summary
Introduced
02/06/2026
02/06/2026
In Committee
02/10/2026
02/10/2026
Crossed Over
Passed
Dead
Introduced Session
104th General Assembly
Bill Summary
Creates the Government Reporting Enhancement and Transparency Act. Provides that, beginning fiscal year 2028, the annual cash receipts from all external sources of a local government shall determine if the local government is a Category 1 government, Category 2 government, Category 3 government, or Category 4 government. Provides that, each fiscal year, the responsible officials of a Category 1 local government shall appoint an auditing committee composed of 3 independent electors to inspect the local government's records using the template for that fiscal year published by the Comptroller. Provides that, each fiscal year, the responsible officials of a Category 2 local government shall enter into agreed upon procedures with an independent CPA. Requires the agreed upon procedures to align with the minimum agreed upon procedures published by the Comptroller. Provides that the responsible officials of a Category 3 local government shall oversee management's preparation of the local government's draft financial statements following the cash basis of accounting. Provides that the responsible officials of a Category 4 local government shall oversee management's preparation of the local government's draft financial statements following GAAP. Provides that, upon completion of the Category 3 local government's or Category 4 local government's draft financial statements, management shall furnish the draft financial statements to the local government's independent CPA firm for audit. Limits home rule powers. Makes other and conforming changes to various Acts. Effective immediately.
AI Summary
This bill, the Government Reporting Enhancement and Transparency Act, establishes a new framework for local government financial reporting and oversight, effective immediately but with requirements beginning in fiscal year 2028. It categorizes local governments into four tiers (Category 1 through 4) based on their annual cash receipts from all external sources, with specific thresholds for each category. Category 1 local governments, those with less than $100,000 in annual cash receipts, will have their records inspected by a committee of three independent electors using a template provided by the Comptroller. Category 2 local governments, with annual cash receipts between $100,000 and $3.5 million, will enter into "agreed-upon procedures" (AUPs), which are specific financial checks performed by a Certified Public Accountant (CPA) firm, aligning with minimum standards set by the Comptroller. Category 3 local governments, with annual cash receipts between $3.5 million and $35 million, will have their responsible officials oversee management's preparation of financial statements based on the cash basis of accounting, which are then audited by an independent CPA. Category 4 local governments, with annual cash receipts of $35 million or more, will follow the same process as Category 3 but will prepare their financial statements according to Generally Accepted Accounting Principles (GAAP). The bill also includes provisions for the selection and retention of CPA firms, limits home rule powers related to financial reporting, and makes conforming changes to various existing laws.
Sponsors (1)
Last Action
Referred to Rules Committee (on 02/10/2026)
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