EXPLANATION: CAPITALS INDICATE MAT TER ADDED TO EXISTIN G LAW.
[Brackets] indicate matter deleted from existing law.
Underlining indicates amendments to bill.
Strike out indicates matter stricken from the bill by amendment or deleted from the law by
amendment.
*sb0962*
SENATE BILL 962
L3 5lr2985
By: Senator Mautz
Introduced and read first time: January 28, 2025
Assigned to: Budget and Taxation
Committee Report: Favorable with amendments
Senate action: Adopted
Read second time: February 28, 2025
CHAPTER ______
AN ACT concerning 1
Municipalities – Legislative Audit – Exemption 2
FOR the purpose of exempting a municipality with annual revenues below a certain amount 3
from a certain audit requirement; clarifying that a certain audit exemption does not 4
affect certain financial reporting requirements; authorizing the Joint Audit and 5
Evaluation Committee to request or require a certain review or audit of the financial 6
records of a certain municipality under certain circumstances; and generally relating 7
to audits of the financial records of municipalities. 8
BY repealing and reenacting, with amendments, 9
Article – Local Government 10
Section 16–305 11
Annotated Code of Maryland 12
(2013 Volume and 2024 Supplement) 13
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 14
That the Laws of Maryland read as follows: 15
Article – Local Government 16
16–305. 17
(a) Except as provided in subsection (b) of this section, each county, municipality, 18
and special taxing district created by the State shall have its financial records audited at 19 2 SENATE BILL 962
least once each fiscal year by the persons and for the purposes specified in this section and 1
§§ 16–307 and 16–308 of this subtitle. 2
(b) (1) Unless the Legislative Auditor determines, on a case–by–case basis, 3
that more frequent audits are required, the Legislative Auditor may authorize a 4
municipality or a special taxing district created by the State with annual revenues of less 5
than $250,000 in the prior 4 fiscal years to have an audit conducted once every 4 years. 6
(2) NOTWITHSTANDING PARAG RAPH (1) OF THIS SUBSECTION AND 7
EXCEPT AS PROVIDED I N SUBSECTION (E) OF THIS SECTION , A MUNICIPALITY IS 8
EXEMPT FROM THE AUDI T REQUIREMENTS OF SU BSECTION (A) OF THIS SECTION 9
FOR ANY FISCAL YEAR IN WHICH THE MUNICIP AL ANNUAL REVENUES A RE LESS 10
THAN $100,000. 11
(c) (1) The audit required under subsection (a) of this section shall be 12
conducted by a certified public accountant: 13
(i) acting in the capacity of an independent auditor or an official 14
auditor of a county or municipality; and 15
(ii) who is in compliance with the Maryland Public Accountancy Act. 16
(2) An official auditor must be approved by the Legislative Auditor to 17
conduct the audit. 18
(3) In conducting the audit, the auditor shall examine the methods, 19
accuracy, and legality of the financial records of the county, municipality, or special taxing 20
district. 21
(d) (1) On the initiative of the Legislative Auditor, the Legislative Auditor may 22
review or audit the financial records of any county, municipality, or special taxing district 23
created by the State. 24
(2) A county, municipality, or special taxing district created by the State 25
may request the Legislative Auditor to audit its financial records. 26
(E) (1) AN AUDIT EXEMPTION FO R A MUNICIPALITY UND ER SUBSECTION 27
(B)(2) OF THIS SECTION DOES NOT AFFECT THE REQUI REMENT OF THAT 28
MUNICIPALITY TO FILE WITH THE DEPARTMENT OF LEGISLATIVE SERVICES A 29
FINANCIAL REPORT IN ACCORDANCE WITH § 16–304 OF THIS SUBTITL E. 30
(2) IF THE FINANCIAL REPO RT SUBMITTED IN ACCO RDANCE WITH § 31
16–304 OF THIS SUBTITLE BY A MUNICIPALITY THAT HAS AN AUDIT EXEMPTI ON 32
UNDER SUBSECTION (B)(2) OF THIS SECTION INDI CATES A FINANCIAL OR 33
ACCOUNTING IRREGULAR ITY OR CONCERN , THE JOINT AUDIT AND EVALUATION 34
COMMITTEE MAY REQUEST OR REQUIRE A REVIEW OR AUDIT OF THE FINANCIAL 35 SENATE BILL 962 3
RECORDS OF THAT MUNI CIPALITY THE MUNICIPALITY TO CONDUCT A REVIEW OR 1
AUDIT OF ITS FINANCI AL RECORDS CONSISTEN T WITH THE REQUIREME NTS OF 2
SUBSECTION (C) OF THIS SECTION. 3
SECTION 2. AND BE IT FURTHER ENACTED, That this Act shall take effect July 4
1, 2025. 5
Approved:
________________________________________________________________________________
Governor.
________________________________________________________________________________
President of the Senate.
________________________________________________________________________________
Speaker of the House of Delegates.