SB 25-023
Fiscal Note
Legislative Council Staff
Nonpartisan Services for Colorado’s Legislature
SB 25-023: LOCAL GOVERNMENT AUDIT EXEMPTION THRESHOLDS
Prime Sponsors:
Sen. Pelton R.; Michaelson Jenet
Rep. Lindstedt
Published for: Senate Local Govt. & Housing
Drafting number: LLS 25-0145
Fiscal Analyst:
Colin Gaiser, 303-866-2677
colin.gaiser@coleg.gov
Version: Initial Fiscal Note
Date: January 16, 2025
Fiscal note status: The fiscal note reflects the introduced bill., which was recommended by the Legislative
Audit Committee.
Summary Information
Overview. The bill increases the revenue and expenditure thresholds under which a local government
may apply to be exempted from an audit.
Types of impacts. The bill is projected to affect the following areas on an ongoing basis:
Minimal State Workload Local Government
Appropriations. No appropriation is required.
Table 1
State Fiscal Impacts
Type of Impact
Budget Year
FY 2025-26
Out Year
FY 2026-27
State Revenue $0 $0
State Expenditures $0 $0
Transferred Funds $0 $0
Change in TABOR Refunds $0 $0
Change in State FTE 0.0 FTE 0.0 FTE
Page 2
January 16, 2025 SB 25-023
Summary of Legislation
Under current law, all local governments must conduct an audit of financial statements each
fiscal year. However, a local government with revenues or expenditures under $100,000 may
apply to be exempted from such an audit, and local governments with revenues or expenditures
between $100,000 and $750,000 may apply for an exemption if the application is prepared by an
independent accountant with knowledge of government accounting. For any fiscal year
beginning on or after January 1, 2025, the bill increases the thresholds from $100,000 to
$200,000 and from $750,000 to $1 million.
State Expenditures
The Office of the State Auditor receives and reviews approximately 1,700 annual applications for
audit exemptions from local governments, and the fiscal note assumes the office will receive and
review up to 15 additional applications as a result of the bill. The office will also need to update
the audit exemption form. This work can be accomplished within existing resources.
Local Government
For local governments that currently do not qualify for an audit exemption but will qualify under
the new thresholds, the bill may decrease workload and expenditures if these local governments
choose to apply for an exemption and no longer have to prepare a full audit.
Effective Date
The bill takes effect 90 days following adjournment of the General Assembly sine die, assuming
no referendum petition is filed.
State and Local Government Contacts
Local Affairs State Auditor
The revenue and expenditure impacts in this fiscal note represent changes from current law under the bill for each
fiscal year. For additional information about fiscal notes, please visit the General Assembly website.