TOPIC: Reporting Threshold for Special Districts
OFFICE: Auditor
STATE: KY
DATE: 08/27/2012
QUESTION / ISSUE: Background: Special districts are local purpose governments that can tax and/or
charge fees for services such as fire protection, water, sanitation, libraries and roads.
In Kentucky, a special district that receives from all sources or expends for all purposes $750,000 or
more in a fiscal year shall provide for the performance of an annual audit. Special districts reporting
less than that amount are required to provide annual financial statements and an audit every four
years.
The Kentucky Auditor wants to determine if Kentucky has the highest threshold ($750,000) in the
country. What is the reporting threshold in your state for special districts?
State
Colorado
Georgia
Idaho
Comments
Special districts in Colorado follow the same provision in the Colorado Statutes
applicable to all local governments. Any local government where revenues or
expenditures do not exceed $500,000 may, with approval of the state auditor, be
granted an exemption from audit for that year. Local governments below the
$500,000 threshold must submit an annual application for exemption from audit that
is due within three months following the end of the fiscal year. There is no
requirement in Colorado Statute to have an audit every few years. Colorado's
threshold has historically coincided with the single audit threshold applicable for A133 audits.
The state of Georgia does not have any special districts.
Idaho has a statutory requirement that utilizes various levels for reporting. Idaho
Code 67-450B provides the requirements for independent financial audits of local
governmental entities to include without limitation, all cities, counties, authorities
and districts organized as separate legal and reporting entities under Idaho law,
and include the councils, commissions and boards as appointed or elected and
charged with fiscal management responsibilities of the local governmental entity.
Audits under these requirements are to be performed by independent auditors in
accordance with generally accepted governmental auditing standards, as defined
by the United States general accounting office. The auditor shall be employed on
written contract.
Maryland
The minimum requirements for any audit performed under the provisions of this
section are:
(a) The governing body of a local governmental entity whose annual expenditures
(from all sources) exceed two hundred fifty thousand dollars ($250,000) shall cause
a full and complete audit of its financial statements to be made each fiscal year.
(b) The governing body of a local governmental entity whose annual expenditures
(from all sources) exceed one hundred thousand dollars ($100,000), but do not
exceed two hundred fifty thousand dollars ($250,000) in the current year shall have
an annual audit or may elect to have its financial statements audited on a biennial
basis.
(c) The governing body of a local governmental entity whose annual expenditures
(from all sources) do not exceed one hundred thousand dollars ($100,000) has no
minimum audit requirements under this section.
(d) Federal audit requirements applicable because of expenditure of federal
assistance supersede the minimum audit requirements provided in this section.
Under State law (Article 19, Section 40 of the Annotated Code of Maryland), each
county, municipal corporation, and taxing district (created under State law) shall
have an annual audit. However, the Legislative Auditor may waive the annual audit
requirement for a municipal corporation or taxing district with annual revenues of
Reporting Threshold for Special Districts 1
State
Minnesota
Comments
less than $250,000 in the prior 4 fiscal years. If a waiver is granted, the local
government is required to have an audit conducted once every 4 years. In any
case, the local government must still file certain financial information with the State
(a document we call the Uniform Financial Report).
Also under Art 19 Sect 40, special taxing districts (created under County law /
code) are required to have annual audits (to be submitted to the appropriate
County). If the special district has annual expenditures of less than $250,000, the
County shall require an audit every 4 years, but still requires an annual financial
report.
In Minnesota, special districts must have an annual audit if total revenues exceed
the annual audit threshold and if they are not subject to financial auditing and
reporting requirements under any other law.
Special districts must have an Agreed-Upon Procedures engagement once in every
five-year period if total revenues are less than the annual audit threshold and if they
are not subject to financial auditing and reporting requirements under any other law.
For the year ended December 31, 2011, the annual audit threshold is $198,000.
This threshold applies to special districts with year ends of September 30, 2011,
December 31, 2011, March 30, 2012, and June 30, 2012. A few special districts
have different fiscal year-ends than those listed.
Except as provided by other law, special districts are required to file with the Office
of the State Auditor a financial statement or audited financial statements and the
special district financial reporting form by 180 days after the end of the special
district’s fiscal year.
Missouri
For any year in which a special district is not audited, the district must prepare a
financial statement in a form prescribed by the state auditor similar to the reporting
requirements for cities reporting on a cash basis and file that statement with the
state auditor.
Attached are two PDF files with the relevant statutes and regulations for Missouri's
political subdivisions. If you have follow-up questions, please contact Regina Pruitt,
CPA, Director of Local Government Audits, at (573) 751-4213 or
regina.pruitt@auditor.mo.gov.
Section 105-145
RSMo.pdf
Nebraska
New York
15csr40-3[1].pdf
The reporting threshold in Nebraska for local governments is $300,000 in
disbursements. Over $300,000 in disbursements we require a cash basis audit.
Under $300,000 in disbursements we allow them to file a non-audited financial
statement.
Over 99 percent of special districts that reported to the New York State Office of the
State Comptroller (OSC) are administrative arms of the towns in which they are
located, and are governed by their Town Boards. There are a few special districts
that are governed by separately elected boards of commissioners, which are
located primarily in downstate New York.
There is no revenue threshold for a special district to have their own audited
financial statements and if they do have their own (which is very unlikely), there is
Reporting Threshold for Special Districts 2
State
Ohio
Oregon
Comments
no requirement for them to submit the statements to OSC.
However, all special districts must file annual financial reports with OSC pursuant to
provisions in General Municipal Law (GML), which states: “every Municipal
Corporation and school, fire, improvement, and special district shall annually make
a report of its financial condition to the Comptroller.” Special districts generally
satisfy the requirements of GML by reporting their finances as part of the respective
town presentations or by filing separate reports (however, it should be noted of the
7,300 special districts in NY, only approximately 30 file separate reports).
Here are the requirements in Ohio.

Ohio Revised Code Chapter 117 requires us to “audit” the State and all 5,000+
subdivisions, regardless of size.
o We can audit two years of statements biennially.
o Of course, A-133 annual audit requirement supersedes the biennial
requirement if it applies.

ORC does not mandate us to follow GAAS or GAGAS – its definition of an audit
does not refer to any standards, and is pretty much whatever we decide is
sufficient.

We have opted to follow GAAS and GAGAS except:
o
We chose to apply agreed-upon procedures to entities spending less than
$1 million per year.
 We’re in process of amending this to $5million.
o
We are in process of implementing some very streamlined procedures for
entities spending less than $100,000 per year.
 We expect fieldwork for these procedures to be about half a day.
We did not implement the agreed-upon procedures until 2009. Before then, we
audited all 5,000+ in accordance with GAAS and GAGAS.
Oregon requires annual financial statement audits of all municipal corporations
having expenditures greater than $500,000. Below is an excerpt from our law
permitting most, (except counties and schools), permission to have annual
(SSARS) reviews ((3)), for smaller entities and self-prepared annual reports ((2)) for
the smallest governments. In every situation the reporting requirements remain
annual.
297.435 Exemption from audit; financial statement and bonding required. (1)
Subject to ORS 297.445, ORS 297.425 does not apply to any municipal
corporation, except a county or a school district, if, with respect to any one calendar
year or fiscal year, the municipal corporation meets all the conditions in either
subsection (2) or (3) of this section.
(2)(a) Total expenditures for all purposes, including moneys expended for debt
retirement, did not exceed $150,000 for the year;
(b) The municipal corporation has submitted financial statements for the year to the
Secretary of State within 90 days following the end of the year; and
(c) A certificate has been submitted with the financial statements stating that the
principal responsible official of the municipal corporation was covered during the
entire year by a fidelity or faithful performance bond in an amount at least equal to
the total amount of moneys received by the municipal corporation during the year.
Reporting Threshold for Special Districts 3
State
Tennessee
Utah
Washington
Comments
(3)(a) Total expenditures for all purposes, including moneys expended for debt
retirement, exceeded $150,000 but did not exceed $500,000 for the year;
(b) The municipal corporation has submitted financial statements for the year to the
Secretary of State within 180 days following the end of the year, and the financial
statements have been reviewed by an accountant or the Secretary of State in
accordance with standards prescribed by the Secretary of State; and
(c) A certificate has been submitted with the financial statements stating that the
official responsible for receiving and disbursing moneys on behalf of the municipal
corporation was covered during the entire year by a fidelity or faithful performance
bond in an amount at least equal to 10 percent of the total receipts for the year, but
not less than $10,000.
(4) The financial statements required by this section shall be in a form prescribed by
the Secretary of State and shall be considered audit reports for the purpose of the
filing fee required by ORS 297.485.
(5) The provisions of ORS 297.466 apply to financial statements for cities reviewed
under subsection (3) of this section. [1977 c.774 §5; 1981 c.245 §1; 1997 c.401 §1;
2007 c.709 §1]
We do not have a threshold for audit. All cities and counties in Tennessee must
receive an annual audit by State Statute. Most of the School Departments are
component units of the Primary Government and most of the Primary Governments
are counties. We have a few special school districts but only a few. There is no
threshold for auditing the Special School Districts either. They are all audited
annually. We have discussed the idea of a threshold for audit and have even
worked on some proposed legislation, but as of yet, we have no threshold. If a
public school exists in Tennessee, it receives an annual audit.
In Utah all local governments, including special districts, are required to have an
annual financial audit if either total revenues or expenditures are $350,000 or
greater. Special districts with total revenue or expenditures greater than or equal to
$200,000 but less than $350,000 are required to have a review. Special districts
with total revenue or expenditures greater than or equal to $100,000 but less than
$200,000 are required to have a compilation. Special districts with revenues and
expenditures less than $100,000 are required to report financial information on
forms provided by the auditor's office.
The Washington State Auditor’s Office is authorized to audit financial information
and compliance with state, federal, and local laws on the part of all local
governments (including school districts and special purpose districts), as well as all
state agencies, in the State of Washington. All local governments are required to
file an annual financial report (GAAP or cash basis) with our Office within 150 days
after fiscal year end, even if no financial audit is scheduled.
Generally, standard local government financial audit frequencies are based on
annual revenues as provided in the table below and are conducted under
Government Auditing Standards. Audits may also be conducted more frequently
due to a number of factors (such as: significant issues of impropriety, risks related
to financial operations, expenditure of $500,000 or more of federal awards,
requirements per state laws, regulations, or contracts, or a written request by the
local government.
I am attaching a Schedule of Local Government Audit Frequencies to let you know
what we do at the Washington State Auditor’s Office. You’ll note on the Schedule
we specifically address audit frequencies and thresholds for Conservation Districts,
Risk Pools and School Districts; then have a section for All Other Local
Governments which includes all of our special purpose districts.
For any special purpose district with annual revenues $300,000 or less we do an
Reporting Threshold for Special Districts 4
State
Comments
annual or biennial ‘audit assessment’ which is a desk review. We require these
small governments to annually submit a questionnaire we call a Schedule 22 (see
attached). We also get revenue and expenditure information from the county
treasurers. These desk reviews help us to assess potential risks and in some cases
trigger an on-site audit.
Special purpose districts with revenues between $300,000 and $2 million receive
either a biennial or triennial financial or accountability audit. Accountability audits
look for indications of fraud, abuse or non-compliance.
Special purpose districts with revenues above $2 million receive financial and
accountability audits every 1, 2 or 3 years based on the attached schedule or based
on the risks/issues we identify.
BARS Schedule_22.doc
Wyoming
Audit Frequency &
Thresholds Aug2012.docx
In Wyoming, special districts must have a CPA audit each year their revenues or
expenditures exceed $1 million. This is per statute.
By rule, we have other reporting requirements for less than $1 million. The first level
is over $500,000 where a CPA review is required.
Reporting Threshold for Special Districts 5