(A) Each city of the first through fifth class shall, after the close of each fiscal year, cause each fund of the city to be audited by the auditor of public accounts or a certified public accountant. The audits shall be completed by February 1 immediately following the fiscal year being audited. Within ten days of the completion of the audit and its presentation to the city legislative body, pursuant to division (D)(6) below, each city shall forward three copies of the audit report to the state’s Department for Local Government for information purposes. The Department shall forward one copy of the audit report to the Legislative Research Commission to be used for the purpose of KRS 6.955 through 6.975.
(B) Except as provided in division (C) below, each city of the sixth class shall, after the close of each odd-numbered fiscal year, cause each fund of the city to be audited by the auditor of public accounts or a certified public accountant. The audits shall be completed by February 1 immediately following the fiscal year to be audited. Within ten days of the completion of the audit and its presentation to the city legislative body, pursuant to division (D)(6) below, each sixth class city shall forward three copies of the audit report to the state’s Department for Local Government for information purposes. The Department shall forward one copy of the audit report to the Legislative Research Commission to be used for the purposes of KRS 6.955 through 6.975. After the close of each even-numbered fiscal year, each sixth class city shall prepare a financial statement in accordance with KRS 424.220 and immediately forward one copy to the state’s Department for Local Government. The Department shall be responsible for forwarding one copy of the financial statement to the Legislative Research Commission.
(C) Any city of the sixth class, which for any fiscal year receives and expends, from all sources and for all purposes, less than $25,000 and which has no long-term debt, whether general obligation or revenue debt, shall not be required to audit each fund of the city for that particular fiscal year. Each city shall annually prepare a financial statement in accordance with KRS 424.220 and immediately forward one copy to the state’s Department for Local Government for information purposes. The Department shall be responsible for forwarding one copy of the financial statement to the Legislative Research Commission to be used for the purposes of KRS 6.955 through 6.975.
(D) Each city required by this section to conduct an annual or biannual audit shall enter into a written contract with the selected auditor. The contract shall set forth all terms and conditions of the agreement which shall include, but not be limited to, requirements that:
(1) The auditor be employed to examine the general purpose financial statements of all governmental, proprietary and fiduciary funds of the city;
(2) The auditor shall include in the annual city audit report an examination of local government economic assistance funds granted to the city under KRS 42.450 through 42.495. The auditor shall include a certification with the annual audit report that the funds were expended for the purpose intended;
(3) All audit information be prepared in accordance with generally accepted governmental auditing standards which includes such tests of the accounting records and such auditing procedures as considered necessary under the circumstances. Where the audit is to cover the use of state or federal funds, appropriate state or federal guidelines shall be utilized;
(4) The auditor prepare a typewritten or printed report embodying the general purpose financial statements and his or her opinion and statements relating thereto;
(5) The auditor express an overall opinion as to whether the general purpose financial statements present fairly the financial condition of the city or state the reasons why an overall opinion cannot be expressed;
(6) The completed audit and all accompanying documentation shall be presented to The City Council at a regular or special meeting; and
(7) Any contract with a certified public accountant for an audit shall require the accountant to forward a copy of the audit report and management letters to the auditor of public accounts upon request of the city or the auditor of the public accounts, and the auditor of public accounts shall have the right to review the certified public accountant’s workpapers upon request.
(E) A copy of an audit report which meets the requirements of this section shall be considered satisfactory and final in meeting any official request to the city for financial data, except for statutory or judicial requirements or requirements of the Legislative Research Commission necessary to carry out the purposes of KRS 6.955 through 6.975.
(F) Upon completion of an audit, the city may elect to publish the auditor’s report in accordance with division (G) below or may publish a financial statement in accordance with division (H) below. Notwithstanding the election of divisions (G) or (H) below, the city shall, within 90 days after the close of the fiscal year, cause to be published in a newspaper qualified under KRS 424.120 a legal display advertisement of not less than eight column inches that the statement required by KRS 424.220 has been prepared and that copies have been provided to each local newspaper of general circulation, each news service and each local radio or television station which has on file with the city a written request to be provided such statement.
(G) (1) If the city elects to publish the auditor’s report prepared in accordance with this section in lieu of the financial statement required by KRS 424.220, it shall publish the auditor’s cover letter to the City Council, the combined balance sheet showing all fund types and account groups, the combined statement of revenues, expenditures and changes in fund balance for all governmental fund types, the combined statement of revenues, expenses and changes in retained earnings/fund balances for all proprietary fund types and similar trust funds, and the combined statement of changes in financial position for all proprietary fund types and similar trust funds in accordance with KRS Chapter 424.
(2) The advertisement shall contain a statement that a copy of the complete auditor’s report, including financial statements and supplemental information, are on file at City Hall and are available for public inspection during normal business hours. The advertisement shall also contain a statement that any citizen may obtain from City Hall a copy of the complete auditor’s report, including financial statements and supplemental information, for his or her personal use. The statement shall notify citizens requesting a personal copy of the city audit report that they will be charged for duplication costs at a rate that shall not exceed $0.25 per page. In addition, the advertisement shall contain a statement that copies of the financial statement prepared in accordance with KRS 424.220 are available to the public at no cost at the business address of the officer responsible for preparation of such statement.
(H) If the city, other than a city of the first or second class or urban-county government, elects to publish the financial statement prepared in accordance with KRS 424.220 in lieu of publishing the auditor’s report, it shall, within 60 days after the completion of the audit, publish such statement in accordance with KRS Chapter 424.
(I) Any city of the fifth or sixth class may utilize the alternative publication methods authorized by KRS 424.190(2) to comply with the provisions of this section.
(KRS 91A.041) (Prior Code, § 33.04)
Statutory reference:
Department for Local Government to provide assistance, see KRS 91A.050