Amends GS 159-34 (annual independent audit of local governments) to change the entity that is certifying auditors from the Local Government Commission (LGC) to the State Auditor (SA). Only requires that the auditor be a certified accountant (was, auditor must be a CPA or a certified accountant).

Now requires that the auditor be selected based on the qualifications described using sealed bids solicited by the governing board, which must be solicited at least every five years (currently, just requires auditor be selected by governing board). Specifies that the auditor should be selected based solely on cost, expertise, and time for completion of the audit and without information as to identity of the bidder. Allows for the governing board to reject an otherwise winning bid and solicit sealed bids again if it determines that the auditor cannot meet the audit schedule of the governing board or has performed inadequately on a prior audit of the governing board. Requires the selected auditor to be certified by the SA to audit accounts of units of local government or public authorities. Requires the SA to establish a process for accountants and CPAs to become certified to conduct annual audits under GS 159-34. Allows any CPA or accountant so certified to be removed for cause.

Clarifies that the LGC may require the board of a unit of local government or public authority (currently, just refers to local government or public authority) that has been the subject of an investigative audit by the SA to select the certified public accountant from a list of three individuals provided by the LGC for its annual audit, instead of the bid process described above. Requires the secretary to provide a notice of noncompliance to a unit of local government or public authority (currently, county or municipality) and specifies it should be sent to the primary mailing address on record with the LGC (currently just sent to the primary mailing address). Requires the secretary to report annually to LGC and NCGA a list of units of local government and public authorities failing to complete and report to the LGC, in a timely fashion, two or more consecutive annual audits as required by GS 159-34. Makes organizational, clarifying, conforming, and technical changes.

Amends GS 115C-447 (annual school independent audits) to change the entity certifying the auditor from the LGC to the SA. Implements the sealed bid process described above, but requires the board of education (not the local government unit) to select the auditor from the sealed bids based on the factors described above. Implements the same annual reporting requirement described above, but for local school administrative units. Authorizes the SA to implement a process for certified public accountants and accountants to become certified to conduct annual audits under GS 115C-447. Allows any CPA or accountant so certified to be removed for cause. Authorizes the LGC to issue rules and regulations for the purposes of improving the quality of auditing and the quality and comparability of reporting pursuant to GS 115C-447 or any similar section of the General Statutes. Permits those rules to consider the needs of the public for adequate information and the performance that the auditor has demonstrated in the past and may be varied according to the size, purpose, or function of the unit, or any other criteria reasonably related to the purpose or substance of the rules or regulations. Requires the secretary to report annually to LGC and NCGA a list of units of local school administrative units failing to complete and report to the LGC, in a timely fashion, two or more consecutive annual audits. Makes technical changes and language gender neutral.

Makes conforming change to the definitions provisions of the School Budget and Fiscal Control Act (GS 115C-423) by adding Commission to mean the LGC.

Appropriates $3.52 million in recurring funds for 2025-26 to the SA to create a fiscal administrative program to implement specified goals related to bringing small local government and public authorities into compliance.

Effective July 1, 2025, and applies to audits conducted on or after that date.