Amends TCA Title 4, Chapter 3, Part 3; Title 6, Chapter 56 and Section 16-18-310.

This bill revises the present law provisions governing audits of municipal corporations, as discussed below. PRESENT LAW Under present law: (1) It is the duty of the governing board of every municipal corporation to have a thorough audit of the financial affairs of the corporation made by a disinterested person skilled in such work, as often as every two years. The cost of each audit must be paid out of the funds of the municipality; (2) The board's duties described above in (1) devolve upon the officers of every municipal corporation having power to provide and enact ordinances for the corporation; (3) If two years lapse without the audit provided for in items (1) and (2) above being made, any 10 persons over 18 years of age, who have paid taxes to such municipal corporation during the two-year period for which no audit has been made, may file a written demand for such an audit with the mayor, and if the audit is not commenced within 15 days after the filing of such demand, the 10 persons may file their bill in the chancery court against the corporation, and officers of the corporation charged with the duty of causing the audit to be made. Upon proof of their failure to provide for the audit and the demand therefor by the complainants, the chancellor must decree that the audit be made, and appoint an auditor who will make the audit. The cost of the audit so made is adjudged against the municipality as a part of the costs of the case; and (4) The result of each audit provided for in items (1)-(3) above are kept as a public record of the corporation, and are subject to the inspection of each citizen or taxpayer of the corporation. A summary of the audit, prepared by the auditor, must be published in at least one issue of a newspaper of general circulation in the corporation, if there is one. Also, the municipality must place a copy of the result of each audit in the main branch of the public library located within the boundaries of the municipality. A municipality that permits access to public information through the internet may also place a copy on the municipality's homepage. THIS BILL This bill rewrites the above-described audit provisions and instead provides the following: (1) The governing body of each municipality must cause an annual audit to be made of the accounts and records of all departments, boards, and agencies under its jurisdiction that receive and disburse funds; (2) The comptroller of the treasury, through the department of audit, must ensure that the audits are prepared in accordance with generally accepted governmental auditing standards and determine whether the audits meet minimum audit standards, which are prescribed by the comptroller of the treasury. An audit will not meet the requirements of this provision until the audit has been approved by the comptroller; (3) The audits may be prepared by certified public accountants or by the department of audit. The cost of each audit must be paid out of the funds of the municipality; (4) If the governing body of the municipality fails or refuses to have the audit prepared, the comptroller may appoint a certified public accountant or direct the department of audit to prepare the audit, the cost of such audit to be paid by the municipality; (5) All such audits must be completed as soon as practicable after the end of the fiscal year of the municipality. The preparer of the audit must furnish one copy of each audit to the mayor, chief executive officer, each member of the governing body, and the comptroller of the treasury. Copies of each audit must also be made available to the press; (6) The result of each audit must be kept as a public and permanent record of the municipality and will be subject to the inspection of each citizen or taxpayer; (7) If a municipality fails to prepare auditable financial records in a timely manner, the comptroller may appoint a certified public accountant or certified municipal finance officer to prepare financial records for the municipality's annual audit. The cost of such financial service is paid by the municipality; and (8) The internal audit staff of the municipality must conduct audits in accordance with the standards established by the comptroller of the treasury pursuant to present law.