AN ACT relating to local entities and declaring an emergency.

Amend KRS 91A.020 to allow cities bringing in or expending less than $15 million to conform to cash, modified accrual, or budgetary basis of accounting rather than generally accepted governmental accounting principles; amend KRS 91A.040 to allow cities bringing in or expending less than $500,000 to perform an agreed-upon procedures engagement for the fifth fiscal year in which the city remains in that fiscal category, and require cities conducting an audit to contract with an…

Accountants Advertising Auditor of Public Accounts Audits and Auditors Cities Financial Responsibility Local Government Public Records and Reports Publications Reports Mandated Local Mandate

Introduced: February 12, 2026

Last action: April 10, 2026

(Acts Ch. 91)

In effect since April 10, 2026

This act carries an emergency clause, so it took effect as soon as it became law instead of waiting the usual 90 days after the session adjourned (Ky. Constitution § 55).

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This bill changes the financial reporting and auditing rules for Kentucky cities, allowing smaller cities to use simpler accounting methods and, in some cases, a less intensive financial review process instead of a full audit. It also updates deadlines and publication requirements for cities to share budget and financial information with the public and state officials. Who it may affect: residents of small and mid-sized Kentucky cities, local government officials, and certified public accountants who work with city governments.

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