HB256 Alabama 2022 Session

Summary

Primary Sponsor

Prince ChestnutRepresentative

Democrat

Session

Regular Session 2022

Title

Municipal Audit Clarification Act, annual or biennial audit or annual report in lieu of audit, based on annual expenditures of municipality, Sec. 11-43-85 am'd.

Summary

HB256 establishes a tiered municipal audit system in Alabama, requiring annual audits for large towns, biennial audits for mid-sized towns, and optional annual reports in lieu of audits for very small towns, with reporting to the city council and state auditors.

What This Bill Does

Sets audit frequency by municipal annual expenditures: $300,000 or more requires an annual audit by an independent public accountant; less than $300,000 (except as noted) requires a biennial audit; less than $100,000 may opt for an annual report in lieu of the biennial audit, following specific procedures. All audits or reports must be conducted by an independent public accountant or the Department of Examiners of Public Accounts, with reports provided to the Department and, for the under-$100,000 option, also to the city council and recorded in the council minutes. The act preserves an annual audit requirement at least once per year and clarifies reporting formats and recipients.

Who It Affects

• Mayors or city managers of Alabama municipalities (must arrange and oversee audits or annual reports according to expenditure thresholds, and appoint an independent public accountant or use the Department of Examiners of Public Accounts).
• City councils (receive audit or annual report, and the annual report under the $100,000 threshold must be presented at the first council meeting and spread on the minutes).

Key Provisions

• Amends Section 11-43-85 to require annual audits for municipalities with $300,000+ in annual expenditures and biennial audits for those spending less than $300,000.
• Allows municipalities with less than $100,000 in annual expenditures, by council election, to substitute an annual report for the biennial audit, using procedures set by the Department of Examiners of Public Accounts; the report must include seven specified items (cash proof and reconciliation, cash balances, bank balances, cash receipts and disbursements, compliance with state law, agreed-upon procedures, and motor fuel tax reporting).
• Audits or annual 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; the under-$100,000 annual report must also be presented to the city council and spread upon the council minutes.
• Effective date: the act takes effect on the first day of the third month after governor approval.

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