50 ILCS 310/ Governmental Account Audit Act.

(50 ILCS 310/0.01) (from Ch. 85, par. 700)

Sec. 0.01. Short title. This Act may be cited as the Governmental Account Audit Act.

(Source: P.A. 86-1324.)

(50 ILCS 310/1) (from Ch. 85, par. 701)

Sec. 1. Definitions. As used in this Act, unless the context otherwise indicates:

"Governmental unit" or "unit" includes all municipal corporations in and political subdivisions of this State that appropriate more than $5,000 for a fiscal year, with the amount to increase or decrease by the amount of the Consumer Price Index (CPI) as reported on January 1 of each year, except the following:

(1) School districts.

(2) Cities, villages, and incorporated towns subject to the Municipal Auditing Law, as contained in the Illinois Municipal Code, and cities that file a report with the Comptroller under Section 3.1-35-115 of the Illinois Municipal Code.

(3) Counties with a population of 1,000,000 or more.

(4) Counties subject to the County Auditing Law.

(5) Any other municipal corporations in or political subdivisions of this State, the accounts of which are required by law to be audited by or under the direction of the Auditor General.

(6) (Blank).

(7) A drainage district, established under the Illinois Drainage Code (70 ILCS 605), that did not receive or expend any moneys during the immediately preceding fiscal year or obtains approval for assessments and expenditures through the circuit court.

(8) Public housing authorities that submit financial reports to the U.S. Department of Housing and Urban Development.

"Governing body" means the board or other body or officers having authority to levy taxes, make appropriations, authorize the expenditure of public funds or approve claims for any governmental unit.

"Comptroller" means the Comptroller of the State of Illinois.

"Consumer Price Index" means the Consumer Price Index for All Urban Consumers for all items published by the United States Department of Labor.

"Audit report" means the written report of the auditor and all appended statements and schedules relating to that report, presenting or recording the findings of an examination or audit of the financial transactions, affairs, or conditions of a governmental unit.

"Auditor" means a licensed certified public accountant, as that term is defined in Section 0.03 of the Illinois Public Accounting Act, or the substantial equivalent of a licensed CPA, as provided under Section 5.2 of the Illinois Public Accounting Act, who performs an audit of governmental unit financial statements and records and expresses an assurance or disclaims an opinion on the audited financial statements.

"Report" includes both audit reports and reports filed instead of an audit report by a governmental unit receiving revenue of less than $850,000 during any fiscal year to which the reports relate.

"Generally accepted accounting principles" means accounting principles generally accepted in the United States.

"Generally accepted auditing standards" means auditing standards generally accepted in the United States.

(Source: P.A. 100-837, eff. 8-13-18; 101-419, eff. 1-1-20.)

(50 ILCS 310/2) (from Ch. 85, par. 702)

Sec. 2. Except as otherwise provided in Section 3, the governing body of each governmental unit shall cause an audit of the accounts of the unit to be made by an auditor or auditors. Such audit shall be performed annually and shall cover the immediately preceding fiscal year of the governmental unit. The audit shall include all the accounts and funds of the governmental unit, including the accounts of any officer of the governmental unit who receives fees or handles funds of the unit or who spends money of the unit. The audit shall begin as soon as possible after the close of the last fiscal year to which it pertains, and shall be completed and the audit report filed with the Comptroller within 180 days after the close of such fiscal year unless an extension of time is granted by the Comptroller in writing. An audit report which fails to meet the requirements of this Act shall be rejected by the Comptroller and returned to the governing body of the governmental unit for corrective action. The auditor or auditors performing the audit shall submit not less than 3 copies of the audit report to the governing body of the governmental unit being audited.

All audits to be filed with the Comptroller under this Section must be submitted electronically and the Comptroller must post the audit reports on the Internet no later than 45 days after they are received. If the governmental unit provides the Comptroller's Office with sufficient evidence that the audit report cannot be filed electronically, the Comptroller may waive this requirement. The Comptroller must also post a list of governmental units that are not in compliance with the reporting requirements set forth in this Section.

Any financial report under this Section shall include the name of the purchasing agent who oversees all competitively bid contracts. If there is no purchasing agent, the name of the person responsible for oversight of all competitively bid contracts shall be listed.

(Source: P.A. 101-419, eff. 1-1-20.)

(50 ILCS 310/3) (from Ch. 85, par. 703)

Sec. 3. Any governmental unit receiving revenue of less than $850,000 for any fiscal year shall, in lieu of complying with the requirements of Section 2 for audits and audit reports, beginning with fiscal year 2016, either: (i) cause an audit of the accounts of the unit to be made once every 4 years and file with the Comptroller an annual financial report containing information required by the Comptroller, or (ii) file with the Comptroller an annual financial report containing information required by the Comptroller, a copy of which has been provided to each member of that governmental unit's board of elected officials, presented either in person or by a live phone or web connection during a public meeting, and approved by a 3/5 majority vote. In addition, a governmental unit receiving revenue of less than $850,000 may file with the Comptroller any audit reports which may have been prepared under any other law. Any governmental unit receiving revenue of $850,000 or more for any fiscal year shall, in addition to complying with the requirements of Section 2 for audits and audit reports, file with the Comptroller the financial report required by this Section. Such financial reports shall be on forms so designed by the Comptroller as not to require professional accounting services for its preparation. All reports to be filed with the Comptroller under this Section must be submitted electronically and the Comptroller must post the reports on the Internet no later than 45 days after they are received. If the governmental unit provides the Comptroller's Office with sufficient evidence that the report cannot be filed electronically, the Comptroller may waive this requirement. The Comptroller must also post a list of governmental units that are not in compliance with the reporting requirements set forth in this Section.

Any financial report under this Section shall include the name of the purchasing agent who oversees all competitively bid contracts. If there is no purchasing agent, the name of the person responsible for oversight of all competitively bid contracts shall be listed.

(Source: P.A. 97-890, eff. 8-2-12; 97-1142, eff. 12-28-12; 98-1019, eff. 7-1-15.)

(50 ILCS 310/4) (from Ch. 85, par. 704)

Sec. 4. Overdue report.

(a) If the required report for a governmental unit is not filed with the Comptroller in accordance with Section 2 or Section 3, whichever is applicable, within 180 days after the close of the fiscal year of the governmental unit, the Comptroller shall notify the governing body of that unit in writing that the report is due and may also grant a 60-day extension for the filing of the audit report. If the required report is not filed within the time specified in such written notice, the Comptroller shall cause an audit to be made by an auditor, and the governmental unit shall pay to the Comptroller actual compensation and expenses to reimburse him or her for the cost of preparing or completing such report.

(b) The Comptroller may decline to order an audit and the preparation of an audit report (i) if an initial examination of the books and records of the governmental unit indicates that the books and records of the governmental unit are inadequate or unavailable due to the passage of time or the occurrence of a natural disaster or (ii) if the Comptroller determines that the cost of an audit would impose an unreasonable financial burden on the governmental unit.

(c) The State Comptroller may grant extensions for delinquent audits or reports. The Comptroller may charge a governmental unit a fee for a delinquent audit or report of $5 per day for the first 15 days past due, $10 per day for 16 through 30 days past due, $15 per day for 31 through 45 days past due, and $20 per day for the 46th day and every day thereafter. These amounts may be reduced at the Comptroller's discretion. All fees collected under this subsection (c) shall be deposited into the Comptroller's Administrative Fund.

(Source: P.A. 101-419, eff. 1-1-20; 102-558, eff. 8-20-21.)

(50 ILCS 310/4.5)

Sec. 4.5. Comptroller's Audit Expense Revolving Fund. There is created the Comptroller's Audit Expense Revolving Fund as a special fund to be held by the State Treasurer, ex officio, as custodian, but separate and apart from the funds in the State treasury. The following moneys shall be deposited into that Fund:

(1) All moneys received by the Comptroller for reimbursement of the Comptroller's cost of performing audits and preparing or completing reports under Section 4 of this Act, Section 6-31004 of the Counties Code, or Section 8-8-4 of the Illinois Municipal Code.

(2) All moneys appropriated to that Fund by the General Assembly.

Expenditures from the Fund shall be made on vouchers signed by the Comptroller, for the sole purpose of paying the Comptroller's cost of performing audits and preparing or completing reports under Section 4 of this Act, Section 6-31004 of the Counties Code, or Section 8-8-4 of the Illinois Municipal Code.

The State Treasurer shall invest moneys in the Fund in the same manner and subject to the same restrictions as moneys in the State treasury.

(Source: P.A. 88-280.)

(50 ILCS 310/5) (from Ch. 85, par. 705)

Sec. 5. (a) Prior to fiscal year 2019, the audit report shall contain statements that conform with generally accepted accounting principles or other comprehensive basis of accounting and that set forth the financial position and results of financial operations for each fund of the governmental unit. Each audit report shall include only financial information, findings, and conclusions that are adequately supported by evidence in the auditor's working papers to demonstrate or prove, when called upon, the basis for the matters reported and their correctness and reasonableness. In connection with this, each governmental unit shall retain the right of inspection of the auditor's working papers and shall make them available to the Comptroller, or his or her designee, upon request. The audit report shall also include the professional opinion of the auditor or auditors with respect to the financial statements or, if an opinion cannot be expressed, a declaration that he or she is unable to express such opinion and an explanation of the reasons he or she cannot do so. Each audit report shall include the certification of the auditor or auditors making the audit that the audit has been performed in compliance with generally accepted auditing standards.

(b) For fiscal year 2019 and each fiscal year thereafter, the audit report shall contain statements that set forth the financial position and results of financial operations for financial statements for governmental activities, business-type activities, discretely presented component units, and each major fund and aggregated nonmajor fund. Each audit report shall include only financial information, findings, and conclusions that are adequately supported by evidence in the auditor's working papers to demonstrate or prove, when called upon, the basis for the matters reported and their correctness and reasonableness. In connection with this, each governmental unit shall retain the right of inspection of the auditor's working papers and shall make them available to the Comptroller, or his or her designee, upon request. The audit report shall also include the professional opinion of the auditor or auditors with respect to the financial statements or, if an opinion cannot be expressed, a declaration that he or she is unable to express an opinion and an explanation of the reasons he or she cannot do so. Each audit report shall include a representation by of the auditor or auditors conducting the audit that the audit has been performed in accordance with generally accepted auditing standards.

(c) For fiscal year 2019 and each fiscal year thereafter, audit reports shall contain financial statements prepared in accordance with generally accepted accounting principles and audited in accordance with generally accepted auditing standards if the last audit report filed preceding fiscal year 2019 expressed an unmodified or modified opinion by the auditor pertaining to the financial statements that were prepared in accordance with generally accepted accounting principles.

(d) For fiscal year 2019 and each fiscal year thereafter, audit reports containing financial statements prepared in accordance with an other comprehensive basis of accounting may follow the best practices and guidelines as outlined by the American Institute of Certified Public Accountants and shall be audited in accordance with generally accepted auditing standards. If the governing body of a governmental unit submits an audit report containing financial statements prepared in accordance with generally accepted accounting principles, thereafter all future audit reports shall also contain financial statements prepared in accordance with generally accepted accounting principles.

(e) Audits may be performed on financial statements prepared using either an accrual or cash basis of accounting, depending upon the system followed by the governmental unit, and audit reports shall comply with this Section.

(Source: P.A. 100-837, eff. 8-13-18; 101-419, eff. 1-1-20.)

(50 ILCS 310/6) (from Ch. 85, par. 706)

Sec. 6. When the audit is completed the auditor making such audit shall make and sign at least 3 copies of the report of the audit and immediately file them with the governmental unit audited. Governmental units receiving revenue of $850,000 or more for any fiscal year shall immediately make one copy of the audit report and one copy of the financial report required by Section 3 of this Act a part of its public record. Governmental units receiving revenue of less than $850,000 shall immediately make one copy of the audit report, or one copy of the report authorized by Section 3 of this Act to be filed instead of the audit report, a part of its public record. These copies shall be open to public inspection. In addition, the governmental unit shall file one copy of the report with the Comptroller and with the county clerk of the county in which the principal office of the governmental unit is located. A governmental unit may, in filing its audit report with the Comptroller, transmit with such report any comment or explanation that it wishes to make concerning the report.

(Source: P.A. 101-419, eff. 1-1-20.)

(50 ILCS 310/7) (from Ch. 85, par. 707)

Sec. 7. The report filed with the Comptroller, together with any accompanying comment or explanation, immediately becomes part of his public records and shall at all times thereafter be open to public inspection.

(Source: P.A. 78-592.)

(50 ILCS 310/9) (from Ch. 85, par. 709)

Sec. 9. The expenses of the audit and investigation of public accounts provided for by this Act, whether ordered by the governing body or the Comptroller, shall be paid by the governmental unit for which the audit is made. Payment shall be ordered by the governing body out of the funds of the unit and such authorities shall make provision for payment. Contracts for the performance of audits required by this Act may be entered into without competitive bidding. If the audit is made by a licensed public accountant retained by the Comptroller, the governmental unit shall pay to the Comptroller actual compensation and expenses to reimburse him for the cost of making such audit.

The governing body of any governmental unit having taxing powers may levy an auditing tax in an amount that will not require extension of such tax at a rate in excess of .005% of the value of all taxable property in the unit as equalized or assessed by the Department of Revenue. This auditing tax may be in excess of or in addition to any statutory limitation of rate or amount. Money received from the auditing tax shall be held in a special fund and used only for the payment of auditing expenses.

(Source: P.A. 81-1509.)

(50 ILCS 310/10) (from Ch. 85, par. 710)

Sec. 10. This Act does not relieve any officer of any other duties required by law of him with respect to the auditing of public accounts or the disbursement of public funds. Failure of the governing body of any governmental unit to comply with the provisions of this Act does not affect the legality of taxes levied for any of the funds of such governmental unit.

(Source: P.A. 91-357, eff. 7-29-99.)

(50 ILCS 310/11) (from Ch. 85, par. 711)

Sec. 11. The governing body of a governmental unit may establish an audit committee, and may appoint members of the corporate authority or other appropriate officers to the committee, to review audit reports prepared under this Act and any other financial reports and documents, including management letters prepared by or on behalf of the unit.

(Source: P.A. 82-644.)