093_HB2258

 
                                     LRB093 08205 MKM 08412 b

 1        AN ACT in relation to local government.

 2        Be  it  enacted  by  the People of the State of Illinois,
 3    represented in the General Assembly:

 4        Section 5.  The Governmental Account Audit Act is amended
 5    by changing Section 5 as follows:

 6        (50 ILCS 310/5) (from Ch. 85, par. 705)
 7        Sec. 5. The audit report  shall  contain  fund  financial
 8    statements  that  conform  with generally accepted accounting
 9    principles. The financial statement report may be limited  to
10    fund financial statements and account groups presented on the
11    cash,  modified  accrual, or accrual method of accounting and
12    all  appropriate  disclosures  related  to   fund   financial
13    statements  and  that  set  forth,  insofar  as possible, the
14    financial position and results of  financial  operations  for
15    each fund of the governmental unit. A statement of management
16    discussion  and  analysis  is  not  required.   Funds  may be
17    grouped in any reasonable and prudent  manner.   Depreciation
18    of  non-proprietary fixed assets is not required.  Each audit
19    report shall include only financial information, findings and
20    conclusions that are adequately supported by evidence in  the
21    auditor's working papers to demonstrate or prove, when called
22    upon,   the   basis   for  the  matters  reported  and  their
23    correctness and reasonableness.   In  connection  with  this,
24    each  governmental  unit shall retain the right of inspection
25    of the auditor's working papers and shall make them available
26    to the Comptroller, or his designee, upon request.  The audit
27    report shall also include the  professional  opinion  of  the
28    licensed  public  accountant  with  respect  to the financial
29    statements  or,  if  an  opinion  cannot  be   expressed,   a
30    declaration  that he is unable to express such opinion and an
31    explanation of the reasons  he  cannot  do  so.   Each  audit
 
                            -2-      LRB093 08205 MKM 08412 b
 1    report  shall  include the certification of the accountant or
 2    accountants  making  the  audit  that  the  audit  has   been
 3    performed  in  compliance  with  generally  accepted auditing
 4    standards.
 5    (Source: P.A. 85-1000.)

 6        Section 10.  The Illinois Municipal Code  is  amended  by
 7    changing Sections 8-8-3 and 8-8-5 as follows:

 8        (65 ILCS 5/8-8-3) (from Ch. 24, par. 8-8-3)
 9        Sec.    8-8-3.  The   corporate   authorities   of   each
10    municipality coming under the provisions of this  Division  8
11    shall  cause  an  audit  of  the  funds  and  accounts of the
12    municipality to be  made  by  an  accountant  or  accountants
13    employed   by  such  municipality  or  by  an  accountant  or
14    accountants  retained  by  the  Comptroller,  as  hereinafter
15    provided.
16        The accounts and funds of each municipality  with  annual
17    expenditures  of  more  than  $200,000  that (i) has having a
18    population of 800 or more or (ii) has having a bonded debt or
19    (iii) owns owning or operates operating any  type  of  public
20    utility  shall be audited annually. The audit herein required
21    shall  include  all  of  the  accounts  and  funds   of   the
22    municipality.  Such  audit shall be begun as soon as possible
23    after the close of the fiscal year, and  shall  be  completed
24    and  the  report submitted within 6 months after the close of
25    such fiscal year,  unless  an  extension  of  time  shall  be
26    granted  by  the  Comptroller  in  writing. The accountant or
27    accountants making the audit shall submit  not  less  than  2
28    copies  of  the  audit report to the corporate authorities of
29    the municipality being audited. Municipalities not  operating
30    utilities  may cause audits of the accounts of municipalities
31    to be made more often than herein provided, by an  accountant
32    or  accountants.  The  audit  report of such audit when filed
 
                            -3-      LRB093 08205 MKM 08412 b
 1    with the Comptroller together with an audit  report  covering
 2    the remainder of the period for which an audit is required to
 3    be  filed  hereunder  shall  satisfy the requirements of this
 4    section.
 5        Municipalities not covered by the previous  paragraph  of
 6    less  than  800 population which do not own or operate public
 7    utilities and do not have bonded debt,  shall  file  annually
 8    with   the   Comptroller   a   financial   report  containing
 9    information  required  by  the   Comptroller.   Such   annual
10    financial report shall be on forms devised by the Comptroller
11    in  such  manner  as  to  not require professional accounting
12    services for its preparation.
13        In addition to  any  audit  report  required,  those  all
14    municipalities  required to be audited, except municipalities
15    of less than 800 population  which  do  not  own  or  operate
16    public  utilities  and  do  not  have bonded debt, shall file
17    annually with the Comptroller a supplemental report on  forms
18    devised and approved by the Comptroller.
19    (Source: P.A. 78-592.)

20        (65 ILCS 5/8-8-5) (from Ch. 24, par. 8-8-5)
21        Sec.  8-8-5.  The  audit shall be made in accordance with
22    generally accepted  auditing  standards.   The  audit  report
23    shall  contain  fund  financial  statements that conform with
24    generally accepted accounting principles as limited  by  this
25    Section.   Reporting on the financial position and results of
26    financial operations for each fund of the municipality  shall
27    be   in   accordance   with   generally  accepted  accounting
28    principles, insofar as possible.   Each  audit  report  shall
29    include  only financial information, findings and conclusions
30    that are adequately supported by evidence  in  the  auditor's
31    working papers to demonstrate or prove, when called upon, the
32    basis  for  the  matters  reported  and their correctness and
33    reasonableness.  In connection with this,  each  municipality
 
                            -4-      LRB093 08205 MKM 08412 b
 1    shall retain the right of inspection of the auditor's working
 2    papers  and  shall make them available to the Comptroller, or
 3    his designee, upon request.  The audit report  shall  consist
 4    of  the professional opinion of the accountant or accountants
 5    with respect to the financial statements or,  if  an  opinion
 6    cannot  be  expressed,  a  declaration that the accountant is
 7    unable to express such opinion  and  an  explanation  of  the
 8    reasons  he  cannot  do  so.  Municipal authorities shall not
 9    impose limitations on the scope of the audit  to  the  extent
10    that  the  effect  of  such  limitations  will  result in the
11    qualification  of  the   opinion   of   the   accountant   or
12    accountants.  Each  audit  report  filed with the Comptroller
13    shall be accompanied by a copy of each official statement  or
14    other  offering  of materials prepared in connection with the
15    issuance of indebtedness of the municipality since the filing
16    of the last audit report.
17        Audits under this Division may be  made  upon  either  an
18    accrual,  modified  accrual,  or  cash  basis  of  accounting
19    depending  upon  the system followed by each municipality and
20    the  financial  statement  report  may  be  limited  to  fund
21    financial statements and  account  groups  presented  on  the
22    cash,  modified  accrual, or accrual method of accounting and
23    all  appropriate  disclosures  related  to   fund   financial
24    statements.    A   statement  of  management  discussion  and
25    analysis shall not be required.  Funds may be grouped in  any
26    reasonable    and    prudent    manner.     Depreciation   of
27    non-proprietary fixed assets is not required.
28    (Source: P.A. 87-433.)

29        Section 99.  Effective date.  This Act takes effect  upon
30    becoming law.