House Committee Passes Municipal Audit Reform Bill

On March 24th, the House Committee on Local Government advanced Senate Bill 192, legislation aimed at modernizing audit requirements for small to mid-sized city governments, with a favorable expression. 

SB 192 allows qualifying cities to use agreed-upon procedures conducted by a certified public accountant or the Auditor of Public Accounts in place of a full audit under certain conditions. This approach offers a more flexible, cost-effective option while maintaining transparency and accountability. 

Sponsored by Senator Amanda Mays Bledsoe (R-Lexington), the bill addresses ongoing challenges cities face in securing and affording certified public accountants to complete required audits, particularly in smaller communities with limited resources. 

The legislation is the result of collaboration between the Kentucky League of Cities, Kentucky Society of CPAs, and the Kentucky Auditor of Public Accounts to address these challenges while ensuring cities can continue to meet statutory financial reporting requirements. 

Importantly, the bill does not eliminate audit requirements but instead provides an alternative pathway for qualifying cities, ensuring oversight standards remain in place while reducing unnecessary administrative and financial burdens. 

SB 192 now moves to the House floor for further consideration.