Legislation sponsored by 1st District Senator Stan Humphries that would help reduce audit costs on annual audits for county government, while at the same time still holding them accountable to taxpayers was approved by a committee Wednesday. State Auditor Mark Harmon also supported by Senate Bill 144 that was passed by the Senate Standing Committee on State and Local Government.
Senate Bill 144 would allow the Auditor of Public Accounts to do an agreed-upon procedures engagement, or AUP, which would review key internal controls or specific activities of a county sheriff or county clerk’s office. A release says the bill is based on similar legislation that passed in Ohio, and the estimated cost of an AUP would be between 25 and 50 percent less than a full financial statement audit.
Harmon says the proposed legislation would still allow the Auditor’s office to convert an AUP to a full financial statement audit if at any time they determine more oversight is needed. The Auditor’s office would also have the option to decline a request for an AUP due to risk assessment, the number of consecutive years a county sheriff or clerk receives an AUP, or other factors related to proper oversight.
While county sheriffs and county clerks would have the option for AUP’s under SB 144, Harmon notes county fiscal courts would not since most Kentucky fiscal courts carry some level of debt which requires a full financial statement audit.
Auditor Harmon worked with Senator Humphries, the Kentucky Association of Counties (KACo), the Kentucky Sheriff’s Association, and the Kentucky County Clerks Association to craft the bill. Now that the legislation has passed out of committee, it moves on to the full Senate for consideration.
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