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53	53	STATE OF OKLAHOMA
54	54
55	55	1st Session of the 58th Legislature (2021)
56	56
57	57	SENATE BILL 275 By: Thompson
58	58
59	59
60	60
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63	63	AS INTRODUCED
64	64
65	65	An Act relating to cities and towns; amending 11 O.S.
66	66	2011, Sections 17-105, as last amended by Section 1,
67	67	Chapter 82, O.S.L. 2017 and 17-107 (11 O.S. Supp.
68	68	2020, Section 17-105), which relate to municipal
69	69	finances; modifying minimum municipal income for
70	70	which certain audits shall be required; makin g
71	71	certain audits biennial; replacing cer tain auditing
72	72	procedures with procedures prescribed by the State
73	73	Auditor and Inspector; modifying time certain audit
74	74	report is due; modifying municipal income
75	75	requirements; redirecting certain funds; creating the
76	76	Special Investigative Unit Aud iting Revolving Fund;
77	77	providing for revenue and expenditures; repealing 11
78	78	O.S. 2011, Section 17-108, which relates to municipal
79	79	trusts; and providing for cod ification.
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85	85	BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOM A:
86	86	SECTION 1. AMENDATORY 11 O.S. 2011, Section 17 -105, as
87	87	last amended by Section 1, Chapter 82, O.S.L. 2017 (11 O.S. Supp.
88	88	2020, Section 17-105), is amended to read as follows:
89	89	Section 17-105. A. The governing body of each municipality
90	90	with an income of Twenty-five Thousand Dollars ($25,000.00) Fifty
91	91	Thousand Dollars ($50,000.00) or more to its general fund in revenue
92	92	to all funds including component units of which the municipality is
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144	144	a beneficiary, during a fiscal year shall cause to be prepared, by
145	145	an independent licensed public accountant or a certified public
146	146	accountant, an annual financial statement audit to be conducted in
147	147	accordance with auditing standards generally accepted in the United
148	148	States of America and “Government Auditing S tandards” as issued by
149	149	the Comptroller General of the United States. Such au dit shall be
150	150	ordered within thirty (30) days of the cl ose of each fiscal year.
151	151	Copies shall be filed with the State Auditor and Inspector within
152	152	six (6) months after the close of the fiscal year in accor dance with
153	153	the provisions of Sections 3022 and 3023 paragraph 2 of subsection A
154	154	of Section 212A of Title 68 74 of the Oklahoma Statutes and with the
155	155	governing body of the municipality.
156	156	B. The governing body of each municipality with an income of
157	157	Twenty-five Thousand Dollars ($ 25,000.00) Fifty Thousand Dollars
158	158	($50,000.00) or more to its general fund during a fiscal year in
159	159	total revenue to all funds including component unit s of which the
160	160	municipality is a beneficiary, and with a population of less than
161	161	two thousand five hundred (2,500) as of the most recent Federal
162	162	Decennial Census, and for whom an annual fin ancial statement audit
163	163	is not required by another law , regulation or contract, shall cause
164	164	to be prepared, by an independent licensed public accountan t or a
165	165	certified public accountant, an annual a biennial financial
166	166	statement audit in accordance with audi ting standards generally
167	167	accepted in the United States and Gover nment Auditing Standards as
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219	219	issued by the Comptroller General of the United States , or an. Each
220	220	biennial audit shall cover the two (2) pre ceding years. The
221	221	governing body of each m unicipality may alternatively request
222	222	biennial agreed-upon-procedures engagement over certain financial
223	223	information and compliance requirements to be performed in
224	224	accordance with the applicable attestation standar ds of The American
225	225	Institute of Certified Public Acco untants. The specific procedures
226	226	to be performed are as follows for the fiscal year:
227	227	1. Prepare a schedule of changes in fund balances for each fund
228	228	and determine compliance with the statutory prohibit ion of creating
229	229	fund balance deficits;
230	230	2. Prepare a budget and actual financial schedule for the
231	231	General Fund and any other significant funds listing separately each
232	232	federal fund and determine complianc e with the legal level of
233	233	appropriations by comparing expenditures and encumbrances to
234	234	authorized appropriations;
235	235	3. Agree material bank account balances to bank statements, and
236	236	trace significant reconciling items to subsequent clearance;
237	237	4. Compare uninsured deposits to fair value of pledged
238	238	collateral;
239	239	5. Compare use of material -restricted revenues and re sources to
240	240	their restrictions;
241	241	6. Determine compliance with requirements for separate funds;
242	242	and
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294	294	7. Determine compliance with reserve account and de bt service
295	295	coverage requirements of bond indentures.
296	296	Such prescribed by the State Auditor and Inspector. Each
297	297	biennial agreed-upon-procedures engagement shall cover the two (2)
298	298	preceding years. The audit or agreed-upon-procedures engagement
299	299	shall be ordered within thirty (30) days of the close of each fisc al
300	300	year that the audit is due. Copies shall be filed with the State
301	301	Auditor and Inspector within six (6) nine (9) months after the close
302	302	of the fiscal year in accordance wi th the provisions of Sections
303	303	3022 and 3023 paragraph 2 of subsection A of Section 212A of Title
304	304	68 74 of the Oklahoma Statutes and with the governing body of the
305	305	municipality.
306	306	C. The municipal income requirements in subsections A and B of
307	307	this section shall not include any grant moni es provided to a
308	308	municipality from any federal, state , or other governmental entity.
309	309	The municipal income requirements shall also not include income of
310	310	any public trust established under Sections 176 through 180.4 of
311	311	Title 60 of the Oklahoma Statutes with a municipality as the
312	312	beneficiary of the trust; provided, that income from trusts
313	313	established principally for the purpose of operating electric,
314	314	water, wastewater and sanitation utilities shall be included for
315	315	purposes of the municipal income requirements.
316	316	SECTION 2. AMENDATORY 11 O.S. 2011, Section 17 -107, is
317	317	amended to read as follows:
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369	369	Section 17-107. If a municipality does not file a copy of its
370	370	audit or agreed-upon-procedures report as provided in Section 17 -105
371	371	of this title, the State Auditor and Inspector shall notify the
372	372	Oklahoma Tax Commission which shall withhold from the municipality
373	373	its monthly allocations of gasoline taxes until the audit report is
374	374	filed. If a report is not filed within two (2) years one (1) year
375	375	after the close of the fiscal year in the case of an annual audit,
376	376	or the second fiscal year of a biennial audit period , the funds
377	377	being withheld shall be remi tted by the Oklahoma Tax Commission to
378	378	the county in which the incorporated city or town is located and
379	379	deposited to the county highway fund of that coun ty to be used as
380	380	otherwise provided by law Special Investigative Unit Auditing
381	381	Revolving Fund created in Section 3 of this act .
382	382	SECTION 3. NEW LAW A new section of law to be codified
383	383	in the Oklahoma Statutes as Section 17-107A of Title 11, unless
384	384	there is created a duplication in numbering, reads as follows:
385	385	There is hereby created in the State Tr easury a revolving fund
386	386	for the State Auditor and Inspector to be desi gnated the “Special
387	387	Investigative Unit Auditing Revolving Fund”. The fund shall be a
388	388	continuing fund, not subject to fiscal year limitations, and shall
389	389	consist of all monies received by the State Auditor and Inspector
390	390	from funds withheld from a municipality’s allocations of gasoline
391	391	taxes as provided in Section 17 -107 of Title 11 of the Oklahoma
392	392	Statutes and all monies received from legislative appropriations.
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444	444	All monies accruing to the credit of the fund are hereby
445	445	appropriated and may be budgeted and e xpended by the State Auditor
446	446	and Inspector for the purpose of offse tting expenses incurred from
447	447	special investigative audit activities relating to municipal
448	448	government. Expenditures from the fund shall be made upon warr ants
449	449	issued by the State Treasurer against claims filed as prescribed by
450	450	law with the Director of the Office of Management and Enterprise
451	451	Services for approval and payment.
452	452	SECTION 4. REPEALER 11 O.S. 2011, Section 17-108, is
453	453	hereby repealed.
454	454
455	455	58-1-336 MR 1/6/2021 9:23:57 AM

Oklahoma 2022 Regular Session

Oklahoma Senate Bill SB275 Compare Versions