HB17 Alabama 2026 Session

Summary

Primary Sponsor

Bill LambRepresentative

Republican

Session

2026 Regular Session

Title

Municipal audits, expenditure thresholds for municipal audits revised

Summary

HB17 raises the threshold for annual municipal audits to $500,000, narrows biennial-audit coverage to expenditures between $300,000 and just under $500,000, and allows the smallest towns to file an annual report in place of an audit.

What This Bill Does

If enacted, municipalities with annual expenditures of $500,000 or more would be required to have an annual audit by an independent public accountant each fiscal year. Municipalities with expenditures under $500,000 but at least $300,000 would have biennial audits. Municipalities with expenditures under $300,000 may elect to file an annual report in lieu of a biennial audit; the annual report would count as the annual audit and must include specified cash and compliance information. Audits or reports must follow generally accepted auditing standards and be in a format prescribed by the Department of Examiners of Public Accounts; the act becomes effective October 1, 2026.

Who It Affects

• Group 1: Municipalities with annual expenditures of $500,000 or more will be required to undergo an annual audit by an independent public accountant each fiscal year.
• Group 2: Municipalities with annual expenditures under $500,000 will be affected as follows: those with $300,000 to under $500,000 will have biennial audits, and those under $300,000 may file an annual report in lieu of a biennial audit (the report counts as the annual audit).

Key Provisions

• Amends Section 11-43-85 to raise the annual-audit threshold to $500,000 and set the biennial-audit rule for expenditures under $500,000 but over $300,000.
• Allows municipalities with expenditures under $300,000 to elect an annual report in lieu of the biennial audit; the annual report must be submitted to the Department of Examiners of Public Accounts and counts as the annual audit.
• Requires audits/reports to follow generally accepted auditing standards and be in a format prescribed by the Department of Examiners of Public Accounts.
• Specifies that the Department of Examiners of Public Accounts receives the audits/reports; the annual report option includes specific content items (cash proof, cash balances, bank balances, cash receipts/disbursements, compliance with state law, agreed-upon procedures, and motor-fuel tax reports).
• Effective date: October 1, 2026.

AI-generated summary using openai/gpt-5-nano on Feb 11, 2026. May contain errors — refer to the official bill text for accuracy.

Subjects

Counties & Municipalities