procedures engagement. A. The governing body of each municipality with Fifty Thousand Dollars ($50,000.00) or more in total revenue to all funds, including component units of which the municipality is a beneficiary, during a fiscal year shall cause to be prepared, by an independent licensed public accountant or a certified public accountant, an annual financial statement audit to be conducted in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards as issued by the Comptroller General of the United States. Such audit shall be ordered within thirty (30) days of the close of each fiscal year. Copies shall be filed with the State Auditor and Inspector within six (6) months after the close of the fiscal year in accordance with the provisions of the Municipal Audit Reform Act of 2022 and with the governing body of the municipality. B. The governing body of each municipality with Fifty Thousand Dollars ($50,000.00) or more in total revenue to all funds, including component units of which the municipality is a beneficiary, and with a population of less than two thousand five hundred (2,500) as of the most recent Federal Decennial Census, and for whom an annual financial statement audit is not required by another law, regulation or contract, shall cause to be prepared, by an independent licensed public accountant or a certified public accountant, a biennial financial statement audit in accordance with auditing standards generally accepted in the United States and Government Auditing Standards as issued by the Comptroller General of the United States. Each biennial audit shall cover the two (2) preceding years. The governing body of each municipality may alternatively request a biennial agreed-upon-procedures engagement. Agreed-upon procedures required under the Municipal Audit Reform Act of 2022 shall be performed in accordance with the applicable attestation standards of the American Institute of Certified Public Accountants. The audit or agreed-upon-procedures engagement shall be ordered within thirty (30) days of the close of the fiscal year that the audit is due. Copies shall be filed with the State Auditor and Inspector within nine (9) months after the close of the fiscal year in accordance with the provisions of paragraph 2 of subsection A of Section 212A of Title 74 of the Oklahoma Statutes and with the governing body of the municipality, with the deadline to order and file the audit or agreed-upon procedures eligible for extension by the State Auditor and Inspector for special circumstances or emergencies. C. The municipal income requirements in subsections A and B of this section shall not include any grant monies provided to a municipality from any federal, state, or other governmental entity. The municipal income requirements shall not include income of any public trust established under Sections 176 through 180.4 of Title 60 of the Oklahoma Statutes with a municipality as the beneficiary of the trust; provided, income from trusts established principally for the purpose of operating electric, water, wastewater, and sanitation utilities shall be included for purposes of the municipal income requirements. D. The governing body of each municipality that requests the biennial agreed-upon-procedures engagement provided in subsection B of this section shall: 1. Determine the establishment of policies related to adjustments, write-downs, or write-offs for various receivables due to the municipality or the utility-related trust and select a sample of adjustments to test for adherence to policies and for appropriate supporting documentation; 2. Obtain two (2) months of bank statements of the general fund and utility fund and confirm that cash deposits were made in the appropriate accounts and verify utility billing receipts or posting reports agree with the daily deposits; 3. Agree upon a pay rate for the city manager or town administrator, city or town clerk, city or town treasurer, and payroll clerk, to be authorized and documented in the personnel file or in approved meeting minutes. If any employee received compensation over and above his or her authorized salary or hourly rate, the payroll clerk, upon request, shall provide appropriate documentation of authorization for such pay. The requirements of this paragraph shall not include expense reimbursements but shall include any allowances considered taxable; 4. Determine the establishment of policies of use, proper municipal purpose, and adherence to prescribed policies for entities that use debit or credit cards; 5. Select a sample of transactions to test for supporting documentation; 6. Prepare a cash basis schedule of changes in fund balances for each fund and determine compliance with the statutory prohibition of creating fund balance deficits; 7. Agree material fiscal year-end bank account balances to bank statements and trace significant reconciling items to subsequent clearance and determine if any bank accounts exist that are not under city council purview; 8. Compare uninsured deposits at fiscal year-end to the fair value of pledged collateral; 9. Inquire if any instances of known fraud, illegal acts, or noncompliance with laws and regulations have occurred; and 10. Compare the use of material-restricted revenues and resources to the restrictions of the governing body of the municipality. E. A public trust with a municipal government or governments as the beneficiary that meet the same financial requirements established in subsection B of this section may, as an alternative to obtaining an audit as required in Section 180.1 of Title 60 of the Oklahoma Statutes, follow the biennial agreed-upon-procedures engagement outlined in subsection D of this section. Added by Laws 1977, c. 256, § 17-105, eff. July 1, 1978. Amended by Laws 1979, c. 30, § 1, emerg. eff. April 6, 1979; Laws 1984, c. 125, § 1, emerg. eff. April 10, 1984; Laws 1987, c. 110, § 1, eff. Nov. 1, 1987; Laws 1991, c. 124, § 2, eff. July 1, 1991; Laws 2005, c. 459, § 1, eff. July 1, 2005; Laws 2016, c. 211, § 1; Laws 2017, c. 82, § 1; Laws 2022, c. 254, § 2, eff. July 1, 2022; Laws 2024, c. 287, § 1, eff. Nov. 1, 2024.
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