In the first several months of the year, South Carolina municipalities have financial reports due to the state, and municipal officials must submit their Statement of Economic Interest. In some cases, city or town audits are due during this period, although this is determined by the timing of the beginning of the municipality’s fiscal year.
Audits and compilation of financial statements
Depending on when a city’s fiscal year begins, audit reporting may or may not be an item for the city to complete at the beginning of the year. SC Code Section 5-7-240 requires all municipalities to submit a financial audit to the Office of the State Treasurer within 13 months of the end of that municipality’s fiscal year.
An audit must include all financial records and transactions of the municipality and any agency funded in whole by the municipality, plus a report of the recording, collection and distribution of applicable court fines.
For municipalities with a fiscal year ending December 31, the 13-month requirement means that the audit for FY 2024 is due by January 31, 2026. For a fiscal year ending June 30, the audit for FY 2024 will be due July 31, 2026.
Any municipality that misses its audit submission deadline may have all of its state payments — including 100% of Local Government Fund dollars, all of the Local Option Sales Tax revenue if the city is located in a LOST county and state accommodations tax funds — withheld by the State Treasurer's office until the audit is received. The State Treasurer posts a list of municipal delinquent audits available online.
A change to state law in 2023 allows cities and towns with less than $500,000 in total recurring revenues the option of submitting a compilation of financial statements as an alternative to a full audit. Municipalities with a court system must submit this annually, and those without a court system must submit them once every three years. They should follow the same rule of submitting them within 13 months of the end of the fiscal year.
Local Government Finance Reports
Municipalities must submit their Local Government Finance Report to the SC Department of Revenue and Fiscal Affairs, due by March 15. The report is available online. Municipalities that do not submit this report on time face the penalty of losing 10% of the municipality’s share of the Local Government Fund, under SC Code Section 6-1-50.
Statement of Economic Interest submissions
Public officials must use the SC State Ethics Commission’s Statement of Economic Interest forms to report their income, as well as any economic interest in real, personal or business property, according to SC Code Section 8-13-1110.
The requirement applies to all public officials, including those whose public service is unpaid.
The State Ethics Commission maintains a full list of all types of public officials subject to the SEI requirement, as well as the circumstances under which they must make a disclosure. The forms are due by electronic filing by noon on March 30.
State law defines an economic interest as “an interest distinct from that of the general public in a purchase, sale, lease, contract, option, or other transaction or arrangement involving property or services in which a public official, public member, or public employee may gain an economic benefit.”
The economic interests that officials must disclose on the forms include their own business dealings and property, but also those of immediate family members as well.
The fines that can be charged to the individual official, not the municipality, for overdue SEI submissions can be substantial. Once the forms become overdue, fines for not filing them can start increasing daily until they hit maximum amounts.
Important Reporting Dates
- January 31 – Audits due for municipalities with fiscal years ending December 31
- March 15 – Local Government Finance Report due
- March 30 at noon – Statements of Economic Interest due
- July 31 – Audits due for municipalities with fiscal years ending June 30