(a) This act shall be known and may be cited as the Municipal Audit Clarification Act.
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Terms Used In Alabama Code 11-43-85

  • Fiscal year: The fiscal year is the accounting period for the government. For the federal government, this begins on October 1 and ends on September 30. The fiscal year is designated by the calendar year in which it ends; for example, fiscal year 2006 begins on October 1, 2005 and ends on September 30, 2006.
  • following: means next after. See Alabama Code 1-1-1
  • preceding: means next before. See Alabama Code 1-1-1
  • state: when applied to the different parts of the United States, includes the District of Columbia and the several territories of the United States. See Alabama Code 1-1-1
  • year: means a calendar year; but, whenever the word "year" is used in reference to any appropriations for the payment of money out of the treasury, it shall mean fiscal year. See Alabama Code 1-1-1
(b)

(1) In a municipality with annual expenditures of three hundred thousand dollars ($300,000) or more, the mayor or city manager shall provide for and cause to be made an annual audit of the financial affairs and transactions of all funds and activities of the municipality by an independent public accountant for each fiscal year of the municipality.
(2) Except as provided in subdivision (3), in a municipality with annual expenditures of less than three hundred thousand dollars ($300,000), the mayor or city manager shall provide for and cause to be made a biennial audit of the financial affairs and transactions of all funds and activities of the municipality by an independent public accountant for each fiscal year of the municipality. The audit conducted pursuant to this subdivision shall include each fiscal year since the preceding audit.
(3) In a municipality with annual expenditures of less than one hundred thousand dollars ($100,000), the city council may elect to provide for and direct the mayor or city manager to cause to be made, in lieu of the biennial audit required under subdivision (b)(2), an annual report that complies with procedures established by the Department of Examiners of Public Accounts. The annual report shall be provided to the Department of Examiners of Public Accounts and shall constitute an annual audit report. The report shall include all of the following:

a. Proof and reconciliation of cash.
b. Confirmation of cash balances.
c. A list of all bank balances.
d. A statement of cash receipts and cash disbursements.
e. A statement of compliance with state law.
f. A report of agreed upon procedures.
g. A report of motor fuel excise taxes collected and the distribution and use of those proceeds.
(c) A municipal audit under this section shall be conducted in accordance with generally accepted auditing standards in a format prescribed by the Department of Examiners of Public Accounts.
(d)

(1) A municipal audit or annual report under this section shall be provided to the Department of Examiners of Public Accounts in accordance with Section 41-5A-12.1.
(2) In addition to the requirements of subdivision (1), a municipal audit report under subdivision(b)(3) shall be submitted to the city council at its first meeting after completion of the report and shall be spread upon the minutes of the council.
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