Summary as Introduced
Amends the Governmental Account Audit Act. Provides that any governmental unit receiving revenue of less than $1,500,000 (rather than $850,000) for any fiscal year shall, in lieu of causing an annual audit of the accounts of the unit to be made, either (i) cause an audit of the accounts of the unit to be made once every 4 years and file with the Comptroller an annual financial report containing information required by the Comptroller or (ii) file with the Comptroller an annual financial report containing information required by the Comptroller, a copy of which has been provided to each member of that governmental unit's board of elected officials, presented either in person or by a live phone or web connection during a public meeting, and approved by a 3/5 majority vote. Makes conforming changes. Effective immediately.
Staff Analysis
House Bill 2352 would amend the Governmental Account Audit Act to raise the revenue threshold that determines whether a governmental unit must undergo an annual audit of its financial accounts. The goal is to provide more flexibility to smaller local governments with limited revenues, while still maintaining a level of financial transparency and oversight.
Revenue Threshold Increased:
The amendment increases the threshold for requiring an annual audit from $850,000 to $1,500,000 in revenue for any fiscal year. This change acknowledges inflation and the financial reality of small governmental units, reducing their audit burden.
Alternatives to Annual Audit:
Governmental units under the $1.5 million threshold will have two options instead of conducting an annual audit:
1. Option 1: Conduct a full audit once every 4 years, and in the interim years, file an annual financial report with the State Comptroller containing all required information.
2. Option 2: Skip the audit entirely, but still file an annual financial report that:
• Includes all information required by the Comptroller.
• Is shared with all elected officials of the governing board.
• Is presented during a public meeting—either in person or via live phone or web connection.
• Is approved by a 3/5 majority of the governing board.
• Conforming Changes and Immediate Effectiveness:
The bill also makes necessary technical changes to ensure consistency throughout the statute and is effective immediately upon becoming law.
This legislation would reduce the financial and administrative burden on smaller local governments, such as townships, park districts, and special service units, which often struggle to afford annual audits. At the same time, it retains accountability by requiring regular financial reporting, public disclosure, and approval by a supermajority of elected officials.
The provision balances cost savings and transparency, aligning audit requirements with the scale of governmental operations.
Amendment 1 (Adopted)
House Amendment 1, added as Section 3.5 to the Governmental Account Audit Act, creates a targeted exemption from annual audit requirements for specific units of government (park districts, forest preserve districts, and conservation districts), depending on their revenue levels.
Key Provisions:
• Audit Requirement Based on Revenue:
These local government districts will only be required to conduct an audit if their annual revenue exceeds $1,500,000 in a given fiscal year beginning on or after the effective date of this amendment.
• Alternative to Audit for Lower-Revenue Districts:
If a park district, forest preserve district, or conservation district does not meet the $1.5 million revenue threshold, it is exempt from conducting a full audit.
Instead, such a district must file an annual financial report with the Illinois Comptroller, consistent with the reporting requirements already established under Section 3 of the Act.
Purpose and Impact:
This amendment aligns with a broader legislative effort to ease financial and administrative burdens on smaller or lower-revenue local government entities.
By establishing a revenue threshold and requiring a streamlined financial reporting alternative, the provision ensures continued transparency and accountability, while reducing unnecessary compliance costs for smaller districts. It also standardizes audit exemptions across district types, consistent with similar proposals affecting other local governments.
In summary, the amendment provides fiscal relief to certain local districts without eliminating oversight, and reflects an effort to tailor reporting obligations to the scale of a district’s operations.