HB443 Alabama 2021 Session

Summary

Primary Sponsor

Prince ChestnutRepresentative

Democrat

Co-Sponsors

Kelvin LawrenceJeff SorrellsDebbie Wood

Session

Regular Session 2021

Title

Municipalities, Chestnut Accountability Municipal Audit Clarification Act, requiring annual, biennial audit for certain municipalities, annual report in lieu of audit for certain municipalities, Sec. 11-43-85 am'd.

Summary

HB443 updates Alabama's municipal auditing rules to require annual or biennial audits based on city spending, and allows very small municipalities to file an annual report instead of a full audit.

What This Bill Does

The bill sets spending-based rules: cities spending $300,000 or more annually must have an annual audit; those spending less than $300,000 must have a biennial audit. For municipalities spending less than $100,000, the city council may choose to substitute an annual report (instead of the biennial audit) that meets specific requirements and serves as the annual audit. All audits or reports are prepared by an independent public accountant (or the Department of Examiners of Public Accounts), reported to the city council, and filed with the Department of Examiners of Public Accounts in the prescribed format.

Who It Affects

• Cities and towns in Alabama, whose annual expenditures determine whether they must have an annual audit, a biennial audit, or an annual report in lieu of an audit.
• Mayors or city managers who must arrange the audits or annual reports, and city councils who receive and record the audit or annual report.

Key Provisions

• Amends Section 11-43-85 to implement the Chestnut Accountability Municipal Audit Clarification Act.
• For municipalities with annual expenditures of $300,000 or more: the mayor or city manager must obtain an annual audit by an independent public accountant for each fiscal year.
• For municipalities with annual expenditures under $300,000: the mayor or city manager must obtain a biennial audit by an independent public accountant for each fiscal year, covering each year since the preceding audit.
• For municipalities with annual expenditures under $100,000: the city council may elect to provide for an annual report (in lieu of the biennial audit) that complies with procedures established by the Department of Examiners of Public Accounts and counts as the annual audit report.
• The annual report (when used) must include: proof and reconciliation of cash, confirmation of cash balances, a list of all bank balances, a statement of cash receipts and disbursements, a statement of compliance with state law, a report of agreed-upon procedures, and a report of sales tax on fuel and its use.
• Audits and reports must be conducted in accordance with generally accepted auditing standards and in a format prescribed by the Department of Examiners of Public Accounts.
• Audits or annual reports must be provided to the Department of Examiners of Public Accounts and, for the annual report (substitution), presented to the city council at its first meeting after completion and spread upon the council minutes.
• Effective date: becomes law on the first day of the third month after approval by the Governor.

AI-generated summary using openai/gpt-5-nano on Feb 22, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Municipalities