91A.040 Annual and biennial city audits -- Exemption -- Attestation engagement --
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/ky/91a-040A research copy — for the controlling text, always check the official state or federal source. Not legal advice.
Financial statement -- Publication -- Contents -- Enforcement action --
Penalties -- Extension -- Withholding of state funds for noncompliance -- Audit
expenses to be billed to audited city.
(1)Except as provided in subsections
(2)and
(3)of this section, each city shall, after
the close of each fiscal year, cause each fund of the city to be audited by the
Auditor of Public Accounts or a certified public accountant. The audit shall be
completed by March 1 immediately following the fiscal year being audited. The
city shall forward an electronic copy of the audit report to the Department for Local
Government for information purposes by no later than April 1 immediately
following the fiscal year being audited.
(2)In lieu of the annual audit requirements in subsection
(1)of this section, a city with
a population equal to or less than three thousand (3,000) based upon the most recent
federal decennial census may elect to have an audit performed every other fiscal
year in the following manner:
(a)After the close of each odd-numbered fiscal year, the city shall for that odd-
numbered year cause each fund of the city to be audited by the Auditor of
Public Accounts or a certified public accountant. The audits shall be
completed by March 1 immediately following the fiscal year to be audited.
The city shall forward an electronic copy of the audit report to the Department
for Local Government for information purposes by no later than April 1
immediately following the fiscal year being audited; and
(b)After the close of each even-numbered fiscal year, the city shall not be
required to complete an annual audit but shall forward an electronic copy of
its financial statement prepared in accordance with KRS 424.220 to the
Department for Local Government by no later than October 1 immediately
following the close of the even-numbered fiscal year.
(3)Any city, which for any fiscal year receives and expends, from all sources and for
all purposes, less than five hundred thousand dollars ($500,000), and which has no
long-term debt, whether general obligation or revenue debt, shall not be required to
audit each fund of the city for that particular fiscal year. In addition, each city
exempted in accordance with this subsection shall:
(a)Annually prepare a financial statement in accordance with KRS 424.220 and
shall, not later than October 1 following the conclusion of the fiscal year,
forward one
(1)electronic copy to the Department for Local Government for
information purposes; and
(b)If exempted under this subsection for more than four
(4)consecutive fiscal
years after July 1, 2022, have prepared an attestation engagement covering the
fourth fiscal year in which the city qualified for an exemption under this
subsection. An attestation engagement completed pursuant to this subsection
shall be:
1. Prepared by an independent certified public accountant or by the
Auditor of Public Accounts pursuant to a contract with the city using
generally accepted attestation standards as promulgated by the American
Institute of Certified Public Accountants and any additional procedures
established by the Department for Local Government through
administrative regulation;
2. Completed by no later than March 1 immediately following the
conclusion of the fiscal year in which in the attestation engagement is
required;
3. Submitted to the Department for Local Government as one
(1)electronic
copy no later than April 1 after its completion;
4. Advertised to the public within thirty
(30)days of its completion by
causing the publication of a legal display advertisement of not less than
six
(6)column inches in a newspaper qualified under KRS 424.120
stating that the attestation has been prepared and copies have been
provided to each local newspaper of general circulation, each news
service, and each local radio and television station which has on file
with the city a written request to receive copies of financial statements
under KRS 424.220. Any city advertising under this subparagraph shall
be exempt from publishing its financial statement under KRS
424.220(6)(b) for any year in which it is required to have an attestation
engagement completed; and
5. Provided to the Auditor of Public Accounts upon request for review of
the final report and all related work papers and documents regarding the
attestation engagement.
(4)If a city is required by another provision of law to audit its funds more frequently or
more stringently than is required by this section, the city shall also comply with the
provisions of that law.
(5)The Department for Local Government shall, upon request, make available
electronic copies of the audit reports and financial statements received by it under
subsections
(1)to
(3)of this section to the Legislative Research Commission to be
used for the purposes of KRS 6.955 to 6.975 or to the Auditor of Public Accounts.
(6)Each city required by this section to conduct an annual or biennial audit shall enter
into a written contract with an auditor, who shall be a certified public accountant or
the Auditor of Public Accounts. The contract shall set forth all terms and conditions
of the agreement which shall include but not be limited to requirements that:
(a)The auditor be employed to examine the basic financial statements, which
shall include the government-wide and fund financial statements;
(b)The auditor shall include in the annual or biennial city audit report an
examination of local government economic assistance funds granted to the
city under KRS 42.450 to 42.495. The auditor shall include a certification
with the annual or biennial audit report that the funds were expended for the
purpose intended;
(c)All audit information be prepared in accordance with generally accepted
governmental auditing standards which include tests of the accounting records
and auditing procedures considered necessary in the circumstances. Where the
audit is to cover the use of state or federal funds, appropriate state or federal
guidelines shall be utilized;
(d)The auditor shall prepare a typewritten or printed report embodying:
1. The basic financial statements and accompanying supplemental and
required supplemental information;
2. The auditor's opinion on the basic financial statements or reasons why
an opinion cannot be expressed; and
3. Findings required to be reported as a result of the audit;
(e)The completed audit and all accompanying documentation shall be presented
to the city legislative body at a regular or special meeting; and
(f)Any contract with a certified public accountant for an audit shall require the
accountant to forward a copy of the audit report and management letters to the
Auditor of Public Accounts upon request of the city or the Auditor of Public
Accounts, and the Auditor of Public Accounts shall have the right to review
the certified public accountant's work papers upon request.
(7)A copy of an audit report which meets the requirements of this section shall be
considered satisfactory and final in meeting any official request to a city for
financial data, except for statutory or judicial requirements, or requirements of the