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Rep. Veil outlines bill to ease audit rules for small towns, warns of funding loss for noncompliance
Summary
Representative Veil told a Senate committee HB244 would give small local governments with under $2.5 million in annual expenditures more flexible audit options while preserving accountability; he said failure to comply could bar localities from state and federal funds including CDBG, LMEG and LRA.
Representative Veil presented House Bill 244 to a Senate committee on Feb. 10, saying the bill "provides some flexibility in the state's annual audit requirements for small local governments whose expenditures are less than 2,500,000.0." He said the change is intended to balance compliance costs for small cities with continued taxpayer accountability.
Veil said the bill would require a 'full gap audit' every fifth year for qualifying local governments and create a framework for auditors to work with municipalities. "This actually adds a a full gap audit required every fifth year," he said, while acknowledging counties and cities differ in staff capacity and resources.
Several senators questioned the bill's scope. Senator Hosteller asked whether the measure would apply to counties and school systems; Veil replied it applies to counties and cities but "not schools." Senator Harbison noted the state audit website shows multiple school systems missing audits for 2023 and 2024 and said he did not want to extend deadlines for schools.
Veil warned of concrete penalties for noncompliance. "If you're not in compliance with the audit, you're not a qualified local government, so you don't have access to CDBG, your LMEG funds, your LRA," he said, adding that loss of those state or federal funds would be the consequence of failing to meet the bill's audit requirements.
The committee discussed implementation challenges, with Veil acknowledging some localities have gone up to nine years without an audit and that HB244 does not attempt to address all causes for audit delays. No formal vote on HB244 occurred during the session; committee members instead selected a set of bills for consideration and approved the agenda by voice vote before adjourning.
The committee moved on to committee work and adjourned to its assigned committees; no further action on HB244 was recorded at the hearing.
