Bill Text: IL SB2638 | 2017-2018 | 100th General Assembly | Engrossed
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Amends the Governmental Account Audit Act. Provides that an audit report based on the governmental unit's selection of the accrual, cash, or modified cash basis of accounting meets all requirements for conformity with generally accepted accounting principles, including the certification of the accountant or accountants making the audit that the audit has been performed in compliance with generally accepted auditing standards. Effective immediately.
Spectrum: Bipartisan Bill
Status: (Passed) 2018-08-13 - Public Act . . . . . . . . . 100-0837 [SB2638 Detail]
Download: Illinois-2017-SB2638-Engrossed.html
Bill Title: Amends the Governmental Account Audit Act. Provides that an audit report based on the governmental unit's selection of the accrual, cash, or modified cash basis of accounting meets all requirements for conformity with generally accepted accounting principles, including the certification of the accountant or accountants making the audit that the audit has been performed in compliance with generally accepted auditing standards. Effective immediately.
Spectrum: Bipartisan Bill
Status: (Passed) 2018-08-13 - Public Act . . . . . . . . . 100-0837 [SB2638 Detail]
Download: Illinois-2017-SB2638-Engrossed.html
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1 | AN ACT concerning local government.
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2 | Be it enacted by the People of the State of Illinois,
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3 | represented in the General Assembly:
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4 | Section 5. The Governmental Account Audit Act is amended by | ||||||
5 | changing Sections 1 and 5 as follows:
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6 | (50 ILCS 310/1) (from Ch. 85, par. 701)
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7 | Sec. 1. Definitions. As used in this Act, unless the | ||||||
8 | context
otherwise indicates:
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9 | "Governmental unit" or "unit" includes all municipal | ||||||
10 | corporations in
and political subdivisions of this State that | ||||||
11 | appropriate more than $5,000
for a fiscal year, with the amount | ||||||
12 | to increase or decrease by the amount of the
Consumer Price | ||||||
13 | Index (CPI) as reported on January 1 of each year, except the
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14 | following:
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15 | (1) School districts.
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16 | (2) Cities, villages, and incorporated towns subject | ||||||
17 | to the
Municipal Auditing Law, as contained in
the Illinois | ||||||
18 | Municipal Code, and cities that file a report with the
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19 | Comptroller under Section 3.1-35-115 of the Illinois | ||||||
20 | Municipal Code.
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21 | (3) Counties with a population of 1,000,000 or more.
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22 | (4) Counties subject to the County Auditing
Law.
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23 | (5) Any other municipal corporations in or political |
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1 | subdivisions of
this State, the accounts of which are | ||||||
2 | required by law to be audited by
or under the direction of | ||||||
3 | the Auditor General.
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4 | (6) (Blank).
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5 | (7) A drainage district, established under the | ||||||
6 | Illinois Drainage
Code (70 ILCS 605), that did not receive | ||||||
7 | or expend any moneys during the
immediately preceding | ||||||
8 | fiscal year or obtains approval for assessments and
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9 | expenditures through the circuit court.
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10 | (8) Public housing authorities that submit financial | ||||||
11 | reports to the U.S.
Department of Housing and Urban | ||||||
12 | Development.
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13 | "Governing body" means the board or other body or officers | ||||||
14 | having
authority to levy taxes, make appropriations, authorize | ||||||
15 | the expenditure
of public funds or approve claims for any | ||||||
16 | governmental unit.
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17 | "Comptroller" means the Comptroller of the State of | ||||||
18 | Illinois.
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19 | "Consumer Price Index" means the Consumer Price Index for | ||||||
20 | All Urban
Consumers for all items published by the United | ||||||
21 | States Department of Labor.
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22 | "Licensed public accountant" means the holder of a valid | ||||||
23 | certificate
as a public accountant under the Illinois Public | ||||||
24 | Accounting Act.
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25 | "Audit report" means the written report of the licensed | ||||||
26 | public
accountant and all appended statements and schedules |
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1 | relating to that
report,
presenting or recording the findings | ||||||
2 | of an examination or audit of the
financial transactions, | ||||||
3 | affairs, or conditions of a governmental unit.
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4 | "Auditor" means a licensed certified public accountant, as | ||||||
5 | that term is defined in Section 0.03 of the Illinois Public | ||||||
6 | Accounting Act, who performs an audit of governmental unit | ||||||
7 | financial statements and records and expresses an assurance or | ||||||
8 | disclaims an opinion on the audited financial statements. | ||||||
9 | "Report" includes both audit reports and reports filed | ||||||
10 | instead of an
audit report by a governmental unit receiving | ||||||
11 | revenue of less than $850,000
during any fiscal year to which | ||||||
12 | the reports relate.
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13 | (Source: P.A. 92-191, eff. 8-1-01; 92-582, eff. 7-1-02.)
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14 | (50 ILCS 310/5) (from Ch. 85, par. 705)
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15 | Sec. 5.
(a) Prior to fiscal year 2019, the The audit report | ||||||
16 | shall contain statements that conform with
generally accepted | ||||||
17 | accounting principles or other comprehensive basis of | ||||||
18 | accounting and that set forth , insofar as
possible, the | ||||||
19 | financial position and results of financial operations for
each | ||||||
20 | fund of the governmental unit. Each audit report shall include | ||||||
21 | only
financial information, findings , and conclusions that are | ||||||
22 | adequately
supported by evidence in the auditor's working | ||||||
23 | papers to demonstrate or
prove, when called upon, the basis for | ||||||
24 | the matters reported and their
correctness and reasonableness. | ||||||
25 | In connection with this, each governmental
unit shall retain |
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1 | the right of inspection of the auditor's working papers
and | ||||||
2 | shall make them available to the Comptroller, or his or her | ||||||
3 | designee, upon
request. The audit report shall also include the
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4 | professional opinion of the auditor or auditors licensed public | ||||||
5 | accountant with respect to the
financial statements or, if an | ||||||
6 | opinion cannot be expressed, a declaration
that he or she is | ||||||
7 | unable to express such opinion and an explanation of the | ||||||
8 | reasons
he or she cannot do so. Each audit report shall include | ||||||
9 | the certification of
the auditor or auditors accountant or | ||||||
10 | accountants making the audit that the audit has been
performed | ||||||
11 | in compliance with generally accepted auditing standards.
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12 | (b) For fiscal year 2019 and each fiscal year thereafter, | ||||||
13 | the audit report shall contain statements that set forth the | ||||||
14 | financial position and results of financial operations for each | ||||||
15 | fund of the governmental unit. Each audit report shall include | ||||||
16 | only financial information, findings, and conclusions that are | ||||||
17 | adequately supported by evidence in the auditor's working | ||||||
18 | papers to demonstrate or prove, when called upon, the basis for | ||||||
19 | the matters reported and their correctness and reasonableness. | ||||||
20 | In connection with this, each governmental unit shall retain | ||||||
21 | the right of inspection of the auditor's working papers and | ||||||
22 | shall make them available to the Comptroller, or his or her | ||||||
23 | designee, upon request. The audit report shall also include the | ||||||
24 | professional opinion of the auditor or auditors with respect to | ||||||
25 | the financial statements or, if an opinion cannot be expressed, | ||||||
26 | a declaration that he or she is unable to express an opinion |
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1 | and an explanation of the reasons he or she cannot do so. Each | ||||||
2 | audit report shall include the certification of the auditor or | ||||||
3 | auditors making the audit that the audit has been performed in | ||||||
4 | compliance with generally accepted auditing standards. | ||||||
5 | (c) For fiscal year 2019 and each fiscal year thereafter, | ||||||
6 | audit reports shall contain financial statements prepared in | ||||||
7 | conformity with generally accepted accounting principles and | ||||||
8 | audited in conformity with generally accepted auditing | ||||||
9 | standards if the last audit report filed preceding fiscal year | ||||||
10 | 2019 expressed an unmodified or modified opinion by the | ||||||
11 | independent auditor that the financial statements were | ||||||
12 | presented in conformity with generally accepted accounting | ||||||
13 | principles. | ||||||
14 | (d) For fiscal year 2019 and each fiscal year thereafter, | ||||||
15 | audit reports containing financial statements prepared in | ||||||
16 | conformity with an other comprehensive basis of accounting may | ||||||
17 | follow the best practices and guidelines as outlined by the | ||||||
18 | American Institute of Certified Public Accountants and shall be | ||||||
19 | audited in conformity with generally accepted auditing | ||||||
20 | standards. If the governing body of a governmental unit submits | ||||||
21 | an audit report containing financial statements prepared in | ||||||
22 | conformity with generally accepted accounting principles, | ||||||
23 | thereafter all future audit reports shall also contain | ||||||
24 | financial statements presented in conformity with generally | ||||||
25 | accepted accounting principles. | ||||||
26 | (e) Audits may be made on financial statements prepared |
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1 | using either an accrual or cash basis of accounting, depending | ||||||
2 | upon the system followed by the governmental unit, and audit | ||||||
3 | reports shall comply with this Section. | ||||||
4 | (Source: P.A. 85-1000.)
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5 | Section 10. The Counties Code is amended by changing | ||||||
6 | Sections 6-31002 and 6-31006 as follows:
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7 | (55 ILCS 5/6-31002) (from Ch. 34, par. 6-31002)
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8 | Sec. 6-31002. Definitions. As used in this Division, unless | ||||||
9 | the context otherwise requires:
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10 | 1. "Comptroller" means the Comptroller of the State of | ||||||
11 | Illinois;
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12 | 2. "accountant" or "accountants" means and includes all | ||||||
13 | persons
authorized to practice public accounting under the laws | ||||||
14 | of this State;
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15 | 3. "funds and accounts" means all funds of a county derived | ||||||
16 | from
property taxes and all funds and accounts derived from | ||||||
17 | sources other than
property taxes, including the receipts and | ||||||
18 | expenditures of the fee earnings
of each county fee officer;
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19 | 4. "audit report" means the written report of the | ||||||
20 | accountant or
accountants and all appended statements and | ||||||
21 | schedules relating thereto,
presenting or recording the | ||||||
22 | findings of an examination or audit of the
financial | ||||||
23 | transactions, affairs and condition of a county;
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24 | 5. "population" means the number of persons residing in a |
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1 | county
according to the last preceding federal decennial | ||||||
2 | census ; . | ||||||
3 | 6. "auditor" means a licensed certified public accountant, | ||||||
4 | as that term is defined in Section 0.03 of the Illinois Public | ||||||
5 | Accounting Act, who performs an audit of county financial | ||||||
6 | statements and records and expresses an assurance or disclaims | ||||||
7 | an opinion on the audited financial statements; "auditor" does | ||||||
8 | not include a county auditor elected or appointed under | ||||||
9 | Division 3-1 of the Counties Code.
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10 | (Source: P.A. 86-962.)
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11 | (55 ILCS 5/6-31006) (from Ch. 34, par. 6-31006)
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12 | Sec. 6-31006. Audit report. | ||||||
13 | (a) Prior to fiscal year 2019, the The audit report shall | ||||||
14 | contain
statements that are in conformity with generally | ||||||
15 | accepted public accounting
principles or other comprehensive | ||||||
16 | basis of accounting and shall set forth , insofar as possible, | ||||||
17 | the financial position
and the results of financial operations | ||||||
18 | for each fund, account , and office
of the county government. | ||||||
19 | The audit report shall also include the
professional opinion of | ||||||
20 | the auditor or auditors accountant or accountants with respect | ||||||
21 | to the
financial status and operations or, if an opinion cannot | ||||||
22 | be expressed, a
declaration that such auditor accountant is | ||||||
23 | unable to express such opinion and an
explanation of the | ||||||
24 | reasons he or she cannot do so. Each audit report shall
include | ||||||
25 | the certification of the auditor or auditors accountant or |
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1 | accountants making the audit
that the audit has been performed | ||||||
2 | in compliance with generally accepted
auditing standards. Each | ||||||
3 | audit report filed with the Comptroller shall be
accompanied by | ||||||
4 | a copy of each official statement or other offering of
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5 | materials prepared in connection with the issuance of | ||||||
6 | indebtedness of the
county since the filing of the last audit | ||||||
7 | report.
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8 | (b) For fiscal year 2019 and each fiscal year thereafter, | ||||||
9 | the audit report shall contain statements that set forth the | ||||||
10 | financial position and the results of financial operations for | ||||||
11 | each fund, account, and office of the county government. The | ||||||
12 | audit report shall also include the professional opinion of an | ||||||
13 | auditor or auditors with respect to the financial status and | ||||||
14 | operations or, if an opinion cannot be expressed, a declaration | ||||||
15 | that the auditor is unable to express an opinion and an | ||||||
16 | explanation of the reasons he or she cannot do so. Each audit | ||||||
17 | report shall include the certification of the auditor or | ||||||
18 | auditors making the audit that the audit has been performed in | ||||||
19 | compliance with generally accepted auditing standards. Each | ||||||
20 | audit report filed with the Comptroller shall be accompanied by | ||||||
21 | a copy of each official statement or other offering of | ||||||
22 | materials prepared in connection with the issuance of | ||||||
23 | indebtedness of the county since the filing of the last audit | ||||||
24 | report. | ||||||
25 | (c) For fiscal year 2019 and each fiscal year thereafter, | ||||||
26 | audit reports shall contain financial statements prepared in |
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1 | conformity with generally accepted accounting principles and | ||||||
2 | audited in conformity with generally accepted auditing | ||||||
3 | standards if the last audit report filed preceding fiscal year | ||||||
4 | 2019 expressed an unmodified or modified opinion by the | ||||||
5 | independent auditor that the financial statements were | ||||||
6 | presented in conformity with generally accepted accounting | ||||||
7 | principles. | ||||||
8 | (d) For fiscal year 2019 and each fiscal year thereafter, | ||||||
9 | audit reports containing financial statements prepared in | ||||||
10 | conformity with an other comprehensive basis of accounting may | ||||||
11 | follow the best practices and guidelines outlined by the | ||||||
12 | American Institute of Certified Public Accountants and shall be | ||||||
13 | audited in conformity with generally accepted auditing | ||||||
14 | standards. If the county board of a county submits an audit | ||||||
15 | report containing financial statements prepared in conformity | ||||||
16 | with generally accepted accounting principles, thereafter all | ||||||
17 | future audit reports shall also contain financial statements | ||||||
18 | presented in conformity with generally accepted accounting | ||||||
19 | principles. | ||||||
20 | (e) Audits may be made on financial statements prepared | ||||||
21 | using either an accrual or cash basis of accounting, depending | ||||||
22 | upon the system followed by the county, and audit reports shall | ||||||
23 | comply with this Section. | ||||||
24 | (Source: P.A. 86-962; 87-424.)
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25 | Section 15. The Illinois Municipal Code is amended by |
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1 | changing Sections 8-8-2 and 8-8-5 as follows:
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2 | (65 ILCS 5/8-8-2) (from Ch. 24, par. 8-8-2)
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3 | Sec. 8-8-2.
The following terms shall, unless the context | ||||||
4 | otherwise indicates,
have the following meanings:
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5 | (1) "Municipality" or "municipalities" means all cities, | ||||||
6 | villages
and incorporated towns having a population of less | ||||||
7 | than 500,000 as
determined by the last preceding Federal | ||||||
8 | census.
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9 | (2) "Corporate authorities" means a city council, village | ||||||
10 | board of
trustees, library board, police and firemen's pension | ||||||
11 | board, or any
other body or officers having authority to levy | ||||||
12 | taxes, make
appropriations, or approve claims for any | ||||||
13 | municipality.
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14 | (3) "Comptroller" means the Comptroller of the State of | ||||||
15 | Illinois.
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16 | (4) "Accountant" or "accountants" means all persons | ||||||
17 | licensed to
practice public accounting under the laws of this | ||||||
18 | State.
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19 | (5) "Audit report" means the written report of the | ||||||
20 | accountant or
accountants and all appended statements and | ||||||
21 | schedules relating thereto,
presenting or recording the | ||||||
22 | findings of an examination or audit of the
financial | ||||||
23 | transactions, affairs, or condition of a municipality.
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24 | (6) "Annual report" means the statement filed, in lieu of | ||||||
25 | an audit
report, by the municipalities of less than 800 |
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1 | population, which do not
own or operate public utilities and do | ||||||
2 | not have bonded debt.
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3 | (7) "Supplemental report" means the annual statement | ||||||
4 | filed, in
addition to any audit report provided for herein, by | ||||||
5 | all municipalities,
except municipalities of less than 800 | ||||||
6 | population which do not own or
operate public utilities and do | ||||||
7 | not have bonded debt.
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8 | (8) "Auditor" means a licensed certified public | ||||||
9 | accountant, as that term is defined in Section 0.03 of the | ||||||
10 | Illinois Public Accounting Act, who performs an audit of | ||||||
11 | municipal financial statements and records and expresses an | ||||||
12 | assurance or disclaims an opinion on the audited financial | ||||||
13 | statements. | ||||||
14 | (Source: P.A. 81-1050.)
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15 | (65 ILCS 5/8-8-5) (from Ch. 24, par. 8-8-5)
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16 | Sec. 8-8-5.
(a) Prior to fiscal year 2019, the The audit | ||||||
17 | shall be made in accordance with generally accepted
auditing | ||||||
18 | standards. Reporting on the financial position and results of
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19 | financial operations for each fund of the municipality shall be | ||||||
20 | in
accordance with generally accepted accounting principles or | ||||||
21 | other comprehensive basis of accounting , insofar as
possible . | ||||||
22 | Each audit report shall include only financial information,
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23 | findings , and conclusions that are adequately supported by | ||||||
24 | evidence in the
auditor's working papers to demonstrate or | ||||||
25 | prove, when called upon, the
basis for the matters reported and |
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1 | their correctness and reasonableness.
In connection with this, | ||||||
2 | each municipality shall retain the right of
inspection of the | ||||||
3 | auditor's working papers and shall make them available to
the | ||||||
4 | Comptroller, or his or her designee, upon request. The audit | ||||||
5 | report shall
consist of the professional opinion of the auditor | ||||||
6 | or auditors accountant or accountants with
respect to the | ||||||
7 | financial statements or, if an opinion cannot be expressed,
a | ||||||
8 | declaration that the auditor accountant is unable to express | ||||||
9 | such opinion and an
explanation of the reasons he or she cannot | ||||||
10 | do so. Municipal authorities shall not
impose limitations on | ||||||
11 | the scope of the audit to the extent that the effect
of such | ||||||
12 | limitations will result in the qualification of the opinion of | ||||||
13 | the auditor or auditors
accountant or accountants . Each audit | ||||||
14 | report filed with the Comptroller
shall be accompanied by a | ||||||
15 | copy of each official statement or other offering
of materials | ||||||
16 | prepared in connection with the issuance of indebtedness of
the | ||||||
17 | municipality since the filing of the last audit report.
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18 | Audits under this Division may be made upon either an | ||||||
19 | accrual or cash
basis of accounting depending upon the system | ||||||
20 | followed by each
municipality. | ||||||
21 | (b) For fiscal year 2019 and each fiscal year thereafter, | ||||||
22 | the audit shall be made in accordance with generally accepted | ||||||
23 | auditing standards. Each audit report shall include only | ||||||
24 | financial information, findings, and conclusions that are | ||||||
25 | adequately supported by evidence in the auditor's working | ||||||
26 | papers to demonstrate or prove, when called upon, the basis for |
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1 | the matters reported and their correctness and reasonableness. | ||||||
2 | In connection with this, each municipality shall retain the | ||||||
3 | right of inspection of the auditor's working papers and shall | ||||||
4 | make them available to the Comptroller, or his or her designee, | ||||||
5 | upon request. The audit report shall also consist of the | ||||||
6 | professional opinion of an auditor or auditors with respect to | ||||||
7 | the financial statements or, if an opinion cannot be expressed, | ||||||
8 | a declaration that the auditor is unable to express an opinion | ||||||
9 | and an explanation of the reasons he or she cannot do so. | ||||||
10 | Municipal authorities shall not impose limitations on the scope | ||||||
11 | of the audit to the extent that the effect of the limitations | ||||||
12 | will result in the qualification of the opinion of the auditor | ||||||
13 | or auditors. Each audit report filed with the Comptroller shall | ||||||
14 | be accompanied by a copy of each official statement or other | ||||||
15 | offering of materials prepared in connection with the issuance | ||||||
16 | of indebtedness of the municipality since the filing of the | ||||||
17 | last audit report. | ||||||
18 | (c) For fiscal year 2019 and each fiscal year thereafter, | ||||||
19 | audit reports shall contain financial statements prepared in | ||||||
20 | accordance with generally accepted accounting principles and | ||||||
21 | audited in accordance with generally accepted auditing | ||||||
22 | standards if the last audit report filed preceding fiscal year | ||||||
23 | 2019 expressed an unmodified or modified opinion by the | ||||||
24 | independent auditor that the financial statements were | ||||||
25 | presented in accordance with generally accepted accounting | ||||||
26 | principles.
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1 | (d) For fiscal year 2019 and each fiscal year thereafter, | ||||||
2 | audit reports containing financial statements prepared in | ||||||
3 | accordance with an other comprehensive basis of accounting may | ||||||
4 | follow the best practices and guidelines outlined by the | ||||||
5 | American Institute of Certified Public Accountants and shall be | ||||||
6 | audited in accordance with generally accepted auditing | ||||||
7 | standards. If the corporate authority of a municipality submits | ||||||
8 | an audit report containing financial statements prepared in | ||||||
9 | accordance with generally accepted accounting principles, | ||||||
10 | thereafter all future audit reports shall also contain | ||||||
11 | financial statements presented in accordance with generally | ||||||
12 | accepted accounting principles. | ||||||
13 | (e) Audits may be made on financial statements prepared | ||||||
14 | using either an accrual or cash basis of accounting, depending | ||||||
15 | upon the system followed by the municipality, and audit reports | ||||||
16 | shall comply with this Section. | ||||||
17 | (Source: P.A. 87-433.)
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18 | Section 99. Effective date. This Act takes effect upon | ||||||
19 | becoming law.
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