Important New Guidelines for Municipal Audits in Alabama

Act 2022-345 (HB256) was recently passed into law by the Alabama Legislature. HB256, also known as the Municipal Audit Clarification Act, details how mayors or city managers of a municipality should audit their municipality’s financial expenditures and how often these audits should be conducted.

Now that this bill is in effect, it is important for relevant parties to familiarize themselves with its updated requirements.

Audit Breakdown

HB256 separates audit requirements into three categories. These categories are designed to make auditing easier for smaller municipalities while ensuring that enough detailed information is provided to government agencies.

The categories are as follows:

  • Category 1: Municipalities with expenditures of $300,000 or more – Annual audit required
  • Category 2: Municipalities with expenditures of less than $300,000 – Biannual audit required
  • Category 3: Municipalities with expenditures of less than $100,000 – Annual report that “complies with procedures established by the Department of Examiners of Public Accounts” is required

Stay Informed

Municipalities need to stay up-to-date with the requirements of HB256. To ensure proper compliance of audits/reports, carefully read over the information and examples provided by Rachel L. Riddle, Chief Examiner for the Department of Examiners of Public Accounts.

Contact your accounting team to ensure you are current regarding the requirements of HB256, or check in with the team at Borland Benefield. We have extensive experience handling audits for municipalities, and we’d be happy to meet and make sure you comply with the new Act. 

Steady. Accurate. Consistent.

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