HB414 Alabama 2025 Session

Summary

Primary Sponsor

Bill LambRepresentative

Republican

Session

2025 Regular Session

Title

Municipalities, municipal audits further provided for

Summary

HB414 raises the municipal audit threshold to $500,000 and expands audit or annual-report options for smaller Alabama towns.

What This Bill Does

Under HB414, municipalities spending $500,000 or more would be required to have an annual audit by an independent public accountant. Municipalities spending between $300,000 and $499,999 would have biennial audits. Municipalities spending less than $300,000 would have the option of a biennial audit or an annual report with procedures set by the Department of Examiners of Public Accounts. The act becomes effective October 1, 2025.

Who It Affects

• Municipalities with annual expenditures of $500,000 or more: must obtain an annual audit by an independent public accountant.
• Municipalities with annual expenditures between $300,000 and $499,999: must obtain biennial audits.
• Municipalities with annual expenditures under $300,000: may choose between a biennial audit or an annual report prepared under Department procedures.
• City leaders (mayors or city managers) and city councils: responsible for arranging audits or annual reports and for presenting reports to the council and the Department of Examiners of Public Accounts.

Key Provisions

• Threshold changes: annual audits required for expenditures of $500,000 or more; biennial audits required for expenditures between $300,000 and $499,999; the smallest towns (< $300,000) may have a biennial audit or an annual report.
• Small-town annual report contents: for those choosing a report in lieu of an audit, the report must include cash proof and reconciliation, cash balances, list of bank balances, cash receipts and disbursements, compliance with state law, agreed-upon procedures, and motor fuel excise taxes information.
• Audit standards and format: audits must follow generally accepted auditing standards and use a format prescribed by the Department of Examiners of Public Accounts.
• Reporting to the Department: all audits or annual reports must be provided to the Department of Examiners of Public Accounts; audits that fall under the smallest municipalities may also be provided to the city council and must be spread in the council minutes.
• Effective date: the act becomes effective on October 1, 2025.

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

Subjects

Counties & Municipalities