In 2022, the Municipal Audit Clarification Act (Act 2022-345, Acts of Alabama) was passed, which requires municipalities to follow new audit reporting requirements. This mandate was effective as of July 1, 2022, and the Examiners of Public Accounts office has recently started to issue letters of noncompliance. Continue reading to learn more about this mandate, what happens if you are behind on compliance, and how Avizo can help you move forward.
Alabama’s Municipal Audit Clarification Act
This Act outlines three categories of audit or annual report requirements for municipalities, determined by annual expenditures, as follows:
- You Spent $300,000 or More: Municipalities with annual expenditures of $300,000 or more are required to have an annual audit conducted by an independent public accountant.
- You Spent Between $100,000-$300,000: Municipalities with annual expenditures of less than $300,000 but at least $100,000 may elect to have biennial audits, which include each fiscal year since the preceding audit, conducted by an independent public accountant.
- You spent Less Than $100,000: Municipalities with annual expenditures less than $100,000 may elect to provide an annual report that complies with the procedures established by the Department of Examiners of Public Accounts in lieu of an audit.
Under this Act, all municipalities have 60 days after the completion of their audit to submit a copy to the Alabama Department of Examiners of Public Accounts.
Late Alabama Municipal Audit Compliance and Reporting
Since this went into effect in 2022, municipalities have not been contacted for any outstanding need to submit these reports. In particular, smaller municipalities who generally do not budget the funds to complete an audit may not be up-to-date in submitting their reports, and they are now receiving letters stating that they are years behind on this new compliance. As one of the leading municipality auditors in Baldwin County, Avizo Group has experience in working with municipalities who have not had an audit completed to develop a Corrective Action Plan with a timeline to submitting the two most recent fiscal years with a plan to remain in compliance going forward.
For municipalities that have had an audit, Avizo Group can work with you to submit the paperwork as needed for the Department of Examiners of Public Accounts.
Contact Us
It is imperative for municipalities around the state of Alabama begin to comply. Even if you have not received a letter, if you are not submitting reports/audits as required, you are in noncompliance. Schedule a call with us to learn more information about getting in compliance.
Kirsten Owens, CPA
A Manager on our assurance team, Kirsten maintains expertise to provide auditing services with a specialization in Avizo’s governmental and construction-based niches. She is one of the primary leads on our in-field audits and completes training for all members of the firm before they visit clients offices.
