This bill amends Minnesota Statutes 2024, section 412.591, subdivision 3, to raise the revenue threshold that requires cities to perform annual audits. Specifically, the bill changes the threshold from $150,000 to $500,000, effective August 1, 2025, for audits performed in 2026 and thereafter. If a city's annual revenue from all governmental and enterprise funds exceeds this new threshold, the city council must provide for an annual audit by the state auditor or a certified public accountant. If the revenue is at or below the new threshold, the council is required to conduct an audit at least once every five years.

Additionally, the bill updates the reference year for the implicit price deflator for state and local expenditures from 2004 to 2025, ensuring that the revenue threshold is adjusted for inflation in future years. This change aims to alleviate the audit burden on smaller cities while maintaining oversight of financial affairs for those with higher revenues.

Statutes affected:
Introduction: 412.591