County auditors: special districts: annual audit exceptions

More districts can use less intensive financial reviews, agreed-upon procedures, or compilations instead of annual audits when their finances run through the county system. The law retains local approval requirements and allows county auditors to order an audit after reviewing the alternative report.

What the law does ​

• Extends from January 1, 2027, to January 1, 2037, authority for qualifying districts to substitute financial reviews, agreed-upon procedures engagements, or annual financial compilations for annual audits.
• Raises the qualifying annual-revenue limit from $150,000 to $250,000.
• Allows districts with under $50,000 in annual revenue, after using annual financial compilations for five consecutive years, to move to either a regular audit or a financial review.
• Requires unanimous approval by the district governing board and county board of supervisors, and requires all district transactions to run through the county financial system.
• Preserves county auditors’ authority to appoint an accountant to audit a district after receiving an alternative review, engagement, or compilation.

Who it affects ​

• Special districts with annual revenue of up to $250,000.
• Special-district governing boards and county boards of supervisors.
• County auditors and the accountants they use for district audits and alternative financial work.

Context ​

The alternative-audit provisions repeal on January 1, 2037, unless extended again.