Auditors, lawmakers split over SB 145 consolidation of federal single audits
Get AI-powered insights, summaries, and transcripts
Subscribe
Summary
Senate Finance heard extensive testimony on SB 145, which would restructure audit requirements by raising small-entity thresholds and creating a statewide federal single audit; auditors warned consolidation could reduce oversight and increase fraud risk; committee agreed to roll the bill for amendment work.
The Senate Finance Committee heard more than an hour of testimony on Senate Bill 145, a proposal that would streamline the state’s audit system by raising thresholds for certain audits and combining federal single audits into a consolidated statewide submission.
Proponents said the bill would reduce duplication, speed the state’s annual comprehensive financial report and free auditing capacity that could be used by local entities. The bill would raise the exemption threshold for reporting from $50,000 to $100,000, create a tier of agreed-upon procedures for entities with revenue between $100,000 and $1,000,000, and align the state’s approach with a $1,000,000 federal threshold for a federal single audit.
Multiple certified public accountants and audit professionals testified in opposition or with concerns. Daniel Trujillo, a 19-year state government auditor, said advancing SB 145 "would increase the state's risk of federal noncompliance and make federal dollars more vulnerable to fraud, waste, and abuse." Joe Ortiz, CPA, and Scott Eliason, another long-time government auditor, urged separating the tiered-system revisions from any move to a statewide federal single audit and asked for clearer backfill procedures to ensure previously audited federal program work continues to receive appropriate testing.
DFA general counsel George Hippenite told the committee DFA’s fiscal impact report flagged potential ambiguities — for example, whether the bill’s definition of “agency” could unintentionally include local public bodies — but said DFA’s reading of the current text is that local public bodies would not be included. The committee also adopted a technical amendment to strike appropriation language (the appropriation will appear in House Bill 2) and heard that additional amendments — including striking gifts and donations language from the audit fund and clarifying oversight roles — are under discussion.
Committee members repeatedly asked whether consolidation would reduce on-the-ground auditing of federal program dollars. Proponents, including the state auditor’s office, said agency-level audits would continue under current contracting arrangements and that the change would combine federal single audits for federal reporting purposes; opponents argued consolidation risks masking agency-level problems and diluting accountability.
After prolonged questioning and multiple requests for further technical changes, the committee decided to roll SB 145 to allow more stakeholder engagement and to refine amendments.