This bill amends Arkansas law regarding the audits of counties and municipalities, specifically focusing on the definitions and requirements for financial audits. It introduces new definitions, such as "required report" and "turnback funds," and clarifies the responsibilities of the Legislative Auditor in conducting audits. Municipalities are allowed to hire licensed accountants to perform financial audits, which must be submitted to the Legislative Auditor within ten days of issuance. The bill also outlines the format for financial statements and provides an alternative basis for audits, allowing governing bodies to adopt different accounting standards if desired.

Additionally, the bill establishes consequences for municipalities that fail to file required reports within eighteen months after the end of a fiscal year. In such cases, the Legislative Joint Auditing Committee can notify the Treasurer of State to withhold turnback funds until compliance is achieved. If the funds are withheld for over twelve months, they will be redistributed to other municipalities, and the non-compliant municipality will not accrue further turnback funds until all required reports are filed. The act is set to take effect on June 30, 2024.

Statutes affected:
HB 1571: 10-4-412, 19-5-101, 27-70-207, 14-71-101(b)
Act 453: 10-4-412, 19-5-101, 27-70-207, 14-71-101(b)