the Savings Reserve Account in accordance with G.S. 143‑15.3(a).
(c) The State Controller shall transfer funds from the unreserved credit balance to the Repairs and Renovation Reserve Account in accordance with G.S. 143‑15.3A(a).
(d) Repealed by Session Laws 2000, ch. 67, s. 7.7(e), effective June 30, 2001.
(e) The General Assembly may appropriate that part of the anticipated General Fund credit balance not expected to be reserved only for capital improvements or other one‑time expenditures. (1991, c. 689, s. 346; 1991 (Reg. Sess., 1992), c. 812, s. 7(a), (c); c. 993, s. 12; 1993, c. 321, s. 17.1(a); 1993 (Reg. Sess., 1994), c. 591, s. 5(a); 1995, c. 324, s. 5.2(a); 1996, 2nd Ex. Sess., c. 18, s. 7.1(a); 1997‑443, s. 7.9(b); 2000‑67, s. 7.7(e).)
§ 143‑15.3. Use of General Fund credit balance; priority uses.
(a) There is established a Savings Reserve Account as a restricted reserve in the General Fund. The State Controller shall reserve to the Savings Reserve Account one‑fourth of any unreserved credit balance remaining in the General Fund at the end of each fiscal year until the account contains funds equal to five percent (5%) of the amount appropriated the preceding year for the General Fund operating budget, including local government tax‑sharing funds, that were directly appropriated. In the event that the one‑fourth exceeds the amount necessary to reach the five percent (5%) level, only funds necessary to reach that level shall be reserved. If there are insufficient funds in the unreserved credit balance for the Savings Reserve Account and the Repairs and Renovations Reserve Account, then the requirements of this section shall be complied with first, and any remaining funds shall be reserved to the Repairs and Renovations Reserve Account, in accordance with G.S. 143‑15.3A.
(a1) If the balance in the Savings Reserve Account falls below the five percent (5%) level during a fiscal year, the State Controller shall, in accordance with subsection (a) of this section, reserve to the Savings Reserve Account for the following fiscal years up to one‑fourth of any unreserved credit balance remaining in the General Fund at the end of each fiscal year until the account again equals the five percent (5%) level set out in subsection (a) of this section.
(a2) The transfer of funds to the Savings Reserve Account in accordance with this section or any other provision of law is not an "appropriation made by law", as that phrase is used in Article V, Section 7(1) of the North Carolina Constitution.
(b) The Director may not use funds in the Savings Reserve Account unless the use has been approved by an act of the General Assembly. (1991, c. 689, s. 346; 1991 (Reg. Sess., 1992), c. 812, s. 7(b), (c); c. 900, s. 11; c. 993, s. 13; 1993, c. 321, ss. 17.1(c), 21.2; 1993 (Reg. Sess., 1994), c. 591, s. 5(b); c. 769, s. 7.27(b); 1997‑443, s. 7.9(c); 2000‑67, s. 7.7(f); 2005‑276, s. 2.2(c).)
§ 143‑15.3A. Repairs and Renovations Reserve Account.
(a) There is established a Repairs and Renovations Reserve Account as a restricted reserve in the General Fund. The State Controller shall reserve to the Repairs and Renovations Reserve Account three percent (3%) of the replacement value of all State buildings supported from the General Fund, at the end of each fiscal year.
(b) The funds in the Repairs and Renovations Reserve Account shall be used only for the repair and renovation of State facilities and related infrastructure that are supported from the General Fund. Funds from the Repairs and Renovations Reserve Account shall be used only for the following types of projects:
(1) Roof repairs and replacements;
(2) Structural repairs;
(3) Repairs and renovations to meet federal and State standards;
(4) Repairs to electrical, plumbing, and heating, ventilating, and air‑conditioning systems;
(5) Improvements to meet the requirements of the Americans with Disabilities Act, 42 U.S.C. § 12101 et seq., as amended;
(6) Improvements to meet fire safety needs;
(7) Improvements to existing facilities for energy efficiency;
(8) Improvements to remove asbestos, lead paint, and other contaminants, including the removal and replacement of underground storage tanks;
(9) Improvements and renovations to improve use of existing space;
(10) Historical restoration;
(11) Improvements to roads, walks, drives, utilities infrastructure; and
(12) Drainage and landscape improvements.
Funds from the Repairs and Renovations Reserve Account shall not be used for new construction or the expansion of the footprint of an existing facility unless required in order to comply with federal or State codes or standards.
The Director of the Budget shall not use funds in the Repairs and Renovations Reserve Account unless the use has been approved by an act of the General Assembly or, if the General Assembly is not in session, the Director of the Budget has first consulted with the Joint Legislative Commission on Governmental Operations under G.S. 143‑15.3A(c).
(c) The Governor shall consult with the Joint Legislative Commission on Governmental Operations before making allocations from the Repairs and Renovations Reserve Account.
Notwithstanding this subsection, whenever an expenditure is required because of an emergency that poses an imminent threat to public health or public safety, and is either the result of a natural event, such as a hurricane or a flood, or an accident, such as an explosion or a wreck, the Governor may take action under this subsection without consulting the Commission if the action is determined by the Governor to be related to the emergency. The Governor shall report to the Commission on any expenditures made under this paragraph no later than 30 days after making the expenditure and shall identify in the report the emergency, the type of action taken, and how it was related to the emergency. (1993, c. 321, s. 17.1(b); c. 561, s. 16; 1993 (Reg. Sess., 1994), c. 591, s. 5(c); 1995, c. 324, s. 5.2(b); 1996, 2nd Ex. Sess., c. 18, ss. 7.1(b), 7.4(b), (d); 1997‑443, s. 7.9(d).)
§ 143‑15.3B. The Clean Water Management Trust Fund.
(a) The Clean Water Management Trust Fund is established in G.S. 113A‑253. The General Assembly finds that, due to the critical need in this State to clean up pollution in the State's surface waters and to protect and conserve those waters that are not yet polluted, it is imperative that the State provide a minimum of one hundred million dollars ($100,000,000) each calendar year to the Clean Water Management Trust Fund; therefore, there is annually appropriated from the General Fund to the Clean Water Management Trust Fund the sum of one hundred million dollars ($100,000,000).
(b) The funds in the Clean Water Management Trust Fund shall be used only in accordance with Article 18 of Chapter 113A of the General Statutes. (1996, 2nd Ex. Sess., c. 18, s. 27.6(b); 1997‑443, s. 7.9(a); 2000‑67, ss. 7.7(b)‑(d); 2001‑474, s. 26.)
§ 143‑15.3C. Work First Reserve Fund.
(a) The State Controller shall establish a restricted reserve in the General Fund to be known as the Work First Reserve Fund. Funds from the Work First Reserve Fund shall not be expended until appropriated by the General Assembly.
(b), (c) Repealed by Session Laws 1999‑237, s. 6. (1997‑443, s. 12.12A; 1999‑237, s. 6(g).)
§ 143‑15.3D. Trust Fund for Mental Health, Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs.
(a) The Trust Fund for Mental Health, Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs is established as an interest‑bearing, nonreverting special trust fund in the Office of State Budget and Management. Moneys in the Trust Fund shall be held in trust and used solely to meet the mental health, developmental disabilities, and substance abuse services needs of the State. The Trust Fund shall be used to supplement and not to supplant or replace existing State and local funding available to meet the mental health, developmental disabilities, and substance abuse services needs of the State.
The State Treasurer shall hold the Trust Fund separate and apart from all other moneys, funds, and accounts. The State Treasurer shall be the custodian of the Trust Fund and shall invest its assets in accordance with G.S. 147‑69.2 and G.S. 147‑69.3. Investment earnings credited to the assets of the Trust Fund shall become part of the Trust Fund. Any balance remaining in the Trust Fund at the end of any fiscal year shall be carried forward in the Trust Fund for the next succeeding fiscal year.
Moneys in the Trust Fund shall be expended only in accordance with subsection (b) of this section and in accordance with limitations and directions enacted by the General Assembly.
(b) Moneys in the Trust Fund for Mental Health, Developmental Disabilities, and Substance Abuse Services and Bridge Funding Needs shall be used only to:
(1) Provide start‑up funds and operating support for programs and services that provide more appropriate and cost‑effective community treatment alternatives for individuals currently residing in the State's mental health, developmental disabilities, and substance abuse services institutions.
(2) Facilitate the State's compliance with the United States Supreme Court decision in Olmstead v. L.C. and E.W.
(3) Facilitate reform of the mental health, developmental disabilities, and substance abuse services system and expand and enhance treatment and prevention services in these program areas to remove waiting lists and provide appropriate and safe services for clients.
(4) Provide bridge funding to maintain appropriate client services during transitional periods as a result of facility closings, including departmental restructuring of services.
(5) Construct, repair, and renovate State mental health, developmental disabilities, and substance abuse services facilities.
(c) Notwithstanding G.S. 143‑18, any nonrecurring savings in State appropriations realized from the closure of any State psychiatric hospitals that are in excess of the cost of operating and maintaining a new State psychiatric hospital shall not revert to the General Fund but shall be placed in the Trust Fund and shall be used for the purposes authorized in this section. Notwithstanding G.S. 143‑18, recurring savings realized from the closure of any State psychiatric hospitals shall not revert to the General Fund but shall be used for the payment of debt service on financing contract indebtedness authorized pursuant to Article 9 of Chapter 142 of the General Statutes for the construction of a new State psychiatric hospital. Any remainder not needed for this debt service shall be credited to the Department of Health and Human Services to be used only for the purposes of subsections (b)(2) and (b)(3) of this section. (2001‑424, s. 21.58(a); 2003‑314, s. 3.3.)
§ 143‑15.3E. JDIG Reserve Fund.
(a) The State Controller shall establish a reserve in the General Fund to be known as the JDIG Reserve. Funds from the JDIG Reserve shall not be expended or transferred except in accordance with G.S. 143B‑437.63.
(b) It is the intent of the General Assembly to appropriate funds annually to the JDIG Reserve established in this section in amounts sufficient to meet the anticipated cash requirements for each fiscal year of the Job Development Investment Grant Program established pursuant to G.S. 143B‑437.52. (2004‑124, s. 6.12(a).)
§ 143‑15.4. General Fund operating budget size limited.
(a) Size Limitation. Except as otherwise provided in this section, the General Fund operating budget each fiscal year shall not be greater than seven percent (7%) of the projected total State personal income for that fiscal year. For the purpose of this section, the General Fund operating budget includes any appropriations for local tax‑sharing, but does not include appropriations for (i) capital expenditures or (ii) one‑time expenditures due to natural disasters, federal mandates, or other emergencies.
(b) Increase in Size Limitation. To the extent that any percent increase in appropriations for a fiscal year for (i) Medicaid, (ii) operation of prisons, or (iii) the costs of providing health insurance for teachers and State employees, exceeds the percent increase in State personal income growth for the same period, the limitation on the size of the General Fund operating budget provided in subsection (a) of this section for that fiscal year shall be increased by the dollar amount represented by the excess percentage. For all subsequent fiscal years, the percent limitation contained in subsection (a) shall then be increased to reflect that dollar adjustment.
(c) Fiscal Reports. The Office of State Budget and Management and the Fiscal Research Division of the General Assembly shall each submit a tentative estimate of total State personal income for the upcoming fiscal year to the General Assembly no later than February 1 of each year. The Office and the Fiscal Research Division shall each submit a final projection of total State personal income for the upcoming fiscal year to the General Assembly no later than May 1 of each year. The General Assembly shall use the lower of the two final projections to calculate the limitation on the size of the General Fund operating budget provided in this section. (1991, c. 689, s. 346; 1991 (Reg. Sess., 1992), c. 993, s. 14; 2000‑140, s. 93.1(a); 2001‑424, s. 12.2(b).)
§ 143‑16. Article governs all departmental, agency, etc., appropriations.
Every State department, bureau, division, officer, board, commission, institution, State agency, or undertaking, shall operate under an appropriation made in accordance with the provisions of this Article; and no State department, bureau, division, officer, board, commission, institution, or other State agency or undertaking shall expend any money, except in pursuance of such appropriation and the rules, requirement and regulations made pursuant to this Article. (1925, c. 89, s. 17; 1929, c. 100, s. 18.)
§ 143‑16.1. Federal funds.
(a) All federal funds shall be expended and reported in accordance with provisions of the Executive Budget Act, except as otherwise provided by law. Proposed budgets recommended to the General Assembly by the Governor and Advisory Budget Commission shall include information concerning the federal expenditures in State agencies, departments and institutions in the same manner as State funds. Each budgetary category shall show the total received and anticipated State and federal expenditures, along with a description of the purpose for which the federal funds will be spent at the program level. All expenditures for the prior fiscal year and all expenditures anticipated in the proposed budget shall be reported by objects of expenditure by purpose and shall be identified by each federal grant. For the purpose of this section, "federal funds" are any financial assistance made to a State agency by the United States government, whether a loan, grant, subsidy, augmentation, reimbursement, or any other form. The Director of the Budget may adopt rules and regulations establishing uniform planning, budgeting and fiscal procedures, not inconsistent with federal law, that ensure that all federal funds shall be expended in a standardized manner. The function of the Advisory Budget Commission under this section applies only if the Director of the Budget consults with the Commission in preparation of the budget.
(b) The Secretary of each State agency that receives and administers federal Block Grant funds shall prepare and submit the agency's Block Grant plans to the Fiscal Research Division of the General Assembly not later than February 20 of each odd‑numbered calendar year and not later than April 20 of each even‑numbered calendar year. The agency shall submit a separate Block Grant plan for each Block Grant received and administered by the agency, and each plan shall include, but not be limited to, the following:
(1) A delineation of the proposed dollar amount allocations by activity and by category, including dollar amounts to be used for administrative costs; and
(2) A comparison of the proposed funding with two prior years' program budgets.
The Director of the Budget shall review for accuracy, consistency, and uniformity each State agency's Block Grant plans prior to submission of the plans to the General Assembly. (1977, 2nd Sess., c. 1219, s. 45; 1983, c. 717, s. 56; c. 761, s. 57; 1985 (Reg. Sess., 1986), c. 955, s. 65; 1991 (Reg. Sess., 1992), c. 900, s. 8; 1998‑212, s. 7.2; 1999‑237, s. 5(r).)
§ 143‑16.2. Reports.
Whenever the Governor or any other executive officer, agency, board, or commission is authorized by law to consult with the Advisory Budget Commission prior to taking some action, if there has been no consultation such action should be reported in writing to the Speaker of the House of Representatives, the President of the Senate, and the Director of the Fiscal Research Division as soon as practicable after the action is taken. This section does not apply to preparation of the budget. (1985 (Reg. Sess., 1986), c. 955, s. 126.)
§ 143‑16.3. No expenditures for purposes for which the General Assembly has considered but not enacted an appropriation.
Notwithstanding any other provision of law, no funds from any source, except for gifts, grants, funds allocated from the Repair and Renovations Account in accordance with G.S. 143‑15.3A, and funds allocated from the Contingency and Emergency Fund in accordance with G.S. 143‑12(b), may be expended for any new or expanded purpose, position, or other expenditure for which the General Assembly has considered but not enacted an appropriation of funds for the current fiscal period; provided, however, that in the event the Director of the Budget declares that it is necessary to deviate from this provision, he may do so after prior consultation with the Joint Legislative Commission on Governmental Operations. For the purpose of this section, the General Assembly has considered a purpose, position, or other expenditure when that purpose is included in a bill, amendment, or petition and when any committee of the Senate or the House of Representatives deliberates on that purpose. (1985 (Reg. Sess., 1986), c. 1014, s. 177; 1987 (Reg. Sess., 1988), c. 1086, s. 50; 1989, c. 752, s. 47; 1991 (Reg. Sess., 1992), c. 812, s. 6(b); 1996, 2nd Ex. Sess., c. 18, s. 7.4(j); 1997‑443, s. 7.8(a).)
§ 143‑16.4. Settlement Reserve Fund.
(a) The "Settlement Reserve Fund" is established as a restricted reserve in the General Fund. Except as otherwise provided in this section, funds shall be expended from the Settlement Reserve Fund only by specific appropriation by the General Assembly.
(a1) A Health Trust Account is established in the Settlement Reserve Fund. The portion of each Master Settlement Agreement payment identified in Section 6(3) of S.L. 1999‑2 shall be credited to the Health Trust Account. The State Controller shall transfer all funds in the Health Trust Account to the Health and Wellness Trust Fund created in Article 6C of Chapter 147 of the General Statutes.
(a2) A Tobacco Trust Account is established in the Settlement Reserve Fund. The portion of each Master Settlement Agreement payment identified in Section 6(2) of S.L. 1999‑2 shall be credited to the Tobacco Trust Account. The State Controller shall transfer all funds in the Tobacco Trust Account to the Tobacco Trust Fund created in Article 75 of Chapter 143 of the General Statutes.
(b) Unless prohibited by federal law, federal funds provided to the State by block grant or otherwise as part of federal legislation implementing a settlement between United States tobacco companies and the states shall be credited to the Settlement Reserve Fund. Unless otherwise encumbered or distributed under a settlement agreement or final order or judgment of the court, funds paid to the State or a State agency pursuant to a tobacco litigation settlement agreement, or a final order or judgment of a court in litigation between tobacco companies and the states, shall be credited to the Settlement Reserve Fund. (1998‑191, s. 2; 2000‑147, s. 1.)
§ 143‑16.5: Repealed by Session Laws 1999‑237, s. 19a, effective June 30, 1999, and applicable to agreements entered on or after November 15, 1998.
§ 143‑16.6. (For contingent repeal see Editor's Note) Assignment to the State of rights to tobacco manufacturer escrow funds.
A tobacco product manufacturer that elects to place funds into escrow pursuant to G.S. 66‑291(a)(2) may make an assignment of its interest in the funds to the benefit of the State. The assignment applies to all funds, and any earnings and appreciation, that are in the escrow account at the time of the assignment or are subsequently deposited into the escrow account and are not released under the provisions of subdivision (1) or (2) of G.S. 66‑291(b) at any time on or before the expiration of 10 years from the date of assignment. The assignment is irrevocable and shall include any reversionary interest in the escrow account and the funds therein that would otherwise belong to the tobacco manufacturer, including the right to receive the escrowed funds pursuant to G.S. 66‑291(b)(3).
An assignment of rights executed pursuant to this section shall be in writing and shall be signed by a duly authorized representative of the tobacco product manufacturer making the assignment. An assignment is effective upon delivery to the Attorney General and the financial institution where the escrow account is maintained. (2005‑276, s. 34.1(d).)
§ 143‑17. Requisition for allotment.
Before an appropriation of any spending agency shall become available, such agency shall submit to the Director, not less than 20 days before the beginning of each quarter of each fiscal year a requisition for an allotment of the amount estimated to be required to carry on the work of the agency during the ensuing quarter and such requisition shall contain such details of proposed expenditures as may be required by the Director. The Director shall approve such allotments, or modifications of them, as he may deem necessary to make, and he shall submit the same to the State Controller who in the course of his operations shall check for compliance with such allotments. No allotment shall be changed nor shall transfers be made except upon the written request of the responsible head of the spending agency and by approval of the Director of the Budget in writing: Provided, that quarterly allotments made to the State Auditor's office, State Treasurer's office, and Administrative Office of the Courts shall be in such amounts as may be designated by the Advisory Budget Commission, and shall be made available in accordance with procedures determined by the Advisory Budget Commission. (1925, c. 89, s. 18; 1929, c. 100, s. 19; 1955, c. 578, s. 4; 1981, c. 859, s. 47.1; 1985 (Reg. Sess., 1986), c. 1024, s. 14.)
§ 143‑18. Unencumbered balances to revert to treasury; capital appropriations excepted.
All unencumbered balances of maintenance appropriations shall revert to the State treasury to the credit of the general fund or special funds from which the appropriation and/or appropriations, were made and/or expended, at the end of each fiscal year; except that capital expenditures for the purchase of land, the erection of buildings, new construction or renovations in progress shall continue in force until the attainment of the object or the completion of the work for which the appropriations are made; except that maintenance appropriations to the General Assembly shall remain available until expended, unless otherwise provided by the Legislative Services Commission.
As used in this section, "unencumbered" means not obligated in the form of purchase orders, contracts, renovations in progress or salary commitments. No purchase orders, contracts, renovations in progress, or salary commitments shall be entered into during a fiscal year unless sufficient funds are available within the purpose for which the funds were appropriated by the General Assembly or as authorized by the Director of the Budget as allowed by law. (1925, c. 18, s. 19; 1929, c. 100, s. 20; 1983 (Reg. Sess., 1984), c. 1034, s. 181; 1985, c. 479, s. 158; 1989 (Reg. Sess., 1990), c. 1066, s. 26.)
§ 143‑18.1. Decrease of projects within capital improvement appropriations; requesting authorization of capital projects not specifically provided for.
(a) Upon the request of the administration of a State agency or institution, the Director of the Budget may decrease the scope of a capital improvement project. Prior to taking any action under this subsection, the Director of the Budget may consult with the Advisory Budget Commission.
(b) Upon the request of the administration of a State agency or institution, the Director of the Budget may when, in his opinion, it is in the best interest of the State to do so, increase the cost of a capital improvement project within the appropriation made to that State agency or institution within the capital improvement appropriation to that agency or institution for that biennium, provided that the project may not be increased in scope under the authority of this subsection. Prior to taking any action under this subsection, the Director of the Budget may consult with the Advisory Budget Commission.
(c) Upon the request of the administration of any State agency or institution, the Director of the Budget may accept funds by gift or grant for the construction of a capital improvement project not specifically provided for or authorized by the General Assembly. These funds shall be placed in a special reserve account to be held by the State Treasurer until the end of the biennium in which the account was established or until the capital improvement project is authorized by the Director of the Budget, whichever occurs first. These funds shall be invested and the interest thereon shall be added to the reserve. If the project is not authorized by the end of that biennium, the State Treasurer shall pay the funds accumulated in the special reserve account to the grantor or donor. Upon the establishment of a special reserve account under this section, the Director of the Budget shall notify the Speaker of the House and President of the Senate of the receipt of the funds and the existence of the reserve account. Upon the request of the administration of any State agency or institution, the Governor may, under G.S. 120‑76(8), authorize the construction of a capital improvement project not specifically authorized by the General Assembly if such project is to be fully funded by gifts, grants, receipts, special funds, self‑liquidating indebtedness, other funds, or any combination of funds, but not including funds appropriated from the General Fund. All expenditures under this authorization shall be handled in full compliance with the provisions of the Executive Budget Act.
The agency shall support its request for such capital improvement project, or projects, with the following information: the estimated annual operating costs for (i) utilities; (ii) maintenance; (iii) repairs; (iv) additional personnel; (v) any and all other expenses to the State resulting from the addition of this facility to the plant of the institution. Prior to taking any action under this section to authorize a project, the Governor or the Director of the Budget may consult with the Advisory Budget Commission and the Capital Planning Commission. (1965, c. 841, s. 1; 1983, c. 717, s. 57; 1985 (Reg. Sess., 1986), c. 955, ss. 66‑71; 1987, c. 282, s. 26; 1996, 2nd Ex. Sess., c. 18, s. 7.4(e).)
§ 143‑19. Help for Director.
The Director is hereby authorized to secure such special help, expert accountants, draftsmen and clerical help as he may deem necessary to carry out his duties under this Article; and shall fix the compensation of all persons employed under this Article; which shall be paid by the State Treasurer upon the warrant of the State Controller. A statement in detail of all persons employed, time employed, compensation paid, and itemized statement of all other expenditures made under the terms of this Article, shall be reported to the General Assembly by the Director, and all payments made under this Article shall be charged against and paid out of the emergency contingent fund and/or such appropriations as may be made for the use of the Office of State Budget and Management. (1925, c. 89, s. 20; 1929, c. 100, s. 21; 1957, c. 269, s. 2; 1961, c. 1181, s. 2; 1979, 2nd Sess., c. 1137, s. 37; 1985 (Reg. Sess., 1986), c. 1024, s. 15; 2000‑140, s. 93.1(a); 2001‑424, s. 12.2(b).)
§ 143‑20. Accounting records.
The State Controller shall be responsible for keeping a record of the appropriations, allotments, expenditures, and revenues of each State department, institution, board, commission, officer, or other agency in any manner handling State funds. These records shall be kept in summary form, or in as much detail as the State Controller may deem advisable. (1925, c. 89, s. 22; 1929, c. 100, s. 22; 1955, c. 578, s. 5; 1957, c. 269, s. 2; 1979, 2nd Sess., c. 1137, s. 37; 1983, c. 913, s. 31; 1985 (Reg. Sess., 1986), c. 1024, s. 16.)
§ 143‑20.1. Annual financial statements.
Every fiscal year, all State agencies and component units of the State, as defined by generally accepted accounting principles, shall prepare annual financial statements on all funds administered by them no later than 60 days after the end of the State's fiscal year then ended in accordance with generally accepted accounting principles as described in authoritative pronouncements and interpreted or prescribed by the State Controller, and in the form required by the State Controller. The State Controller shall publish guidelines specifying the procedures to implement the necessary records, procedures, and accounting systems to reflect these statements on the proper basis of accounting.
Accordingly, the State Controller shall combine the financial statements for the various agencies into a Comprehensive Annual Financial Report for the State of North Carolina in accordance with generally accepted accounting principles. These statements, along with the opinion of the State Auditor, shall be published as the official financial statements of the State and shall be distributed to the Governor, the Office of State Budget and Management, members of the General Assembly, heads of departments, agencies, and institutions of the State, and other interested parties. The State Controller shall notify the Director of the Budget of any State agencies and component units of the State, as defined by generally accepted accounting principles, that have not complied fully with the requirements of this section within the specified time, and the Director of the Budget shall employ whatever means necessary, including the withholding of allotments, to ensure immediate corrective actions. (1983, c. 913, s. 32; 1985 (Reg. Sess., 1986), c. 1024, ss. 17‑19; 2000‑67, s. 7(a); 2000‑140, s. 93.1(a); 2001‑424, s. 12.2(b).)
§ 143‑21. Issuance of subpoenas.
The Director shall have and is hereby given full power and authority to issue the writ of subpoena for any and all persons who may be desired as witnesses concerning any matters being inquired into by the Director or the Commission, and such writs when signed by the Director shall run anywhere in this State and be served by any civil process officer without fees or compensation. Any failure to serve writs promptly and with due diligence, shall subject such officer to the usual penalties and liabilities and punishment as are now provided in the cases of like kind applying to sheriffs, and any persons who shall fail to obey said writ shall be subject to punishment for contempt in the discretion of the court and to be fined as witnesses summoned to attend the superior court, and such remedies shall be enforced against such offending witnesses upon motion and notice filed in the Superior Court of Wake County by the Attorney General under the direction of the Director. Any and all persons who shall be subpoenaed and required to appear before the Director or the Commission as witnesses concerning any matters being inquired into shall be compellable and required to testify, but such persons shall be immune from prosecution and shall be forever pardoned for violation of law about which such person is so required to testify. (1925, c. 89, s. 25; 1929, c. 100, s. 23; 1953, c. 675, s. 18.)
§ 143‑22. Surveys, studies and examinations of departments and institutions.
The Director is hereby given full power and authority to make such surveys, studies, examinations of departments, institutions and agencies of this State, as well as its problems, so as to determine whether there may be an overlapping in the performance of the duties of the several departments and institutions and agencies of the State, and to make surveys, examinations and inquiries into the matter of the various activities of the State, and to survey, appraise, examine and inspect and determine the true condition of all property of the State, and what may be necessary to protect it against fire hazard, deterioration, and to conserve its use for State purposes, and to make and issue and to enforce all necessary, needful or convenient rules and regulations for the enforcement of this Article. (1925, c. 89, s. 26; 1929, c. 100, s. 23; 1969, c. 458, s. 2.)
§ 143‑23. All maintenance funds for itemized purposes; transfers between objects or line items.
(a) All appropriations now or hereafter made for the maintenance of the various departments, institutions and other spending agencies of the State, are for the (i) purposes or programs and (ii) objects or line items enumerated in the itemized requirements of such departments, institutions and other spending agencies submitted to the General Assembly by the Director of the Budget and the Advisory Budget Commission, as amended by the General Assembly. The function of the Advisory Budget Commission under this subsection applies only if the Director of the Budget consults with the Commission in preparation of the budget.
(a1) Notwithstanding the provisions of subsection (a) of this section, a department, institution, or other spending agency may, with approval of the Director of the Budget, spend more than was appropriated for:
(1) An object or line item within a purpose or program so long as the total amount expended for the purpose or program is no more than was appropriated from all sources for the purpose or program for the fiscal period;
(2) A purpose or program, without consultation with the Joint Legislative Commission on Governmental Operations, if the overexpenditure of the purpose or program is:
a. Required by a court, Industrial Commission, or administrative hearing officer's order;
b. Required to respond to an unanticipated disaster such as a fire, hurricane, or tornado; or
c. Required to call out the National Guard.
The Director of the Budget shall report on a quarterly basis to the Joint Legislative Commission on Governmental Operations on any overexpenditures under this subdivision; or
(3) A purpose or program, after consultation with the Joint Legislative Commission on Governmental Operations in accordance with G.S. 120‑76(8), and only if: (i) the overexpenditure is required to continue the purpose or programs due to complications or changes in circumstances that could not have been foreseen when the budget for the fiscal period was enacted and (ii) the scope of the purpose or program is not increased. The consultation is required as follows:
a. For a purpose or program with a certified budget of up to five million dollars ($5,000,000), consultation is required when the authorization for the overexpenditure exceeds ten percent (10%) of the certified budget;
b. For a purpose or program with a certified budget of from five million dollars ($5,000,000) up to twenty million dollars ($20,000,000), consultation is required when the authorization for the overexpenditure exceeds five hundred thousand dollars ($500,000) or seven and one‑half percent (7.5%) of the certified budget, whichever is greater;
c. For a purpose or program with a certified budget of twenty million dollars ($20,000,000) or more, consultation is required when the authorization for the overexpenditure exceeds one million five hundred thousand dollars ($1,500,000) or five percent (5%) of the certified budget, whichever is greater;
d. For a purpose or program supported by federal funds or when expenditures are required for the reasons set out in subdivision (2) of this subsection, no consultation is required.
(a2) Funds appropriated for salaries and wages are also subject to the limitation that they may only be used for:
(1) Salaries and wages or for premium pay, overtime pay, longevity, unemployment compensation, workers' compensation, temporary wages, moving expenses of employees, payment of accumulated annual leave, certain awards to employees, tort claims, and employer's social security, retirement, and hospitalization payments;
(2) Contracted personal services if (i) the contract is for temporary services or special project services, (ii) the term of the contract does not extend beyond the fiscal year, (iii) the contract does not impose obligations on the State after the end of the fiscal year; and (iv) the total of all overexpenditures for contracted personal services approved in a program for a fiscal year does not exceed the greater of five hundred thousand dollars ($500,000) or ten percent (10%) of the lapsed salary funds in the program for the fiscal year; and
(3) Uses for which overexpenditures are permitted by subdivision (2) of subsection (a1) of this section but the Director of the Budget shall include such use and the reason for it in his quarterly report to the Joint Legislative Commission on Governmental Operations.
Lapsed salary funds shall not be used for new permanent employee positions or to raise the salary of existing employees.
(a3), (a4) Repealed by Session Laws 1996, Second Extra Session, c. 18, s. 7.4(f).
(b) Repealed by Session Laws 1985, c. 290, s. 8.
(c) Transfers or changes as between objects or line items in the budget of the Senate may be made by the President Pro Tempore of the Senate.
(d) Transfers or changes as between objects or line items in the budget of the House of Representatives may be made by the Speaker of the House of Representatives.
(e) Transfers or changes as between objects or line items in the budget of the General Assembly other than of the Senate and House of Representatives may be made jointly by the President Pro Tempore of the Senate and the Speaker of the House of Representatives.
(e1) Transfers or changes as between objects or line items in the budget of the Office of the Governor may be made by the Governor.
(e2) Transfers or changes as between objects or line items in the Office of the Lieutenant Governor may be made by the Lieutenant Governor.
(f) As used in this section:
(1) "Object or line item" means a budgeted expenditure or receipt in the budget enacted by the General Assembly that is designated by (i) a thirteen‑digit code in the 1000‑object code series or (ii) an eleven‑digit code in all other object code series, in accordance with the Budget Code Structure and the State Accounting System Uniform Chart of Accounts set out in the Administrative Policies and Procedures Manual of the Office of the State Controller.
(2) "Purpose or program" means a group of objects or line items for support of a specific activity outlined in the budget adopted by the General Assembly that is designated by a nine‑digit fund code in accordance with the Budget Code Structure and the State Accounting System Uniform Chart of Accounts set out in the Administrative Policies and Procedures Manual of the Office of the State Controller. (1929, c. 100, s. 24; 1981, c. 1127, s. 82; 1985, c. 290, s. 8; c. 479, s. 159; c. 757, s. 183; 1985 (Reg. Sess., 1986), c. 955, s. 72; 1989, c. 752, s. 44; 1991 (Reg. Sess., 1992), c. 812, s. 6(c); c. 900, s. 9(a); 1994, Ex. Sess., c. 24, s. 9(a)‑(c); 1993 (Reg. Sess., 1994), c. 769, s. 13; 1995, c. 507, s. 6.3; c. 509, ss. 77, 78; 1996, 2nd Ex. Sess., c. 18, s. 7.4(f); 1997‑443, s. 7.8(c); 2005‑276, s. 6.7(b).)
§ 143‑23.1. Repealed by Session Laws 1985, c. 290, s. 4, effective July 1, 1985.
§ 143‑23.2. Transfers to Department of Health and Human Services.
(a) Political subdivisions may appropriate funds directly to the Department of Health and Human Services for Medicaid programs. Other public agencies and private sources may transfer funds to the Department for Medicaid programs. The Department may accept unconditional and unrestricted donations of such funds. Notwithstanding the provisions of this Article which might forbid such transfer or donation, the University of North Carolina Hospitals at Chapel Hill may transfer funds as provided by the previous sentence of this section.
(b) Contributed funds shall be subject to the Department of Health and Human Services administrative control and shall be allocated only as specifically provided in the current operations appropriations act, except such contributions shall not reduce State general revenue funding. At the end of any fiscal year, the unobligated balance of any such funds shall not revert to the General Fund, but shall be reappropriated for these purposes in the next fiscal year. (1987, c. 861, s. 1; 1989, c. 141, s. 18; c. 361; 1997‑443, s. 11A.118(a); 1999‑237, s. 11.10(b).)
§ 143‑23.3. Transfer of certain funds authorized.
In order to assure maximum utilization of funds in county departments of social services, county or district health agencies, and area mental health, developmental disabilities, and substance abuse services authorities, the Director of the Budget may transfer excess funds appropriated to a specific service, program, or fund, whether specified service in a block grant plan or General Fund appropriation, into another service, program, or fund for local services within the budget of the respective State agency. (2001‑424, s. 21.11.)
§ 143‑24. Borrowing of money by State Treasurer.
The Director of the Budget, by and with the consent of the Governor and Council of State, shall have authority to authorize and direct the State Treasurer to borrow in the name of the State, in anticipation of the collection of taxes, such sum or sums as may be necessary to make the payments on the appropriations as even as possible and to preserve the best interest of the State in the conduct of the various State institutions, departments, bureaus, and agencies during each fiscal year. (1929, c. 100, s. 25.)
§ 143‑25. Maintenance appropriations dependent upon adequacy of revenues to support them.
(a) All maintenance appropriations now or hereafter made are hereby declared to be maximum, conditional and proportionate appropriations, the purpose being to make the appropriations payable in full in the amounts named herein if necessary and then only in the event the aggregate revenues collected and available during each fiscal year of the biennium for which such appropriations are made, are sufficient to pay all of the appropriations in full; otherwise, the said appropriations shall be deemed to be payable in such proportion as the total sum of all appropriations bears to the total amount of revenue available in each of said fiscal years. Except as provided in subsection (b) of this section, the Director of the Budget is given full power and authority to examine and survey the progress of the collection of the revenue out of which such appropriations are to be made, and to declare and determine the amounts that can be, during each quarter of each of the fiscal years of the biennium properly allocated to each respective appropriation. In making such examination and survey, the Director of the Budget shall receive estimates of the prospective collection of revenues from the Secretary of Revenue and every other revenue collecting agency of the State. The Director of the Budget may reduce all of said appropriations pro rata when necessary to prevent an overdraft or deficit to the fiscal period for which such appropriations are made. The Governor may also reduce all of said appropriations pursuant to Article III, Section 5(3) of the Constitution in accordance with subsection (b) of this section, after consulting with the Joint Legislative Commission on Governmental Operations under G.S. 120‑76(8) if prior consultation is required by that section. The purpose and policy of this Article are to provide and insure that there shall be no overdraft or deficit in the general fund of the State at the end of the fiscal period, growing out of appropriations for maintenance and the Director of the Budget is directed and required to so administer this Article as to prevent any such overdraft or deficit. Prior to taking any action under this section to reduce appropriations pro rata, the Governor may consult with the Advisory Budget Commission.
(b) The General Assembly recognizes that it has required units of local government to adopt and maintain annual balanced budgets and take other steps to assure financially sound operations under the Local Government Budget and Fiscal Control Act and other provisions of Chapter 159 of the General Statutes. Accordingly, the General Assembly finds that in order to satisfy those statutory requirements and provide adequate services to their citizens, units of local government must be able to rely on the funds and local revenue sources the General Assembly has provided.
It is the intent of the General Assembly that funds that have been collected by the State on behalf of local governments and funds that the General Assembly has appropriated or otherwise committed to local governments shall not be reduced except as provided in this section. In exercising the powers contained in Section 5(3) of Article III of the North Carolina Constitution, the Governor shall not withhold from distribution funds that have been collected by the State on behalf of local governments or funds that the General Assembly has appropriated or otherwise committed to local governments unless, after making adequate provision for the prompt payment of principal of and interest on bonds and notes of the State according to their terms, the Governor has exhausted all other sources of revenue of the State including surplus remaining in the treasury at the beginning of the fiscal period.
This subsection does not authorize the Governor to withhold revenues from taxes levied by units of local governments and collected by the State. The General Assembly recognizes that under Section 19 of Article I of the North Carolina Constitution and under the Due Process Clause of the United States Constitution, the State is prohibited from taking local tax revenue. (1929, c. 100, s. 26; 1955, c. 578, s. 7; 1973, c. 476, s. 193; 1981, c. 859, s. 47.1; 1983, c. 717, s. 58; 1985, c. 290, s. 5; 1985 (Reg. Sess., 1986), c. 955, ss. 73, 74; 1996, 2nd Ex. Sess., c. 18, s. 7.4(g); 2002‑120, s. 7.)
§ 143‑26. Director to have discretion as to manner of paying annual appropriations.
(a) Except as provided in subsection (b) of this section or as otherwise provided by State or federal law, it shall be discretionary with the Director of the Budget whether any annual appropriation shall be paid in monthly, quarterly or semiannual installments or in a single payment.
(b) Except as otherwise provided by State or federal law, an annual appropriation of one hundred thousand dollars ($100,000) or less to or for the use of a nonprofit corporation shall be paid in a single annual payment. An annual appropriation of more than one hundred thousand dollars ($100,000) to or for the use of a nonprofit corporation shall be paid in quarterly or monthly installments, in the discretion of the Director of the Budget. (1897, c. 368; Rev., s. 5372; C.S., s. 7683; 1925, c. 275, s. 9; 1929, c. 100, s. 27; 2001‑424, s. 6.7; 2001‑513, s. 1(b).)
§ 143‑27. Appropriations to educational, charitable and correctional institutions are in addition to receipts by them.
All appropriations now or hereafter made to the educational institutions, and to the charitable and correctional institutions, and to such other departments and agencies of the State as receive moneys available for expenditure by them are declared to be in addition to such receipts of said institutions, departments or agencies, and are to be available as and to the extent that such receipts are insufficient to meet the costs anticipated in the budget authorized by the General Assembly, of maintenance of such institutions, departments, and agencies; Provided, however, that if the receipts, other than gifts and grants that are unanticipated and are for a specific purpose only, collected in a fiscal year by an institution, department, or agency exceed the receipts certified for it in General Fund Codes, Highway Fund Codes, or Wildlife Fund Codes, the Director of the Budget shall decrease the amount he allots to that institution, department, or agency from appropriations from that Fund by the amount of the excess, unless the Director of the Budget has consulted with the Joint Legislative Commission on Governmental Operations and unless the Director of the Budget finds that (i) the appropriations from that Fund are necessary to maintain the function that generated the receipts at the level anticipated in the certified Budget Codes for that Fund and (ii) the funds may be expended in accordance with G.S. 143‑23. Notwithstanding the foregoing provisions of this section, receipts within The University of North Carolina realized in excess of budgeted levels shall be available, up to a maximum of ten percent (10%) above budgeted levels, for each Budget Code, in addition to appropriations, to support the operations generating such receipts, as approved by the Director of the Budget.
The Office of State Budget and Management shall report to the Joint Legislative Commission on Governmental Operations and to the Fiscal Research Division of the Legislative Services Office within 30 days after the end of each quarter on expenditures of receipts in excess of the amounts certified in General Fund Codes, Highway Fund Codes, or Wildlife Fund Codes, that did not result in a corresponding reduced allotment from appropriations from that Fund. (1929, c. 100, s. 28; 1981 (Reg. Sess., 1982), c. 1282, s. 66; 1983, c. 761, s. 14; 1985, c. 479, ss. 156, 157; 1989 (Reg. Sess., 1990), c. 936, s. 5(a); 1996, 2nd Ex. Sess., c. 18, s. 7.4(h)(1), (2); 1997‑256, s. 11; 1997‑347, s. 7; 1997‑401, s. 7; 1997‑418, s. 6; 1997‑443, s. 7.8(d); 2000‑140, s. 93.1(a); 2001‑424, s. 12.2(b); 2003‑283, s. 6; 2003‑284, s. 6.2.)
§ 143‑27.1. Repealed by Session Laws 1979, 2nd Session, c. 1137, s. 43.
§ 143‑27.2. Discontinued service retirement allowance and severance wages for certain State employees.
(a) When the Director of the Budget determines that the closing of a State institution or a reduction in force will accomplish economies in the State Budget, he shall pay either a discontinued service retirement allowance or severance wages to any affected State employee, provided reemployment is not available. As used in this section, "economies in the State Budget" means economies resulting from elimination of a job and its responsibilities or from a lack of funds to support the job. In determining whether to pay a discontinued service retirement allowance or severance wages, the Director of the Budget shall consider the recommendation of the department head involved and any recommendation of the State Personnel Director. Severance wages shall not be paid to an employee who chooses a discontinued service retirement. Severance wages shall not be subject to employer or employee retirement contributions. Severance wages shall be paid according to the policies adopted by the State Personnel Commission.
Notwithstanding any other provisions of the State's retirement laws, any employee of the State who is a member of the Teachers' and State Employees' Retirement System or the Law‑Enforcement Officers' Retirement System and who has his job involuntarily terminated as a result of economies in the State Budget may be entitled to a discontinued service retirement allowance, subject to the approval of the employing agency and the availability of agency funds. An unreduced discontinued service retirement allowance, not otherwise allowed, may be approved for employees with 20 or more years of creditable retirement service who are at least 55 years of age; or a discontinued service retirement allowance, not otherwise allowed, may be approved for employees with 20 or more years of creditable retirement service who are at least 50 years of age, reduced by one‑fourth of one percent (1/4 of 1%) for each month that retirement precedes his fifty‑fifth birthday. In cases where a discontinued service retirement allowance is approved, the employing agency shall make a lump sum payment to the Administrator of the State Retirement Systems equal to the actuarial present value of the additional liabilities imposed upon the System, to be determined by the System's consulting actuary, as a result of the discontinued service retirement, plus an administrative fee to be determined by the Administrator.
The salary used to determine severance wages under this section is the last annual salary except that if the employee was promoted within the previous 12 months, the last annual salary is that annual salary prior to the promotion. If the annual salary prior to the promotion is used, it shall be adjusted to account for any across‑the‑board legislative salary increases. Excluded from any calculation are any benefits such as, but not limited to, overtime pay, shift pay, holiday premium, or longevity pay.
(b) Any employee separated from State government and paid severance wages under this section shall not be employed under a contractual arrangement by any State agency, other than the constituent institutions of The University of North Carolina and the constituent institutions of the North Carolina Community College System, until 12 months have elapsed since the separation. This subsection does not affect any reduction in force rights that the employee may have. (1979, c. 838, s. 22; 1983, c. 761, s. 225; c. 923, s. 217(R); 1983 (Reg. Sess., 1984), c. 1034, s. 251; 1985 (Reg. Sess., 1986), c. 981, s. 1; c. 1024, s. 20; 1987, c. 177, s. 2; 1989 (Reg. Sess., 1990), c. 1066, s. 36(a); 1998‑212, s. 28.28(a).)
§ 143‑28. All State agencies under provisions of this Article.
It is the intent and purpose of this Article that every department, institution, bureau, division, board, commission, State agency, person, corporation, or undertaking, by whatsoever name now or hereafter called, that expends money appropriated by the General Assembly or money collected by or for such departments, institutions, bureaus, boards, commissions, persons, corporations, or agencies, under any general law of this State, shall be subject to and under the control of every provision of this Article. Any power expressed in this Article or necessarily implied from the language hereof or from the nature and character of the duties imposed, in addition to the powers and duties heretofore expressly conferred herein, shall be held and construed to be given hereby to the end that any and all duties herein imposed and made and all purposes herein expressed may be fully performed and completely accomplished, and to that end this Article shall be liberally construed. (1925, c. 89, s. 28; 1929, c. 100, s. 29; 1955, c. 578, s. 8; 1957, c. 269, s. 2; 1979, 2nd Sess., c. 1137, s. 37; 1981, c. 859, s. 47.1; 1985, c. 290, s. 6.)
§ 143‑28.1. Highway Fund appropriation.
Notwithstanding any other provisions of this Article, the appropriations made from the Highway Fund for highway construction and maintenance are subject to the following provisions.
(1) Cash Flow Funding for Highway Construction and Maintenance. Highway maintenance and construction funds shall be budgeted, expended and accounted for on a "cash flow" basis. Pursuant to this end, highway maintenance and construction contracts shall be planned and limited so payments due at any time will not exceed the cash available to pay them.
(2) Appropriations are for Payments and Contract Commitments to be Made in the Appropriation Fiscal Year. The appropriations provided for by the Appropriations Act for highway maintenance and construction are for maximum payments estimated to be made during the appropriation fiscal year and for maximum contracting authority for future years. Highway maintenance and construction contracts shall be scheduled so that the total contract payments and other expenditures charged to projects in the fiscal year for each highway maintenance and construction appropriation item will not exceed the current appropriations provided by the General Assembly and unspent prior appropriations made by the General Assembly for the particular appropriation item.
(3) Payments Subject to Availability of Funds Retainage Fully Funded 5% Cash Balance Required. The annual appropriations for highway maintenance and construction provided for by the Appropriations Act shall be expended only to the extent that sufficient funds are available in the Highway Fund. The Department of Transportation shall fully fund retainage from maintenance and construction contracts in the year in which the work is performed, and in addition shall maintain an available cash balance at the end of each month equal to at least five percent (5%) of the unpaid balance of the total maintenance and construction contract obligations. In the event this cash position is not maintained, no further construction and maintenance contract commitments shall be entered into until the cash balance has been regained. For the purposes of awarding contracts involving federal‑aid, any amount due from the federal government and the Highway Bond Fund as a result of unreimbursed expenditures may be considered as cash for the purposes of this provision.
(4) Anticipation of Revenues. In awarding State highway construction and maintenance contracts requiring payments beyond a biennium, the Director of the Budget may anticipate revenues as authorized and certified by the General Assembly, to continue contract payments for up to seventy‑five percent (75%) of the revenues which are estimated for the first fiscal year of the succeeding biennium and which are not required for other budget items. Up to fifty percent (50%) of the revenues not required for other budget items may be anticipated for the second fiscal year of the succeeding biennium's contract payments. Up to forty percent (40%) of the revenues not required for other budget items may be anticipated for the first year of the second succeeding biennium and up to twenty percent (20%) of the revenues not required for other budget items may be anticipated for the second year of the second succeeding biennium.
(5) Amounts Obligated Payments Subject to the Availability of Funds Termination of Contracts. Highway maintenance and construction appropriations may be obligated in the amount of allotments made to the Department of Transportation by the Office of State Budget and Management for the estimated payments for maintenance and construction contract work to be performed in the appropriation fiscal year. The allotments shall be multi‑year allotments and shall be based on estimated revenues and shall be subject to the maximum contract authority contained in subdivision (2) above. Payment for highway maintenance and construction work performed pursuant to contract in any fiscal year other than the current fiscal year will be subject to appropriations by the General Assembly. Highway maintenance and construction contracts shall contain a schedule of estimated completion progress and any acceleration of this progress shall be subject to the approval of the Department of Transportation provided funds are available. The State reserves the right to terminate or suspend any highway maintenance or construction contract and any highway maintenance or construction contract shall be so terminated or suspended if funds will not be available for payment of the work to be performed during that fiscal year pursuant to the contract. In the event of termination of any contract, the contractor shall be given a written notice of termination at least 60 days before completion of scheduled work for which funds are available. In the event of termination, the contractor shall be paid for the work already performed in accordance with the contract specifications.
(6) Provision Incorporated in Contracts. The provisions of subdivision (5) of this section shall be incorporated verbatim in all highway construction and maintenance contracts.
(7) Existing Contracts Are Not Affected. The provisions of this section shall not apply to highway construction and maintenance contracts awarded by the Department of Transportation prior to July 15, 1980. (1979, 2nd Sess., c. 1137, s. 62; 1981, c. 859, s. 9; 1996, 2nd Ex. Sess., c. 18, s. 19.4(b); 2000‑140, s. 93.1(a); 2001‑424, s. 12.2(b).)
§ 143‑29. Delegation of power by Director.
Any power or duty herein conferred on the Governor as Director may be exercised and performed by such person or persons as may be designated or appointed by him from time to time in writing. (1925, c. 89, s. 29; 1929, c. 100, s. 30.)
§ 143‑30. Budget of State institutions.
The several institutions of the State, boards, departments, commissions, agencies, persons or corporations, included with the terms hereof to which appropriations are made now or hereafter for permanent improvements or for maintenance, shall, before any of such appropriations, whether for permanent improvements or for maintenance, are available or paid to them or any one of them, budget their requirements and present the same to the Director of the Budget on or before the first day of June of each odd‑numbered year hereafter. There shall be a separate budget presented for permanent improvements and for maintenance. Each of said budgets shall contain the requirements of said institutions, boards, commissions, and agencies, persons and corporations, and undertakings, as hereinbefore defined, for the succeeding two years. Each institution, board, department, commission, agency, person or corporation, in the preparation of such budget, shall follow as nearly as may be the itemized recommendations of the Director of the Budget and Advisory Budget Commission and/or as amended by the General Assembly. The forms, except when modified and changed by authority of the Director of the Budget, shall be the forms used in presenting the requests. The function of the Advisory Budget Commission under this section applies only if the Director of the Budget consults with the Commission in preparation of the budget. (1925, c. 230, s. 2; 1929, c. 100, s. 32; 1985 (Reg. Sess., 1986), c. 955, s. 75.)
§ 143‑31. Building and permanent improvement funds spent in accordance with budget.
All buildings and other permanent improvements, which shall be erected and/or constructed, shall be erected and/or constructed, and carried on and the money spent therefor in strict accordance with the budget requests of such institution, board, commission, agency, person, or corporation filed with the Director of the Budget. The expenditure of appropriations for maintenance shall be in strict accordance with the budget recommendations for such institution, board, commission, agency, person or corporation and/or as amended or changed by the General Assembly. It shall be the duty of the Director of the Budget to see that all money appropriated for either permanent improvements or maintenance shall be expended in strict accordance with the budget recommendations and/or as amended by the General Assembly, for each department, institution, board, commission, agency, person or corporation. If the Director of the Budget shall ascertain that any department, institution, board, commission, agency, person or corporation has used any of the moneys appropriated to it for any purpose other than that for which it was appropriated and budgeted, as herein required, and not in strict accordance with the terms of this Article, the Director of the Budget shall have the power and he is hereby authorized to notify such institution, board, commission, agency, person or corporation that no further sums from any appropriation made to it will be available to such department, institution, board, commission, agency, person or corporation until and after the persons responsible for the diversion of the said funds shall have replaced the same, and the Director of the Budget shall have the power and he is hereby authorized to notify the State Controller not to approve or issue any further warrants for such department, institution, board, commission, agency, person or corporation for any unexpended appropriation and the State Controller is hereby prohibited from approving or issuing any further warrants for such department, institution, board, commission, agency, person or corporation until he shall have been otherwise directed by the Director of the Budget. (1925, c. 230, s. 3; 1929, c. 100, s. 33; 1961, c. 1181, s. 3; 1985 (Reg. Sess., 1986), c. 1024, s. 21.)
§ 143‑31.1. Study and review of plans and specifications for building, improvement, etc., projects.
It shall be the duty and responsibility of the Director of the Budget to determine whether buildings, repairs, alterations, additions or improvements to physical properties for which appropriations of State funds are made have been designed for the specific purpose for which such appropriations are made, that such projects have been designed giving proper consideration to economy in first cost, in maintenance cost, in materials and type of construction. Architectural features shall be selected which give proper consideration to economy in design. The Director of the Budget shall have prepared a complete study and review of all plans and specifications for such projects and bids on same will not be received until the results of such study and review have been incorporated in such plans and specifications, and until economic conditions of the construction industry are considered by the Office of State Budget and Management to be favorable to the letting of construction contracts. The Director of the Budget may, when he considers it in the best interest of the State to do so, terminate design contracts when it is documented that the designer has failed to perform the conditions enumerated in the contract.
Notwithstanding G.S. 143‑135, the Director of the Budget may authorize the Department of Health and Human Services and the Department of Correction to use funds necessary for projects that correct deficiencies, improve living conditions, or renovate unneeded patient space for State office space. (1953, c. 1090; 1963, c. 423; 1975, c. 879, s. 46; 1979, 2nd Sess., c. 1137, s. 37; 1981, c. 860, s. 12; 1983 (Reg. Sess., 1984), c. 1116, s. 95; 1997‑443, s. 11A.118(a); 2000‑140, s. 93.1(a); 2001‑424, s. 12.2(b).)
§ 143‑31.2. Appropriation, allotment, and expenditure of funds for historic and archeological property.
The Department of Cultural Resources may not expend any State funds for the acquisition, preservation, restoration, or operation of historic or archeological real and personal property, and the Director of the Budget may not allot any appropriations to the Department of Cultural Resources for a particular historic site until (i) the property or properties shall have been approved for such purpose by the Department of Cultural Resources according to criteria adopted by the North Carolina Historical Commission, (ii) the report and recommendation of the North Carolina Historical Commission has been received and considered by the Department of Cultural Resources, and (iii) the Department of Cultural Resources has found that there is a feasible and practical method of providing funds for the acquisition, restoration and/or operation of such property. (1963, c. 210, s. 3; 1973, c. 476, s. 48; 1985 (Reg. Sess; 1986), c. 1014, s. 171(e).)
§ 143‑31.3. Grants to nonstate health and welfare agencies.
Nonstate health and welfare agencies shall submit their appropriation requests for grants‑in‑aid through the Secretary of the Department of Health and Human Services for recommendations to the Director of the Budget and the Advisory Budget Commission and the General Assembly, and agencies receiving these grants, at the request of the Secretary of the Department of Health and Human Services, shall provide a postaudit of their operations that has been done by a certified public accountant. The function of the Advisory Budget Commission under this section applies only if the Director of the Budget consults with the Commission in preparation of the budget. (1979, c. 838, s. 35; 1985 (Reg. Sess., 1986), c. 955, s. 76; 1997‑443, s. 11A.118(a).)
§ 143‑31.4. Non‑State match restrictions.
Whenever money is required to match in appropriation made for a specific purpose by the State of North Carolina, the recipient of the appropriation shall actually receive as a gift, grant, earnings in actual money, or a pledge that can be used as collateral in any prudent loan transaction, the matching amount required. The recipient shall retain the matching amount received in its possession until spent for that purpose and shall spend an equal percentage of the appropriation and of the matching amount each time an expenditure is made, unless the individual appropriation requires otherwise. (1985, c. 479, s. 155.)
§ 143‑31.5. Repayment of certain unexpended and unencumbered sums; reports.
(a) Whenever funds have been appropriated by an act ratified before January 1, 1985, directly by the provisions of that act to a specific non‑state agency, but those funds are not expended or encumbered by that agency by June 30, 1988, the agency shall no later than July 31, 1988, repay to the State all sums not so expended or encumbered. For the purposes of this section, agency includes any corporation, association, board, commission, city, county, local school administrative unit or board of education, or local commission, but does not include a community college.
(b) Any such agency so appropriated funds for fiscal year 1980‑81, 1981‑82, 1982‑83, 1983‑84 or 1984‑85 shall report to the State Budget Office no later than December 31, 1986, the amount of any such funds not yet expended or encumbered. The State Budget Office shall monthly transmit a copy of such reports to the Joint Legislative Commission on Governmental Operations and the Fiscal Research Division. (1985 (Reg. Sess., 1986), c. 1014, s. 180; 1987, c. 564, s. 26; c. 722; 2000‑140, s. 93.1(l).)
§ 143‑32. Person expending an appropriation wrongfully.
(a) Any trustee, director, manager, building committee or other officer or person connected with any institution, or other State agency as herein defined, to which an appropriation is made, who shall expend any appropriation for any purpose other than that for which the money was appropriated and budgeted or who shall consent thereto, shall be liable to the State of North Carolina for such sum so spent and the sum so spent, together with interest and costs, shall be recoverable in an action to be instituted by the Attorney General for the use of the State of North Carolina, which action may be instituted in the Superior Court of Wake County, or any other county, subject to the power of the court to remove such action for trial to any other county, as provided in G.S. 1‑83, subdivision (2). Notwithstanding the provisions of Chapters 120, 128, 135, and 143 of the General Statutes, the board of trustees of the State administered retirement system may not pay any retirement benefits or allowances, except for withdrawn contributions, to any person found liable pursuant to this subsection until the person has paid to the State the sum required by this subsection, together with interest and costs. The Attorney General shall notify the retirement system of any member's outstanding liability under this subsection and shall also notify the retirement system when this liability has been removed.
(b) Any member or members of any board of trustees, board of directors, or other controlling body governing any of the institutions of the State, or any officer, employee of, or person holding any position with any of the institutions of the State, or other State agency as herein defined, who willfully acts to divert, use, or expend any funds appropriated for the use of said institution or agency, in a manner designed to circumvent the provisions of this section, including normal reversions of State funds, by failing to properly receive or deposit funds, or by the improper expenditure or transfer of funds for any purpose other than that for which the funds were appropriated and budgeted, shall be guilty of a Class 1 misdemeanor. All offenses against this section shall be held to have been committed in the County of Wake and shall be tried and disposed of in the General Court of Justice for Wake County. If such offender be not an officer elected by vote of the people, conviction of such offense shall be sufficient cause for removal from office or dismissal from employment by the Governor upon 30 days' notice in writing to such offender. (1925, c. 230, s. 4; 1929, c. 100, s. 34; 1977, c. 930; 1985, c. 479, s. 195; 1993, c. 539, s. 1002; 1994, Ex. Sess., c. 24, s. 14(c).)
§ 143‑33. Intent.
It is an intent and purpose of this Article that all departments, institutions, boards, commissions, agencies, persons or corporations to which appropriations for permanent improvements and/or maintenance are made, shall submit to the Director of the Budget their requests for the payment of such appropriations in the form of a budget, following the recommendations made by the Director of the Budget and the Advisory Budget Commission and/or as amended by the General Assembly. The function of the Advisory Budget Commission under this section applies only if the Director of the Budget consults with the Commission in preparation of the budget. (1925, c. 230, s. 5; 1929, c. 100, s. 35; 1985 (Reg. Sess., 1986), c. 955, s. 77.)
§ 143‑34. Penalties and punishment for violations.
(a) Except as provided by subsection (b) of this section, a refusal to perform any of the requirements of this Article, and the refusal to perform any rule or requirement or request of the Director of the Budget made pursuant to, or under authority of, the Executive Budget Act, shall subject the offender to penalty of two hundred fifty dollars ($250.00), to be recovered in an action instituted either in Wake County Superior Court, or any other county, by the Attorney General for the use of the State of North Carolina, and shall also constitute a Class 1 misdemeanor. If the offender is not an officer elected by vote of the people, the offense shall be sufficient cause for removal from office or dismissal from employment by the Governor upon 30 days' notice in writing to the offender.
(b) A false statement made in violation of G.S. 143‑6.2(b2) is a Class A1 misdemeanor offense. (1929, c. 100, s. 36; 1993, c. 539, s. 1003; 1994, Ex. Sess., c. 14, s. 61; c. 24, s. 14(c); 2005‑276, s. 6.9(b).)
§ 143‑34.1. Positions included in the State's payroll must be approved by the Director of Budget; payment of benefits and other salary‑related items must be made from same source as salary; dependent care assistance program authorized; flexible compensation benefits authorized.
(a) Before a department, institution, or other agency of State government establishes a new position or changes the funding of an existing position, the agency must submit the proposed action to the Director for approval. The Director shall review the proposed action to ensure that it is within the amount appropriated to the agency. If the Director approves the action, the Director shall notify the agency and the State Controller of the approval. The State Controller may not honor a voucher in payment of a payroll that includes a new position or a change in an existing position that has not been approved by the Director.
(a1) A department, institution, or other agency of State government may establish new receipt‑supported positions only after prior consultation with the Joint Legislative Commission on Governmental Operations. This subsection shall not apply to work‑order funded positions in the Department of Transportation that are created for the purpose of highway construction, to positions at The University of North Carolina or its constituent institutions, or to positions established by the Governor to expand the State's capabilities in dealing with the threat of terrorism in the event of an emergency or other exigent circumstances.
(b) Required employer salary‑related contributions for retirement benefits, death benefits, disability salary continuation and Social Security for employees whose salaries are paid from general fund or highway fund revenues, or from department, office, institutional or agency receipts, or from nonstate funds, shall be paid from the same source as the source of the employees' salaries. In those instances in which an employee's salary is paid in part from the general fund, or the highway fund, and in part from the department, office, institutional or agency receipts, or from nonstate funds, the required salary‑related contributions shall be paid from the general fund, or the highway fund, only to the extent of the proportionate part paid from the general fund, or highway fund, in support of the salary of such employee, and the remainder of the employer's contribution requirements shall be paid from the same source which supplies the remainder of such employee's salary. The requirements of this section as to the source of payment are also applicable to payments on behalf of the employee for hospital‑medical insurance, longevity payments, salary increments, and legislative salary increases. The State Controller shall approve the method of payment by State departments, offices, institutions and agencies for employer salary‑related requirements of this section, and determine the applicability of the section to an employer's salary‑related contribution or payment in behalf of an employee.
(c) The Director of the Budget is authorized to provide eligible officers and employees of State departments, institutions, and agencies not covered by the provisions of G.S. 116‑17.2 a program of dependent care assistance as available under Section 129 and related sections of the Internal Revenue Code of 1986, as amended. The Director of the Budget may authorize State departments, institutions, and agencies to enter into annual agreements with employees who elect to participate in the program to provide for a reduction in salary. With the approval of the Director of the Budget, savings in the employer's share of contributions under the Federal Insurance Contributions Act on account of the reduction in salary may be used to pay some or all of the administrative expenses of the program. Should the Director decide to contract with a third party to administer the terms and conditions of a program of dependent care assistance, he may select a contractor only upon a thorough and completely competitive procurement process.
(d) Notwithstanding any other provisions of law relating to the salaries of officers and employees of departments, institutions, and agencies of State government, the Director of the Budget is authorized to provide a plan of flexible compensation to eligible officers and employees of State departments, institutions, and agencies not covered by the provisions of G.S. 116‑17.2 for benefits available under Section 125 and related sections of the Internal Revenue Code of 1986 as amended. This plan shall not replace, substitute for, or duplicate any benefits provided to employees and officers under Article 1A of Chapter 120 of the General Statutes and Articles 1, 3, 4, and 6 of Chapter 135 of the General Statutes. The plan may, however, include offerings for products and benefits that are supplemental or additional to these statutory benefits. In providing a plan of flexible compensation, the Director of the Budget may authorize State departments, institutions, and agencies to enter into agreements with their employees for reductions in the salaries of employees electing to participate in the plan of flexible compensation provided by this section. With the approval of the Director of the Budget, savings in the employer's share of contributions under the Federal Insurance Contributions Act on account of the reduction in salary may be used to pay some or all of the administrative expenses of the program. Should the Director of the Budget decide to contract with a third party to administer the terms and conditions of a plan of flexible compensation as provided by this section, it may select such a contractor only upon a thorough and completely advertised competitive procurement process. (1949, c. 718, s. 5; 1957, c. 269, s. 2; 1961, c. 1181, s. 4; 1979, 2nd Sess., c. 1137, s. 44; 1983 (Reg. Sess., 1984), c. 1034, s. 162; 1985 (Reg. Sess., 1986), c. 1024, ss. 22, 23; 1989, c. 458, s. 4; 1989 (Reg. Sess., 1990), c. 1059, s. 4; 1991, c. 542, s. 7; 1991 (Reg. Sess., 1992), c. 1044, ss. 14(a), (e), (i); 1993, c. 561, s. 42; 1993 (Reg. Sess., 1994), c. 769, s. 7.28A; 1997‑443, s. 33.20(a); 1999‑237, s. 28.27(a); 2001‑424, s. 32.19A(a); 2001‑470, s. 4; 2004‑199, s. 35.)
§ 143‑34.2. Information as to requests for nonstate funds for projects imposing obligation on State; statement of participation in contracts, etc., for nonstate funds; limiting clause required in certain contracts or grants.
All State agencies, funds, or state‑supported institutions shall submit to the Office of State Budget and Management, as of the original date thereof, copies of all applications and requests for nonstate funds, (including federal funds), to be used for any purpose to which this section is applicable. This section shall be applicable to all projects and programs which do or may impose upon the State of North Carolina any substantial financial obligation at the time of or subsequent to the acceptance of any funds received upon any such application or request. Every State agency, fund or state‑supported institution seeking nonstate funds for any such project or program shall furnish to the Office of State Budget and Management and the Advisory Budget Commission with each such copy of application or request, a statement of the purposes for which any such project or program is desired or advocated, the source and amount of funds to be granted or provided therefor, and a statement of the conditions, if any, upon which such funds are to be provided. Prior to approval of any such project or program, the Office of State Budget and Management shall furnish to the Fiscal Research Division of the General Assembly a list of the projects or purposes and the current and future financial impact of those projects or purposes.
It shall be required of all State agencies, funds, or state‑supported institutions, commissions or regional planning and development bodies to submit to the Office of State Budget and Management a statement of participation in any contract, agreement, plan or request for nonstate funds (including federal funds).
Any contract or grant entered into by a State board, commission, agency, department or institution for the operation of a new program by such State board, commission, agency, department or institution or for the enrichment of an ongoing program of such State board, commission, agency, department or institution shall include a limiting clause which specifically states that continuation of the contract or grant program with State appropriations beyond the current State fiscal year is subject to State funds being appropriated by the General Assembly specifically for that program.
The function of the Advisory Budget Commission under this section applies only if the Director of the Budget consults with the Commission in preparation of the budget. (1965, c. 1181; 1969, c. 1210; 1977, c. 802, s. 15.25; 1979, 2nd Sess., c. 1137, ss. 37, 45; 1985 (Reg. Sess., 1986), c. 955, s. 78; 1997‑443, s. 7(c); 2000‑140, s. 93.1(a); 2001‑424, s. 12.2(b).)
§ 143‑34.3. Repealed by Session Laws 1977, c. 802, s. 15.20.
§ 143‑34.4: Recodified as § 120‑36.6 by Session Laws 1983 (Regular Session 1984), c. 1034, s. 177.1.
§ 143‑34.5: Repealed by Sessions Laws 1985, c. 479, s. 160.
§ 143‑34.6. Deposit of payroll deductions.
Employer and employee salary‑related contributions and deductions for employees whose salaries were paid from the general fund, Highway Fund, agency receipts, or any combination thereof shall not be withdrawn or transferred except to an account whose cash balance earns interest for the general fund or Highway Fund, as provided in G.S. 147‑69.1, until payment is made directly to the ultimate agency or party to whom they are due. (1983, c. 761, s. 27.)
§ 143‑34.7. Participation by Legislative Officers.
The Speaker and Speaker Pro Tempore of the House of Representatives and the President Pro Tempore and Majority Leader of the Senate may attend all meetings of the Advisory Budget Commission. (1983 (Reg. Sess., 1984), c. 1034, s. 163.)
§ 143‑34.8. Reserved for future codification purposes.
§ 143‑34.9. Reserved for future codification purposes.
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