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HB17 ENROLLED
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HB17
RBXAWYM-2
By Representative Lamb
RFD: County and Municipal Government
First Read: 13-Jan-26
PFD: 25-Jun-25
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PFD: 25-Jun-25
Enrolled, An Act,
Relating to municipal audits; to amend Section
11-43-85, Code of Alabama 1975, to revise the annual
expenditure threshold amounts that trigger municipal audits.
BE IT ENACTED BY THE LEGISLATURE OF ALABAMA:
Section 1. Section 11-43-85, Code of Alabama 1975, is
amended to read as follows:
"§11-43-85
(a) This section shall be known and may be cited as the
Municipal Audit Clarification Act.
(b)(1) In a municipality with annual expenditures of
three five hundred thousand dollars ($300,000) ($500,000) or
more, the mayor or city manager shall provide for and cause to
be made an annual audit of the financial affairs and
transactions of all funds and activities of the municipality
by an independent public accountant for each fiscal year of
the municipality.
(2) Except as provided in subdivision (3), in a
municipality with annual expenditures of less than three five
hundred thousand dollars ($300,000) ($500,000) , the mayor or
city manager shall provide for and cause to be made a biennial
audit of the financial affairs and transactions of all funds
and activities of the municipality by an independent public
accountant for each fiscal year of the municipality. The audit
conducted pursuant to this subdivision shall include each
fiscal year since the preceding audit.
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fiscal year since the preceding audit.
(3) In a municipality with annual expenditures of less
than one three hundred thousand dollars ($100,000) ($300,000) ,
the city council may elect to provide for and direct the mayor
or city manager to cause to be made, in lieu of the biennial
audit required under subdivision (b)(2), an annual report that
complies with procedures established by the Department of
Examiners of Public Accounts. The annual report shall be
provided to the Department of Examiners of Public Accounts and
shall constitute an annual audit report. The report shall
include all of the following:
a. Proof and reconciliation of cash.
b. Confirmation of cash balances.
c. A list of all bank balances.
d. A statement of cash receipts and cash disbursements.
e. A statement of compliance with state law.
f. A report of agreed upon procedures.
g. A report of motor fuel excise taxes collected and
the distribution and use of those proceeds.
(c) A municipal audit under this section shall be
conducted in accordance with generally accepted auditing
standards in a format prescribed by the Department of
Examiners of Public Accounts.
(d)(1) A municipal audit or annual report under this
section shall be provided to the Department of Examiners of
Public Accounts in accordance with Section 41-5A-12.1.
(2) In addition to the requirements of subdivision (1),
a municipal audit report under subdivision (b)(3) shall be
submitted to the city council at its first meeting after
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submitted to the city council at its first meeting after
completion of the report and shall be spread upon the minutes
of the council."
Section 2. This act shall become effective on October
1, 2026.
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1, 2026.
________________________________________________
Speaker of the House of Representatives
________________________________________________
President and Presiding Officer of the Senate
House of Representatives
I hereby certify that the within Act originated in and
was passed by the House 20-Jan-26.
John Treadwell
Clerk
Senate 07-Apr-26 Passed
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