KRS 65.065: Budgets -- Application only to fiscal periods ending before July 1, 2014 --

Transition to requirements of KRS 65A.010 to 65A.090 -- Filing -- Financial

statements -- Audits -- Enforcement.

(1) The provisions of this section shall apply for fiscal perio ds ending prior to July 1,

2014. For fiscal periods beginning on or after July 1, 2014, the provisions of this

section shall no longer apply; instead, the provisions of KRS 65A.010 to 65A.090

shall apply. Districts shall cooperate with the Department for L ocal Government

and the Auditor of Public Accounts to ensure an orderly transition from the

reporting requirements of this section to the reporting requirements of KRS

65A.010 to 65A.090. Notwithstanding the dates established by this subsection, the

provisions of this section and KRS 65A.010 to 65A.090 shall be administered such

that the registration required by KRS 65A.090(1) occurs as required by that

subsection, and there is no gap in reporting by entities subject to this section and

KRS 65A.010 to 65A.090 as the transition occurs.

(2) The governing body of each district shall annually prepare a budget and, as

appropriate, shall classify budget units in the same fashion as county budgets are

classified in accordance with KRS 68.240(2) to (5). The state lo cal finance officer

shall prepare standard budget forms for district use and shall furnish them to county

clerks for distribution to district officers. No moneys shall be expended from any

funds or any sources, except in accordance with the budget which ha s been filed

with the fiscal court to be available for public inspection. No budget of a district

shall become effective until filed with the fiscal court of the county in which the

district is located for submission to the Department for Local Government. For

those districts with multicounty jurisdictions, the district shall file a copy with each

of the fiscal courts within the jurisdiction of the district for their review. If the

budget is not filed with the fiscal court at least thirty (30) days prior to the start of

the district fiscal year, the fiscal court shall immediately notify the county attorney.

The county attorney shall then notify the governing board of the special district of

the noncompliance and then proceed with any steps necessary to preve nt the

expenditure of funds by the special district until the district is in compliance.

(3) The governing body of each district which for the year in question receives from all

sources or expends for all purposes less than seven hundred fifty thousand dol lars

($750,000) shall annually prepare a financial statement, except that once every four

(4) years the district's governing body shall provide for the performance of an audit

as provided in subsection (5) of this section.

(4) The governing body of each district which for the year in question receives from all

sources or expends for all purposes seven hundred fifty thousand dollars ($750,000)

or more shall provide for the performance of an annual audit as provided in

subsection (5) of this section.

(5) To provide for the performance of an audit, the governing body of a district shall

employ an independent certified public accountant or contract with the Auditor of

Public Accounts to perform an audit of the funds in the district budget. The audit

shall conform to:

(a) Generally accepted governmental auditing standards, which means those

standards for audits of governmental organizations, programs, activities, and

functions issued by the Comptroller General of the United States; and

(b) Additional procedures an d reporting requirements as may be required by the

Auditor of Public Accounts. A unit of government furnishing funds directly to

a district may require additional audits at its own expense. Upon request, the

State Auditor of Public Accounts may review the final report and all related

work papers and documents of the independent certified public accountant

relating to the audit. If a district is required by law to audit its funds more

often than is required by this section, it shall perform those audits and may

submit them in lieu of the requirements of this section, if the audits meet the

requirements of this subsection.

(6) The provisions of subsection (3) of this section shall not apply to any district that is

required by law to annually submit a financial report to an agency of state

government. The districts shall annually submit a copy of their financial report to

the county judge/executive and to the state local finance officer and once every four

(4) years provide for the performance of an audit as pro vided in subsection (5) of

this section.

(7) Any resident of the district may bring an action in the Circuit Court to enforce the

provisions of this section. The Circuit Court shall hear the action and, on a finding

that the governing body of the district has violated the provisions of this section,

shall order the district to comply with the provisions. The Circuit Court, in its

discretion, may allow the prevailing party, other than the district, a reasonable

attorney's fee and court costs, to be paid from the district's treasury.