Oklahoma 2022 Regular Session

Oklahoma House Bill HB1058 Compare Versions

Version 1 (Old)

Version 2 (New)

Old	New		Differences
1		-	An Act
2		-	ENROLLED HOUSE
	1	+
	2	+
	3	+	ENGR. S. A. TO ENGR. H. B. NO. 1058 Page 1 1
	4	+	2
	5	+	3
	6	+	4
	7	+	5
	8	+	6
	9	+	7
	10	+	8
	11	+	9
	12	+	10
	13	+	11
	14	+	12
	15	+	13
	16	+	14
	17	+	15
	18	+	16
	19	+	17
	20	+	18
	21	+	19
	22	+	20
	23	+	21
	24	+	22
	25	+	23
	26	+	24
	27	+
	28	+	ENGROSSED SENATE AMENDMENT
	29	+	TO
	30	+	ENGROSSED HOUSE
3	31		BILL NO. 1058 By: Boles of the House
4	32
5	33		and
6	34
7		-	Taylor and Hall of the
8		-	Senate
	35	+	Hall of the Senate
	36	+
	37	+
	38	+
	39	+
	40	+	An Act relating to cities and towns; amending 11 O.S.
	41	+	2011, Sections 17-105, as last amended by Section 1,
	42	+	Chapter 82, O.S.L. 2017 and 17 -107 (11 O.S. Supp.
	43	+	2020, Section 17-105), which relate to municipal
	44	+	finances; modifying minimum municipal income for
	45	+	which certain audits shall be required; making
	46	+	certain audits biennial; replacing certain auditing
	47	+	procedures with procedures prescribed by the State
	48	+	Auditor and Inspector; modifying time certain audit
	49	+	report is due; modifying municipal income
	50	+	requirements; redirecting certain funds; creating the
	51	+	Special Investigative Unit Auditing Revolving Fund;
	52	+	providing for revenue and expenditures; provid ing for
	53	+	codification; repeali ng 11 O.S. 2011, Section 17 -108,
	54	+	which relates to municipal trust exemptions;
	55	+	providing an effective date; and declaring an
	56	+	emergency.
9	57
10	58
11	59
12	60
13	61
14		-	An Act relating to cities and towns; enacting the
15		-	Municipal Audit Reform Act of 2022 ; amending 11 O.S.
16		-	2021, Section 17-105, which relates to annual aud its
17		-	of municipalities; increasin g municipal income
18		-	threshold for required annual or biennial audits to
19		-	be conducted; modify ing manner in which threshold is
20		-	calculated; modifying statutory references; defining
21		-	scope of biennial audit; deleting certain required
22		-	procedures; authorizing th e use of alternate auditing
23		-	procedure; directing development of alternate
24		-	auditing procedure in collaboration with certain
25		-	entities; providing time limitation for use of
26		-	alternate auditing procedure; providing that act
27		-	shall sunset by operation of law unless certain
28		-	conditions have been met; requiring alternate
29		-	auditing procedure to meet certain attestation
30		-	standards; extending time for filin g of audit;
31		-	providing for additional extension of time under
32		-	certain conditions; including and excluding income
33		-	from certain trusts in calculating municipal income;
34		-	amending 11 O.S. 2021, Section 17-107, which relates
35		-	to the failure to file an audit; specifying condition
36		-	under which withholding of certain gasoline taxes
37		-	shall cease; requirin g certain withheld funds to be
38		-	deposited in certain revolving fund; creating the
39		-	Special Investigative Unit Auditing Revo lving Fund;
40		-	making fund continuing and nonfiscal ; stating sources
41		-	of revenue; stating purpose of fund; establishing
42		-	procedures of expenditures of monies accruing to the
43		-	credit of the fund; repealing 11 O.S. 20 21, Section
44		-	17-108, which relates to municipal trust exemptions;
45		-	providing for noncodification; providing for ENR. H. B. NO. 1058 Page 2
46		-	codification; providing an effective date; and
47		-	declaring an emergency .
	62	+	AUTHOR: Remove as principal Senate author Hall and substitute as
	63	+	principal Senate autho r Taylor. Retain Hall as Senate
	64	+	coauthor
	65	+
	66	+	AMENDMENT NO. 1. Page 1, strike the title, enacting clause and
	67	+	entire bill and insert
	68	+
	69	+	“An Act relating to cities and towns; pr oviding short
	70	+	title; amending 11 O.S. 2021, Section 17 -105, which
	71	+	relates to annual aud its of municipalities;
	72	+	increasing municipal income threshold for required
	73	+	annual or biennial audits to be conducted; modify ing
	74	+	manner in which threshold is calculated; m odifying
	75	+
	76	+	ENGR. S. A. TO ENGR. H. B. NO. 1058 Page 2 1
	77	+	2
	78	+	3
	79	+	4
	80	+	5
	81	+	6
	82	+	7
	83	+	8
	84	+	9
	85	+	10
	86	+	11
	87	+	12
	88	+	13
	89	+	14
	90	+	15
	91	+	16
	92	+	17
	93	+	18
	94	+	19
	95	+	20
	96	+	21
	97	+	22
	98	+	23
	99	+	24
	100	+
	101	+	statutory references; defining scope of biennial
	102	+	audit; deleting certain required procedures;
	103	+	authorizing the use of alternate auditing procedure;
	104	+	directing development of alternate auditing procedure
	105	+	in collaboration with certain entities; providing
	106	+	time limitation for use of alternate auditing
	107	+	procedure; providing that act shall s unset by
	108	+	operation of law unless certain conditions have been
	109	+	met; requiring alternate auditing procedure to meet
	110	+	certain attestation standards; extending time for
	111	+	filing of audit; providing for additional extension
	112	+	of time under certain conditions; including and
	113	+	excluding income from certain trusts in calculating
	114	+	municipal income; amending 11 O.S. 2021, Section 17-
	115	+	107, which relates to the failure to file an audit;
	116	+	specifying condition under which withholding of
	117	+	certain gasoline taxes shall cease; requirin g certain
	118	+	withheld funds to be deposited in certain revolving
	119	+	fund; creating the Special Investigative Unit
	120	+	Auditing Revolving Fund; making fund continuing and
	121	+	nonfiscal; stating sources of revenue; stating
	122	+	purpose of fund; establishing procedures of
	123	+	expenditures of monies accruing to the credit of the
	124	+	fund; repealing 11 O.S. 20 21, Section 17-108, which
	125	+	relates to municipal trust exemptions; providing for
	126	+	noncodification; providing for codification;
	127	+	providing an effective date; and declaring an
	128	+	emergency.
48	129
49	130
50	131
51	132
52		-	SUBJECT: Cities and towns
53	133
54	134		BE IT ENACTED BY THE PE OPLE OF THE STATE OF OKLAHOMA:
55		-
56	135		SECTION 1. NEW LAW A new section of law not to be
57	136		codified in the Oklahoma Stat utes reads as follows:
58		-
59	137		This act shall be known and may be cited as the "Municipal Audit
60	138		Reform Act of 2022".
61		-
62	139		SECTION 2. AMENDATORY 11 O.S. 20 21, Section 17-105, is
63	140		amended to read as follows:
	141	+
	142	+	ENGR. S. A. TO ENGR. H. B. NO. 1058 Page 3 1
	143	+	2
	144	+	3
	145	+	4
	146	+	5
	147	+	6
	148	+	7
	149	+	8
	150	+	9
	151	+	10
	152	+	11
	153	+	12
	154	+	13
	155	+	14
	156	+	15
	157	+	16
	158	+	17
	159	+	18
	160	+	19
	161	+	20
	162	+	21
	163	+	22
	164	+	23
	165	+	24
64	166
65	167		Section 17-105. A. The governing bod y of each municipality
66	168		with an income of Twenty-five Thousand Dollars ($25,000. 00) Fifty
67	169		Thousand Dollars ($50,000.00) or more to its general fund in total
68		-	revenue to all funds , including component units of which the
	170	+	revenue to all funds including component units of which the
69	171		municipality is a be neficiary, during a fiscal year shall cause to
70	172		be prepared, by an independent licensed public accountant or a
71	173		certified public accountant, an annual financial statement audit to
72	174		be conducted in accordance with auditing standards generally
73		-	accepted in the United States of Amer ica and "Government Auditing
74		-	Standards" as issued by the Comptroller ~~G eneral~~ of the United
	175	+	accepted in the United States of Amer ica and “Government Auditing
	176	+	Standards” as issued by the Comptroller General of the United
75	177		States. Such audit shall be ordered within thirty (30) days of the
76	178		close of each fiscal year. Copies shall be filed with the State
77	179		Auditor and Inspector within six (6) months after the close of the
78	180		fiscal year in accordance with the provisions of Sections 3022 and
79		-	3023 of Title 68 of the Oklahoma Statutes ~~this act~~ and with the
	181	+	3023 of this act Title 68 of the Oklahoma Statutes and with the
80	182		governing body of the municipality.
81		-
82	183		B. The governing body of each muni cipality with an income of
83	184		Twenty-five Thousand Dollars ($25,000. 00) Fifty Thousand Dollars
84	185		($50,000.00) or more to its general fund during a fiscal year in
85		-	total revenue to all funds , including component units of which the
	186	+	total revenue to all funds including component units of which the
86	187		municipality is a beneficiary, and with a population of less than
87	188		two thousand five hundred (2,50 0) as of the most recent Federal
88	189		Decennial Census, and for whom an annual financial statement audit
89	190		is not required by another law, regulation or contract, shall cause
90		-	to be prepared, by an i ndependent licensed public accountant or a ENR. H. B. NO. 1058 Page 3
	191	+
	192	+	ENGR. S. A. TO ENGR. H. B. NO. 1058 Page 4 1
	193	+	2
	194	+	3
	195	+	4
	196	+	5
	197	+	6
	198	+	7
	199	+	8
	200	+	9
	201	+	10
	202	+	11
	203	+	12
	204	+	13
	205	+	14
	206	+	15
	207	+	16
	208	+	17
	209	+	18
	210	+	19
	211	+	20
	212	+	21
	213	+	22
	214	+	23
	215	+	24
	216	+
	217	+	to be prepared, by an i ndependent licensed public accountant or a
91	218		certified public accou ntant, an annual a biennial financial
92	219		statement audit in accordance with auditing standards generally
93	220		accepted in the United States and Government Auditing Standards as
94	221		issued by the Comptrol ler General of the U nited States, or an
95	222		agreed-upon-procedures engagement over certain financial information
96	223		and compliance requirements to be performed in accordance with the
97	224		applicable attestation standards of The American Institute of
98	225		Certified Public Accountants. The spe cific procedures to be
99	226		performed are as follows for the fiscal year:
100		-
101	227		1. Prepare a schedule of changes in fund balances for each fund
102	228		and determine compliance wit h the statutory prohibition of creating
103	229		fund balance deficits;
104		-
105	230		2. Prepare a budget and actual financial schedule for the
106	231		General Fund and any other significant funds listing separately eac h
107	232		federal fund and determine compliance with the legal level of
108	233		appropriations by comparing expenditures and encumbrances to
109	234		authorized appropriations;
110		-
111	235		3. Agree material bank account balances to bank statements, and
112	236		trace significant reconciling items to subsequent clearance;
113		-
114	237		4. Compare uninsured deposits to fair value of pledged
115	238		collateral;
116		-
117	239		5. Compare use of material -restricted revenues and resources to
118	240		their restrictions;
119	241
	242	+	ENGR. S. A. TO ENGR. H. B. NO. 1058 Page 5 1
	243	+	2
	244	+	3
	245	+	4
	246	+	5
	247	+	6
	248	+	7
	249	+	8
	250	+	9
	251	+	10
	252	+	11
	253	+	12
	254	+	13
	255	+	14
	256	+	15
	257	+	16
	258	+	17
	259	+	18
	260	+	19
	261	+	20
	262	+	21
	263	+	22
	264	+	23
	265	+	24
	266	+
120	267		6. Determine compliance with requirements for separate funds;
121	268		and
122		-
123	269		7. Determine compliance with reserve account and debt service
124	270		coverage requirements of bond indentures. Each biennial audit sha ll
125	271		cover the two (2) preceding years.
126		-
127		-	Such The governing body of each municipality may alternatively
	272	+	The governing body of each municipality may alternatively
128	273		request a biennial agreed -upon-procedures engagement to be
129	274		prescribed by the State Auditor and Inspector, developed in
130	275		collaboration with a r epresentative from a statewide organization
131	276		that has represented municipal governments for at least fifty (50)
132	277		years, a representative from an organization that advises or trains
133	278		municipal clerks and treasurers, and a certified public accountan t.
134	279		Each biennial agreed -upon-procedures engagement shall cover the two
135		-	(2) preceding years. ENR. H. B. NO. 1058 Page 4
136		-
	280	+	(2) preceding years.
137	281		For engagements performed for the fiscal year ending June 30,
138	282		2023, the prescribed procedures developed under the terms of this
139	283		subsection will be utilized on a on e-year basis ending June 30,
140	284		2024. The procedures shall then be submitted to the Legislature for
141	285		ratification. If the rules are not ratified by the Legisla ture on
142	286		or before December 31, 2023, the Municipal Audit Reform Act of 2022
143	287		shall sunset and be repealed as a matter of law. Agreed-upon
144	288		procedures required under this act sha ll be performed in accordance
145	289		with the applicable attestation standards of The A merican Institute
146	290		of Certified Public Accountants.
147	291
148		-	The audit or agreed-upon-procedures engagement shall be ordered
149		-	within thirty (30) days o f the close of each the fiscal year that
150		-	the audit is due. Copies shall be filed with the State Auditor and
151		-	Inspector within six (6) nine (9) months after the close of the
	292	+	ENGR. S. A. TO ENGR. H. B. NO. 1058 Page 6 1
	293	+	2
	294	+	3
	295	+	4
	296	+	5
	297	+	6
	298	+	7
	299	+	8
	300	+	9
	301	+	10
	302	+	11
	303	+	12
	304	+	13
	305	+	14
	306	+	15
	307	+	16
	308	+	17
	309	+	18
	310	+	19
	311	+	20
	312	+	21
	313	+	22
	314	+	23
	315	+	24
	316	+
	317	+	Such The audit or agreed-upon-procedures engagement shall be
	318	+	ordered within thirty (30) days o f the close of each the fiscal year
	319	+	that the audit is due . Copies shall be filed with the State Auditor
	320	+	and Inspector within six (6) nine (9) months after the close of the
152	321		fiscal year in accordance with the provisions of Sections 3022 and
153	322		3023 paragraph 2 of subsection A of Section 212 A of Title 68 74 of
154	323		the Oklahoma Statutes and with the governing body of the
155	324		municipality., with the deadline to order and file the audit or
156	325		agreed-upon procedures eligible for extension by the State Auditor
157		-	and Inspector for special circumstances or emergencies.
158		-
	326	+	for special circumstances or emergencies.
159	327		C. The municipal income requirements in su bsections A and B of
160	328		this section shall not include any grant monies provided to a
161	329		municipality from any federal, state, or other gover nmental entity.
162	330		The municipal income requirements shall not include income of any
163	331		public trust established under Section s 176 through 180.4 of Title
164	332		60 of the Oklahoma Statutes with a municipality as the be neficiary
165	333		of the trust; provided, income from trusts established principally
166	334		for the purpose of operating electric, water, wastewater , and
167	335		sanitation utilities shall be i ncluded for purposes of the municipal
168	336		income requirements.
169		-
170	337		SECTION 3. AMENDATORY 11 O.S. 20 21, Section 17-107, is
171	338		amended to read as follows:
172		-
173	339		Section 17-107. If a municipality does not file a copy of its
174	340		audit or agreed-upon-procedures report as provided in Section 17-105
	341	+
	342	+	ENGR. S. A. TO ENGR. H. B. NO. 1058 Page 7 1
	343	+	2
	344	+	3
	345	+	4
	346	+	5
	347	+	6
	348	+	7
	349	+	8
	350	+	9
	351	+	10
	352	+	11
	353	+	12
	354	+	13
	355	+	14
	356	+	15
	357	+	16
	358	+	17
	359	+	18
	360	+	19
	361	+	20
	362	+	21
	363	+	22
	364	+	23
	365	+	24
	366	+
175	367		of this title, the State Auditor and Inspector shall notify the
176	368		Oklahoma Tax Commission which shall withhold from the municipality
177	369		its monthly allocations of gasoline taxes un til notified by the
178	370		Office of the State Auditor and Inspector that the audit report is
179	371		has been filed. If a report is not filed within two (2) years after
180		-	the close of the fisc al year in the case of an annual audit, or the ~~ENR. H. B. NO. 1058 Page 5~~
	372	+	the close of the fisc al year in the case of an annual audit, or the
181	373		second fiscal year of a biennial audit period, the funds being
182	374		withheld shall be remitt ed by the Oklahoma Tax Commission to the
183	375		county in which the incorporated city or town is located and
184	376		deposited to the cou nty highway fund of that county to be used as
185	377		otherwise provided by law Special Investigative Unit Auditing
186	378		Revolving Fund created pursuant to Section 4 of this act.
187		-
188	379		SECTION 4. NEW LAW A new section of law to be codified
189	380		in the Oklahoma Statutes as Section 17-107A of Title 11, unless
190	381		there is created a duplica tion in numbering, reads as follows:
191		-
192	382		There is hereby created in the State Treasury a revolving fund
193		-	for the State Auditor and Inspector to be designated the "Special
194		-	Investigative Unit Auditing Revolving Fund ". The fund shall be a
	383	+	for the State Auditor and Inspector to be designated the “Special
	384	+	Investigative Unit Auditing Revolving Fund ”. The fund shall be a
195	385		continuing fund, not sub ject to fiscal year limitations, and shall
196	386		consist of all monies received by the State Auditor and Inspector
197		-	from funds withheld from a municipality 's allocations of gasoline
	387	+	from funds withheld from a municipality ’s allocations of gasoline
198	388		taxes as provided in Section 17-107 of Title 11 of the Oklahoma
199	389		Statutes and all monies received from legislative appropriations for
200	390		the purpose of conducting investigative municipal audits. All
	391	+
	392	+	ENGR. S. A. TO ENGR. H. B. NO. 1058 Page 8 1
	393	+	2
	394	+	3
	395	+	4
	396	+	5
	397	+	6
	398	+	7
	399	+	8
	400	+	9
	401	+	10
	402	+	11
	403	+	12
	404	+	13
	405	+	14
	406	+	15
	407	+	16
	408	+	17
	409	+	18
	410	+	19
	411	+	20
	412	+	21
	413	+	22
	414	+	23
	415	+	24
	416	+
201	417		monies accruing to the credit of such fund are hereby appropriated
202	418		and may be budgeted and expended by the State Auditor an d Inspector
203	419		for the purpose of offsetting expenses incurred from speci al
204	420		investigative audit activities relating to municipal government.
205	421		Expenditures from the fund shall be made upon warrants issued by the
206	422		State Treasurer against claims filed as prescri bed by law with the
207	423		Director of the Office of Management and Enterpris e Services for
208	424		approval and payment.
209		-
210	425		SECTION 5. REPEALER 11 O.S. 20 21, Section 17-108, is
211	426		hereby repealed.
212		-
213	427		SECTION 6. This act shall become effec tive July 1, 2022.
214		-
215	428		SECTION 7. It being immediately ne cessary for the preservation
216	429		of the public peace, health or safety, an emergency is hereby
217	430		declared to exist, by reason whereof this act shall take effect and
	431	+	be in full force from and a fter its passage and approval.”
	432	+
	433	+
	434	+	ENGR. S. A. TO ENGR. H. B. NO. 1058 Page 9 1
	435	+	2
	436	+	3
	437	+	4
	438	+	5
	439	+	6
	440	+	7
	441	+	8
	442	+	9
	443	+	10
	444	+	11
	445	+	12
	446	+	13
	447	+	14
	448	+	15
	449	+	16
	450	+	17
	451	+	18
	452	+	19
	453	+	20
	454	+	21
	455	+	22
	456	+	23
	457	+	24
	458	+
	459	+	Passed the Senate the 25th day of April, 2022.
	460	+
	461	+
	462	+
	463	+	Presiding Officer of the Sena te
	464	+
	465	+
	466	+	Passed the House of Representatives the ____ day of __________,
	467	+	2022.
	468	+
	469	+
	470	+
	471	+	Presiding Officer of the House
	472	+	of Representatives
	473	+
	474	+	ENGR. H. B. NO. 1058 Page 1 1
	475	+	2
	476	+	3
	477	+	4
	478	+	5
	479	+	6
	480	+	7
	481	+	8
	482	+	9
	483	+	10
	484	+	11
	485	+	12
	486	+	13
	487	+	14
	488	+	15
	489	+	16
	490	+	17
	491	+	18
	492	+	19
	493	+	20
	494	+	21
	495	+	22
	496	+	23
	497	+	24
	498	+
	499	+	ENGROSSED HOUSE
	500	+	BILL NO. 1058 By: Boles of the House
	501	+
	502	+	and
	503	+
	504	+	Hall of the Senate
	505	+
	506	+
	507	+
	508	+
	509	+	An Act relating to cities and towns; amending 11 O.S.
	510	+	2011, Sections 17-105, as last amended by Section 1,
	511	+	Chapter 82, O.S.L. 2017 and 17 -107 (11 O.S. Supp.
	512	+	2020, Section 17-105), which relate to municipal
	513	+	finances; modifying minimum municipal income for
	514	+	which certain audits shall be require d; making
	515	+	certain audits biennial; replacing certain auditing
	516	+	procedures with procedures prescribed by the State
	517	+	Auditor and Inspector; modifying time certain audit
	518	+	report is due; modifying municipal income
	519	+	requirements; redirecting certain funds; creating the
	520	+	Special Investigative Unit Auditing Revolving Fund;
	521	+	providing for revenue and expenditures; providing for
	522	+	codification; repeali ng 11 O.S. 2011, Section 17 -108,
	523	+	which relates to municipal trust exemptions;
	524	+	providing an effective date; and declaring an
	525	+	emergency.
	526	+
	527	+
	528	+
	529	+
	530	+
	531	+	BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
	532	+	SECTION 8. AMENDATORY 11 O.S. 2011, Section 17-105, as
	533	+	last amended by Section 1, Chapter 82, O.S.L. 2017 (11 O.S. Supp.
	534	+	2020, Section 17-105), is amended to re ad as follows:
	535	+	Section 17-105. A. The governing body of each municipality
	536	+	with an income of Twenty-five Thousand Dollars ($25,000. 00) Fifty
	537	+	Thousand Dollars ($50,000.00) or more to its general fund in revenue
	538	+	to all funds, including component units of wh ich the municipality is
	539	+
	540	+	ENGR. H. B. NO. 1058 Page 2 1
	541	+	2
	542	+	3
	543	+	4
	544	+	5
	545	+	6
	546	+	7
	547	+	8
	548	+	9
	549	+	10
	550	+	11
	551	+	12
	552	+	13
	553	+	14
	554	+	15
	555	+	16
	556	+	17
	557	+	18
	558	+	19
	559	+	20
	560	+	21
	561	+	22
	562	+	23
	563	+	24
	564	+
	565	+	a beneficiary, during a fiscal year shall cause to be prepared, by
	566	+	an independent licensed public accountant or a certified public
	567	+	accountant, an annual financial statement audit to be conducted in
	568	+	accordance with auditing standards generally accepted in the United
	569	+	States of America and "Government Auditing Standards " as issued by
	570	+	the Comptroller General of the United States. Such audit shall be
	571	+	ordered within thirty (30) days of the close of each fiscal year.
	572	+	Copies shall be filed with the State Auditor and Inspector within
	573	+	six (6) months after the close of the fiscal year in accordance with
	574	+	the provisions of Sections 3022 and 3023 paragraph 2 of subsection A
	575	+	of Section 212A of Title 68 74 of the Oklahoma Statutes and with the
	576	+	governing body of the municipality.
	577	+	B. The governing body of each municipality with an income of
	578	+	Twenty-five Thousand Dollars ($25,000. 00) Fifty Thousand Dollars
	579	+	($50,000.00) or more to its general fund during a fiscal year in
	580	+	total revenue to all funds, incl uding component units of which the
	581	+	municipality is a beneficiary, and with a population of less than
	582	+	two thousand five hundred (2,50 0) as of the most recent Federal
	583	+	Decennial Census, and for whom an annual financial statement audit
	584	+	is not required by anoth er law, regulation or contract, shall cause
	585	+	to be prepared, by an independent licensed public accountant or a
	586	+	certified public accou ntant, an annual a biennial financial
	587	+	statement audit in accordance with auditing standards generally
	588	+	accepted in the United States and Government Auditing Standards as
	589	+
	590	+	ENGR. H. B. NO. 1058 Page 3 1
	591	+	2
	592	+	3
	593	+	4
	594	+	5
	595	+	6
	596	+	7
	597	+	8
	598	+	9
	599	+	10
	600	+	11
	601	+	12
	602	+	13
	603	+	14
	604	+	15
	605	+	16
	606	+	17
	607	+	18
	608	+	19
	609	+	20
	610	+	21
	611	+	22
	612	+	23
	613	+	24
	614	+
	615	+	issued by the Comptroller General of the United States , or an. Each
	616	+	biennial audit shall cover the two (2) preceding years. The
	617	+	governing body of each municipality may alternatively request
	618	+	biennial agreed-upon-procedures engagement over certain financial
	619	+	information and compliance requirements to be performed in
	620	+	accordance with the applic able attestation standards of The American
	621	+	Institute of Certified Public Accountants. The specific procedures
	622	+	to be performed are as follows for the fiscal year:
	623	+	1. Prepare a schedule of changes in fund balances for each fund
	624	+	and determine compliance wit h the statutory prohibition of creating
	625	+	fund balance deficits;
	626	+	2. Prepare a budget and actual financial schedule for the
	627	+	General Fund and any other significant funds listing separately each
	628	+	federal fund and determine compliance with the legal level of
	629	+	appropriations by comparing expenditures and encumbrances to
	630	+	authorized appropriations;
	631	+	3. Agree material bank account balance s to bank statements, and
	632	+	trace significant reconciling items to subsequent clearance;
	633	+	4. Compare uninsured deposits to fair value of pledged
	634	+	collateral;
	635	+	5. Compare use of material -restricted revenues and resources to
	636	+	their restrictions;
	637	+	6. Determine compliance with requirements for separate funds;
	638	+	and
	639	+
	640	+	ENGR. H. B. NO. 1058 Page 4 1
	641	+	2
	642	+	3
	643	+	4
	644	+	5
	645	+	6
	646	+	7
	647	+	8
	648	+	9
	649	+	10
	650	+	11
	651	+	12
	652	+	13
	653	+	14
	654	+	15
	655	+	16
	656	+	17
	657	+	18
	658	+	19
	659	+	20
	660	+	21
	661	+	22
	662	+	23
	663	+	24
	664	+
	665	+	7. Determine compliance with reserve account and debt service
	666	+	coverage requirements of bond indentures.
	667	+	Such prescribed by the State Auditor and Inspector. Each
	668	+	biennial agreed-upon-procedures engagement shall cover the two (2)
	669	+	preceding years. The audit or agreed-upon-procedures engagement
	670	+	shall be ordered within thirty (30) days o f the close of each the
	671	+	fiscal year that the audit is due . Copies shall be filed with the
	672	+	State Auditor and Inspector withi n six (6) nine (9) months after the
	673	+	close of the fiscal year in accordance with the provisions of
	674	+	Sections 3022 and 3023 paragraph 2 of subsection A of Section 212A
	675	+	of Title 68 74 of the Oklahoma Statutes and with the governing body
	676	+	of the municipality.
	677	+	C. The municipal income requirements in subsections A and B of
	678	+	this section shall not include any grant monies provided to a
	679	+	municipality from any federal, state, or other governmental entity.
	680	+	The municipal income requirements shall also not include income of
	681	+	any public trust established under Sections 176 through 180.4 of
	682	+	Title 60 of the Oklahoma Statutes with a municipality as the
	683	+	beneficiary of the trust; provided, that income from trusts
	684	+	established principally for the purpose of operating electric,
	685	+	water, wastewater, and sanitation utilities shall be included for
	686	+	purposes of the municipal income requirements.
	687	+	SECTION 9. AMENDATORY 11 O.S. 2011, Section 17 -107, is
	688	+	amended to read as follows:
	689	+
	690	+	ENGR. H. B. NO. 1058 Page 5 1
	691	+	2
	692	+	3
	693	+	4
	694	+	5
	695	+	6
	696	+	7
	697	+	8
	698	+	9
	699	+	10
	700	+	11
	701	+	12
	702	+	13
	703	+	14
	704	+	15
	705	+	16
	706	+	17
	707	+	18
	708	+	19
	709	+	20
	710	+	21
	711	+	22
	712	+	23
	713	+	24
	714	+
	715	+	Section 17-107. If a municipality do es not file a copy of its
	716	+	audit or agreed-upon-procedures report as provided in Section 17 -105
	717	+	of this title, the State Auditor and Inspector shall notify the
	718	+	Oklahoma Tax Commission which shall withhold from the municipality
	719	+	its monthly allocations of gas oline taxes until the audit report is
	720	+	filed. If a report is not filed within two (2) years one (1) year
	721	+	after the close of the fisc al year in the case of an annual audit,
	722	+	or the second fiscal year of a biennial audit period , the funds
	723	+	being withheld shall be remitted by the Oklahoma Tax Commission to
	724	+	the county in which the incorporated city or town is located and
	725	+	deposited to the cou nty highway fund of that county to be used as
	726	+	otherwise provided by law Special Investigative Unit Auditing
	727	+	Revolving Fund created pursuant to Section 3 of this act .
	728	+	SECTION 10. NEW LAW A new section of law to be codified
	729	+	in the Oklahoma Statutes as Section 17 -107A of Title 11, unless
	730	+	there is created a duplication in numbering, reads as follows:
	731	+	There is hereby created in the State Treasury a revolving fund
	732	+	for the State Auditor and Inspector to be designated the "Special
	733	+	Investigative Unit Auditing Revolving Fund". The fund shall be a
	734	+	continuing fund, not subject to fiscal year limitations, and shall
	735	+	consist of all monies received by the State Auditor and Inspector
	736	+	from funds withheld from a municipality's allocations of gasoline
	737	+	taxes as provided in Section 17 -107 of Title 11 of the Oklahoma
	738	+	Statutes and all monies received from legislative appropriatio ns.
	739	+
	740	+	ENGR. H. B. NO. 1058 Page 6 1
	741	+	2
	742	+	3
	743	+	4
	744	+	5
	745	+	6
	746	+	7
	747	+	8
	748	+	9
	749	+	10
	750	+	11
	751	+	12
	752	+	13
	753	+	14
	754	+	15
	755	+	16
	756	+	17
	757	+	18
	758	+	19
	759	+	20
	760	+	21
	761	+	22
	762	+	23
	763	+	24
	764	+
	765	+	All monies accruing to the credit of said fund are hereby
	766	+	appropriated and may be budgeted and expended by the State Auditor
	767	+	and Inspector for the purpose of offsetting expenses incurred from
	768	+	special investigative audit activities relating to municipa l
	769	+	government. Expenditures from said fund shall be made upon warrants
	770	+	issued by the State Treasurer against claims filed as prescri bed by
	771	+	law with the Director of the Office of Management and Enterprise
	772	+	Services for approval and payment.
	773	+	SECTION 11. REPEALER 11 O.S. 2011, Section 17 -108, is
	774	+	hereby repealed.
	775	+	SECTION 12. This act shall become effec tive July 1, 2021.
	776	+	SECTION 13. It being immediately necessary for the preservation
	777	+	of the public peace, heal th or safety, an emergency is hereby
	778	+	declared to exist, by reason whereof this act shall take effect and
218	779		be in full force from and a fter its passage and approval.
219		-	ENR. H. B. NO. 1058 Page 6
220		-	Passed the House of Rep resentatives the 11th day of May, 2022.
	780	+	Passed the House of Representatives the 1st day of March, 2021.
221	781
222	782
223	783
224	784
225	785		Presiding Officer of th e House
226	786		of Representatives
227	787
228	788
229		-
230		-	Passed the Senate the 25th day of April, 2022.
	789	+	Passed the Senate the ___ day of __________, 2021.
231	790
232	791
233	792
234	793
235	794		Presiding Officer of the Senate
236	795
237	796
238		-	OFFICE OF THE GOVERNOR
239		-	Received by the Office of the Governor this _ ___________________
240		-	day of ___________________, 20_______, at _______ o'clock _______ M.
241		-	By: _________________________________
242		-	Approved by the Governor of the State of Oklahoma this _____ ____
243		-	day of ___________________, 20_______, at _______ o'clock ______ _ M.
	797	+
	798	+	ENGR. H. B. NO. 1058 Page 7 1
	799	+	2
	800	+	3
	801	+	4
	802	+	5
	803	+	6
	804	+	7
	805	+	8
	806	+	9
	807	+	10
	808	+	11
	809	+	12
	810	+	13
	811	+	14
	812	+	15
	813	+	16
	814	+	17
	815	+	18
	816	+	19
	817	+	20
	818	+	21
	819	+	22
	820	+	23
	821	+	24
244	822
245	823
246		-	_________________________________
247		-	Governor of the State of Oklahoma
248		-
249		-	OFFICE OF THE SECRETARY OF STATE
250		-	Received by the Office of the Secretary of State this __________
251		-	day of ___________________, 20_______, at _______ o'clock _______ M.
252		-	By: _________________________________