The LGC’s policy has been to not approve financings in November (or later) for a local government until it has approved that unit’s new audit. The LGC’s refusal to approve new borrowings is one of the few tools the Treasurer’s office has to force local governments to get audits done in a timely manner, and we don’t blame them for using it.
The post linked below from the State Treasurer’s website indicates there may be some leniency this year from the “blackout” rule, at least for bank placement financings. We think this would be an entirely appropriate approach to take, and we think continuing to require new audits for public offerings also makes sense.
We would expect that this would not necessarily be a uniform policy for approval: if there were meaningful internal control issues on your past audits, problems that have persisted over more than one audit, or deficits shown in funds on your last audit, we can see the LGC wanting to see the new audit before approving new debt. If this is a one-off problem of being late, we bet that this policy will then apply to let you proceed with a bank placement financing.
Here’s the link to the Treasurer’s post: https://www.nctreasurer.com/blog/2020/05/15/audit-deadline-june-30-2020-financial-statements