Bill > SF564

This bill modifies the requirements for cities to perform annual financial audits by raising the revenue threshold that triggers mandatory yearly audits. Currently, cities with combined clerk and treasurer offices must have an annual audit if their annual revenue exceeds $150,000. The bill increases this threshold to $500,000 starting in 2025 and provides for annual inflation adjustments thereafter. Under the new provision, cities with annual revenue at or below $500,000 will only be required to have a comprehensive audit once every five years, with the specific audit year chosen randomly. This change means smaller cities will have more flexibility in managing their financial reporting requirements, potentially reducing administrative costs and burden. The bill specifies that these new audit requirements will take effect on August 1, 2025, and will apply to audits performed for the 2026 fiscal year and beyond. The revenue threshold will be adjusted annually based on the implicit price deflator for state and local expenditures, as published by the U.S. Department of Commerce.

Government Affairs

https://www.revisor.mn.gov/bills/bill.php?b=Senate&f=SF0564&ssn=0&y=2025