The bill amends the Audit Act to enhance audit requirements and redefine key terms related to auditing state agencies and local public bodies. It revises the definition of "local public body" to exclude entities with annual revenues below $100,000 and expands the definition of "agency" to include organizations that support public post-secondary educational institutions. Additionally, the bill introduces provisions for statewide federal single audits starting in fiscal year 2028, aimed at assessing the state's compliance with federal laws concerning major federal assistance programs. It also modifies audit requirements based on cash and investment assets, annual revenue, or federal expenditures, establishing new financial reporting thresholds and exemptions for smaller local public bodies.

Moreover, the bill creates a nonreverting "audit fund" in the state treasury to cover audit costs, with payments for the state auditor's salaries and expenses drawn from this fund. It mandates that agencies or local public bodies designated for audit must contract with an independent auditor, subject to oversight approval for certain educational institutions. If an agency fails to recommend an independent auditor within sixty days, the state auditor can select one on their behalf. The bill also stipulates that the state auditor will review all audit reports and may authorize progress payments to the independent auditor, ensuring that final payments are contingent upon a written determination of competent audit execution in line with contractual and regulatory standards.

Statutes affected:
introduced version: 6-6-1, 12-6-2, 12-6-3, 12-6-5, 12-6-13, 12-6-14