Amendment Expands Mandates for Local Government Financial AuditsAuthors: Brad Stewart, Matt Marcellis
August 21, 2018
On August 13, 2018, Senate Bill 2638 became law. It amends the Municipal Code, along with other Codes affecting local government, by expanding the mandates applicable to local government financial audits.
First, the new law requires that local government audit reports contain statements that set forth the financial position and the results of financial operations for each fund, account, and office of the county government. Additionally, the audit report must include the professional opinion of an auditor (not an accountant) with respect to the financial status and operations of the local government, or a declaration that an opinion cannot be expressed with the reason an opinion cannot be expressed.
Next, the audit report shall contain financial statements prepared in conformity with generally accepted accounting principles and audited in conformity with generally accepted auditing standards, but only if the last audit report filed prior to 2019 expressed an opinion by the auditor that the financial statements were presented in conformity with generally accepted accounting principles. Audit reports containing financial statements prepared in conformity with another comprehensive basis of accounting may follow specified best practices and guidelines and shall be audited in conformity with generally accepted auditing standards. If an audit report is submitted containing financial statements prepared in conformity with generally accepted accounting principles, thereafter all future audit reports must also contain financial statements presented in conformity with generally accepted accounting principles. Regardless, the audit report must include the auditor’s certification that the audit was performed in compliance with generally accepted auditing standards.
Finally, the law requires that each audit report filed with the Illinois State Comptroller be accompanied by a copy of each official statement or other offering of materials prepared in connection with the issuance of indebtedness of the local government since the filing of the last audit.