FIN-2000-3410

This Special Financial Report presents the results of our efforts to check the records of the North Carolina Department of State Treasurer pursuant to North Carolina General Statute Sec. 147-64.6.(c)(8). This statute provides that 'the Auditor shall check the treasury records at the time a Treasurer assumes office (not to succeed himself), and therein charge him with the balance in the treasury, and shall check the Treasurer's records at the time he leaves office to determine that the accounts are in order.' Article 3, Section 7 of the North Carolina Constitution provides that the term of office for the treasurer shall be four years and shall commence on the first day of January next after his/her election and continue until his/her successor is elected and qualified. On November 7, 2000, Richard H. Moore was elected Treasurer and began his term on January 2, 2001, succeeding Treasurer Harlan E. Boyles. We performed the procedures we considered necessary under the circumstances to check the balance in the treasury records as of December 31, 2000, as reported on the schedules included herein, and to determine that the records are in order. The primary procedure used was confirmation with external parties to determine that the reported treasury balance exists. Additional procedures were used to determine that the reported balance in the treasury is properly valued and recorded. In our opinion, the balance in the treasury as of December 31, 2000 is accurately reported on the schedules included herein, except for the amount reported for fixed assets. The fixed asset amounts are overstated by an amount that is not readily determinable. In addition, we found deficiencies in internal control and instances of noncompliance that are related to authorized investments, fixed assets and escheat property. The preceding matters are not material to the reported balance in the treasury and are more fully discussed in the Findings and Recommendations Section of this report.