AN ACT relating to local government financial practices.

Amend KRS 91A.040 to change the population thresholds for exceptions to annual municipal audits to a single exception for municipalities with less than 3,000 people; change the revenue exception from $150,000 to $500,000; allow the Department for Local Government to consider any evidence in assessing whether to allow an extension from the deadline for annual audits; permit the department to grant extensions up to 18 months; amend KRS 91A.040, 65.003, and 65.920 to indicate that…

Financial Responsibility Local Government State Agencies Ethics Auditor of Public Accounts Audits and Auditors Cities

Introduced: February 14, 2025

Last action: April 1, 2025

(Acts Ch. 153)

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This bill changes the rules around financial audits for Kentucky's smaller local governments. It raises the thresholds that allow small municipalities to skip annual audits, gives the state more flexibility to grant deadline extensions, and clarifies that state funding penalties for audit noncompliance cannot block payments owed to cities for services they provide to the state. It also gives certain city governments connected to the Eastern Kentucky Exposition Center the option to have that organization…

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