| 19 | 6 | | relating to local government budgets and audits, so as to update and revise provisions,2 |
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| 20 | 7 | | content, and form of annual audits by local governments; to authorize regulatory basis of3 |
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| 21 | 8 | | accounting framework for certain annual audits; to authorize the state auditor to prescribe4 |
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| 22 | 9 | | necessary forms and information contained in certain components of such audits; to provide5 |
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| 23 | 10 | | for exceptions; to provide that constitutional county officers may be liable for the failure of6 |
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| 24 | 11 | | their offices to assist counties in complying with audit requirements; to provide for the7 |
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| 25 | 12 | | temporary withholding of compensation for certain officers for failing to assist counties in8 |
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| 26 | 13 | | complying with audit requirements; to provide for related matters; to repeal conflicting laws;9 |
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| 27 | 14 | | and for other purposes.10 |
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| 28 | 15 | | BE IT ENACTED BY THE GENERAL ASSEMBLY OF GEORGIA:11 |
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| 29 | 16 | | SECTION 1.12 |
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| 30 | 17 | | Article 1 of Chapter 81 of Title 36 of the Official Code of Georgia Annotated, relating to13 |
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| 31 | 18 | | local government budgets and audits, is amended by revising Code Section 36-81-7, relating14 |
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| 32 | 19 | | to audit of financial affairs and transactions, contents, copy to state auditor, and public15 |
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| 33 | 20 | | inspection, as follows:16 |
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| 34 | 21 | | H. B. 244 (SUB) |
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| 35 | 22 | | - 1 - 25 LC 47 3465S |
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| 40 | 25 | | excess of 1,500 persons according to the latest estimate of population by the United19 |
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| 41 | 26 | | States Bureau of the Census or its successor agency or expenditures of $550,000.0020 |
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| 42 | 27 | | $2.5 million or more shall provide for and cause to be made an annual audit of the21 |
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| 43 | 28 | | financial affairs and transactions of all funds and activities of the local government for22 |
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| 44 | 29 | | each fiscal year of the local government.23 |
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| 45 | 30 | | (2) The governing authority of each local unit of government not included in24 |
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| 46 | 31 | | paragraph (1) of this subsection shall may provide for and cause to be made the an audit25 |
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| 47 | 32 | | required pursuant to paragraph (1) of this subsection not less often than once every two26 |
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| 48 | 33 | | fiscal years using the special purpose framework prescribed by the state auditor. The27 |
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| 49 | 34 | | state auditor shall develop reporting templates to be used by a local unit of government28 |
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| 50 | 35 | | making a report pursuant to this paragraph and establish an effective date to begin29 |
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| 51 | 36 | | reporting under the special purpose framework. Audits performed pursuant to this30 |
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| 52 | 37 | | paragraph shall be for both fiscal years.31 |
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| 53 | 38 | | (3)(A) The governing authority of each local unit of government having expenditures32 |
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| 54 | 39 | | of less than $550,000.00 $1 million or less in that such government's most recently33 |
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| 55 | 40 | | ended fiscal year may elect to provide for and cause to be made, in lieu of the biennial34 |
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| 56 | 41 | | audit otherwise required under provided for in paragraph paragraphs (1) and (2) of this35 |
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| 57 | 42 | | subsection, an annual report of agreed upon procedures for that fiscal year. The agreed36 |
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| 58 | 43 | | upon procedures shall include as a minimum: proof and reconciliation of cash,37 |
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| 59 | 44 | | confirmation of cash balances, a listing of bank balances by bank, copies of financial38 |
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| 60 | 45 | | statements and notes as prescribed by the state auditor, a statement of cash receipts and39 |
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| 61 | 46 | | cash disbursements, a review of compliance with state law, and a report of agreed upon40 |
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| 62 | 47 | | procedures. The annual report of agreed upon procedures performed pursuant to this41 |
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| 63 | 48 | | paragraph shall not be used for more than four consecutive years. The governing42 |
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| 64 | 49 | | authority of each local unit of government not included in paragraph (1) or (2) of this43 |
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| 65 | 50 | | H. B. 244 (SUB) |
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| 66 | 51 | | - 2 - 25 LC 47 3465S |
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| 67 | 52 | | subsection shall, no less than every fifth year, provide for and cause to be made an audit44 |
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| 68 | 53 | | of the financial affairs and transactions of all funds and activities of the local45 |
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| 69 | 54 | | government in accordance with generally accepted government auditing standards.46 |
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| 70 | 55 | | (B) Agreed This agreed upon procedures report reports or reports using the special47 |
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| 71 | 56 | | purpose framework shall be in a format prescribed by the state auditor and shall48 |
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| 72 | 57 | | constitute an annual audit report for purposes of and within the meaning of the49 |
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| 73 | 58 | | requirements of subsections (d) through (g) of this Code section. The Department of50 |
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| 74 | 59 | | Community Affairs is authorized to assist requesting local governments in preparing51 |
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| 75 | 60 | | agreed upon procedures reports or special purpose framework reports required under52 |
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| 76 | 61 | | this paragraph and in establishing record-keeping procedures needed in preparing those53 |
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| 77 | 62 | | reports and is further authorized to charge those local governments reasonable fees for54 |
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| 78 | 63 | | that assistance. To the extent that the state auditor is able to perform the agreed upon55 |
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| 79 | 64 | | procedures, the governing body may contract with the state auditor.56 |
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| 80 | 65 | | (4) At the option of the governing authority, an audit may be made at a lesser interval57 |
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| 81 | 66 | | than one year.58 |
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| 82 | 67 | | (5) In the event that a local unit of government presents evidence that in a particular59 |
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| 83 | 68 | | fiscal year unusual circumstances resulted in expenditures exceeding the amounts60 |
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| 84 | 69 | | provided for in this subsection, the state auditor shall be authorized for good cause shown61 |
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| 85 | 70 | | to grant exceptions to the audit filing required under this subsection.62 |
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| 86 | 71 | | (b) The audits of each local government shall be conducted in accordance with generally63 |
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| 87 | 72 | | accepted government auditing standards. Each audit shall also contain a statement of any64 |
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| 88 | 73 | | agreement or arrangement under which the local unit of government has assumed any65 |
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| 89 | 74 | | actual or potential liability for the obligations of any governmental or private agency,66 |
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| 90 | 75 | | authority, or instrumentality. Such statement shall include the purpose of the agreement67 |
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| 91 | 76 | | or arrangement, shall identify the agency, authority, or instrumentality upon whose68 |
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| 92 | 77 | | obligations the unit of local government is or may become liable, and shall state the amount69 |
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| 93 | 78 | | of actual liability and the maximum amount of potential liability of the local government70 |
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| 94 | 79 | | H. B. 244 (SUB) |
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| 95 | 80 | | - 3 - 25 LC 47 3465S |
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| 111 | 94 | | audit if the basis of such adverse opinion is the result of a unit of local government84 |
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| 112 | 95 | | making a report pursuant to paragraph (2) of subsection (a) of this Code section.85 |
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| 113 | 96 | | (c.1)(1) The annual audit reports of a county or consolidated city-county government86 |
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| 114 | 97 | | shall also contain financial statements prepared in conformity with generally accepted87 |
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| 115 | 98 | | governmental accounting principles, providing a detailed account of the supplemental88 |
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| 116 | 99 | | official income and related expenditures of each county officer listed in Article IX,89 |
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| 117 | 100 | | Section I, Paragraph III(a) of the Constitution, provided that such county officer is paid90 |
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| 118 | 101 | | in whole or in part on a salary basis and over whom the county governing authority91 |
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| 119 | 102 | | exercises budgetary authority; and such financial statements shall be the representation92 |
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| 120 | 103 | | of such officers. Such officers shall be obligated to cooperate with the county or93 |
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| 121 | 104 | | consolidated government in the preparation of such financial statements and audit reports94 |
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| 122 | 105 | | and shall provide such government with all documentation the government deems95 |
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| 123 | 106 | | necessary to prepare such financial statements or audit reports. The failure of any such96 |
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| 124 | 107 | | H. B. 244 (SUB) |
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| 125 | 108 | | - 4 - 25 LC 47 3465S |
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| 126 | 109 | | officer to cooperate with or provide required documentation to a county or consolidated97 |
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| 127 | 110 | | government shall not result in any liability applying to such government.98 |
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| 128 | 111 | | (2) The opinion of the performing auditor with respect to the financial statement99 |
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| 129 | 112 | | provided for in this subsection, in addition to an explanation of any qualifications or100 |
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| 130 | 113 | | disclaimers contained in the opinion, shall also disclose, in accordance with generally101 |
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| 131 | 114 | | accepted government auditing standards, any apparent material violation of state or local102 |
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| 132 | 115 | | law discovered during the audit of the supplemental official income of such county103 |
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| 133 | 116 | | officers.104 |
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| 134 | 117 | | (3) As used in For the purpose of this subsection, the term 'supplemental official income'105 |
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| 135 | 118 | | means all funds from any source other than funds appropriated by a county or106 |
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| 136 | 119 | | consolidated government that an individual or his or her office derives from performing107 |
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| 137 | 120 | | duties that are within his or her official capacity as a county officer.108 |
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| 138 | 121 | | (d)(1) Each annual audit report of a local unit of government shall be completed and a109 |
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| 139 | 122 | | copy of the report forwarded to the state auditor within 180 days after the close of the110 |
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| 140 | 123 | | unit's fiscal year. In addition to the audit report, the local unit of government shall111 |
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| 141 | 124 | | forward to the state auditor, within 30 days after the audit report due date, written112 |
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| 142 | 125 | | comments on the findings and recommendations in the report, including a plan for113 |
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| 143 | 126 | | corrective action taken or planned and comments on the status of corrective action taken114 |
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| 144 | 127 | | on prior findings. If corrective action is not necessary, the written comments should115 |
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| 145 | 128 | | include a statement describing the reason it is not. In the case of units provided for in116 |
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| 146 | 129 | | paragraph (2) of subsection (a) of this Code section, the audit reports for both fiscal117 |
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| 147 | 130 | | periods shall be submitted within 180 days after the close of each second fiscal year and118 |
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| 148 | 131 | | the written comments shall be submitted within 30 days after the audit report due date.119 |
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| 149 | 132 | | (2) The state auditor shall review the audit report and written comments submitted to the120 |
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| 150 | 133 | | auditor's office to ensure that it meets the requirements for audits of local governments.121 |
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| 151 | 134 | | If the state auditor finds the requirements for audits of local governments have not been122 |
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| 152 | 135 | | complied with, the state auditor shall within 60 days of receipt of the audit or the written123 |
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| 153 | 136 | | H. B. 244 (SUB) |
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| 154 | 137 | | - 5 - 25 LC 47 3465S |
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| 157 | 139 | | shall submit to them a list of deficiencies to be corrected. A copy of this notification shall125 |
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| 158 | 140 | | also be sent by the state auditor to each member of the General Assembly whose126 |
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| 159 | 141 | | senatorial or representative district includes any part of the unit of local government.127 |
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| 160 | 142 | | (3) If the state auditor has not received any required audit or written comments by the128 |
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| 161 | 143 | | date specified in paragraph (1) of this subsection, the state auditor shall within 30 days129 |
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| 162 | 144 | | of such date notify the unit of local government that the audit has not been received as130 |
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| 163 | 145 | | required by law. A copy of this notification shall also be sent by the state auditor to each131 |
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| 164 | 146 | | member of the General Assembly whose senatorial or representative district includes any132 |
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| 165 | 147 | | part of the unit of local government.133 |
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| 166 | 148 | | (4) The state auditor, for good cause shown by those local units in which an audit is in134 |
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| 167 | 149 | | the process of being conducted or will promptly be conducted, may waive the135 |
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| 168 | 150 | | requirement for completion of the audit within 180 days. Such waiver shall be for an136 |
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| 169 | 151 | | additional period of not more than 180 days and no such waiver shall be granted for more137 |
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| 170 | 152 | | than two successive years to the same unit of local government.138 |
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| 171 | 153 | | (5) No state agency shall make or transmit any state grant funds to any local government139 |
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| 172 | 154 | | which has failed to provide all the audits required by law within the preceding five years.140 |
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| 175 | 156 | | Constitution shall be obligated to cooperate with the county or consolidated government142 |
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| 176 | 157 | | in the preparation of financial statements and audit reports required by this Code section143 |
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| 177 | 158 | | and shall provide such government with all documentation deemed necessary by the144 |
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| 178 | 159 | | government to prepare such financial statements or audit reports.145 |
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| 179 | 160 | | (2) The failure of any such officer to cooperate with or provide required documentation146 |
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| 180 | 161 | | to a county or consolidated government shall not result in any liability applying to such147 |
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| 181 | 162 | | government, and the state auditor for good cause shown may waive the requirements of148 |
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| 182 | 163 | | this Code section for either:149 |
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| 183 | 164 | | H. B. 244 (SUB) |
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| 184 | 165 | | - 6 - 25 LC 47 3465S |
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| 185 | 166 | | (A) A period of 90 days following a 180 day waiver granted pursuant to paragraph (4)150 |
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| 186 | 167 | | of subsection (d) of this Code section; or151 |
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| 187 | 168 | | (B) In the event that a 180 day waiver granted pursuant to paragraph (4) of subsection152 |
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| 188 | 169 | | (d) of this Code section was granted to such county or consolidated government in the153 |
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| 189 | 170 | | previous two years, a period of 90 days following the deadline provided for in 154 |
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| 190 | 171 | | paragraph (1) of subsection (d) of this Code section.155 |
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| 191 | 172 | | The waiver provided for in this paragraph shall only be granted if the county or156 |
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| 192 | 173 | | consolidated government's failure to timely file an audit is the result of the failure of one157 |
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| 193 | 174 | | or more such officers to cooperate or provide documentation as required by this158 |
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| 194 | 175 | | paragraph.159 |
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| 195 | 176 | | (3) In the event that a county or consolidated government fails to forward a copy of an160 |
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| 196 | 177 | | audit or report to the state auditor within the time frame provided for in this Code section,161 |
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| 197 | 178 | | and such failure is the result of the failure of a county officer listed in Article IX,162 |
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| 198 | 179 | | Section I, Paragraph III(a) of the Constitution, other than judges of the probate court, to163 |
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| 199 | 180 | | cooperate with such county or consolidated government in the preparation of such audit164 |
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| 200 | 181 | | or report, the governing authority of such county or consolidated government,165 |
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| 201 | 182 | | notwithstanding any other provision of law to the contrary, shall temporarily withhold 50166 |
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| 202 | 183 | | percent of the compensation paid to such officer from county funds until such time as167 |
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| 203 | 184 | | such officer has provided all cooperation and information necessary for the filing of the168 |
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| 204 | 185 | | audit or report. Within 14 days of such an audit or report being completed and forwarded169 |
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| 205 | 186 | | to the state auditor, the governing authority of the county or consolidated government170 |
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| 206 | 187 | | shall pay all such withheld compensation to the officer; provided, however, that such171 |
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| 207 | 188 | | officer shall not be entitled to receive any interest or additional compensation related to172 |
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| 208 | 189 | | such withheld funds.173 |
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| 209 | 190 | | (e) A copy of the report and of any comments made by the state auditor pursuant to174 |
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| 210 | 191 | | paragraph (2) of subsection (d) of this Code section shall be maintained as a public record175 |
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| 211 | 192 | | for public inspection during the regular working hours at the principal office of the local176 |
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| 212 | 193 | | H. B. 244 (SUB) |
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| 213 | 194 | | - 7 - 25 LC 47 3465S |
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| 216 | 196 | | a notification to the public as to the location of and times during which the public may178 |
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| 217 | 197 | | inspect the report.179 |
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| 218 | 198 | | (f) Upon a failure, refusal, or neglect to have an annual audit made, or a failure to file a180 |
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| 219 | 199 | | copy of the annual audit report with the state auditor, or a failure to correct auditing181 |
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| 220 | 200 | | deficiencies noted by the state auditor, the state auditor shall cause a prominent notice to182 |
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| 221 | 201 | | be published in the legal organ of, and any other newspapers of general circulation within,183 |
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| 222 | 202 | | the unit of local government. Such notice shall be a prominently displayed advertisement184 |
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| 223 | 203 | | or news article and shall not be placed in that section of the newspaper where legal notices185 |
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| 224 | 204 | | appear. Such notice shall be published twice and shall state that the governing authority186 |
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| 225 | 205 | | of the unit of local government has failed or refused, as the case may be, to file an audit187 |
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| 226 | 206 | | report or to correct auditing deficiencies, as the case may be, for the fiscal year or years in188 |
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| 227 | 207 | | question. Such notice shall further state that such failure or refusal is in violation of state189 |
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| 228 | 208 | | law.190 |
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| 229 | 209 | | (g) The state auditor may waive the requirement of correction of auditing deficiencies for191 |
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| 230 | 210 | | a period of one year from the required audit filing date, provided evidence is presented that192 |
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